"We have built a garage big enough for a Mercedes, but we're still driving a Golf at the moment. We have enough free space to park the Mercedes comfortably when we get it in the future. We can do that in terms of IT technology. And we will always need to have a partner like COSMO CONSULT for our system, because there are plenty of ideas, and COSMO CONSULT is very innovative and very far ahead of the curve."
Heiko Loroff, General Manager Sächsische Binnenhäfen Oberelbe GmbH
The Sächsische Binnenhäfen Oberelbe GmbH (SBO) was founded in 1990 as a successor to the VEB Binnenhafen. The economic area that it now covers for its customers stretches across two countries and four of Germany’s Länder, as the country’s federal states are properly called. The area includes the Berlin-Brandenburg metropolitan region, the Länder of Saxony-Anhalt, Saxony and Thuringia as well as parts of the Czech Republic. Regular service lines via rail and inland waterway provide reliable connections to the various international ports. Its own six ports along the Upper Elbe make up the strong backbone of the port group. These include Dresden, Riesa, Dessau-Roßlau and Torgau in Germany as well as Děčín and Lovosice in the Czech Republic. The SBO has also taken over the operation of the port of Mühlberg. In 2017, its 160 employees generated a turnover of 23 million euros.
The ports are trimodal, i.e. they are used by all three modes of transport - rail, trucking and ships. "This is one important reason that companies decide to come here. With three modes of transport to choose from, they can be sure that they can move their products at any time. This infrastructure is equivalent to an industrial area," explains SBO’s managing director Heiko Loroff. The ports are always close to a city center or even actually in one. But where are there still industrial areas in city centers nowadays? In recent years, ports have been able to transform themselves from being companies that are only involved in moving goods into modern logistics service providers.
This has also changed the demands that are being placed on ports. It used to be that the kinds of employees were crane drivers, stevedores, switchers and the like. Now the kinds of employees are lawyers, architects, truck drivers, train drivers, metalworkers, expert welders, and commercial specialists for industrial services and for forwarding. "We employ people in over 50 job profiles in our ports in Saxony alone," says Loroff. This is because the operation of a container terminal also means providing ancillary services. What could be more natural than repairing a defective container on site? Or converting containers to be used for special transportation needs? "And if you can repair containers and make them part of your business, you can do the same with truck-mounted swap bodies, which is why we do that, too," says Loroff, describing other kinds of activities.
The port network with its seven ports is one of the largest in Europe in terms of area covered - from Berlin to Prague, and from Leipzig to the Polish border - although it is smaller in terms of turnover. “In Riesa, for example, our main business consists of container transports. In Dresden it is heavy cargo of up to 600 tons, which can be moved, traded, stored and pre-assembled there. In Torgau there is the typical multimodal port with the typical goods to ship. "That is why we need a modern IT system that can work with the management technology, i.e. IT solutions for steering, property management, renting, leasing, and refurbishment, including revision plans and construction plans. Parallel to this, there is also an operator model that must include all the various processes," said the managing director concerning the requirements.
In 2013, Loroff realized that something had to be done in terms of IT: "When I asked the sales department to present all the customer structures such as sales and inquiries or the relationship of inquiries to sales in a clear way, my request could not be fulfilled". For that reason, the first thing we did was to introduce a CRM system. This came about through a personal contact to an employee at Microsoft Partner COSMO CONSULT. "But we quickly saw that we could not solve company’s specific problems with it," recalls Loroff. Then the process between the CRM discussion and the ERP implementation took another year and a half, because we had to analyze exactly what we really needed, see which ERP system suited our company and find out which company might be the right IT partner for us.
After the sole shareholder, the Free State of Saxony, gave its approval, the SBO first overhauled the entire server structure on its own and set it up fresh for it to be able to integrate an ERP system. Then, its management approached the Dresden branch of COSMO CONSULT, Europe's leading Microsoft Dynamics Partner and a global provider of end-to-end solutions as an IT consulting firm, to discuss the possibilities of an ERP implementation that would fit SBO’s various requirements.
The requirements included complying with IT security legislation. The Free State of Saxony required a report reviewing this issue prior to the introduction of the ERP system. In addition to this, the SBO manages a lot of customer data, mostly information about what is transported when and where, i.e. information that would be very interesting to the market’s various competitors and thus needs to be handled very carefully. For this reason, each customer needed to have their own interface for the ERP system. "And not all our customers use the same IT system, so it is important for us to have a system that is so open to the outside that our customers can connect to and interact with without much effort via interfaces," added Loffer.
Finally, the ERP standard Microsoft Dynamics NAV was introduced on 1 January 2015 with COSMO CONSULT as a partner. In addition to the wide range of industry solutions and add-on solutions, regional proximity also contributed to the choice of the IT partner. "I think it's important to have a personal familiarity with the people involved in the project. And with COSMO CONSULT in Dresden, we have a partner with the resources to help us quickly," says Loroff. One reason for the choice of the ERP system was Microsoft's market position as a large company, that comes with the promise of continuous availability of updates and services, even if there were to be a change of IT partners. SAP was not an option for the managing director because he was familiar with the software and the effort necessary to implement it from his previous work in a production company. In addition, the company also wanted to make it easier for employees to master a new system by at least giving them a familiar user interface in the form of a Microsoft product.
And there was another thing that was important to Loroff: "We wanted to stay as close as possible to the standard. As COSMO CONSULT showed us, a lot of what we needed was already there in Dynamics NAV. And from this system we learned what structures we needed for everything to work in the best way possible.” Right from the start, SBO worked with its IT partner to define the goals that they wanted to achieve in the end, such as producing comprehensible and transparent budgets and annual financial statements quickly and efficiently. "We wanted the he actual business figures to be available within a few minutes, without having to go through many databases and Excel lists. And we were successful with that", the managing director said contentedly. It should also be mentioned that the software is multilingual, and it will also connect the ports in the Czech Republic starting at the beginning of 2019.
"We are now very transparent in terms of data, which is particularly important to our shareholder, the Free State of Saxony, which expects us to report on a continual basis," explains Loroff. The SBO is one of the promoters of economic development in Saxony tasked with making life as easy as possible for companies in the Free State so that they can want to come, hire employees, then establish and expand production sites. It is therefore necessary to regularly document how many trains actually come and go, how many containers are transported and how much heavy cargo is handled. The SBO publishes these figures every month in a comprehensible and transparent format.
One very important tool is COSMO CONSULT’s cc|project. This tool makes it possible to create projects, view the entire process as a whole, keep an eye on consequences for sub-processes and compare cost points. With this tool it is possible to create a project for a single truck transport or for the reconstruction of a rail system. At the same time you can also see an overview of the entire annual contract with a major customer. Since a lot grants and subsidies are involved, the SBO must keep an exact record of how the funds are used. "It works great. In all areas, we can represent both our normal tasks and our special tasks as individual projects. This is an excellent and comfortable position for us to be in", says Loroff in appreciation of the tool.
As managing director, however, cost accounting is one of the most important add-on tools for him. He established business controlling in the company, and with this tool the controller is able to create business plans using cost points. The company consists of two areas. First there is the economic are, which is the operational service, and then there is the infrastructure. "If you want to take a budget through to contribution margin accounting for the company, you have to be able to allocate costs to the individual process from management. COSMO CONSULT's cost accounting is perfect for this," says Loroff. Because it has numerous buildings and facilities, the SBO also has a high level of administration compared to a manufacturing company; these costs also have to be allocated, either to the sister companies, to the real estate or the facilities, to operations, in some cases also to multiple entities. "Sometimes a railway operations manager is also a locomotive driver," explains Loroff.
For the managing director, the biggest challenge was to be knowledgeable about all processes, to be able to analyze them and then integrate them into the company’s management. With Microsoft Dynamics NAV we now have the overview and transparency we need as well as the certainty that we have all the data in the system. "Our strong growth in recent years is also due to the fact that we now have an IT infrastructure that functions so well that we can control and simultaneously manage many more processes," says Loroff. He also puts this in the context of future development: "We have built a garage big enough for a Mercedes, but we're still driving a Golf at the moment. We have enough free space to park the Mercedes comfortably when we get it in the future. We can do that in terms of IT technology. And we will always need to have a partner like COSMO CONSULT for our system, because there are plenty of ideas, and COSMO CONSULT is very innovative and very far ahead of the curve."