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OHL ŽS: The New Information System Is a Pilot Project for the Global Company

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A multidisciplinary construction company with more than sixty years’ tradition; one of the largest and most important construction companies in the Czech Republic.

Task

To deploy Microsoft Dynamics AX with the aim of securing support for information processes in the company.

For OHL ŽS, the previous decade was characterized by a significant annual increase in sales; this development took a downward turn in 2010. The persistent depression in the European Union and related government austerity programmes in the Czech Republic and elsewhere translated into a significant decrease in orders from the public sector in the last two years. One of the strategies that the company adopted to stabilize and facilitate its sales growth was the pilot deployment of Microsoft Dynamics AX for the whole OHL Group in Europe, America, and Asia.

Solutions

Installation of the new solution concerned 501 users in total. The solution covered 80 major processes in the company and interconnected the construction and non-construction production.

Users gained access to the information system comprising the MS Dynamics AX applications and an interface, and integration with specialized software for storing documents in the archive and calculating construction item costs and payroll wages. The solution is also linked to a data warehouse and controlling statements.

The advantages of the new solution include the following:

  • logical division of a construction project into a number of activity steps that is easy to grasp (about 30); the activities are usually realized concurrently or in turn
  • determination of target parameters of a construction project and subsequent monitoring of planned and actual values according to the terms and conditions of a concluded contract; determination of presumed profits/losses (revenues and consumed resources) and of the optimal solution, such as “what if” scenarios when there are changes in technology
  • separation of an itemized budget for the client (the methods and criteria for delivering performance and issuing bills to the investor) from the supplier budget (the time schedule and costs of implementing a construction project)
  • design and implementation of accounting processes according to CAS and IFRS standards without duplicate transactions for individual accounting areas

Achievements

The unified information system covers processes that were not implemented in IS before, such as CRM and bid optimization. The approval process has also been fully implemented within IS.

The main benefits include:

  • increased efficiency of company-wide processes
  • AX and CRM are interlinked, which improves business processes in the company and the acquisition of new building contracts
  • increased flexibility in change management
  • facilitated adaptation to new market conditions
  • one solution for the whole OHL holding group
  • the company has its own catalogues of resources (materials, subcontracts, self-manufactured goods, mechanization) in place
  • the possibility of sharing resources, including external ones
  • transition of the whole OHL ŽS to a vertical company managing its construction activities by means of projects; processes were previously implemented for monitoring profits and losses and efficiency on the basis of cost centre accounting

The estimated ROI of the project is 18 months, mainly due to the centralized procurement of materials and subcontracts. On the basis of periodic evaluation of the actual progress as compared to the planned construction project, the risk of unprofitable construction implementation was reduced.

Business Impacts

Among other things, transition of the whole OHL ŽS to a vertical company managing its construction activities by means of projects, increased efficiency of company-wide processes, and increased flexibility in the change management.

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Authors

Richard Nikel

Department Director - Entreprise Application Software

+420 531 025 284

richard.nikel@rsm.cz

Martin Osoba

Department Director - Custom Development

+420 531 025 311

martin.osoba@rsm.cz

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