486 Part III • Acquiring Information Systems
has global responsibilities for IT standardization and
consolidation initiatives.
BAT currently delivers IT services via three data
centers geographically located in Europe (Hamburg,
Germany), North America (Macon, Georgia), and Asia
Pacific (Kuala Lumpur, Malaysia), and are governed by
regional management. All three data centers now operate
under a shared services model: by consolidating IT opera-
tional support functions at the regional level, economies
can be achieved, and these cost savings contribute to the
profitability of the BAT end markets that purchase their IT
services via a chargeback arrangement.
Europe was the first region to extend the shared
services concept beyond data center operations to include
application services: In 1997 an Enterprise Center of
Excellence (ECoE) began to offer hard-to-find SAP
expertise to northern European countries for their R/3
implementation projects. Today the ECoE is also provid-
ing SAP services for Latin America.
In the Asia Pacific region, a data center (APDC) was
established in Technology Park, Malaysia, in early 1999.
Since that time, the APDC has evolved into a shared services
organization (APSS) that combines two business streams: a
data center and a competency center (center of excellence)
for SAP. Personnel with SAP and other IT skill sets are read-
ily available in Malaysia at a cost quite low compared to the
other markets, due in part to early SAP installations in the oil
and gas industries and recent government incentives for eco-
nomic growth in high-technology industries.
While the data centers/shared services units are
providing support for shared business system solutions, IT
organizations that exist at each management unit are
responsible for managing the use of IT for their respective
end markets. These responsibilities include identifying
business requirements, identifying IT solutions, building
business cases for IT projects, and managing support serv-
ices (including local, shared, and outsourced services). For
example, APN has an IT organization based in Hong Kong
with responsibilities covering all the end markets in APN,
including China, Hong Kong, and Taiwan. The smaller end
markets typically operate with very few IT resources of
their own but share resources from the management unit
center. For example, BAT Taiwan only has one IT technical
support resource onsite for desktop and LAN support, who
has a dotted-line report to the IT organization for APN.
New Computer Systems for Taiwan:
The ERP Choice
The new business model for BAT Taiwan created a need
for a new computer system for functions and processes
not previously performed. The Taiwan end market needed
to have its own accounts payable and accounts receivable
systems because these functions had previously been
handled by BAT U.K. It also needed a system to support
direct selling and inventory management for multiple
sales channels, not just for a single distributor.
Two ERP platform standards had been prescribed for
all BAT solutions by 1998: SAP R/3 and Sage Tetra CS/3.
The Sage system was selected for less complex, smaller
operations that did not need the functionality of SAP and
that required a low-cost ERP solution. SAP R/3 was ini-
tially viewed as the standard solution for larger, more
complex BAT markets only, because it had proven to be a
very expensive system to implement and maintain.
However, because the Sage system did not scale well, it was
no longer viewed as the best solution for BAT organizations
in rapidly growing markets. In mid-1999, for example, the
former head of IT for APN (now the Asia Pacific Regional
IT manager) had put an ERP implementation for the Hong
Kong end market on hold because of the weaknesses of both
standard options: CS/3 was not viewed as a sufficiently
robust system for the Hong Kong market, but the costs of an
SAP solution at that time appeared astronomical.
Although Globe House sets strategy and dictates the
standard IT platforms, each end market chooses which ERP
platform standard to implement, as well as when to imple-
ment it. During 1999 and the first six months of 2000,
however, several BAT regions had gained much more
expertise in implementing both ERP platforms. Some of
these implementations were brought forward to achieve
Y2K compliance. Other projects were undertaken as part of
data integration initiatives for the Rothmans merger:
Rothmans brands were transferred to BAT (according to
local government restrictions) and BAT’s processes and
standard systems were adopted for all operations.^2
Within the Asia Pacific region, SAP R/3 projects had
been carried out in Australia, Malaysia, and Singapore.
Malaysia and Singapore were originally implemented
based on the Symphony template; following the merger
with Rothmans, however, the Malaysian implementation
was changed significantly, and it is now regarded as using a
different template. Australia is currently using a BAT SAP
system for manufacturing, and a Rothmans SAP system for
sales. Hence, the Asia Pacific region is currently using three
different SAP R/3 templates to satisfy area needs. Many of
these projects had been done with Andersen Consulting
(now Accenture) as the implementation partner, some using
SAP’s rapid implementation methodology (Accelerated
SAP or ASAP). Because of the success of these projects
and growing pressures for common data standards, it was(^2) Some of Rothmans’ business units had implemented SAP, and
other business units were using BPCS on an AS/400 platform.