British American Tobacco explains its global SAP strategy

Ambitious ERP project will will culminate in a single instance of SAP operating in 65 global markets by 2016

British American Tobacco (BAT) is in the middle of a major ERP consolidation programme that will culminate in a single instance of SAP operating in 65 global markets by 2016.

Jon Veness, data lead at BAT, spoke to Computing ahead of the SAP User Conference in Birmingham next week and described the complexity of the project.

"The SAP ERP programme will support all global processes, global data and information," said Veness.

"Five or six years ago we had 62 ERP instances operating across our global markets, and we have consolidated this down to seven regional instances," he added.

"But they are still implemented in different ways in different markets, so we are still operating in a multi-ERP environment. We want to move to a single global template where everyone will be operating in the same way in every market."

The ERP system will be hosted in Germany, and Malaysia has been selected as the pilot market, which will go live in September 2012 and run for about five months.

Veness estimates that the rollout to all regions will be completed between 2014 and 2016, and will cost "hundreds of millions of pounds".

"It is going to massively reduce the cost for us. We have a lot of inefficiencies in maintaining these systems and putting together global information," said Veness.

"There is a growing demand for consistent information across all of our markets, but at the moment we have an awful lot of different people and regions extracting data, putting it together and providing it to the business," he added.

British American Tobacco explains its global SAP strategy

Ambitious ERP project will will culminate in a single instance of SAP operating in 65 global markets by 2016

The biggest challenge for BAT is going to be standardising markets that have been left to their own devices when operating on the previous SAP systems.

"The biggest challenge for us is the change management aspect. We have come from a federated background, so markets have been able to pull together ERP information in whatever way they wanted," said Veness.

"These old systems have been in a lot of our markets for a long time, and to take that away and put in a common system across all markets will be a challenge. Some will believe it to be a retrograde step," he added.

"However, we have set up an SAP academy and we are doing SAP utilisation reporting, so people are being trained based on how they are using their SAP system at the moment.

"We are not just going to wait for the big system to come in, we are trying our best to get people prepared for it."

BAT has brought in IBM as the systems integrator for the project, but is also using Lodestone as a partner for quality assurance.

"BAT has taken a unique approach to quality assurance. It has invested in the Lodestone team so that we are there throughout the programme," said Harry Singh, partner at Lodestone.

"This differs to a traditional approach where we would go and talk to the company, review the project and then hand it back. By doing it BAT's way it doesn't have to deal with processes that it doesn't understand," he added.

"BAT was quite savvy about where it wanted help and where it didn't. It knows how the technology worked, so that wasn't a problem.

"However, BAT wanted guidance around governance and change management. It wanted to know; how do we effectively deploy this solution? When do we deploy? What is the rollout schedule? We will also be engaging with the pilot market to make sure we get this right."

BAT currently has about 250 staff working on the project, which is by far the biggest initiative on Veness's agenda.

"We really have the board's support for this project. They have put their money where their mouth is and have stopped a lot of other projects for this one to be successful - they want people to focus on this," said Veness.

"Basically, the whole IT function is working on it. We have told people that if what you are doing isn't directly related to the SAP rollout then you need to talk to your manager.

"This is going to be the key focus for IT for the next couple of years."