Leading steel manufacturer in Brazil leverages substantial savings to accelerate digital transformation initiatives
LAS VEGAS, June 3, 2019 – Rimini Street, Inc. (Nasdaq: RMNI), a global provider of enterprise software products and services, the leading third-party support provider for Oracle and SAP software products and a Salesforce partner, today announced that Grupo Ferroeste, Brazil's leading manufacturer of steel, fuel and energy, switched to Rimini Street support and is estimating a R$2 million of savings in total support costs through 2025. Grupo Ferroeste moved to Rimini Street support for its SAP ECC 6.0 system in 2018. By switching to Rimini Street, the company realized savings of 50 percent in its annual maintenance fees and now receives a premium-level, ultra-responsive support for its current, robust SAP system for a minimum of 15 years from the time it transitioned to Rimini Street. In addition, Grupo Ferroeste has been liberated from the vendor's dictated roadmap of continuous upgrades and updates, and is able to move forward with their own business-driven IT roadmap. As part of their roadmap and by leveraging their substantial maintenance savings, the company has restructured its technology department and has planned for several cloud and digital transformation initiatives.
Improved Support Model Optimizes Efficiency
Grupo Ferroeste was created in the state of Minas Gerais 40 years ago and includes companies such as AVB, CBF Indústria and CVB. The company operates mills in the steel, fuel and energy segments, producing steel, pig iron, alcohol, air gases and cement in a 24×7 model and cannot afford to be impacted by IT issues. Reducing costs, increasing productivity and innovating for continued growth are essential pillars in Grupo Ferroeste's business strategy. The organization determined it needed a change to fully meet these goals and began a series of initiatives to restructure the IT department and improve internal efficiency.
During this restructure, Grupo Ferroeste realized their enterprise software vendor maintenance fees were extremely high – about 22% of the total cost of their license agreements. Furthermore, the service from the vendor seemed very slow – the vendor would take days or sometimes weeks to respond to issues raised – and the company was in need of an agile and efficient partner to support its ERP system. After reviewing third-party support providers, Grupo Ferroeste was able to show their board the financial impact and strategic capabilities of working with Rimini Street. Additionally, the organization spoke with several Rimini Street clients in Brazil about the benefits of switching from SAP to Rimini Street for ERP support, and how the move would accelerate Grupo Ferroeste's business-driven IT roadmap versus the company being locked into a vendor-dictated plan. Now, with this improved support model, Grupo Ferroeste can better focus its resources and direct its investments toward strategic initiatives and business transformation.
"We needed efficient support as well as a strategic partner to help accelerate our digital transformation journey, and I was seeing a market trend of switching to third-party support to alleviate the disadvantages of vendor control and wanted to take advantage of this opportunity," said Enéas de Alcântara Silva, IT manager at Grupo Ferroeste. "The slow response from the vendor was causing too many delays internally, but now we have ultra-responsive support from Rimini Street, and have experienced response times in as little as 1 minute regardless of the type of problem, which has been a nice surprise. Everything is done directly with a dedicated, experienced technical specialist, which is a great differentiator in customer care. If an organization is looking to move away from vendor maintenance support, I would highly recommend considering Rimini Street."
As with all Rimini Street clients, Grupo Ferroeste was assigned a senior level Rimini Street Primary Support Engineer (PSE) – each Rimini Street PSE has an average of 15 years' experience. Grupo Ferroeste also receives Rimini Street's industry-leading service level agreement (SLA) guaranteeing access to a team of local engineers 24/7/365 to address any support issues, and a 15-minute response time for Priority 1 critical cases.
Reducing Spend with Added Services
In addition to a vastly improved support model and the ability to optimize IT resources and leverage significant savings, another benefit of moving to Rimini Street is the Company's support for Brazil tax, legal and regulatory updates. These complex updates are provided through Rimini Street's innovative combination of patent-pending tax, legal and regulatory technology, a proven methodology, and ISO 9001-certified development processes to ensure clients receive accurate, high-quality deliverables.
"If we had continued with SAP support, we would have to pay additional consulting costs to adjust to the new tax, legal and regulatory obligations at the time, such as REINF and Nota Fiscal Eletrônica 4.0, the Electronic Invoice," continued Enéas de Alcântara Silva. "And now, with Rimini Street, these fiscal projects are developed within the support contract itself, with no additional cost."
"Grupo Ferroeste has been able to experience Rimini Street's premium level support, which was vastly different from what they had experienced with the original software vendor, and were also able to free up ample savings to put towards digital transformation," said Edenize Maron, general manager, Latin America. "As with so many of Rimini Street's clients, Grupo Ferroeste was able to unshackle themselves from vendor lock-in and put into motion their business-driven roadmap, while at the same time increasing their productivity internally."