Farmers opts for SAP solution

By ADAM GIFFORD

SAP and implementation partner Oxygen have won a fiercely contested bid to install a financial management system in Farmers Trading Company worth $800,000 in licences and services.

Oxygen account manager Wayne Pohe said Farmers subjected the shortlist, which also included Intentia, Oracle and SSA Global Technologies, to intense scrutiny.

"They made us swim for our money," Pohe said.

Farmers is a $750 million business with 74 sites. In the past an enterprise accounting system for such a business might have cost more than twice what Farmers is paying, but competitive pressure and smarter implementation systems have brought down costs.

Scoping started last week, with the system due to go live in September. Pohe said the rapid implementation was possible because Oxygen would use SAP's new best-practice models, which it had already used for two other projects.

"They are great templates, great documentation. They really give you stepping stones to rapid and successful implementation," Pohe said.

Farmers chief financial officer Michael Power said the company was replacing a 12-year-old Masterpiece system from SSA which no longer met business needs.

"The business has changed, we have more channels, and people want information now, not next week and they want to be able to cut and dice the data," Power said.

He said one reason the Oxygen-SAP solution was chosen was because of the retail experience the two companies could offer, and Farmers might consider installing the SAP retail solution once the financials were in place.

Phase two of the project includes optimising the accounts payable process, while phase three involves installing an information warehouse and project accounting modules.

Oxygen might also provide ongoing support. Oxygen already supports the Whitcoulls SAP application and does its accounts payable processing on an outsource basis.

Oxygen chief executive Mike Smith said Farmers would be Oxygen's 57th customer outside its parent Carter Holt Harvey group.

He said the company was already ahead of target for the year on its three key measures: earnings before interest and tax, cashflow and return on investment on working capital ahead of planned yield.

It had already hired 65 people this year, taking staff numbers to about 360, and had 40 open places to cope with growth.

"We are aiming for $85 million in revenue this year, 20 per cent more than last year, " Smith said.