Ansell moves to SAP after Oracle ERP bungle

Australian condom and latex glove manufacturer Ansell has flicked the switch on a new SAP-based enterprise resource planning system across Europe, the Middle East and Africa following a botched implementation of an Oracle version in the Americas.

Ansell began rolling out the ‘Fusion’ Oracle system globally in 2011, starting with North America, but a bungled implementation cost it up to $US15 million in lost sales in the first half of 2012 and many months spent trying to rectify the problem.

The Oracle program began as an effort to update and consolidate around 25 legacy systems onto one platform globally. Ansell selected IBM as its primary integrator, with the first phase of the system rollout going live in mid 2011.

But it ran into “systems design and interface issues” - specifically coding problems which hindered the ERP system’s ability to talk to other systems, resulting in the wrong types or quantities of products being delivered to customers. Ansell has spent the years since pouring resources into attempts to rectify design problems and stabilise the system.

Ansell originally planned to extend the rollout of the Oracle system globally last year, but revealed in financial filings today it has instead opted for an SAP-based ERP system across its operations in Europe, the Middle East and Africa (EMEA).

The SAP system came with Ansell's 2012 acquisition of glove maker Comasec. Ansell first flagged its intention to move to Comasec’s SAP ERP system last year, after Ansell CEO Magnus Nicolin revealed the company was “frustrated” with the pace of improvement in the Oracle ERP.

“Although a lot of progress has been made and the system is fully operational, there is room for further improvement and optimisation,” he said at the time.

“When purchasing Comasec we were aware that it was a reference site for SAP and that it had implemented SAP for a very reasonable cost and on schedule. Comasec has a well-qualified IT team with a strong background in SAP.

“So to speed up integration we decided to put our EMEA Industrial and Specialty Markets businesses onto Comasec’s SAP platform (a reverse integration if you will). This will also help deliver some planned synergies quickly.”

Ansell revealed today the SAP system had been switched on in the EMEA two weeks ago. It said while it was still very early on in the go-live phase, there had been “good progress” so far.

It cited balancing the demands of the continued SAP/Oracle implementation programs as challenges in the year ahead.

Ansell's Oracle system is now stable in North America, and the firm said it is making “final enhancements” to improve efficiency in progress. It spent about $US6 million fine-tuning the Oracle investment in FY2013.

Ansell lost not only customers as a result of the Oracle implementation, but several executives - the company’s project lead and chief information officer Shawn Knox was let go and has since been replaced.