After demerging from Telecom, Chorus established a separate ERP system and chose Zag to help with the implementation.
When Chorus separated from Telecom New Zealand (now Spark) in December 2011, it was in a situation of relying on the line-of-business systems which were suitable for its former parent, but excessively complex for its simplified operations. Furthermore, that arrangement had a deadline; part of the process of establishing itself as a separate entity required Chorus to establish its own separate business systems. It looked to vendor SAP and implementation partner Zag (formerly Soltius) to get the job done and, as a consequence, today has an ERP system which is so effective that it is practically invisible.
Chorus is New Zealand’s largest telecommunications infrastructure company, connecting around 1.8 million lines to homes and businesses throughout the country. It maintains and builds a network predominantly made up of copper and fibre circuits, telephone exchanges, and cabinets and is currently delivering ultra-fast broadband (UFB) to more than 830,000 and growing homes and businesses across most of New Zealand. Chorus has approximately 900 staff, with many of its on-the-ground functions outsourced to third party service providers.
Mark Ascroft, Chorus business owner for the implementation, explains that when the infrastructure company separated from Spark, it was obliged to procure new business systems within a transitional time frame of two and a half years. “This was also an opportunity to establish new systems which were better suited to our business, which is less complex than that of Spark”, he relates.
While Spark uses SAP, Ascroft makes the point that Chorus had no obligation to select the German vendor. “Instead, we tested the market for the ERP system best suited for our business; it so happened that SAP was that solution.”
He says Chorus required the new system to run its financials, procurement, projects and payroll as well as assisting to manage its fibre rollout; it engaged with Zag, which worked with SAP and an internal Chorus project team, to design a roadmap for the implementation of the new solution, and then perform that implementation.
Working with Zag, Chorus embarked on a multi-phase project, implementing SAP ERP and Human Capital Management applications. The ERP project was broken down into phased deliverables – firstly, separation from Telecom, and secondly, optimisation of business functions and expansion of usage footprint where justified but the business.
“We needed a system better configured for our business and that meant a far simpler, more straightforward system which uses a lot of the standard processes which come out of the box. There wasn’t any need for the level of customisation which Spark had to run its more complex business”, explains Ascroft.
“As the implementation progressed, we asked ourselves about the processes we had in place, comparing them with the standard ones; in many instances, ‘we’ve always done it like that’ had to stand aside, with recognition that ‘always doing it like that’ isn’t necessarily the best way” he notes.
Zag was involved in the program since the initial project preparation, and early on took design and delivery responsibility. With this single point of contact, Chorus took further advantage of Zag capabilities including project management and implementation-specific disciplines such as data conversion and cutover management.
The work completed by the Zag team included integration of 9 core SAP modules and a gap analysis and review of reports, interfaces, conversions, enhancements and forms (RICEF) outcomes. This resulted in the implementation of 10 interfaces, 30 minor enhancements, 14 bespoke reports, and conversion programs for all legacy datasets and 11 forms. Keeping the system as ‘vanilla’ as possible was a key requirement for the deployment.
A primary – and major – benefit of a solution which is configured for its lines of business, rather than those of its former parent, is obvious. “The new system does what we need it to do without any complications. We had a tight timeframe for the project and we had to go live at the commencement of the new financial year - we did just that”, confirms Ascroft.
“There is a little more to it than that”, as he makes clear. “Since the implementation, we’ve never had business operations interrupted because of issues with the ERP system. We just don’t give the system a second thought because it just works and has been robust since day one.”
The invisibility of the system means vital processes, such as purchasing and payroll, execute smoothly. “The job gets done well. We can do month- and year-end closes faster. There’s nobody calling the CFO or CIO complaining about problems with systems.” Ascroft adds.
There are, he says, numerous challenges with which Chorus must deal, particularly as fibre is rolled out around New Zealand. “Those are the issues which take up the minds of the members of the board and staff. With SAP and the way it is implemented for our organisation – it is just there and working well – we are able to focus on the plenty of other things we have to worry about.”
A system which has the bare minimum customisation is easier to maintain and support, he adds, with upgrades installed without worry of crashing the system. Ascroft also says the ‘standard’ nature of the implementation means training new people to work with it is faster and easier.
“In the past, I’ve had plenty of ERP difficulties – not with this system. When it went live, the transition from the Spark systems was painless, despite a lot of other things going on at that time, such as migration to virtual desktop infrastructure, and a new document management system. There were a lot of moving parts, but it all came in right on budget and right on time. It’s a great outcome and much of the credit for that goes to Zag. They did a great job”, Ascroft concludes.