Solvay IT provides shared services to four U.S. business units of chemicals and plastics manufacturer Solvay S.A., with aggregate annual sales totalling $1.6 billion. Solvay IT was an SAP customer for eight years, providing application support for up to 1,600 users who accessed enterprise applications for activities like plant and quality maintenance.
Vice President of IT: Ben Gilbert
Problem: Tight margins and goodbut not greatsystem uptime statistics forced Solvay to look at ways to reduce ERP costs by offloading some portion of its infrastructure to a service provider.
Goal: Increase uptime and reduce costs.
Strategy: The company was agnostic about what database and server platforms were to be used, but wanted to maintain control over the process of modifying the applications, a task it viewed as a core competency. "If there's something you have to be wary of, it's losing all capability on the application management side," says Gilbert. So the company outsourced only the systems management component.
Challenges: What was the biggest hurdle? "Getting my internal staff to be comfortable that we could rely on an outside vendor," says Gilbert. He also reports some initial telecommunications problems. For instance, floods in Phoenix washed out Solvay's data connections to its service provider.
Business Value: Solvay pared six full-time maintenance and support employees from the payroll, and gained a fixed cost based on the number of users of its SAP systems.
Assessment: The company reports capital expenditures on hardware have been reduced globally by 10 to 20 percent. "Outsourcing takes you totally out of the capital arena," says Gilbert.
This article was originally published on 06-16-2003