"The Georgian railroad" completed SAP implementation of S/4HANA

JSC Gruzinskaya zheleznaya doroga in 2013 began system search of the possible problem solving typical for many state enterprises connected with archaism of technologies of information processing, use of data from many sources and with historically developed "scrappy automation". A large number of the objects of operation (1422 bridges, 32 tunnels, 22 passenger stations and 114 loading stations), personnel (about 12 thousand), the lack of modern tools of financial analytics, budgeting and also incomplete automation of production business processes do this task very difficult.

In 2014, based on scientific and technical audit the strategy of development for information technologies focused on the business development strategy was developed and approved. During implementation of IT strategy of JSC Gruzinskaya zheleznaya doroga purchased licenses to use of the software of SAP AG company (SAP Business Suite, SAP Business Objects BI Suite, SAP Planning and Consolidation Management (BPC), SAP Profit and Cost Management (PCM), SAP S/4HANA and SAP HANA).

On May 7, 2015 the SAP company and JSC Gruzinskaya zheleznaya doroga announced the beginning of the large-scale project on implementing solutions of SAP on the basis of the high-performance SAP S/4HANA platform.

In 2015 on a competitive basis the right to implementation of an end-to-end information system was received by Soft-Reyting Consult Georgia company - Soft-Reyting Consult subsidiary company (Ukraine), the partner of SAP company in Ukraine and Georgia with a 20-year experience. Besides, to the project also other partners of SAP – in particular, the leader of industry specifics in the field of railway transport - Orianda Solutions AG company (Switzerland) will be attracted. In total more than 30 consultants are involved.

More than 100 owners of business processes, analysts and IT specialists enter into project team of JSC Gruzinskaya zheleznaya doroga.

The management of JSC Gruzinskaya zheleznaya doroga together with the general contractor - Soft-Reyting Consult Georgia company, held on October 23, 2015 a starting meeting with project participants and announced business results which expects from its implementation.

Project Tasks

JSC Gruzinskaya zheleznaya doroga will become the first organization in the region of the CIS which announced start of implementation of this innovative solution. Within the project it is necessary to upgrade all key business processes: from management of finance, purchases and personnel before carrying out repair work.

In 2014 in JSC Gruzinskaya zheleznaya doroga audit of business processes is booked. It showed that fragmentary automation slows down development of the company, without allowing managers to receive an objective, relevant and complete picture. The decision on transition to the integrated platform on the SAP platform is made by the management of Gruzinskaya zheleznaya doroga in connection with strategic plans of full automation of key business processes. In particular, it is necessary to create a single system of budgeting, it will provide:

• operational adjustments of the budget
• approval of the price of purchases of branches,
• automation of work of treasury,
• system implementation for conducting tax accounting
• formations of the tax statements integrated with Tax administration of Georgia
• will provide support of processes of maintenance and repair of infrastructure and the rolling stock.

The SAP S/4HANA technology will help to control business processes of the enterprise in real time and as much as possible to simplify decision making processes on key tasks.

For creation of uniform infrastructure the complex of the SAP solutions Business Suite is selected from JSC Gruzinskaya zheleznaya doroga. The choice of the SAP solution was influenced by results of the booked external audit, broad examination of vendor in the field of rail transportation. Within the project it is necessary to implement the SAP ERP enterprise management system, the solution for a business intelligence of SAP Business Objects and functionality of SAP PM for process automation of a maintenance and repair of the equipment.

The project will begin in May, 2015, start of the main functional units is planned for June 1, 2016, project completion is planned for June 1, 2017.

"Transition to the modern powerful solution – a necessary step for ensuring stable development of JSC Gruzinskaya zheleznaya doroga: the enterprises, closely connected not only with all branches of the economy, but also servicing passenger traffic. Implementing solutions of SAP will give us necessary control over all key business processes and will increase efficiency of our work that is important for all ecosystem of our partners and clients" — Mamuka Bakhtadze, the CEO   of JSC Gruzinskaya zheleznaya doroga noted.

It is expected that project implementation will allow JSC Gruzinskaya zheleznaya doroga to increase operating profit, to reduce warehouse stocks, to reduce finance costs and repair expenses, to reduce receivables. Further the number of the automated business processes is going to be increased, having implemented some other SAP solutions at the central office and subsidiary companies. Also at the enterprise the Competence Center of SAP for training of employees in work with new solutions and support of the created infrastructure will be created.

"SAP solutions are used in the largest railway companies of the world. For example, Indian Railways every day servicing about 20 million passengers earn $5 million a day thanks to implementation of a booking system based on SAP. Other client of SAP — "National society of the railroads of Belgium", one of the railway networks which are most loaded in the world, annually saves about €3 million thanks to budgeting process automation. In Georgia several largest national companies already use SAP solutions, including the power enterprise "Telasi" and operator of telecommunication services Caucasus Online. We are sure that the best practices of the Georgian railroads in the field of implementation and use of the latest technologies of SAP will be demanded also by other companies of the country", - Maxim Matyash, the managing director of SAP in the CIS countries noted.

Project Progress

On March 2, 2017 the SAP company and JSC Gruzinskaya zheleznaya doroga announced project completion of SAP implementation of S/4HANA.

A system will allow the company to make strategic decisions and to manage organizational processes. For March 2, 2017 a system is used ~ by 500 users.

Action with participation of JSC Gruzinskaya zheleznaya doroga, (2015)

The decision on transition to SAP S/4HANA to JSC Gruzinskaya zheleznaya doroga was made in 2015. Audit of IT infrastructure showed that incomplete automation slows down development of the company, without allowing the management to see an overall picture of business and to make management decisions on its basis.

Upgrade of the main business processes, from management of finance, purchases and personnel, before repair work became a main goal of the project.

The international command of support SAP MaxAttention took part in project implementation, she carried out quality control of the implemented technology, trained specialists, helped to complete the project in time.

Project Results

On start of the project the ambitious tasks were set for an implementation team. Bonus support of SAP thanks to which we got access to global examination of the company and also the help of qualified specialists at each stage became a powerful component for us. System implementation of SAP S/4HANA will allow to monitor quickly all business processes that, in turn, will increase the speed of acceptance of management decisions. Mamuka Bakhtadze, CEO of JSC Gruzinskaya zheleznaya doroga

The joint project of SAP and JSC Gruzinskaya zheleznaya doroga - an important stage in business development of SAP in the region as it is the first exit in productive operation of a system based on SAP S/4HANA. The integrated solution will help the company to achieve effective objectives on increase in transparency of business, growth of process performance and asset management. We are sure that experience of transformation of JSC Gruzinskaya zheleznaya doroga will be demanded by the enterprises from the different industries as in Europe, and around the world. Alexander Arnold, the director of work with the strategic industries in the region of Central and Eastern Europe SAP SE