Vodafone calls on SAP to be strategic global supplier

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Vodafone has strengthened an existing relationship with SAP by confirming the application giant's status as a strategic global partner, with the aim of driving down costs and ramping up operational efficiency.

Previously Vodafone's relationship with SAP was limited to a short-term contract focused on the provision of enterprise resource planning (ERP) functions for the company's HQ in Newbury, Berkshire.

Other operating companies in the Vodafone Group were responsible for choosing their own local suppliers, meaning both SAP and non-SAP applications were in play.

The relationship has now been extended with the signing of an open-ended contract under which SAP will support Vodafone's worldwide operations by delivering business applications and services based on its SAP NetWeaver and mySAP ERP platforms, spanning the mobile giant's functions responsible for finance, HR, supply chain and management information (MI).

Vodafone is currently formulating a roll-out plan and prioritising which countries will be first to benefit from the standardised template, according to Carl Conn, global client director at SAP.

While exact financial terms of the deals have not been disclosed, Conn described it as a "substantial investment in licences." Furthermore, it is likely that the partnership will help Vodafone meet the strategic cost-cutting objectives it set itself last year.

In October, the communications giant entered a three-way marriage with EDS and IBM, designed to shave just under a third from its £560 million annual application development and maintenance overhead.

In addition to looking after some of Vodafone's core IT systems and creating code for the company's CRM and billing components, EDS and IBM were also charged with rationalising the number of application development and maintenance suppliers Vodafone employs.

"The outsourcing of this application development and maintenance work complements a series of other projects designed to reduce group overheads including the regional consolidation of data centres and the centralisation of network supply chain management," said Arun Sarin, Vodafone's chief executive when the partnership was announced last year.

"This initiative is a good example of how Vodafone is finding new ways to deliver greater cost efficiencies across the business," he added.

The ethos behind this latest announcement involving SAP follows a similar theme.

"It is important to put in place global agreements so that our operating companies can quickly and easily adopt technology solutions that meet their operational needs," said Detlef Schultz, Vodafone's global supply chain director.

"SAP's global reach and its proven technologies will help us to deliver on our ambition to improve efficiency and reduce costs right across the group."

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