Construction giant migrates to Cloud to support expansion

    2777
    Skyway Stage 3 construction. (Photo courtesy of peri.com.ph)
    Skyway Stage 3 construction. (Photo courtesy of peri.com.ph)

    DIGITAL transformation is the only way that the 88-year-old EEI Corporation, known for its now iconic blue logo plastered all over the Skyway extension and many other construction projects—to be able to cope with the demands put upon them—building infrastructure critical for the country’s growth and development.

    Engineering Equipment, Inc. (EEI) started out as Engineering Equipment and Supply Company (EESCO) and was established in 1931 by an American named Ray Parker. It initially focused on distribution of mill equipment for the mining industry. It later diversified into the steel fabrication business, building sea vessels, as well as manufacturing of truck bodies, trailers, and structural pipes. In 1964, EESCO changed its name to EEI. Today, it is part of the Yuchengco Group, a conglomerate with interests in banking, financial services, and property development.

    Revenues for the company amounted to P22B in 2018. Its phenomenal 35 percent growth from P15B in 2017 somehow made it vulnerable the complications in project preparation, deployment and monitoring because of the amount of work it needs to do. In preparing for the onslaught of projects it will be receiving due to the Build! Build! Build! program of the government, EEI decided to go to the Oracle Cloud.

    “We had already computerized and automated our systems for many years. Using an on-premise system we are able to monitor at least those functions that are close to us. This system has quickly become antiquated because of the speed by which the company needed to grow and cope up with both the size and the scope of the projects we will be handling,” Ferdinand Sia, CFO, EEI says.

    The large projects that Sia mentioned includes the P25B MRT-7 project which started in 2014. Added into the portfolio is the still ongoing was the Skyway Stage 3 Project, part of an elevated highway system tagged as the Metro Manila Skyway. There are hundreds of other smaller project in the pipeline here and abroad.

    Moreover, it has to handle at least 1,500 transactions daily, automate project management and monitoring, and serve its more than 23,000 employees, manage an equipment yard in Cavite and over 40 warehouses spread across the country.

    “The complexity has multiplied tremendously because of the size of the projects. And our systems were not ready then to handle this big an opportunity. The risks associated with a less-than-optimal management approach are severe. They include derailed budgets and schedules, which cost millions of pesos,” Sia mentioned.

    “To be profitable, we have to keep track of expenses. And on big projects, say something costing P25 billion, it’s easy to overspend. Accurate and timely financial information is very important to be profitable,” Sia points out as he mentioned how using Oracle Cloud redefined the way they did business and changed the speed and accuracy by which reports are generated and cost cutting is done.

    He said that for years, EEI used Excel to create a cost-variance reports, among many others. This approach worked for smaller projects. Mega-projects, posed a totally different scheme. Operating out of sync means that the manual system would be onerous, time-consuming, frustrating, and prone to inaccuracy.

    Using human compilers to gather data from multiple sources often resulted in conflicts of veracity. It was such a big challenge that despite having three full-time employees per project, it still took about three weeks to accomplish a cost-variance analysis, for example.

    The lack of a central repository of accurate data, the heart of an ERP, limited EEI’s ability to keep close tabs on projects. Monthly reports took about three weeks to generate. Yet, it had to be done. It was the only way EEI executives could tell if a project was veering off-track.

    “Any financials that are three-to-four weeks old are not very useful,” Sia admits.

    To help bring greater visibility, transparency, and speed to its business, EEI decided to upgrade its on-premises Oracle E-Business Suite to the Oracle ERP Cloud. The ERP suite included Oracle ERP Cloud, with Cloud Services for financials, purchasing, sourcing, procurement, contracts, project management, inventory management, project financials, project contract billing, supplier portal, and self-service procurement.

    The enterprise-wide project was spearheaded by Sia and a 30-man team, drawn from multiple departments, who would work full-time to drive the project to success. It took only 11 months to get from project start to go live, but even a shorter time to move from on-premise to Cloud.

    Using Oracle Cloud platform and the attached systems, EEI could now generate reports that used to take 22 days in just 2 minutes. Preparing financial statements has gone down from three weeks to four days. 120 dedicated accounting staff down reduced by 20 people who were re-assigned elsewhere. And more importantly there is greater visibility, transparency and governance. Everything is captured and automated, with less chances of human error.

    Savings from time spent developing reports amounted to about P20M to P30M a year from processing of report from about 40 project sites, and over a hundred employees managing the sites.

    Procurement processes have also been standardized cutting confusion and indecision, while improving speed and agility. EEI now can automatically get quotations and bids making it easier for the procurement team to get the best supplier, with the best cost, and the best payment and delivery terms.

    “Digital transformation is serious business. It’s not a walk in the park. Managing people.

    That’s key. At the end of the day, systems and processes are all about people,” Sia said in reference to the Oracle ERP Cloud and how it did not fail to deliver on its promise.

    “We are very happy that we are able to get EEI moving up to the Cloud. We like to be challenged by a company such as EEI, who is a long-time partner of ours, and we are happy to say we delivered,” Mina Lim, Country Managing Director, Oracle Philippines said.