How SAP Software System S/4HANA Transformed IOI Group

How SAP Software System S/4HANA Transformed IOI Group

At the recently held SAP Forward Together 2020 Webinar—SAP’s signature virtual event across Southeast Asia—Alvin Lee, Head of Business Systems and Information Technology at IOI Corporation Berhad (IOI Group) shared how the company enhanced its operational efficiencies with SAP software system S/4HANA.

Incorporated in October 1969, IOI Group is one of Malaysia’s biggest conglomerates. It exports downstream products to more than 85 countries worldwide and is considered one of the leading integrated and sustainable palm oil players globally. The company owns two palm oil refineries in the country and four oleochemical manufacturing plants located in Malaysia and Germany. Its specialty oils and fats manufacturing business is carried out through its associate company, Bunge Loders Croklaan (formerly known as IOI Loders Croklaan) which has manufacturing operations in Malaysia, the Netherlands, United States of America, Canada, Ghana and the People’s Republic of China.

IOI Group’s business operations were previously done manually and in silos. According to Lee, there was no single source of truth and management was unable to make informed decisions quickly, as information was scattered everywhere. The company realized it had to transform and implement technological innovations in order to adapt to market changes as well as new regulatory requirements. To stay relevant, it had to embark on a journey towards digital transformation.

In July 2018, led by Group Managing Director & Chief Executive Dato’ Lee Yeow Chor, IOI Group started on the implementation of a group-wide SAP software system with S/4HANA designed to run on the SAP HANA in-memory database to further drive integration across business segments and enhance overall operational efficiency. The digitalization program was implemented in several roll-out stages to streamline existing diverse and stand-alone legacy systems and led to the creation of ONE IOI Integrated Platform, which the group calls its “Future-Forward Digital Ecosystem.”

The SAP digitalization program aimed to:

  • streamline and drive greater process efficiency
  • provide solutions to trace products throughout the company’s supply chain
  • support faster and more efficient accounting processes through automation and standardization
  • strengthen IOI Group’s business fundamentals and ability to create long-term value for stakeholders

SAP Software System S/4HANA for Real-time Decision-making and Analytics

The group-wide SAP software system project was successfully implemented across IOI Group’s corporate and refinery divisions in July 2019. With the system in place, the company derived greater efficiencies in operating and monitoring business operations through efficient financial reporting and accounting processes, accelerated operational procedures, speedy data analysis, and manpower efficiencies.

During the SAP Forward Together 2020 event, Lee further explained how SAP helped IOI Group:

“We use the SAP Cloud Platform to connect satellite applications with S/4HANA to achieve greater business efficiency. With a strong ERP platform, our group can now continue to assess our businesses in real-time, and ensure both producing and sourcing sustainable palm oil priorities continue to be topmost within our agenda. There is no better choice in the market as SAP is the world’s leading ERP software provider with strong capabilities in finance, supply chain, and asset management while having the agility to support plantation industry-specific requirements.”

Lee notes that going forward, IOI Group’s integrated digital approach with SAP will also include other digital solutions. He said the company is in discussions with SAP to further automate and systematize time-consuming manual activities through robotic processing automation.

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