A leading North American processor and distributor of metals, with operations in the United States, Mexico, Canada, China and Brazil. The Company distributes and processes various kinds of metals, including stainless and carbon steel and aluminum products.
Through a series of acquisitions, the distributor was running disparate systems for the Enterprise Resource Planning (ERP) software at three of their facilities. Having made the decision to deploy SAP ERP software throughout the corporation, they soon realized the complexity of the implementation based on their pilot at corporate headquarters and determined it would be too costly to implement, support and maintain at their other two facilities. They also didn’t want to divert the attention of their technical resources off of the SAP project to have to maintain and manage the legacy mainframe systems at the other locations.
After reviewing their technical and business challenges, we suggested they outsource their mainframe environment. We performed an analysis of their systems and developed an outsourcing arrangement that would reduce costs and improve efficiencies. The plan allowed for the technical support, console management, hardware and software upgrades, system monitoring, capacity planning, storage administration, disaster recovery planning and support, and staff retention and management.
It was important to get the foundation of the plan in place as quickly as possible. The majority of the the distributor’s IT team was located at their corporate site. It was hard to manage technical resources at the remote locations. Magenium came in and took over the staff by putting a management team in place and formalizing processes to better manage those existing resources. By installing a time tracking system, staff was better able to account for their time and Magenium was able to review that data and use it as a basis for efficiency improvements. Now having a dedicated team in place that is operating at top efficiency, management can focus on the new technology being developed at the corporate site and have their staff contribute to the strategic initiatives of the business. Additionally, Magenium devised a disaster recovery plan ensuring business continuity and now had the resources to test the plan to mitigate their risks.
By outsourcing their mainframe environment, they are experiencing the following benefits:
- Cost reduction and control – Outsourcing their mainframe support to Magenium has driven down their infrastructure costs. Magenium is able to deliver economies of scale to provide a lower total cost of ownership over a period of time. By establishing a formal service agreement with Magenium, management has a clearly defined set of expectations while maintaining control over the handling of their infrastructure.
- Increase operational efficiencies – By effectively managing the staff’s time, Magenium is able to increase efficiencies by analyzing that data and reducing redundancies. To date, staff has been reduced by 35% while keeping operations running at peak performance.
- Free up internal resources – By outsourcing their mainframe support, the technology staff at Ryerson is able to focus on their corporate strategic initiatives while Magenium takes care of the day-to-day operations of the mainframe.
- Gain access to high quality resources – Mainframe professionals are getting harder to come by. By outsourcing mainframe support to Magenium, they doesn’t have the risk that a lack of technical expertise can bring. Magenium has developed a team with a depth of expertise that would otherwise be very costly to hire and retain. Magenium has invested in training and educational programs to increase the value of their staff to deliver increased value.
- Improve business focus – Management is now able to focus on corporate strategy rather than a having to take a more tactical focus.
- Mitigate risk – By having a disaster recovery plan in place and tested, they are able to reduce their risk. Magenium has delivered 99% system uptime and 100% disaster recovery testing. With formal documented processes; they reduce their risk by having no operational ambiguity and a set of procedures that can serve as a basis for operational improvements.