In an already complex and complicated IT world, they bring new meaning to diversity and mobility.
Headquartered in Hong Kong, the Wallem Group provides shipping agent and shipbroker services through more than 8,500 employees across 21 countries and at sea.
With such extensive operations, including elements constantly steaming across the seven seas, the Group needed a flexible and scalable enterprise resource planning (ERP) system with greater process integration capability.
“There’s enough problems controlling and managing IT infrastructure when you know precisely where it is,” says director and CIO Patrick Slesinger, “let alone when it is constantly moving at sea.”
Microsoft’s Dynamics AX ERP software (AX) met Wallem’s needs, according to Slesinger. “While the former Infor System 21 provided Wallem significant business value for over a decade, it was AS/400-based and written in RPG programming language, requiring vendor involvement every time there was integration.”
Rewriting everything
Deploying AX was a feat in itself, requiring the re-writing of all operational system interfaces and in most cases, the systems themselves. Wallem has worked closely with Microsoft to ensure any Microsoft technology rolled out is customized according to business requirements.
Another deployment challenge is aligning employees’ personal expectations of the project with business needs. “We resolved this issue through open communication and a clear steering committee and project structure,” Slesinger says. Since 2000, Wallem has deployed an e-procurement system called Total Procurement Solution (TPS), which enables ships at sea to be part of shore-based procurement processes for stores and spares.
“TPS was the first vessel-based e-procurement system in the maritime industry, and continues to be the only system offering full process cycle support,” says Slesinger. “Being public key infrastructure–based and holding all quotations in encrypted form on disk, TPS ensures data security.”
Better decisions
He added that the system contains more than 2,000,000 line items of procurement history, improving procurement officers’ decision making. With TPS integrated into AX, Wallem’s ship management customers have full on-line access to their ships’ procurement, accounting and personnel records.
Business intelligence systems were rolled out together with the AX project to improve transparency in financial reporting. “Customers and suppliers are provided with OLAP cubes to aid in their decision making,” Slesinger says. An OLAP cube is a cubical arrangement of data to allow quick data analysis.
The organization also provides full imaging support online for documents such as invoices, and on a monthly CD ROM for physical archiving purposes.
“We’ve integrated a Really Simple Syndication (RSS) feed server with Dynamics AX to ensure all stakeholders are updated on data or event changes, allowing them to take appropriate action,” says Slesinger. He claims that the initiative is “a first of its kind” in the maritime industry.
“By making explicit tacit knowledge, AX facilitates our move towards a learning organization,ö Slesinger says. Specifically, accurate reporting and trend analysis help Wallem better understand customer behaviors and needs, improving customer service and satisfaction. Better knowledge management has also led to cost optimization and new business stream identification.
From a strategic perspective, the new system provides real-time information with metadata to allow timely decision making and avoid exposure to legal liabilities. “It also improves synchronization and alignment of business units towards a common corporate direction,” says Slesinger.
Reducing business processes
Wallem has reduced processes across all business units to enable process re-engineering, identification of best practices and re-composition of service offerings. “These new or re-composed services require high levels of integration into the ERP system, and AX enables that,” Slesinger says.
The organization has leveraged on K2’s Blackpearl business process management system, which is integrated into the AX, business intelligence and RSS environments. “This level of integration would have been difficult and expensive in the previous AS/400-based environment,” says Slesinger.
According to K2, Blackpearl is a platform on which users can easily assemble and execute Microsoft-based workflow applications. K2 claims that Blackpearl allows easy modification of these applications when business needs change.
Raising operational efficiency
Slesinger noted that besides improving knowledge management, the AX project tightened integration of different business processes. “The deployment of AX and related systems has allowed us to make processes geographically independent.”
“By integrating TPS and Microsoft BizTalk platform with AX, Wallem can seamlessly connect to vessel companies, and provide them with an efficient procurement service and reporting system,” he says. The integration also allows the organization to build a solid foundation to support further business initiatives.
“We have cut error rates and unnecessary re-entry of data,” says Slesinger. “The need for accounting support for the vessels has fallen 60 per cent, and procurement process time has been reduced by 80 per cent.”
According to Wallem, the new platform has strengthened analytical capability and expedited extraction of performance measurement data and reports. The company also states that AX’s open-ended architecture allows a wide range of internally- developed and external applications to be integrated to support procurement processes.
Measuring performance
Slesinger cautions that when measuring performance, it is “impossible” to attribute any individual business value from the project to particular tools used. “For example, improved workflow puts greater structure into a process, while also making tacit knowledge explicit and enabling geographically distributed processing.”
However, he revealed some quantifiable improvements from the project. Wallem’s staff headcount grew by less than five per cent year-on-year in 2007, leading to a 40 per cent rise in productivity.
Slesinger stresses that the primary driver behind deployment was to increase flexibility and facilitate re-configuring and augmenting of existing offerings to create new services. “Consequently, we had 30 per cent more customers in 2007 compared with 2006.”
He has some advice for CIOs seeking to do an IT revamp of similar nature and scale to Wallem’s. “Top management commitment to the end goal and a fundamental understanding of challenges to be faced during the project is crucial.”
A clear and well-documented business strategy, preferably developed alongside the IT strategy, is also required to ensure investments are aligned with organizational objectives and protected against potential risks, he says.
