absa bank

Client Profile

The Absa Group Limited (Absa), listed on the JSE Limited, is one of South Africa’s largest financial services groups. Absa conducts business primarily in South Africa and on the African continent. At 30 June 2006, Absa had assets of US$65.7 billion, 8.1 million customers, more than 720 physical outlets, 6,256 automated teller machines and 34,688 permanent employees. Absa became a subsidiary of Barclays Bank plc in July 2005, when Barclays acquired a controlling stake in the Absa Group.

Business Challenge

The Real Estate & Asset Management division had a number of burning platforms, most critically the labour intensive and highly administrative reconciliation between multiple systems, as well as outdated platforms requiring renewal. Cyclic changes in the Properties market were also creating pressing demands on improving operational efficiencies to keep pace.

Although reinforcing and mandating the group sourcing operating model as part of the Barclays acquisition programme, the need became imperative for a standardised, integrated platform to support their centrally led procurement services to the group. Enhanced management information was also a critical requirement for driving improved supplier and channel compliance as part of a broader cost focused improvement of purchase to pay processes.

The Group Finance function of the client has been traditionally transaction-processing focused with a disproportionate amount of time and effort being spent on resolving ad hoc operational errors and reconciliation issues between multiple systems. With added regulatory and compliance pressures as a result of the Barclays acquisition, a pressing need emerged to standardise the general ledger platform and move towards a common data model for finance information.

While the HR division of the client had already been running their payroll on SAP HR for 4 years, this implementation had been tactical, and needed to be re-aligned to the full Absa legal entity structure as enabled by a multi-company code structure.

Project Scope and Solution overview

The challenge of the project lay in its complexity, scale and integration. Nine integrated SAP modules (SRM, MM, PS, CO, FI, PM, RE-FX, EHS, BW) were deployed, requiring very tight management of scope and business requirements. Over 20 interfaces required specifications, delivering and testing to ensure integration, and over 3000 end users were trained and authorised on SAP. Furthermore, nearly two million data records had to be converted from eight source legacy systems, and seven applications were planned to be decommissioned. The broad and complex scope required a very focused and dedicated work ethic. The project is described as “one of the most complex, integrated projects in the continent’s financial services industry.”*

*I-Net Bridge 17 July 2006

Benefits Achieved

Absa’s new system demonstrates how progressive companies use enterprise systems to differentiate themselves—an insight confirmed in Accenture’s latest enterprise systems research. Absa has drastically improved sourcing, reporting and real estate management capabilities, lowered maintenance costs and enhanced procurement capabilities resulting in more than 2 million shopping carts and requisitions being created within weeks of the go-live date. According to Absa’s Chief Operating Officer Pieter van der Merwe, “Our continued improvement of Absa’s operations ensures we deliver below-the-line shareholder value, and this new platform is an example of our commitment to becoming a high-performance organisation.” Absa expects to achieve savings of US$52.24 million in the next five years, thanks to the new system implemented.