BAT lights up £26m SAP savings

British American Tobacco (BAT) has saved millions of pounds by cutting down the number of enterprise resource planning (ERP) systems it runs around the world.

Since 2005, BAT - which made a £2.3bn profit last year - has consolidated its 62 SAP and Sage CS/3 ERP systems onto six regional SAP platforms.

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Since the initial work began in 2005, 8,700 of BAT's 11,200 users have been migrated onto the new system with around £26m in IT costs saved by the end of 2007.

Meanwhile the improvements to the regional supply chain that the ERP programme has enabled are predicted to lead to €700m in savings between 2005 and 2009.

The company was prompted to embark on the project as it felt it had too many back office systems with little standardisation which, at £34m per year, was costing the company too much in support and development.

Speaking at a SAP event at London's Wembley Stadium, BAT's group head of demand IT, Phil Colman said the company has learned that to make such a project successful senior executives need to be brought round to the tech team's vision.

"Don't go anywhere until you've done that," he said.

Colman - who expects the programme to be finished by the third quarter of 2009 - advised other tech departments thinking of embarking on a similar project to "never give up" on trying to get exec buy-in.

As well as reducing support costs, Colman said work has helped with other initiatives such as implementing shared services, improving information management and paving the way for transformation projects in finance and HR.