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Pharmaceutical firm chooses SAP for long haul

With a limited IT staff and a tight budget, Ontario, Canada-based Contract Pharmaceuticals Ltd. is moving forward with plans to upgrade to mySAP ERP.

When Ontario, Canada-based Contract Pharmaceuticals Ltd. began growing in the mid-1990s, executives there determined it was time to invest in an enterprise resource planning (ERP) suite for the long haul.

The more customization you do to every upgrade, the more complicated and more time consuming they become.
Gary Tamming,
chief financial officerContract Pharmaceuticals

After an exhaustive search, Contract Pharmaceuticals dumped its legacy systems in 1999, beginning with an accelerated SAP (ASAP) implementation. Since then, it has invested about $1 million in its SAP software, upgrading in 2003 to SAP R/3 4.6B.

Located 50 miles north of Toronto, Contract Pharmaceuticals has about 250 employees based in its headquarters and a nearby laboratory it acquired in June 2003. The company manufactures and packages prescription and over-the-counter drugs, which it ships to locations in North America, Europe, Australia and Japan.

Contract Pharmaceuticals has three instances of SAP running on Windows NT with SQL Server used as the back-end database management system.

The company recently purchased licenses to implement mySAP ERP and has chosen the Canadian division of IDS Scheer to help oversee the project. Through a partnership with SAP, IDS Scheer provides implementation services for SAP's supply chain and ERP applications.

Executives at Contract Pharmaceuticals have gotten a lot of experience with SAP projects and aren't afraid to talk about the lessons they have learned over the years. Choose the implementation partner wisely and be sure to have a strong project leader to ensure the implementation stays on scope, said Gary Tamming, chief financial officer at Contract Pharmaceuticals.

Tamming said the company's annual IT budget is about $300,000.

"For us, certain modules went splendidly and others had some hiccups," Tamming said. "Getting the right consultants with not only the right level of technical experience, but also the right level business acumen and marrying those together was key."

The company chose not to customize SAP out of fear that future upgrades would become too burdensome.

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"The more customization you do to every upgrade, the more complicated and more time consuming they become," Tamming said. "To a certain extent we had to reengineer our business processes to fit SAP off the shelf."

While executives purchased the licenses to upgrade to mySAP ERP, the company is in the final stages of an acquisition and will move forward with its upgrade in early 2006, Tamming said.

Dennis Hingsberg, the company's IT manager, said he is interested in using the capabilities in NetWeaver to integrate the company's various systems. Implementing SAP Portals will extend capabilities to additional end users, Hingsberg said.

SAP Enterprise Portal integrates information and applications for end users into a single view. When an employee logs into the system in the morning, information will be displayed based on that individual's role in the company. The roles can be configured as general as manager or employee, or as specific as an analyst or HR professional.

"We have about 100 clients on our network here at the head office site and only 60 user licenses, so the other 40 don't have access," Hingsberg said. "With the portals we see it as a cheaper way to go about the licensing."

The company's major initiatives with the upgrade is the ability to deploy what Tamming calls "strategic enterprise management," the ability to integrate planning and controlling processes throughout the company. The software will integrate all commercial and logistical planning areas to one location and link data throughout the company, resulting in faster and more efficient reports for management, Tamming said.

He also said the company hopes to implement the use of score cards to improve the tracking of deliveries and product quality. Score cards based on supplier and delivery data allow customers to make ordering decisions and provide information for suppliers to improve performance.

The upgrade will also streamline the company's cumbersome payroll system and add self-services for employees seeking access to their payroll records, Tamming said. Regulatory compliance issues will also be addressed with the upgrade.

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