MICROSOFT NAVISION ELIMINATES MANUAL PROCESSES, BOOSTS PRODUCTIVITY AT SABAH SOFTWOODS

SITUATION
Sabah Softwoods Bhd plays a special role in the forestry sector of Malaysia’s eastern state of Sabah. It was incorporated in 1974 to establish commercial forest plantations as part of efforts to sustain in perpetuity Sabah’s forest resources.

Since then, Sabah Softwoods has become the biggest forest plantation developer in Sabah. A member company of the state-owned Yayasan Sabah (Sabah Foundation), the company oversees over 60,000ha of forest and oil palm plantations in the Tawau district.

Sabah Softwoods’ 12 plantations are located in the Brumas and Kalabakan areas, some 70km from its headquarters in Tawau. Timber from its forest plantations are typically used in the pulp and paper, and furniture industries.

Since the 1980s, Sabah Softwoods’ core management and operations functions have been handled by various stand-alone computerized systems running on the Microsoft DOS platform. These applications covered functions such as accounting, payroll, stocks inventory, budgeting, machine running costs, fixed assets, production systems and job orders.

The systems were developed in-house and were running on a database system named Revelation. A central processing unit (EDP Department) was set up at the HQ to process all the company’s data. Information from the seven oil palm estates and five plantation trees estates had to be sent periodically to the HQ through a flow of physical documents.

Here, the data had to be manually input for processing and, inevitably, inputting errors crept into the system while bottlenecks in processing were not uncommon. And after the data was processed, the flow was reversed as piles of management reports were printed and sent back to the managers in the various estates.

The individual stand alone systems made data integration very difficult, explains Victor Chin, ICT Manager of Sabah Softwoods.

Information from the legacy systems could not be easily read by analytical tools. For example, data from the DOS-based systems had to be converted by a third party application to the ASCII format before it could be exported to Microsoft Excel. In some cases, even this could not be done and this resulted in double entry of data.

“Data from the various estates would also take quite a while to reach the HQ. This resulted in a lack of timely information and hindered our top management in the decision making process,” he adds.

The limitations of the systems prompted the management to convert its two-decade-old DOS-based applications to the latest Windows-based technology. “We saw the need to link up all the databases from the various estates, improve the systems data integration and have information readily available to our key decision makers,” Chin recalls.

SOLUTION
After evaluating ERP systems from several vendors, Sabah Softwoods selected Microsoft Business Solutions – Navision, a business solution used by over 35,000 small to mid-sized companies in over 50 countries.

“The proposal to deploy Navision by Microsoft partner Cyansys Bhd was the best among the three which we received,” says Chin, adding Navision met most of Sabah Softwoods’ stringent criteria. “Its capabilities were quite impressive,” he adds.

Cyansys was engaged to oversee the deployment as well as customize additional functionalities where required. According to Chin, the implementation proceeded smoothly. The deployment commenced in early 2005 and Phase 1 was completed in less than 6 months.

The Navision modules currently deployed include General Ledger, Accounts Receivable, Accounts Payable, Purchasing, Sales, Inventory, Machine Running Cost and Fixed Assets. The Navision solution runs on Microsoft Windows Server 2003.

Under the 2nd Phase of the Navision project, scheduled to be rolled out by mid-2006, Cyansys is working to customize certain functionalities relating to estate production. Chin commends Cyansys for doing “a good job” in implementing the Navision solution.

Sabah Softwoods is also in the process of linking all its 12 plantations to the Navision system at the HQ through satellite link (VSAT). The link up is easily facilitated given the capabilities of the Windows Server System, Chin adds.


BENEFITS

Eliminates Inefficient Processes
Navision has transformed work and business processes in Sabah Softwoods, eliminating inefficient and unproductive processes. Firstly, it has virtually stopped the flow of paper-based source documents from the estates to the HQ in Tawau and the reverse flow of reports to the estate managements.

“The Navision system enables us to network the computers from our 12 estates to the server at HQ, allowing us to do data integration, data retrieval and reduce data duplication. Business processes have improved tremendously,” Chin explains.

The highly integrated solution has effectively rendered the central processing unit redundant. With Navision, there is no longer a need for the EDP Department staff to input data from a mountain of documents into various DOS-based systems. “We have redeployed the four central processing unit staff to handle other higher value-added tasks,” says Chin.

He affirms that Navision has helped Sabah Softwoods attain its goal of using information and communications technology to achieve higher levels of efficiency and productivity in its business operations.

Speeds Up Financial Consolidation
The Navision system has speeded up the processing and consolidating of financial information. The HQ staff no longer needs to spend long hours re-keying and in reconciling financial data from various stand-alone systems used by its estates.

Under the old system, financial reports would only be available some three weeks after the end of each month. This meant that the management usually had to wait three weeks before it could get information relating to the production and financial performance of the various estates.

“If they wanted the latest figures, they would have to call the individual estate managers and get them to manually compile the information,” explains Chin.

With the Navision system linked to all the estates, the HQ is able to access the latest production-related figures from the estates. Likewise, the estate managers would also have online access to the relevant reports pertaining to their operations.

Facilitates Decision Making
Navision has put at the disposal of Sabah Softwoods’ senior management and estate managers a powerful tool for analyses and decision-making.

Because Navision modules are tightly integrated, the solution provides the management with greater insight into every area of Sabah Softwoods’ business operations. “There is very efficient data integration from the Purchasing, Sales, Account Receivables to Account Payable modules,” says Chin.

“The accountant is also very happy now that the data from the ERP (Navision) can easily be copied and pasted into Microsoft Excel for further analysis,” he adds.

“Every estate manager now has a computer terminal link to the Navision server. This will enable the managers to access information relating to their production, field maintenance costs, and so on.

“They can monitor this through the up-to-date data that is keyed into the Navision system by their staff. They no longer need to rely on reports from the Central Processing Unit in Tawau,” Chin explains.

As Navision’s integrated on-line management information system (MIS) is very user friendly, this represents a huge convenience to the top management team, Chin adds.

A Boost to Profits
With the timely and accurate information provided by Navision, the managers are able to manage their estates better as well as improve efficiency and effectiveness.

“With Navision, estate managers have information relating to costs, production, yield and machine running costs at their fingertips. This helps them pinpoint problems areas and to take necessary corrective actions.”

“This, in turn, will lower the field maintenance cost and improve the yield of the crops (oil palm),” explains Chin.

“Navision enables each estate to do their very best to get better yields and this will result in better income and higher profits,” he adds.

Chin concludes by saying that the strategic use of IT in the form of Navision has provided Sabah Softwoods with a vital competitive edge. “We have no doubt we made the right decision in deploying Navision. It is an integrated and powerful solution which meets all our requirements.”