Inside Danway’s Enormous 11-Brand ERP Makeover
Client:Danway, a leading engineering project-management firm
- Company had outgrown older enterprise resource planning (ERP) system
- Project management, billing and costs needed greater oversight
- SAP ERP system
- CSC’s consulting and implementation services
- SAP ERP systems implemented on time, within budget
- Full transparency across projects of resources
- Most components delivered “out of the box,” requiring little or no expensive customization
Updating an ERP system is a decidedly challenging task. These vital systems, the operational backbones of many companies, are complex suites of software that must integrate multiple applications and databases from various organizational departments. This level of complexity means that more than half of all ERP implementations exceed their budgets, and nearly three quarters of ERP implementations are completed late, according to a survey conducted by Panorama Consulting Services.
Those kinds of cost and time overruns are damaging enough when the upgrade is being done at just one company. But when ERP systems are to be upgraded across an entire family of companies, the task — and the consequences of overruns — become even more challenging.
Yet that is precisely the task being undertaken by Danway Electrical & Mechanical Engineering LLC, an engineering services company based in Dubai, UAE, and its Abu Dhabi-based parent company, Al Nowais Investments.
What’s more, the companies have done so with impressive results. A new ERP system was selected for Danway EME and then installed on time and within budget. Now the system, implemented with CSC’s help, is providing Danway with greater visibility into its projects, helping keep costs under control, and producing satisfied customers.
Several years ago, executives at parent company Al Nowais Investments decided that all of their 11 brands — including Danway, Federal Foods, Emircom and Pharmatrade — needed ERP upgrades. The business leaders also decided that, given this project’s enormous scope, they would conduct the upgrades in sequence, one company at a time. “We don’t like taking a ‘big bang’ approach, where it might work out, or it might not,” says Girish Thakur, CIO of Al Nowais. “Instead, our strategy is to wait for one company to finish and make sure all the pain points are addressed before we start the next one.”
Unfortunately, there was a pain point on the way toward implementing the plan. The first of the 11 ERP implementations — conducted at Federal Foods, which supplies regional retailers, institutional kitchens, hotels and restaurants — was deemed by Al Nowais executives as less than successful. So the executive team decided to bring in a new partner. And, after a careful bidding and evaluation process, they chose CSC.
To begin, CSC was enlisted to help Thakur and his team upgrade an older ERP system at Danway. This company provides professional services to construction, engineering and industrial customers in the U.A.W. These customers include the DEWA (Dubai Electricity and Water Authority), ADWEA (Abu Dhabi Water and Electricity Authority), EMAL (Emirates Aluminum Company Ltd.), DUBAL (Dubai Aluminum Co. Ltd.), ENOC (Emirates National Oil Co.), Sharjah Electricity & Water Authority (SEWA), and Al Naboodah Contracting.
While the Al Nowais holding company gives day-to-day operating responsibility to Danway EME officers, it sets overall group strategies, including those for IT. So when Danway EME officers said the company needed a new ERP system to replace an older system its business had outgrown, CIO Thakur knew he’d need an all-group IT plan.
Supporting Project Management
Danway, along with most of the other Al Nowais companies, was running an ERP system that had been installed nearly a decade earlier. The system had been fine in its day, but Danway EME had since grown dramatically, stressing the ERP system beyond its limits. As a result, cost overruns were becoming a serious problem, billings were not always completed properly, maintenance and support costs were rising, and customers were dissatisfied. “A lot of projects were running at financial risk,” Thakur recounts.
In 2009, the CFOs of Danway and the other Al Nowais holdings, along with CIO Thakur and his team, evaluated several ERP alternatives. They ultimately selected SAP ERP for its integrated approach and rich industry features. “It really caters to our requirements,” Thakur says.
CSC was selected as Danway’s implementation partner, Thakur says, largely based on its ability to complete the SAP implementation quickly and with a minimum of customization work. CSC also came recommended by the SAP team itself, as the two companies have partnered on projects.
What ultimately sealed the deal was the promise of greater transparency across operations. “Let’s say we need a product for one of our 20 sites,” Thakur offers as an example. “We need to see that Site A doesn’t have a requirement at this stage, that the product can be pulled out from Site B, and that the product can be implemented at Site C, where the requirements are at a critical phase. That kind of transparency helps us better use our resources.”
Another important aspect of the CSC-SAP solution: tools for better project closings. In the past, Thakur says, when Danway EME approached the completion of large engineering projects, the result was often a chaotic chase for documentation, final drawings and other materials required by the clients. No more. Now the SAP system collects these files and data in a central location so that when a project closes, everything needed for the final client presentation is easily available. “It’s kind of a one-stop shop for all the team members,” Thakur says.
Implementing for Success
To oversee Danway’s SAP implementation, CSC installed a half-dozen or so staff members onsite so they could work closely with Danway officers. This staff was complemented by a CSC team of offshore professionals.
The implementation of SAP ERP at Danway went smoothly by all accounts, and was completed both on time and within budget. Today Danway runs SAP modules for project management, financial accounting, financial controlling, HR management, plant maintenance, material management, sales & distribution and document management. Some 90 Danway projects of various sizes are now being run on these SAP systems.
“CSC [staffers] were the right consultants,” he says. “Despite a lot of challenges on our end, they gave us good information and a fast implementation.”
Looking ahead, Thakur says he hopes CSC will not only complete the remaining SAP implementations, but also collaborate as a true technology partner with Al Nowais. “I would love to see CSC coming on board to have a long-term relationship with our organization,” he says. “And I would definitely recommend it to others.”