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Marsulex reaps the benefits of enterprise-wide information systems.

Faced with losing its core computing capabilities, Marsulex decided on outsourcing which allows for future growth but doesn't lose sight of a smaller company's financial concerns

The rallying cry "less is more" takes on new resonance as Canadian businesses deal with the double whammy of the country's continuing economic difficulties and the pressures of stiffer global competition. Achieving maximum results with minimum resources is easier said than done -- especially for small- and mid-sized companies.

All companies seek to react faster to market changes, and to be more innovative in their responses to market demand and opportunity. But often they can only achieve this with the speed and comprehensiveness of enterprise-wide information systems. Because enterprise-wide information systems provide a complete picture of the company's total operations, the critical information needed for timely management decisions can be readily available, at any location in the company. This allows businesses to maximize planning, service, and overall performance, regardless of size.

But how does a medium-sized organization find the resources necessary for an enterprise-wide information systems strategy? Like most mid-sized companies with revenues between $200 and $500 million, Toronto-based Marsulex, an independent distributor of sulphur products, was concerned its resources were limited in implementing an enterprise-wide information strategy. But the company's management was creative and resourceful enough to achieve information technology benefits traditionally realized by large corporations. This case study shows how Marsulex not only discovered, but maintained the benefits of enterprise-wide IT systems, using limited resources.

As part of ICI's global restructuring, Marsulex, then known as ICI Canada's Sulphur Products Division, was divested in June 1989 and suddenly faced losing its core computing capabilities within a year.

As a leading North American manufacturer and distributor of sulfuric acid and liquid sulfur dioxide, serving a broad number of customers in both Canada and America, Marsulex needed a powerful and cohesive information system for successful business operations. Under its parent company, ICI Canada, a subsidiary of London, England's Imperial Chemical Industries, it had used SAP Canada's R/2 System, a fully integrated mainframe applications software system designed to integrate the information needs and operations of domestic and international businesses.

Marsulex relied on the integrated advantages of SAP Canada's software which allowed it to tie together core business functions, with its sales and distribution, materials management, as well as financial, cost and management accounting modules. Although it did not want to sacrifice the competitive advantages gained from making strategic information available enterprise-wide, the newly divested company needed to evaluate which option would give it maximum results with minimum resources.

Balancing change with continuity

Marsulex considered many factors in the search for a system to connect its business units, such as time restraints, technical skills, financial resources and system migration. Recognizing the necessity of a powerful and responsive solution, Marsulex researched the options for enterprise-wide information technology solution.

Marsulex considered building a data centre and maintaining its own software applications. However, this was beyond the company's financial means, with development and training costs estimated to be between $4 and 5 million.

Marsulex also considered replacing existing applications on the mainframe with minicomputer software, but felt this wasn't the best option. While the overall cost was substantially less, rewriting the software from mainframe to mini-computer code would result in reduced application functionality. Although client/server software is available, today offering the functionality of an integrated mainframe software system, it was not available at that time.

Another alternative was for Marsulex to buy its own mainframe system. Although this would allow the company to keep all current software applications, it would be extremely expensive, involving hiring 15 to 20 new employees to run and support the system.

Marsulex chose to secure an outsourcing partner to assist with implementation and training for the R/2 System of integrated mainframe applications. The R/2 System is comprised of 10 integrated modules covering the full range of business applications including financial, managerial and cost accounting; manufacturing and logistics; sales and distribution; human resources planning.

With an enterprise-wide IT system, companies can encounter significant costs for staffing and training. An outsourcing partner allows companies to avoid these costs of additional staffing and training, while offering assistance in obtaining, installing, and supporting all business applications software. Outsourcing enabled Marsulex to use the software that was an essential part of its business operations, eliminating financial and technical constraints, and accommodating future growth in the process.

An outsourcing

Marsulex chose Andersen Consulting as its outsourcing partner to implement SAP's R/2 System. Andersen Consulting specializes in strategic services and system integration. The consulting group provides technical support, facilities management experience, and most importantly, expertise in installing, running and supporting SAP applications.

Andersen and SAP Canada work together to make sure Marsulex's needs are met. Together, the companies, provide the technology and consulting expertise Marsulex needs to maximize its information technology resources.

Through an integrated software solution and outsourcing, Marsulex is empowered with the resources of a multi-national conglomerate. The company benefits from a state-of-the-art IT system that is powerful, responsive, and adaptive to the company's competitive stance. Marsulex has broken away from common mid-sized company solutions, by benefiting from enterprise-wide IT systems traditionally reserved for large corporations.

SAP Canada, headquartered in North York, ON, markets and supports the mainframe-based R/2 System and the client/server-based R/3 System of integrated applications software. Both products are designed to integrate the information needs of large multinational and growing domestic companies. The products cover a full range of enterprise-wide applications, including financial cost accounting; manufacturing; sales and distribution; and human resource functions. SAP Canada is a subsidiary of SAP AG, one of the world's largest software vendors with sales of $508 million (DM707) and more than 2,300 customers worldwide.

Bryan Plug is president of SAP Canada.
COPYRIGHT 1993 Chemical Institute of Canada
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Marsulex Inc.
Author:Plug, Bryan
Publication:Canadian Chemical News
Date:May 1, 1993
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