SAP lands Crown Fibre business

“It was a spectacular year,” Mr Riley said – noting that when he said revenue doubled, it was over 2008, a strong year, rather than the recession-hit 2009, which would have made an easier comparison.

His boast may have some local body politicians hiding under their desks.

For SAP’s signature project was a massive ERP (enterprise resource planning) contract for the new Auckland Council - business won without competitive tender by dint of the fact that four of five merging local bodies already used SAP systems.

“That was certainly a significant deal and an enormous project,” Mr Riley told NBR (other major customers include Fonterra; Contact Energy, Frucor, NZ Post, and the New Zealand Police).

The managing director would not put any numbers on the project but Auckland Council chief executive Doug McKay has gone on the record saying that the SAP system cost $54 million. 

The amount spent on IT by the council during its transition period has raised eyebrows. It certainly seemed to catch councilors on the hop at a public meeting last month (and NBR continues to hear rumbles about teething problems from council insiders).

But Mr McKay said the $500 million, 10-year IT budget would work out less than the $90 million a year collectively spent by the seven councils that merged to form the super city

SAP’s Mr Riley focuses on the fact that the Auckland Council ERP project was up and running on time. It was a legislated deadline (October 1, last year), which couldn’t be missed. “We were expecting someone to miss their payroll or be paid wrong but everybody got paid,” he said. “There was no plan B.”

A second major project was being implemented for Auckland Regional Transport (for a reported $2 million), which came in ahead of schedule, Mr Riley said.

He reiterates that SAP worked on the Auckland Council project with partners, who helped meet the deadline. NBR is sure he is thankful to the partners – and perhaps gently pointing to the fact that consultants in orbit around the council project racked up some of the fattest bills.

UFB opportunities
Now, SAP is casting around for further growth areas. One, already identified, is utility companies – especially those involved with the government’s $1.35 million ultrafast broadband project.

In this area, SAP has landed a “multimillion deal,” revealed first to NBR, with WEL Networks (the old Waikato Electric Power Board).

WEL was the lead company in the Ultra Fast Fibre consortium (also including Velocity, Waipa Networks, Hamilton Fibre Network), which landed a contract covering six of the 33 UFB regions: Hamilton, Tauranga, New Plymouth, Whanganui, Hawera and Tokoroa).

With partner Soltius, SAP will implement new financial and asset management systems for WEL, beginning this month. 

The new SAP software will replace systems from Microsoft, Maximo, JDE and Microsoft.

The deal comes on top of an earlier contract with infrastructure engineering contractor Connetics, owned by Orion (in turned owned by the Christchurch City Council, which also owns local UFB contract winner Enable Networks).

Connetics is based in Christchurch, but contracts nationally. 

As companies like WEL and Connetics expand, SAP sees a role to develop new warehousing, inventory, warehouse, inventory management systems.

Beyond the lines business and its crossover with Crown fibre, SAP has had a win in another utility area, landing a major project with Auckland’s WaterCare Services. Mr Riley said his company was chasing transformational projects. 

And with local bodies and utilities around the country being turned on their heads, there’s no shortage of prospects.