Onespire Ltd.’s involvement in the MOL-MOHU project

The history of the Hungarian national waste management system’s development, our tasks and experiences.

Onespire MOL-MOHU project featured image

Introduction

Our company, Onespire Ltd., has been actively involved in the design and development of the IT solutions and processes that form the basis of MOHU MOL Waste Management Ltd.

In this article, we describe the complex and, in many ways, unique activities that our experts have been involved with, and which have created the diverse waste management system that is now an integral part of our lives.

We take an overview of the MOHU-MOL project, the underlying systems, the specificities and the professional- and project management challenges that we faced and our answers to them.

Our cooperation with the MOL Group

Our company’s key client is the large Hungarian oil and gas corporation, and in recent years we have supported the group’s operations in several SAP projects.

Our experts have also contributed to the MOL SAP Ariba implementation project, where our team was responsible for the integration of the new solution with the existing SAP Data Warehouse, as well as supporting the implementation of the contract-to-contract and the supplier approval processes.

Our next significant project was the MOL-MOHU project, which started in 2021 and will be described in detail in this article.
We are proud of our continued cooperation with MOL Group, one of the largest companies in Central and Eastern Europe.

MOL-MOHU’s goals and plans

MOL Plc established MOHU MOL Waste Management Ltd. (MOHU) in 2023, after receiving the Hungarian waste management concession for 35 years to manage approximately 5 million tons of municipal solid waste per year. MOL’s strategic partner in research on chemical recycling technologies and sustainable fuels is the University of Pannonia in Veszprém.

MOHU’s aim is to develop a competitive, sustainable and transparent waste management system that prioritizes recycling and energy recovery from waste.

The main objectives of MOHU are:

To increase the recycling rate of municipal waste from 32% to 65% by 2040.
Reduce the proportion of material going to landfills from 50% to 10%.

The main activities and their chronological overview:

1 July 2023: Official start of the concession.
1 January 2024: Introduction of the national compulsory return system, which required the purchase and installation of reverse vending machines.
End of 2025: Distribution of more than one million new collection containers to the general public, facilitating the selective collection of waste.
By the end of 2028: The construction of a facility capable of recovering at least 100,000 tons of municipal solid waste per year for energy recovery within the first five years.
By the end of 2033: Investment of HUF 185 billion over 10 years.

MOHU’s activities also include the construction of 83 new waste yards, the establishment of more than 20 super-selectors, and the development and expansion of the fleet of garbage trucks in the country. These actions will greatly contribute to increasing the rate of selective waste collection and recycling in Hungary.

History and preparation of the MOL-MOHU concession

In the background, preparatory activities started well before the formal start of the concession in July 2023.

The preparatory phase of the new waste management system started as early as 2021, during which our experts examined international industry standards and existing foreign solutions, assessed which systems would be worth using and how the IT architecture should be designed.

We then built a roadmap based on these foundations, covering a period of about five years.

A high-level overview of the systems of MOL-MOHU

The actual implementation of the waste management back-end systems started in 2022. The main components of MOHU’s current IT architecture are as follows:

SAP ERP: finance, invoicing, accounting.
One Stop Shop Waste Tracking: tracking of waste, recording of measurement data.
Salesforce: customer service, business logic, analytics management.
Deposit and Return System: waste return system.
Legacy systems: solutions inherited from NHKV.
Business Intelligence: analytics and reporting.
MuleSoft: middleware for data flow between systems.

MOL-MOHU has organized the activities around the individual systems in the form of projects. Our company, Onespire Ltd. is responsible for SAP, Salesforce and MuleSoft projects, the latter solution we delivered in collaboration with our partner, the experts at Attention CRM Consulting Ltd.

Introduction of the waste management system’s components and specifics

The actual implementation of the architectural elements of MOL-MOHU started in October 2022, initially with the basic SAP system.

At the beginning of 2023, the One Stop Shop and Salesforce systems with partner registration were launched, when the MuleSoft middleware solution was also implemented with the support of Attention CRM Consulting Ltd.

Then, in July, the integration of Waste Tracking, SAP, Salesforce, Business Intelligence and legacy applications was completed with full functionality, effectively marking the kick-off of the MOHU concession.

And in January 2024, the Deposit and Return System went live, with the collection of bottles starting in June. However, prior to this, preparations had to start as early as 2021 before the roll-out by the project participants.

Characteristics of the MOL-MOHU project

Lack of regulatory framework

The main challenge for the projects was that although the EU and national level social and political expectations were given – to increase the recycling rate of municipal waste from 32% to 65% and to reduce the landfill rate from 50% to 10% by 2040 – the actual regulatory framework was not available in time to meet the high-level expectations.

Therefore, a new organization and all its processes had to be set up and developed without the legal and regulatory provisions defining the exact conditions of operation being in place when the work started. The activities to be carried out, the flows of materials to be managed and the range of public and business partners were not known.

As the business processes were not defined, and the organization did not have a clear understanding about the activities it would have to perform, the IT background could not be developed in the usual way – assessing business requirements, documenting these, and then mapping those requirements into the selected IT solutions.

Tight deadlines

Although the exact regulatory environment was not available at the start of the systems design, the organization nevertheless had to meet very tight deadlines throughout the project.

Time was therefore a constant critical factor throughout the project, which created additional challenges for all involved.

Managing system-based cross-project processes

The MOL-MOHU project is a highly complex solution from an IT point of view, with a large number of system components forming the software architecture.

This naturally requires a significant number of applications, vendors and expertise, and the necessity to coordinate them.

The organization has chosen a systems approach to segmenting the task, which has allowed each project to be staffed by internal and external people who can focus on the solution.

However, as a consequence of the system-based projects, the seamless development of activities across software and the delimitation of processes was not always done in time at the beginning, and we had to pay special attention to this.

Given that 95% of the processes are also affected by the SAP solution we manage, it was necessary to take on some sort of process coordinator role.

Adaptability of foreign solutions

We also looked at the possibility of modelling MOL-MOHU’s processes and IT systems on existing foreign examples, for example from Germany or Austria. In Germany, all waste management companies work in the same way, using SAP for Waste and Recycling. This system covers all the processes involved, including planning the optimal route for waste collection vehicles, planning the work schedules of the staff required for the route, substitutions, tracking the type of waste picked up, the weight, dumping weighing data, etc., so that all data is entered into SAP.

However, the German solution is on one hand regional, i.e. not one company but several are carrying out the tasks, and on the other hand it does not involve subcontractors, but its own staff and equipment. However, MOL-MOHU is currently subcontracting these operational tasks, so there is currently no need for a central process management solution at this level. The subcontractors are simply expected to report data on a monthly basis, on which the financial settlement is made.

MOL-MOHU’s role includes supervising permits, harmonizing fees, collecting data, whitening the market and standardizing processes. Because of these fundamental differences, we had to develop a completely unique solution to cover these specific needs.

The solution chosen by us

Adapting standard solutions

Therefore, the approach we have taken was to try to use SAP standards as a starting point, so once MOL-MOHU is established as a company, the employees can start working and perform their basic tasks such as hiring, paying wages, and invoicing.

First, we installed a SAP solution with limited functionality, consisting of financial (SAP Financial Accounting, SAP FI), controlling (SAP Controlling, SAP CO) and HR (SAP Human Capital Management, SAP HCM) modules. In addition, minimal additional functionality was implemented, almost entirely using SAP standards.

In October 2022, when the organisation became operational, it started using this basic framework. At the same time, the recruitment and hiring of additional staff started, and the legislative environment continued to evolve.

However, the specific, detailed business requirements were not available even then.

Minimum Viable Product approach

Our experts at Onespire Ltd. worked together with the MOL-MOHU team to identify business requirements and processes that, based on the information we had about the regulatory environment at the time, were likely to meet the final legal and regulatory directives.

So, we had to start designing a complex end-product that could not be precisely defined, so we used the Minimum Viable Product (MVP) methodology to design the sub-systems. An MVP is an operational product with limited functionality, that can satisfy a part of the requirements in its given form.

First, the MOL-MOHU staff defined the business requirements for us, which at that time were based on the non-final versions of the regulatory environment, and therefore partly still based on assumptions. Where complex, difficult and uncertain requirements were involved, we tried to formulate together a set of basic expectations as elementary as possible, which we could then refine, develop and finalize as necessary, once the legislation came into force.

At the same time, we presented the standard logic and processes of the system, our industry-specific experience, and then mapped the agreed minimum requirements into the solution.

In addition, we also conducted a GAP analysis during the above activities, collected and recorded any discrepancies, gaps, uncovered requirements and managed them in an agile backlog during the project implementation.

Our goal was to have at least one working core process in each area that could serve the business requirements and processes, for which the final form was not yet known.

Had we mapped more specific, complex, but at least partly assumption-based business requirements into the solutions, there would have been a much greater chance that the final legal provisions would not have been met. In such cases, the considerable amount of work invested might have been rendered completely unnecessary.

In comparison, a simpler solution, which of course requires much less effort to implement in a given system, typically only has to be supplemented or modified, even if the legislative environment changes.

And once the final legal framework is in place, the more complex requirements and business logic that are actually required can be easily and cost-effectively developed, without risk.

Over time, we learned that the client-side team no longer wanted to implement a significant proportion of the highly complex and specific requirements initially defined for the project, they considered the simpler existing approach to be more usable.

The above approach ensured that even if the relevant legislation was not in place by the go-live date, the project staff did not have to carry out significant additional tasks, but could at least start working on the systems according to the best practice processes we proposed.

The MOL-MOHU go-live

The next major milestone was July 1, 2023, when the organization was to take over the management of business clients. From that date, the only way to dispose of and purchase selective waste in Hungary was through MOL-MOHU.

By this date, subcontractors had to be selected in each region, their scope of activities had to be defined in each waste management facility, in collection, in transportation and in sales, as well as contracts had to be prepared and signed with all business partners.

The fundamental objective was to create an operational system that could manage the incoming analytical data and then invoice and account for all activities, and MOL-MOHU could pay the subcontractors who performed the tasks and collect the service fees for them.

The start-up was a success, except for a few minor glitches, and all problems were solved during the first few months.

Development and integration of the DRS system

The next major task was the implementation of the DRS (Deposit and Return System), i.e. the mandatory redemption system. The regulation itself came into force on 1 January 2024, with an EU directive-based target for Hungary to achieve a 90% return rate for PET bottles, ALU cans and glass packaging.

The implementation of the return system was a major milestone in waste management, but it also represents an additional obligation for the stakeholders.
Our experts were involved in the development of the DRS solution processes and its integration with SAP and Salesforce.

The major challenge here was to develop a unified logic that would work for all systems and stakeholders involved. The RVM (Reverse Vending Machine) machines that were part of the return system generated a volume of bottle-level transactional data that other components of the architecture could not have handled properly. Therefore, we had to work with the partners involved in the reverse vending process and the ministry to determine at what level this data could be aggregated so that everyone could be satisfied with the processes and the resulting settlements.

The implementation of the mandatory return system has also created a number of tasks for manufacturers, with a very tight deadline, as from the end of May 2024 only bottles bearing the MOHU logo could be placed on the market. To prepare for this, MOHU had to give them the opportunity to register their new packaging from February, for which the necessary IT system had to be in place by that date.

The various roles of Onespire Ltd. in MOL-MOHU projects

Our experts have been involved on several levels in the planning of MOL-MOHU’s processes and the development of its IT systems.

Our primary and essential role was the implementation of SAP, Salesforce and Business Intelligence solutions and the management of related projects.

In addition, we were responsible for the coordination of the individual target applications and the transfer of the data generated there to SAP, Salesforce and Business Intelligence systems at the appropriate level of detail.

A secondary, but in our view very important and value-adding task was to channel the best practices built into each of the solutions we represented and to adapt them to the evolving business needs that were constantly changing as the regulatory environment was shaped and finalized.

In addition, our experts have also taken on the representation of processes across different systems and thus projects, because SAP, Salesforce and Business Intelligence solutions are embedded in the activities covered by the target systems in many places.

Looking back on the last more than three years of intensive work on the MOL-MOHU project, we have seen the added value of our company not only at the level of individual solutions, but also in the design of cross-system and cross-project processes, the integration of different sub-solutions and the smooth delivery of the entire IT architecture within tight deadlines, all in a constantly changing regulatory environment that fundamentally determines business requirements.

Imperfect conditions, perfect cooperation

For most participants, it was unusual to work in a team where the exact business requirements could not be defined, but a functional system had to be developed.

The legal background has changed a lot during the projects, so even though we managed to avoid having to do a lot of additional work with the minimum viable product approach, we still had to perform a certain amount of extra tasks almost continuously.

These sub-optimal conditions could have led to many clashes and disputes between the parties involved during the projects, but due to the completely fair attitude of MOL-MOHU’s staff, no related issues occurred, the goal of the participants all along was to jointly deliver a successful and well-functioning system.

Summary

During the implementation of the MOL-MOHU project, Onespire Ltd. has played an important role in the development of a waste management system aimed at promoting sustainability and recycling.

The Minimum Viable Product (MVP) approach we proposed during the project allowed us to respond flexibly to the ever-changing regulatory environment, while meeting key business needs at an early stage.

Throughout the project, close professional cooperation between all parties involved ensured that MOL-MOHU’s objectives were achieved and a new, more sustainable direction in waste management was set.

All in all, the MOL-MOHU project has not only contributed to the development of the Hungarian waste management system, but has also helped to strengthen social responsibility. Onespire Ltd. is committed to continue to actively participate in the development and implementation of sustainable solutions to ensure the achievement of environmental goals.