Schwarzkopf clears Y2K tangle with SAP R/3

Haircare products manufacturer Schwarzkopf Australia has purchased SAP's R/3 ERP system to alleviate Y2K problems and eliminate much of its manual data entry activities.

The German-owned organisation names system integration as the driving force behind its decision to implement the software package. It previously operated in a disparate systems environment that was creating unnecessary workloads and was placing it at risk of suffering future Y2K-led IT problems.

"The primary reason for implementing R/3 was to replace our old systems, which lacked integration, were becoming difficult to maintain, and suffered from Y2K problems," said Geoff McKeand, Schwarzkopf Australia's IT manager.

"The main benefits come from having full integration across the system, which eliminates the need to have the same data stored many times. This reduces the possibility of inconsistent data. We also now have greater access to data for analysis and have also had a small reduction in staff."

The company spent "just under $1 million" on software, hardware, licence costs and some SAP-supplied consulting for the rollout since it initiated the project in 1996, McKeand said.

Rather than attempting to launch the system in one fell swoop, however, he said the organisation decided to take a staggered implementation approach in a bid to let its staff ease into the transition, while increasing their knowledge of R/3 at the same time.

"We decided to install R/3 in groups of related modules. The first modules were installed in 1996, with the last module being installed this month.

"We spread the installation out over a three-year period due to our limited staffing resources and our desire to do the installation with our own internal staff.

"This has proved very successful as we have now developed a small team of highly trained R/3 staff and can provide our own R/3 technical support."

McKeand also said the likely arrival of a goods and services tax (GST), and the ability of the new system to support it, is an issue the organisation is about to address. He said the SAP package places the company in good stead to cope with the introduction of a GST and said Schwarzkopf is about to set up a "working party" to look at the impact the tax will have on its business.

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