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SAP® CONSULTING –SOLUTIONS FOR SUCCESS

50 066 597 (03/12)© 2003 by SAP AG. All rights reserved. SAP, R/3, mySAP, mySAP.com, xApps, xApp, and other SAP productsand services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAPAG in Germany and in several other countries all over the world. MarketSet and Enterprise Buyer are jointlyowned trademarks of SAP AG and Commerce One. All other product and service names mentioned are thetrademarks of their respective companies. Data contained in this document serves information purposes only.National product specifications may vary. Printed on environmentally friendly paper.

www.sap.com/contactsap

06113_SS_Book_SAPConsulting_Cover.qxd 28.11.2003 17:06 Seite 1

SAP® CONSULTING – SOLUTIONS FOR SUCCESSDECEMBER 2003

2 Contents

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Manufacturing Industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10Alpha Copy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12Aventis Pharma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18Bharat Petroleum Corp. Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22Brose Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30CJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34Codorníu Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46Degussa AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50Dow Corning Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56Forbo Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60Goodrich Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64Henkel Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68Infineon Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72Janssen-Cilag . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78Loewe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82Marico Industries Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86Multibrás . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92NATO Helicopter Industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96Philips Lighting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100Ratiopharm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104Royal Dutch/ Shell Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108Schwarz Pharma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114Swarovski . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118

CONTENTS

Service Industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122American Eagle Outfitters / The Children’s Place . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124Belgacom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130Bell Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134BKW FMB Energie AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138Canada Post . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142CenTrade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150Danone Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156Fraport AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160GASAG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166is:energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170LINZ AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174Metro Cash & Carry International GmbH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178SFR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182Tele Atlas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188UTA Telekom AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192

Financial & Public Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198Banco Urquijo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200Bank of Ireland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206BKK Landesverband Baden-Württemberg . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214City of Biel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218City of Ghent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 222Dutch Ministry of Education, Culture, and Science . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226Hospital Britanico de Buenos Aires . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 232Hospital San José . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 236HVB Real Estate Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 242Interpolis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 246State of Berlin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250University of Basel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 254University of Nebraska. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 262

3Contents

In these tough times, achieving lasting business success is far from easy. Decision makers need effective ways of managing change, minimizing businessrisks, maximizing ROI, and reducing TCO. This is where SAP® Consultingcomes in – with the expert advice and assistance you need to master these andother challenges.

As part of the SAP Customer Services Network (SAP CSN), SAP Consultinghelps you derive maximum business value from your SAP systems – today and in the future. Leveraging our industry- and solution-specific expertise, our extensive hands-on experience, and our partner network, we quickly andcost-effectively deliver the knowledge and solutions you need to succeed.

SAP Consulting’s comprehensive services cover the entire solution life cycle –from design and implementation through to operational support and on-going business process optimization. What’s more, we provide a point of contact to all the other SAP CSN service offerings, as well as to SAP developersand partners. And our network of over 9,000 consultants and some 120,000 certified partners ensures truly global reach.

But there’s more to SAP Consulting than simply delivering services. In linewith SAP CSN’s vision of empowerment, we help you to achieve real self-sufficiency – through knowledge transfer and proven best practices. This puts you firmly in the driver’s seat, enabling you to establish the in-houseskills and structures needed to support your SAP environment yourself – cost-effectively, flexibly, and securely.

This selection of recent customer success stories demonstrates how SAP Consulting has helped businesses around the world succeed. We are sure you will find this insight into our customers’ experiences relevant to the challenges you face.

Sincerely,

Henning Kagermann Richard StewartChairman and CEO of SAP AG Senior Vice President, SAP Consulting

4

GOOD ADVICE

Introduction

Introduction

SAP Consulting’s portfolio of services delivers expert advice and assistance across the entire life cycle of SAP solutions. From initial analysis and design through planning and implementation toongoing operations, migrations, and upgrades, our services make sure you get the most out ofyour IT investment.

In the first phase of a project, SAP consultants work hand in hand with you to plan and develop a strategy that is aligned with your company’s goals. We also offer expert assessments and return-on-investment analyses, enabling you to pinpoint where IT investments will deliver the greatestvalue. By leveraging SAP’s consulting expertise at an early stage, you benefit from made-to-measure solutions that deliver the results you want.

During the implementation proper, our consultants put your strategies into practice – designing your specific business processes and solution architecture and rolling them out to your organization.

Once your solution is in place, SAP Consulting provides ongoing process optimization to help you meet changing business requirements. Moreover, we offer cutting-edge services to review thequality and risk of any SAP implementation project regardless of whether it was led by SAP.

With SAP Consulting, you have a point of contact to SAP developers, certified partners, and the comprehensive range of cutting-edge services from the SAP Customer Services Network (SAP CSN), including custom development, education, and ongoing support.

Our portfolio comprises four seamlessly integrated core offerings, which are described on the following pages.

5

ALL THE ADVICE YOU’LL EVER NEED

THE FOUR KEY ELEMENTS OF OUR PORTFOLIO

Our four-pronged approach delivers the expertise you require at all stages of the life cycle of SAP solutions.

SAP STRATEGIC CONSULTING SERVICES: START AS YOU MEAN TO GO ON

Even the very best software cannot deliver true value if it is not closely aligned with your specificstrategy and processes – which is why you need sound analysis, planning, and design from theword go.

Business and IT Strategy Consulting: Set Course for SuccessOur business and IT strategy consultants assist you with:

• Defining and fine-tuning your enterprise’s long-term strategy

• Aligning your IT landscape with your business strategy

• Planning effective business process optimization

Business and Value Assessment: Pinpoint Value and Avoid RiskSAP Consulting enables you to connect investments to your specific needs. Our experienced consultants and certified partners work closely with you to:

• Develop a quantified value proposition for your IT investment

• Show precisely what will happen as a result of introducing new software or processes

• Present executives with a solid business case and governance model for proposed projects

• Assess potential risks by closely analyzing the IT solutions behind your key business processesand propose concrete action to mitigate risks

• Detail your actual IT costs, reveal key cost drivers and their causes, and provide a solid basis for cost-reduction decisions

• Identify areas for improvement, outline alternative approaches to reduce inefficiencies, and pro-vide you with a clear picture of initial investment, total cost of ownership (TCO), and potentialreturn on investment (ROI)

6 Introduction

SAP SOLUTION DELIVERY SERVICES:

GET YOUR SOFTWARE UP AND RUNNING QUICKLY AND COST-EFFECTIVELY

SAP Consulting helps ensure that implementations are completed on time, within budget, and according to your expectations. Our experts provide advice on roll-out strategies, system architecture, systems integration, implementations, custom-specific development, and more.

Solution and Architecture Planning/Solution Design: Plan for SuccessTo match your solution precisely to your business, SAP Consulting can:

• Plan and design solutions to support your specific objectives

• Plan and design the right system architecture

• Develop an effective globalization and multinational strategy

• Create a detailed blueprint of your business processes to maximize the benefits of SAP implementation

• Make specific recommendations to ensure that your IT environment is robust, flexible, and scalable and that it delivers the functionality you require

Solution Implementation: Master the Challenge of Introducing New SoftwareSAP Consulting provides assistance throughout the implementation phase. Our services include:

• Expert configuration and testing, tailoring solutions to meet the precise needs of your organization

• Technical installation services that translate your technical blueprint into actual systemsettings

• A dedicated supply chain management service that is specifically designed to streamline criticalsupply chain management (SCM) projects

Integration and Development: Link and Enhance Your Processes and Solutions Custom development and seamless integration of processes, applications, and technology can contribute significantly to achieving your business goals. We help you to:

• Develop and integrate truly made-to-measure solutions with custom programming

• Significantly reduce the time and cost involved in migrating legacy data

• Integrate your company-specific software with SAP and non-SAP solutions

Deployment: Put It All TogetherTo ensure that your system delivers the results you want in day-to-day operation, we:

• Review all aspects of your implementation prior to go-live

• Give you the tools and information you need to maximize the performance of yourinfrastructure following go-live

• Perform remote consulting to deliver rapid, cost-effective support from SAP experts

7Introduction

8

SAP OPERATIONS SERVICES:

ENABLE YOUR SOLUTION TO GROW AND ADAPT WITH YOUR NEEDS

In a fast-moving business world, change is the name of the game. With SAP Consulting, you have a partner who is committed to ongoing improvement. Our operations services encompass IT andkey business drivers, helping you to quickly and effectively optimize your live systems and masterthe challenge of change.

Solution Optimization: Boost Performance and Maximize ValueOnce your solution is up and running, SAP Consulting enables you to get the very best out of it by:

• Assessing the value of your live SAP solution and making sure it delivers the expected cost benefits and business improvements

• Assisting you with the standardization and management of your data

• Streamlining your business processes and maximizing the ROI of your SAP solution

• Proactively identifying and eliminating technical issues in your IT environment

Evolution: Take Your Solutions to the Next LevelSooner or later, upgrading is an issue for every organization. To ensure that your changeover delivers maximum business benefit with minimum hassle, we provide specialized advice and support to:

• Upgrade your applications

• Ensure that your IT infrastructure grows with your business

• Smoothly migrate your SAP operating system and database to new platforms

• Handle the transition from SAP R/2® to SAP R/3®

System Landscape Optimization: Match Your IT to the Challenges of TomorrowTo align your IT solutions with your business strategy and reduce the complexity of your systems,it is sometimes necessary to make significant changes to your system landscape. During such projects, our experts:

• Help you adapt your IT landscape to changes in your organization

• Address the complex issues involved in major changes to your IT environment

• Convert and harmonize data within your SAP solutions

Introduction

9

SAP LIFE-CYCLE MANAGEMENT SERVICES: TOTAL COVERAGE

The life cycle of a solution comprises many and varied challenges. We deliver expert, end-to-endsupport across all phases in the deployment and operation of your SAP software. Our consultantshelp you control quality and risk, handle organizational development and change, and success-fully manage your IT projects and programs.

Quality and Risk Management: Check That Your Project Is on Track – and Keep It ThereSAP Consulting leverages its experience and expertise to provide you with effective quality and riskmanagement. We ensure that your project achieves your strategic and operational objectives by:

• Identifying and managing the risks of your IT implementation

• Accurately assessing and enhancing the level of security of your SAP landscape

• Reviewing the progress of your IT project

• Monitoring the technical design of your IT solution

Organizational Development and Change: Achieve the Results You Want – FastWe work closely with you to implement changes smoothly and effectively. Our consultants assistyou with aligning your IT infrastructure with your strategic initiatives and managing changes andenhancements to your IT infrastructure.

Program and Project Management: Keep Tabs on Even the Most Complex TasksWhen it comes to managing your IT projects, SAP Consulting provides a combination of strategic and tactical implementation services, as well as advice and insight. Our experts:

• Help you to monitor multiple program goals, anticipate problems, and increase theeffectiveness of complex solution programs

• Give you access to expert advice and proven leadership throughout your SAP project

• Provide a single point of contact who understands your technical needs, and gives you ongoing reviews and feedback

SAP CONSULTING: YOUR GLOBAL CONSULTING EXPERTS

When you opt for SAP Consulting, you decide the role you want us to play. We can lead your project, share responsibility with partners, or provide targeted services and expertise ourselves.And because effective knowledge transfer is at the heart of our philosophy, you can count on acquiring the skills you require to take control of your IT solutions.

With more than 9,000 consultants and 120,000 certified partners worldwide, we provide the trulyglobal coverage today’s companies require to succeed.

To find out more, visit our Web site at http://www.sap.com/services/consulting.

Introduction

10 Manufacturing Industries

11Manufacturing Industries

MANUFACTURING INDUSTRIES

Manufacturing Industries

Alpha Copy, a growing com-

pany, needs reliable soft-

ware that is scalable enough

to support its development.

SAP® software provides the

scalability that Alpha Copy

needs. Beginning with

SAP R/3® for ERP, the com-

pany went on to implement

mySAP™ CRM, to give it

flexibility, better customer

service, price-list control,

and competitive advantage.

ALPHA COPYALPHA COPY ADDS THE mySAP™ CRM SOLUTION TO ITSSAP® R/3® SYSTEM

Founded in Greece in 1984 as a distributor of Minolta officeequipment, Alpha Copy provides products and services for mobile telecommunications, digital office automation, digitalsatellite television, and in-room technology for the hospitalityindustry. The company has expanded its activities, becomingthe exclusive Nokia distributor in Greece and vastly increasingits network of service and support centers in Greece, Cyprus,and Balkan countries.

BUSINESS CHALLENGE

Alpha Copy strives to offer prompt market supply of qualityproducts and services while ensuring customer satisfaction inevery business sector of interest.

The company treats partners as extensions of its business, contributing to their goals for achievement and success. As itsmarkets and business expand, Alpha Copy’s main concern isthat, together with its partners, it can continue to offer efficientservice that leads to customer satisfaction before, during, andafter sales.

In order to support its development plans, Alpha Copy chose toimplement the SAP® R/3® System for ERP in 1999. With SAP R/3,the company automated its accounting, sales, distribution, andhuman resources department functions.

Following that, in order to support new customers, maintaincentral control, and meet ambitious goals for speed, flexibility,and reliable customer service, Alpha Copy required an informa-tion system to cover its new territories.

12


SAP SOLUTION

The upgrade to mySAP™ Business Suite solutions was based onthe long-term, successful operation of SAP R/3 and its scalabili-ty to add components according to the growth requirements ofthe company.

Alpha Copy implemented the mySAP Customer RelationshipManagement (mySAP CRM) solution, utilizing these capa-bilities: e-selling, customer service and support (service requestmanagement and knowledge management), and e-services(self-help services and complaint management).

With mySAP CRM, Alpha Copy set the following goals:

• Attain full visibility of its partners

• Offer its partners immediate and complete information overthe Internet about every aspect of business, such as order andfinancial statements

• Allow its partners to enter the orders into Alpha Copy’s system and keep partners updated on current prices

• Provide after-sales service that allows entry, monitoring, andprocessing of any customer problem, whether it is communi-cated via the Internet, call center, fax, or Web shop visit

• Allow the organization of service and spare parts

• Serve Alpha Copy’s trading partners via the Internet, by offering them the option to work with an advanced, com-puterized system without requiring any partner investment

• Provide exact, real-time information concerning existing problems and their status quo to the company, its partners,and Nokia

• Optimize the efforts of existing personnel to collect the maximum information with minimum data entry

• Provide user-friendly interaction and ensure scalability as the company grows

13


BENEFITS

The following benefits that Alpha Copy expected to achieve byimplementing mySAP CRM are now visible throughout the value chain of the company.

E-SellingInitially Alpha Copy faced problems concerning reply time andservice to its partners. With the e-selling capability, partnersplace orders on their own systems via the Internet and receiveimmediate information concerning availability, special prices,photographs, technical features, and order verification. Thatway, Alpha Copy’s personnel saves the time of entering ordersreceived by fax, and mistakes are eliminated. Also, promotingproducts to partners is made easier by pop-up screens that arenow automatically displayed when data is entered in thesystem.

mySAP CRM has improved Alpha Copy’s communication withits partners and foreign branches. Mr. Nikos Kyriazis, financialcontroller of Alpha Copy, says, “With [the] e-selling solution wecan now serve them immediately and efficiently. There is noneed for phone calls to be informed about a price, or informa-tion regarding their financial sheet or an order.

14

Manufacturing Industries 15

“We have literally expanded our system to their companiesthrough the Internet. After having secured a smooth and effective flow of everyday working activities, our personnel can now devote time to helping our partners solve importantmatters, which demand extra attention. In addition, our part-ners can now place orders in the system on their own, can beupdated on availability, and can modify the order accordingly,while mistakes are eliminated.”

Complaint ManagementThe complaint management capability enables Alpha Copy torecord and monitor all customer complaints and requests andsee them through to resolution. According to Kyriazis, “Withthe complaint management [capability] we can systematicallyprocess all requests made by our customers. There are nolonger forgotten problems or misunderstandings. Everything is recorded, while our customers can reach us by all modernmeans of communication – telephone, fax, Internet, or a visitto one of our centers.” Since everything is recorded, AlphaCopy is able to draw valuable statistics concerning the most frequent problems and to prevent them, as well as to commu-nicate the information to Nokia to aid in product development.With mySAP CRM, Alpha Copy provides added value to its customers, partners, and suppliers.

Knowledge Management and Self-HelpWith the knowledge management and self-help services capa-bilities, question and answer information related to customerproblems and queries is available to anyone concerned. Cus-tomers can access this capability directly through the Internet,or indirectly through the customer care line of Alpha Copy.

E-ServiceE-service capability enables Alpha Copy’s partners to post service notifications directly to the central database, via the Internet. Now, if a device needs to be repaired at headquarters,no additional customer and partner data entry is needed. Entrytime at headquarters is substantially reduced and wrong ship-ments are avoided. Kyriazis says: “In the past, it took our part-ners about 45 minutes to enter about 50 devices. Our employeeswere obligated to reenter all data concerning the consumer device along with partner’s data. Entry mistakes or wrong ship-pings were noted many times. With service notification [capa-bilities], our partner enters the data and the description of theproblem directly in our system.” With mySAP CRM, the com-pany’s partners do not need to invest in software, and mistakesand misunderstandings are eliminated.

Service Request ManagementWith the service request management capability, Alpha Copy’spartners and personnel can monitor the repair process, job his-tory, and spare parts used in a device. In addition, by using thepop-up screen, a technician is directly informed whether or notthe warranty for the device has been extended. Kyriazis says, “After-sales service is an important criterion for attracting newcustomers as well as keeping old customers satisfied. The cellu-lar phone is a necessary device for its user.

“In contrast with other products, the customer must be able to solve his problem if possible within an hour. In order for thatto happen, an exemplary solution for the service organization is also required as well as the company’s commitment. With the capabilities offered to us by the service request management[function], our after-sales service ranks first in the Greek marketby far.”


Results The purchase and use of SAP software at Alpha Copy has scaled according to the growth of the company. Kyriazis says,“In the beginning, SAP appeared immense to us. It offers manyand new possibilities that may scare users away. Soon enoughthough, SAP [software] proved user-friendly. We started off witha very small investment. Soon we established the potentials andthe advantages offered to us. To this end, SAP consultantsplayed a significant role – they acted and still act with profes-sional courtesy, responsibility, and efficiency by offering us anexemplary application and proper guidance for our expansion.SAP empowers our personnel and helps Alpha Copy achieve itsgoals.”

THE NEXT STEPS

The next stage for Alpha Copy will be to expand the use of mySAP CRM by implementing the business-to-consumer(B2C) capability, which is expected to improve partner and end-customer service even further. Moreover, it will help the company’s marketing strategy and will reduce sales cycles,leading to savings of money and resources as well as greater customer and partner satisfaction.

Alpha Copy is also planning to leverage structural data of mySAP Business Suite solutions, beginning with warehousemanagement capabilities for better logistic organization.Furthermore, the company will invest in the mySAP Business Intelligence solution to enable it to provide ample and direct reports from the system to higher administration, leading tofaster decision making.


AT A GLANCE

Hardwareplatform Compaq

Operating system Microsoft Windows® NT

Database Oracle

Number of users 50

With a turnover of

�4.79 billion, Aventis

Pharma is the leading player

in France’s pharmaceutical

sector. A satisfied user of

SAP® R/3® since 2001, the

company turned to SAP

Consulting to help it upgrade

to SAP R/3 Enterprise. In a

comprehensive study, the

consultants presented a

clear assessment of the risks

involved, and highlighted

important improvements to

be made to the company’s

export sales application.

Aventis Pharma gave the

project a green light.

AVENTIS PHARMAENTRUSTS SAPWITH UPGRADEWith a turnover of �4.79 billion, 11% of the market share, and approximately 13,500 employees, pharmaceutical giant AventisPharma is no stranger to SAP® software. “We’ve been using SAPsince the beginning of 2001 for our financials system, called Diapason (1,500 users), and for managing our export sales (150 users), which we call Mercury,” explains Patricia Brebion,head of IS finance at France’s leading player in the pharma-ceutical sector. “At the end of 2002, we decided to upgrade ourSAP R/3® 4.6B for two major reasons. First, this version wouldno longer be maintained by SAP as of 2004. Second, we wantedto standardize our various SAP applications and facilitate inte-gration. Whether global, such as GOAL (the ERP applicationused by 23 countries in Europe) and CORE (system for managing finished product plants), or local, such as GIRHAF(Aventis France’s computerized HR management system), our recent applications in fact implement SAP R/3 Enterprise.”

Aventis Pharma wanted an external service provider to help itdefine an upgrade strategy, assess the risks involved (functionaland technical), and determine deadlines, costs, and resource requirements, as well as potential benefits. The company’smain focus included replacing its in-house solution for manag-ing export sales with SAP standard software and then adaptingit to the new pharmaceutical standard CRF21-Part 11 – handledperfectly by SAP R/3 Enterprise. “We didn’t hesitate to call inSAP Consulting. Logically speaking, SAP consultants are in the best position to have detailed knowledge of the differentversions and the improvements between them. In addition, wealready had the opportunity to experience their skill and highdegree of industry and product expertise.”


In March 2003, Aventis Pharma signed with SAP for a tightlypacked 26-day-long project that involved five consultants fromSAP Consulting: two functional experts, a technical develop-ment expert, a technical architect, and a coordinator. The teamdefined the upgrade strategy, taking into account the variousinterfaces (84 inbound interfaces in total) and other technicalaspects. In the final phase, the team made recommendationsfor system optimization, created a detailed schedule, and pro-vided the company with an initial estimate of the costs and a basic plan of action.

IN-DEPTH STUDY

To ensure the project went as smoothly as possible, SAP expertsconducted 24 interviews with a score of Aventis Pharma em-ployees, selected for their business expertise (accounts payableor accounts receivable, fixed assets, direct sales, and so on) or information system skills. “We all appreciated the SAP consul-tants’ capacity for listening and analyzing our varied require-ments,” underscores Brebion. “Many of us weren’t sure if athorough study could be conducted in so short a time. And yet, the study proved to be extremely detailed and pertinent. It confirmed the estimated deadlines/costs/resources that hadbeen established by our IS finance team, gave a precise and clear assessment of the risks involved, and, as we had stronglyexpected, highlighted important improvements to be made tothe export sales application.”


These improvements included, for example, the implementa-tion of SAP R/3 Enterprise foreign-trade processing functions,which would replace the company’s homegrown Mercury ap-plication. The study also showed the possibility of automating

“SAP consultants are in the best

position to have detailed knowledge

of the different versions and the

improvements between them. In

addition, we already had the opportunity

to experience their skill and high degree

of industry and product expertise.”

Patricia Brebion, Head of IS Finance, Aventis Pharma

certain manual processing tasks (transport time management)and of adopting the best pharmaceutical practices specified byCFR21-Part 11. It also identified improvements that could bemade to the company’s financials system (better invoice check-ing, automation of bank reconciliation, use of cash pooling,mass transfer of fixed assets, and so on).


AN EASIER SELL WITH SAP

Thanks to SAP Consulting, Aventis Pharma managed to successfully migrate Diapason (without having to adapt functionality) and Mercury (which involved some improve-ments) by the end of spring 2003. The project involved multiplesoftware integrators, as well as SAP experts. Still in progress, the project is running according to the strict schedule recom-mended in the study.

“It’s very hard to ‘sell’ a migration project to general manage-ment or to employees,” says Brebion. “Its price tag does not offer any highly visible improvement in terms of service, unlikethe implementation of a new module, for example, and therisks involved are not nil. However, having the ‘SAP stamp’ onour upgrade and the benefit of an expert view did a lot to helppromote the project within the company, reduce fear of risks,and convince users of the potential benefits.”


AT A GLANCE

Assignment Comprehensive upgrade study (SAP® R/3® 4.6B to SAP R/3 Enterprise)

Functional scope 2 applications for financialaccounting and export sales

Duration 26 days

Number of SAP consultants 5

Bharat Petroleum, the

$9.5 billion petroleum-

refining and marketing

company, was the first

public-sector oil company

in India to implement

SAP® R/3® cross-industry

solutions, along with

software from the SAP

for Oil & Gas portfolio.

The company chose SAP

Solution Manager, which

offers all the tools, content,

and methodologies a com-

pany needs to implement

and optimize its SAP solu-

tions. With enhanced user

knowledge, employees have

become more efficient and

professional – which has

helped increase Bharat’s

competitive edge.

BHARAT PETROLEUM CORP. LTD.BHARAT PETROLEUM CHOOSES SAP® SOLUTION MANAGER TO ENHANCE KNOWLEDGE AND SUPPORTITS CUSTOMER SUPPORT CENTER

When India’s Bharat Petroleum Corp. Ltd. (BPCL) deployed the SAP® R/3® enterprise-wide resource planning solution – the infrastructure backbone of mySAP™ Business Suite – across337 locations within 16 months, the $9.5 billion petroleum-refining and marketing company needed a robust, integratedapproach to support and enhance the expertise of its 3,000-plusSAP users.

Based in Mumbai, Bharat Petroleum was the first public-sectoroil company in India to implement enterprise-wide resource-planning solutions, along with software from the SAP for Oil & Gas portfolio. What’s more, the implementation projectclaimed the further distinction of being the largest and most ambitious SAP project in India.

To deliver high-quality support and enhance its userknowledge base and business processes supported by the SAPsolutions throughout the organization, BPCL established anSAP competency center (CC), which is far more than a back-end help desk. “BPCL recognized very early that the knowledgelevels of users who were suddenly exposed to a process-basedsystem needed to improve dramatically,” says Shrikant Gathoo,general manager for enterprise-wide transformation at Bharat.“We needed a supporting structure, process, and tool to makethis happen.”

To address these issues, Bharat Petroleum implemented SAP Solution Manager – which functions as the technologybackbone to integrate a company’s internal support organiza-tion, its users, and SAP services. “Knowledge development, andnot just issue resolution, was the key driver for implementingSAP Solution Manager in BPCL,” says Gathoo.


CUSTOMER-FOCUSED REORGANIZATION

As a leader in many of its markets, Bharat Petroleum faced price deregulation and stiff competition from several players,two of them being government-owned firms. Anticipatingthese developments well in advance, BPCL embarked on arestructuring program that culminated in the formation of

“Knowledge development, and not just

issue resolution, was the key driver for

implementing SAP Solution Manager in

BPCL.”

Shrikant Gathoo, General Manager for Enterprise-wideTransformation, Bharat

a more customer-focused organization. “We realized that success can only come with a total reorientation and change in approach, with customers as the focal point,” says Gathoo.“Increasing globalization, new products and services, andinnovative marketing have resulted in very market-savvy consumers. Bharat Petroleum has taken radical steps to keepitself attuned to the changing times, realizing that the futurebelongs to those who listen and adapt to their customers.” The change in strategy underscored the company’s need for a highly reliable, versatile, integrated solution. At that time,BPLC operated disparate legacy systems, which resulted in isolated islands of data. Simply put, the software could not keep pace with the company’s growth. “The transactionvolumes have grown manifold from a few thousand in the early ’90s,” says Gathoo.


Once it had developed its strategic plan, the company began toevaluate enterprise business systems. After a cross-sectionalteam comprised of IT staff and company managers performed acritical analysis of several solutions, BPCL chose SAP. The teamfound that SAP provided the integration and flexibility BharatPetroleum needed. SAP’s local presence in India, which was critical to BPCL, proved to be another influencing factor in itschoice of software. At the time, Bharat Petroleum also decidedto implement SAP Business Information Warehouse (SAP BW),a component of SAP Business Intelligence, a key offering withinthe SAP NetWeaver™ integration and application platform.

AGGRESSIVE IMPLEMENTATION PLAN

With an aggressive implementation plan and tight deadlines,BPCL faced several challenges: for example, it needed to supportand map complex business processes existing in geographicallydispersed locations and develop an IT network for online trans-acting. The success of the implementation depended on effec-tive user training and proper support for employees from themoment of go-live. Enter the SAP CC. The center not onlyhelped BPLC achieve quick deployment and user acceptanceand respond to emerging issues, it helped extend knowledgeacross the entire enterprise.


BPCL carefully planned and executed its rollout of the SAP solutions by establishing four regional teams, with the supportof SAP Consulting as project leader. Due to the close coopera-tion of SAP Customer Services Network members, includingaccount managers and employees from SAP Active Global Support and SAP Global Custom Development Services, BPCLmet its requirements quickly and efficiently. The rollout teammembers assisted users at each location, spending some 20 daysat each one. A central team located at BPCL’s Mumbai head-quarters held responsibility for several prerollout tasks, includ-ing determining each site’s unique process requirements to ensure the appropriate system configuration, uploading masterdata, determining necessary resources following the rollout,and planning and executing user training. The team also handled cutover activities such as stock and cash uploads, andprovided remote support following deployment. Almost 20 lo-cations at a time (the peak volume involved more than 30) wentlive every month after the initial rollout. The competency cen-ter played a critical role in supporting these locations after therollout team members left.


FIVE AREAS OF FOCUS

The competency center was comprised of five teams thatfocused on process, configuration and development, userauthorization, master data exchange, and training and changemanagement. As the single point of contact for the entireorganization, the process team supported existing processes,dealt with changes, and identified and implemented processimprovements and controls. The configuration and develop-ment team had overall control of the SAP system; it maintainedexisting developments and configurations, and handledchanges and improvements, transport controls, hot-packupgrades, SAP’s online support follow-up service, performance

“Our objective is to enable the spread

of knowledge using SAP Solution

Manager as a self-service tool, so users

can find solutions to repetitive or typical

problems. . . . [SAP Solution Manager]

has certainly made us more

competitive.”

Shrikant Gathoo, General Manager for Enterprise-wide Transformation, Bharat

tuning, optimization, and all product-related issues. Theauthorization team was responsible for creating authorizationprofiles for the various roles. The fourth team held responsi-bility for updating the various master data.


This team worked on mutually negotiated (with the businesses)time lines for updating data. The training and change-manage-ment team became deeply involved in the maintenance of skillsand competencies within the competency center as well as theuser community within the organization. The change manage-ment team focused on building total reliability of the system.

BPCL chose to have an SAP expert in each location to help with any issues that might arise. One key user, called a locationanchor (LA), was chosen at each rollout site and became highlyconversant with the various business processes. The LAs helpedresolve issues and functioned as key knowledge-transfer agents,remaining closely involved with both the CC and the 505 SAPSolution Manager users at 342 locations. “The knowledge capital developed through the SAP implementation was veryvaluable, not merely in terms of SAP product knowledge, but,most importantly, in supporting and providing end-to-endquality business solutions at the pace needed in the fast-changing business environment,” says Gathoo.

EMPOWERING KNOWLEDGE TRANSFER

In order to deploy knowledge across the enterprise while sup-porting users, BPCL needed an efficient technology solution to help it address and document issues, deliver timely responsesand satisfactory service, track business process performance,and provide early warning and exception reports. In-house solutions such as e-mail folders could not meet BPCL’s require-ments. That’s where SAP Solution Manager came in. “We choseSAP Solution Manager based on the fact that it suited our work-ing environment completely,” says Gathoo.


In April 2002, BPCL implemented SAP Solution Manager.Today, it integrates the content, solutions, and methods thecompany needs to implement, support, and operate its indus-try-specific and cross-industry software. As the technologicalbackbone of the competency center, SAP Solution Managerhelps BPCL detect critical issues in its core business processesbefore problems develop. Moreover, it provides user support, an internal solution database, and search capabilities through a link to SAP Service Marketplace and SAP remote support. An example: an LA enters a request by generating a notificationfrom the SAP R/3 System, which automatically attaches relevant

“SAP is very professional in its

approach and ensures timely response

to its clients. . . . We look forward to

partnering with SAP to provide us with

complete solutions for our industry.”

Shrikant Gathoo, General Manager for Enterprise-wide Transformation, Bharat

information such as screen data, transaction code, programreference, and so on. The problem request is then transferred to the production server, which logs the issue into SAP SolutionManager. A CC employee allocates the issue to the appropriatesupport person, who responds within the agreed-upon time-lines. The CC then closes the issue. However, the user can re-open the issue if the solution to the problem proves ineffective.

Overall, BPCL has experienced great success with SAP SolutionManager. And as a result, the company made plans to imple-ment SAP Solution Manager at every BPCL unit by the end of 2002. Bharat Petroleum also reaped the benefits of the inte-grated system in many areas of its operations, for example,tracking customer receivables and monitoring credit and in-ventory management.


And, aside from implementing upgrades of SAP Solution Man-ager, BPCL wants to use other features of the software. “Our ob-jective is to enable the spread of knowledge using SAP SolutionManager as a self-service tool, so users can find solutions torepetitive or typical problems,” says Gathoo.

BPCL’s unique approach earned the company recognition from SAP, which certified the petroleum company’s standards.In fact, BPCL became the first oil and gas customer in the South Asia Pacific region to obtain this certification.

LOOKING TO THE FUTURE

SAP Solution Manager has brought a wealth of benefits toBharat Petroleum. “It has certainly helped us become morecompetitive,” says Gathoo. By enhancing the know-how ofusers and their use of the overall SAP e-business solution, employees have become more efficient and professional.

“Our multipronged efforts are designed to create competitiveadvantage by turning users into knowledge workers,” Gathoonotes. For example, armed with more knowledge, employees at BPCL can now deliver better customer service, partly becausethe quality and completeness of transactions have improvedsubstantially. And through the use of query tools and notes,employees can provide vital feedback to help improve activityplanning, training, related processes, and so on. Plus, the elimi-nation of many redundant tasks helps the company increasethe strength of its field sales staff by enabling them to providemore personalized attention to customers – all of which leadsto greater customer satisfaction. The company also expects toobtain a return on its $18 million technology investment with-in three years.

According to Gathoo, the SAP experience has been nothingshort of positive. “SAP is very professional in its approach andensures timely response to its clients,” says Gathoo. “Businessscenarios and requirements change fast and the dependency onSAP support and product development is also increasing daily.We look forward to partnering with SAP to provide us withcomplete solutions for our industry.”


AT A GLANCE

Software •SAP® Solution Manager•SAP R/3®•Software from

SAP for Oil & Gas portfolio

•SAP BW

Hardware Hewlett-Packard;IBM Intel Server

Operating system HP-UX, Windows NT,Linux

Database Oracle

Number of users 3,100 (SAP R/3);600 (SAP BW)

Length of 7 monthsimplementation (SAP Solution Manager)

Implementationpartner SAP India Pvt. Ltd.

The Brose Group,

a worldwide supplier to

the automotive industry,

is setting standards in

just-in-sequence (JIS) pro-

duction. Each component

reaches the customer at

the right time, in the right

sequence, and in the appro-

priate version. Based on

the industry solution SAP®

for Automotive, JIS pro-

cessing is being imple-

mented at various Brose

locations in line with its

global rollout. The result:

inventory levels are never

overstocked, processes are

leaner, and customers enjoy

customized configurations.

BROSE GROUP JUST-IN-SEQUENCE SOLUTION WITH SAP® FOR AUTOMOTIVE SUPPORTS LEANER, MORE COST-EFFECTIVE MANUFACTURING PROCESSES

Automobiles are no longer developed and assembled by themanufacturer in their entirety. In today’s market, the majorityof components and parts come from suppliers who are also taking responsibility for an increasing number of tasks in production, development, and logistics, which were previouslyowned by the manufacturer.

That’s where the core competencies of the Brose Group comeinto play as a worldwide supplier to the automotive industry for window regulators, door systems, seat adjusters, and closuresystems. The Brose Group has approximately 7,000 employeesinvolved in developing, designing, producing, and supplyinghighly intelligent mechanic and electronic systems in 26 locationsacross the world. The business volume of the Brose Groupmore than doubled to �1.8 billion from 1996 through 2002, andthis growth was accompanied by a significant expansion in just-in-sequence (JIS) production.

To make sure that the assembly process runs efficiently, theright components and assemblies must always be in the rightplace at the right time or as the industry calls it just-in-time(JIT). Another aligned process is just-in-sequence (JIS) delivery,which takes into account the correct sequence of components.In a highly complex manufacturing process that can includeover 5,000 individual parts to make up a car, integrating JIS canmake a significant difference in process control.

For this reason, Brose began production using SAP for JIS pro-cessing in 1999 at its first plant; now production plants are being put into operation virtually in series. This has been madepossible by the standardization of the IT environment, which began approximately three and a half years ago with the imple-mentation of SAP® R/3®.


“In light of our rapid growth, our heterogeneous IT environ-ment was no longer able to meet our demands, especially as weopened new locations,” says Christian Ley, department manag-er of the logistics central application system at Brose. Brose’s international orientation meant that only a global IT partnerwould be considered – and one with proven know-how and amature integrated solution. “We knew when we decided onSAP that we had found a partner that understands the automo-tive market. We rely on a partner that is open to innovation, notjust for JIS production, but also to implement other new pro-cesses, such as e-commerce, or sequenced delivery schedules forthe supplier,” Ley explains.

SAP Consulting provided first-hand knowledge of SAPsolutions. This decision proved to be strategic: “Through theclose cooperation between SAP Consulting, product develop-ment, and support, we now have an IT solution that securesour investment in the long-term,” explains Uwe Herold, BroseIT manager.

JIS USING SAP FOR AUTOMOTIVE

JIS was originally implemented as a pilot project at a new plantin the Brazilian city of Curitiba. The pilot project set the stan-dards for the whole company, because in this plant, one solutionwas able to map all processes for the first time. Christian Leysays: “We wanted to implement an integrated and flexible JISsolution, which was capable of handling multiple languages.”Other locations were to profit from the IT architecture tested inCuritiba. Today, this architecture is the master prototype for allother rollouts. The aim was to create a best-of-breed solutionfor the rapidly expanding supplier. Therefore, Brose and SAPjoined forces to develop a tailor-made JIS module.


This module is integrated in SAP for Automotive, which forCuritiba includes SAP solutions for sales and distribution, mate-rials management, production planning, quality management,financial accounting, and controlling.

Ley explains why this software is especially suited to be the basisfor the worldwide implementation of JIS processes: “It is up-to-date, flexible, and standardized.” The master prototype devel-oped in Brazil is now being rolled out systematically at the in-dividual production plants. “Visualize our prototype as being

“We knew when we decided on SAP

that we had found a partner that under-

stands the automotive market. We rely

on a partner that is open to innovation,

not just for JIS production, but also to

implement other new processes, such

as e-commerce, or sequenced delivery

schedules for the supplier.”

Christian Ley, Logistics Department Manager, Brose Group

modular,” says Ley. “If we build a new plant or migrate to an existing one, we have approximately 100 maximum processes tochoose from. We combine these according to a standardizedplan.” The master prototype contains numerous processes forthe purchase order alone – from the Internet purchase orderfor office material to the procurement of serial parts. The char-acteristics that are specific to each customer or country deter-mine the maximum processes that are chosen in the end, orwhether additional development is required.

BROSE AND SAP: JOINT EFFORTS LEAD

TO OUTSTANDING ACHIEVEMENT

Brose and SAP employees jointly developed the prototype under the project management of SAP Consulting. The SAPconsultants provided implementation support and processconsulting, which also covered technical queries, and carriedout end-user training. Thanks to the project experience of theSAP specialists, the project adhered to schedule and budget.Christof Lutz, SAP project manager, says: “Our consultants andthe Brose experts worked openly, flexibly, and constructivelytogether.


“In this atmosphere of trust, we created an implementationmodule that the customer can use as a basis for the long term.”A fixed team of Brose employees is responsible for the imple-mentation project worldwide. This team consists of IT expertsand key users, who carry out the analysis and implementation,before familiarizing the users with the processes. “We place ahigh value on developing know-how internally; after all, ouremployees have to be able to deal with the system confidentlyafter going live, without having to rely on outside help,” saysLey. Moreover, the IT projects at the supplier provide an oppor-tunity for personal development and employee advancement.In the meantime, the implementation team can look back on a run of successes. The rollout strategy proved itself last year with a project duration of six months in Puebla, Mexico. Theimplementation time in Meerane, Germany, was reduced evenfurther to 19 weeks. The plant went live with the solution inNovember 2001, and now serves as the model for JIS productionat Brose.

KEEP IT SIMPLE

The policy for the Meerane plant is “keep it simple.” Ley explains,“Production is extremely customer-related, and synchronizedwith the production of the manufacturer we supply.” For ex-ample, the assembly of a door system starts at the same time asthe production of the corresponding vehicle. The call for thedoors takes place electronically at Brose. The workers on the assembly line use the printout of the production order as an assembly plan. The required variants of vehicle doors are as-sembled on four assembly lines and delivered only a short timeafter completion – a time-critical but extremely lean process.

“It is up-to-date, flexible, and standardized.”

Christian Ley, Logistics Department Manager, Brose Group

The employees need the SAP system only when a transport rackis completely full to trigger inventory postings and shippingprocesses. In this way, the production worker’s contact with theSAP system is reduced to a minimum.

Sticking to the essentials is therefore an indispensable ingre-dient in Brose’s recipe for success. This is true for the individualJIS plants, as well as for the whole rollout strategy, which hasthe project name “speed”: speed is gained by traveling withlightweight baggage.


AT A GLANCE

Company name Brose Group

Industry Automotive

Challenge Improve assembly processes by adopting just-in-sequencemethodology

Implementationpartner SAP® Consulting

Solutions •SAP for Automotivewith JIS solution

•SAP R/3®

Implementation • JIS rolled out globallyhighlights to Brose plants

•Succeeding rolloutimplementation times dropped from 6 months to 19 weeks

Benefits •Reduced cycle time,inventory, andoperational costs

• Flexible solution that can be individuallytailored for customers

•One solution was ableto map all processes for the first time

mySAP™ SUPPLY CHAINMANAGEMENT AT CJADDRESSING SUPPLY CHAIN PERFORMANCE ACROSS A DIVERSE CONSUMER-GOODS PORTFOLIO

Formerly known as Cheil Jedang, CJ is the largest food com-pany in Korea. The company also engages in a diversified set of business activities including pharmaceuticals, entertainmentmedia, home shopping, and logistics. CJ had fiscal year 2001 revenues of 1.96 trillion Korean won ($1.70 billion) and current-ly employs 4,000 people, has 11 manufacturing facilities, andcomprises 29 domestic affiliates and a network of overseasinvestments.

CJ was initially established in 1953 as a sugar refinery. The company has since grown to lead the Korean food market,maintaining its 48% share of domestic sugar sales, developing its brands’ images, and emphasizing flour, cooking oil, season-ings, and processed foods. Through the application of innova-tive biofermentation technology, CJ has become a world leaderin the production of food and animal feed additives. CJ is alsoworking to apply its synthesis and fermentation expertise tobroaden its range of medicines. In 1993, CJ was spun off fromthe Samsung Group. The company subsequently pursued additional commercial activities such as entertainment andhome shopping, laying a foundation for global growth throughdiversification, brand development, research investment, andmanagement independence.

Though CJ had built a foundation of diversified businessesthrough the 1990s, the company was adversely affected by theAsian economic crisis toward the end of the decade. About 25% of CJ’s total revenue is spent on imported materials, andthe devaluation of the Korean won substantially increased raw-material costs and reduced competitiveness. Moreover, demand was reduced in CJ’s core Korean markets, lowering revenue and further slowing the momentum the company had achieved to fund research, advertising, and other growth-generating programs.


While the economic situation in Korea had caused a reductionin profitability, CJ saw the downturn as an opportunity to focuson its core competencies and invest for long-term growth. CJ diverged from the more conservative, cost-focused pathschosen by its rivals and instead concentrated on improvingquality, launching new products, and building brands. Thecompany carefully reviewed its portfolio, pursuing new invest-ments and divesting businesses that did not meet growth orprofitability targets. Moreover, CJ recognized that despite theinherent lack of uniformity across its businesses, there werecommon needs for more efficient processes, better access to information, and improved response to the external environ-ment. In particular, CJ acknowledged that addressing inventorycosts and improving customer service would require focusingon its supply chain operations.

CJ determined that it needed to focus on improving order fulfillment, production planning, and procurement processes;increasing forecast accuracy across its businesses; ensuring thatresource and production capabilities meet market demand byimplementing sales and operations planning processes; and reducing the costs of its raw materials through widespread access to procurement information across organizations. CJ also initiated programs to collaborate with customers to better plan inventory replenishment. The company recognizedthat a broader e-business initiative would be paced by the stabilization of its internal supply chain processes.

After a careful analysis of alternatives, CJ selected mySAP™ Supply Chain Management (mySAP SCM) coupled with SAP®R/3®, SAP Business Information Warehouse (SAP BW), and oth-er SAP solutions to enable the reengineering of its associated execution and planning processes.


“The SAP solutions provided a framework for implementingbusiness processes for our diversified consumer goods portfoliothat meet the standards of global best practices,” says Yong Bum Kim, senior manager of CJ’s Digital Nervous System team,which is focused on improving CJ’s responsiveness across allbusinesses. “After a false start with another vendor’s softwaresolution, we realized that our vision for e-business solutionscould only be accomplished with a solid systems platform with-in CJ. In order to achieve value-adding electronic connectionswith our customers and suppliers, we needed to achieve world-class business processes within our own operations. The SAP solution has allowed us to avoid costly software customizationto achieve this, because the standard SAP solutions incorporatebest practices applicable to our range of processes.”

IN DETAIL

Challenges and ObjectivesCJ had established a well-regarded position in Korea. The KoreaEconomic Daily and the Institute of Industrial Policy Studiesranked CJ seventh in brand power and 11th in brand asset value.CJ was also acclaimed as one of Korea’s top 10 companies by Far Eastern Economist Review and by FinanceAsia. As the Asianeconomic crisis unfolded in the late 1990s, CJ focused on sustaining and enhancing its market positions; and since thecompany had a diverse portfolio, it recognized that it had abroad array of challenges. CJ focused on key objectives forprocess improvements in three business areas:

• Sugar, wheat, and oilProduction of sugar, wheat flour, and cooking oil serves do-mestic demand, and these three businesses are the traditionalcash generators of CJ. However, the markets are growingslowly. For example, sugar accounts for 30% of CJ’s corporateprofit, but revenue is expected to grow only 3% per year.These businesses had tended not to take a rigorous approachto managing raw-material and finished-goods inventory because of the stable and certain markets for these products.Moreover, prices for key raw materials such as raw sugar andwheat grain had varied significantly due to fluctuations insupply conditions and exchange rates. The tendency was tobuild inventories of raw material to protect against price increases and to run production at full capacity to consumethese raw materials. Key objectives for the sugar, wheat, andoil (SWO) businesses were to reduce inventory and raw-material costs, better balance supply with demand, andreduce production costs – and thus increase profitability.


• Bio PharmaThis global business comprises amino-acid-based productsand antibiotics, and 70% of the revenue is from exports. Pricecompetition is significant among the numerous offshore rivals. Profitability has been low, but the business is growingsignificantly, has opportunity for greater margins, and is important to the future of CJ. With a forecasting horizon ofthree months and make-to-stock production that takes intoaccount per-product demand, business process developmenthad been more rigorous in Bio Pharma than in SWO. None-theless, inventory management was acknowledged to be a key issue. In working to better manage its finished-goodsinventory, Bio Pharma focused on ensuring product avail-ability for customer satisfaction and growth, improving profitmargins, and containing costs. Raw-material inventory was a focus for the same reason as in SWO – to minimize the im-pact on the business of price fluctuations due to changing exchange rates and supply conditions. Key objectives for the Bio Pharma business were to reduce inventory and raw-material costs, improve product availability, and enhance customer service.

• Category Management GroupThe company’s Category Management Group (CMG) businesses encompass processed foods, frozen foods, andhousehold products. A key to growth of these businesses hasbeen brand development and management of new-productintroductions. Accordingly, each CMG business has a brandmanager who focuses on ensuring that R&D, advertising, and related expenditures create and sustain products that are superior in taste, quality, safety, and convenience. Anotherkey to growth was ensuring high levels of service to the distribution channels. Also, as with other businesses, con-taining the costs of inventory and procured materials was essential for profitability. Key objectives for the CMG busi-nesses were to enhance brand images through improvementsto customer service and product availability, to plan for highgrowth for some existing and new products, and to reduceoperating costs in line with requirements in other businesses.



CJ Global Logistics Services (CJ GLS) provided transportationand storage services to the CJ businesses. In the late 1990s, CJ GLS had to deal separately with individual businesses andwith the sales, production, and marketing groups from thesebusinesses. Lack of coordinated planning and information access inhibited cost-efficiencies in vehicle scheduling, ware-house management, and other services that CJ GLS provided.

Thus, CJ’s overarching objective was to consider the diversity of needs across its businesses and – wherever appropriate – putin place consistent business processes to address these require-ments. By pursuing this course, CJ would reduce its internal logistics services expenses, inventory-carrying costs, and raw-material procurement outlay; and it would improve service in specific ways to meet the growth and profit opportunities ofeach business in its portfolio.

ImplementationFollowing the Asian economic crisis in the late 1990s, CJ recog-nized that inefficiencies and customer service problems werelargely a result of its multiplicity of ad hoc business processes.The processes in place had evolved in response to many individ-ual and independent requirements within distinct businesses at CJ. The processes were relatively inefficient because theywere predicated on a lack of visibility into operations, tended to generate inaccurate information, and did not formally consider CJ’s interaction with the external world.

CJ initiated a detailed evaluation of its operations to determinehow best to improve efficiency, satisfy customer needs, and establish a set of processes for its diverse businesses. Followingthis evaluation, CJ started to implement a comprehensive e-business program in mid-2000 to address its cost-containmentand customer-service objectives. The company recognized thatits greatest opportunities for improvement lay in improving itsinteraction with customers and suppliers. However, after theinitial implementation, the company realized that the externalcollaboration processes it had begun to implement under the e-business umbrella needed to be based on accurate data fromits operations, and sound internal processes.


Accordingly, CJ decided to focus on improving its execution capabilities by reengineering its business processes covering order fulfillment, production planning, and procurement. The company also decided to implement sales and operationsplanning processes to balance supply and demand. CJ discon-tinued use of the non-SAP e-business software platform it had originally selected, evaluated various vendors, and selectedSAP software as its enterprise system foundation because of thewell-developed business process orientation of SAP solutions.

Figure 1: Supply Chain Planning and Execution Processes

Historical and transactiondata Sales order Sales info – other divisions Delivery

Consensus forecast

BW

Detail scheduling

APO-PPDS

DP release

S&OP

SNP plan

Supply balancing

Allocation

Schedule optimizer

Capable to promise

S&OP data/plansfrom otherdivisions

Production release

Purchase order

Key material requirement

Commitment

Production planning

Production schedule

Material requirements plan

Raw-material inventory

SAP R/3 Production Planning

SAP R/3Materials ManagementForecast by organization

APO-DP APO-ATP (2003)

APO-SNP

SAP® R/3® Sales and Distribution

Finished-goods inventory


CJ began implementing SAP R/3 in September 2000 to establishan execution process foundation, and subsequently selectedand began implementing the SAP Advanced Planner & Optimi-zer (SAP APO) capabilities of mySAP SCM to support the salesand operations planning processes across businesses. CJ engagedSAP Consulting from Korea to take a leading role in managingthe implementation, and the company initially focused onSWO, Bio Pharma, and CMG businesses during 2001 and 2002.The supply chain planning and execution processes put in place are shown in Figure 1, and the implementation programstrategy is shown in Figure 2.

Today, a total of six demand planners and two supply chain coordinators in the SWO and Bio Pharma businesses use theSAP APO capability of mySAP SCM. In CMG, 70 marketers usethe system for demand-planning activities related to brandmanagement, and 3 supply chain coordinators use the systemfor supporting sales and operations planning. The ProductionPlanning and Detailed Scheduling (PP/DS) capabilities of SAPAPO are initially being used by a total of 7 planners at 3 of the 11 plants in CJ. In 2003, SAP APO PP/DS will be implemented in the other manufacturing facilities.

In addition to SAP R/3 and mySAP SCM, CJ implemented SAP BW to monitor relevant transaction data, informationabout supply and demand, actual financial results comparedwith the plan, and key performance indicators. CJ also imple-mented the Customer Interaction Center capabilities of mySAP Customer Relationship Management (mySAP CRM)software. This mySAP CRM implementation enhanced CJ’sability to receive, respond to, and analyze product and serviceclaims submitted by its customers.


Through this implementation, CJ achieved results that supported strategically significant and measurable improve-ments in inventory, customer service, and procurement. For example:

• Forecast accuracyForecast accuracy improved from 70% to 80% for horizons of one month, and the company expects to achieve 98% accuracy by 2003.

• Sales reportingPrior to implementation, information on sales progress hadbeen available in daily reports covering the approximately 100 SKUs in the SWO, Bio Pharma, and CMG businesses. Sinceimplementation, sales information has been available in realtime, so adjustments to the plan can be made more readily.

• ProcurementSeventy percent of purchase orders were released automati-cally from the mySAP SCM demand-planning system during2002 (the first full year of operation), and the companyexpects to achieve a 90% rate by 2003.

• Production planningThe production-planning cycle, which had encompassed 6 days of data collection, 3 days of what-if analyses, and 5 days of planning and associated negotiation, was reducedfrom 14 to 2 days. The faster cycle time also enabled CJ to adhere better to production schedules.

• Standard costingCJ moved from an actual costing system to a standard costingsystem to enable better monitoring and response to variancesin labor, utility costs, and – most importantly – raw mate-rials. Accuracy of standard costs was 98% during 2002 and is expected to improve to 99% by 2003.

• Financial closing cycleAs a result of more precise operational data and shorter planning cycle times, CJ reduced its financial-closing cycletime from seven to four days.


CJ started to implement customer collaboration programs with the expectation that more comprehensive collaborativeprocesses would be put in place in 2003. For example, CJ starteda collaborative replenishment program with Carrefour, a retail-er that distributes CJ’s CMG products in Korea.

In this implementation, Carrefour sends inventory informationto CJ, and CJ replenishes inventory based on a process that considers this stock information, safety-stock levels, preestab-lished reorder points, and existing supply plans. CJ also plansfor Carrefour’s longer-term replenishment requirements bymaking use of the sales and operations planning process, andconsidering an 18-month planning horizon. This collaborativereplenishment program is a precursor to full collaborativeplanning, forecasting, and replenishment (CPFR) programsthat CJ plans to put in place with Carrefour and other retailers.CJ is also considering vendor-managed inventory (VMI) imple-mentations with some retailers, including local discount stores.

In addition to its plans for CPFR and VMI, CJ is planning the following implementations:

•ProcurementCJ expects to implement SAP Enterprise Buyer, a com-ponent of mySAP Supply Relationship Management (mySAP SRM). This implementation will enable standard-ized procurement processes and allow further visibility across businesses into raw-material purchase expenses. Thisimplementation will therefore permit CJ to further reducethe costs and increase the effectiveness of its procurement activity.

•Global available-to-promiseThe initial SAP implementation makes use of SAP available-to-promise (ATP) capabilities. The global ATP capability ofmySAP SCM will be implemented to provide rule-based decision-making capabilities, taking into account inventory,constraints, and planned production information to accu-rately inform customers about the availability of standard and specialty products. The global ATP implementation willfurther enhance customer service through measurablyincreased order-fulfillment service levels.


• Enhanced logistics capabilitiesCJ will extend the standard processes enabled by SAPsolutions to CJ’s global logistics group, CJ GLS. A warehousemanagement solution for the manufacturing plant’s storagearea will be replaced with SAP warehouse management capa-bilities; the transportation-planning and vehicle-schedulingcapability of mySAP SCM will be implemented to achievemore favorable routings; and global ATP capabilities will beimplemented to improve customer service. The collection of new processes will enable consolidation of warehouses, reductions in storage and transportation costs, and develop-ment of new services such as door-to-door delivery.

Figure 2: Implementation Strategy

Business area/function

M1

SWOBIOHHFFPF

PF FF HH BIO

PF FF HH BIO

DP

SNPPP/DS

ATP

Phase I

PF FF HH

SNP

PP/DS

PF FF HHSAPR/3ATP

PhaseII

M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12 M13 M14 M15 M16 M17 M18

3

2001 2002

4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8

PF – Processed Food CMG (Category Management Group)FF – Frozen Food CMGHH – Household Products CMGBIO – Bio Pharma ProductsSWO – Sugar, Wheat Flour, Cooking Oil

Project PreparationBusiness BlueprintRealizationFinal PreparationGo-Live & Support

SNP, PP/DS, ATP Go-Live

DP Go-Live

SAP R/3 Go-Live


• Enterprise portalCJ expects to implement mySAP Enterprise Portal tech-nology, a component of SAP NetWeaver™, to facilitatemanagement and personalization of information across the company’s diverse businesses. This implementation will heighten the level of standardization of business processes throughout CJ, enabling further performanceimprovements.

Through its current and expected implementations, CJ is establishing a consistent set of processes across its diversebusinesses, reducing costs, and improving customer service.CJ expects to continue on this path of improving profitablegrowth as it enhances its business portfolio.

AT A GLANCE

Strategic goals

•Pursue global growth across diverse businesses through selective investment and by streamlining business processes

• Enhance ability to respond to demand shifts in fast-moving consumer goods segment

• Improve delivery performance while reducing inventory

•Reduce costs of offshore procurement of raw materials by minimizing the impact of exchange-rate fluctuations and other uncertainties

Approach

CJ implemented a process innovation program across its diverse businesses following an eco-nomic downturn that affected Asian economies.The company first focused on improving its exe-cution capabilities by reengineering its businessprocesses covering order fulfillment, productionplanning, and procurement. CJ then implementedsales and operations planning processes to betterbalance supply and demand. Supporting actionsincluded increasing forecast accuracy, analyzing its purchase costs, and shortening its production-planning cycle. This approach was enabled by mySAP™ Supply Chain Management and other SAP® solutions.

Results achieved over the period 2000 to 2002

•Reduced stock-outs by 41.2%; expects to achieve a service level of 97% in order fulfillment by 2003

• Lowered finished-goods inventory by 15.4% and raw-material inventory by 18.5%

•Reduced procurement costs by 5%; expects a total reduction of 10% by 2003

• Increased gross margin by 2% as a result of the complete set of cost reductions

• Improved response time to customer claims by 50% and expects to achieve 24-hour turnaround by 2003

The Codorníu Group,

a family-owned wine-pro-

ducing company founded

in the 16th century and

one of the earliest users of

SAP® R/3® in Spain, once

again turned to the ERP

software vendor to help

manage its supply chain.

Today, using the demand

planning capabilities of

SAP Advanced Planning &

Optimization (SAP APO),

a key component of mySAP™

Supply Chain Management

(mySAP SCM), Codorníu

can manage forecasts at

different hierarchy levels

and view the effects of

changes, which can be

grouped according to

product families or disag-

gregated to the finest detail.

CODORNÍUTRANSPARENCY IN DEMAND PLANNINGWITH mySAP™ SCM

The Codorníu Group is a family-owned wine producingcompany that was founded in the 16th century. In 1872, thecompany introduced cava to Spain for the first time usingthe traditional method, and a few years later began the firstexports to Argentina and Cuba.

At present, the Codorníu Group is one of the main producersof cava and quality wines in Spain. It comprises 11 wineries,which are all situated in prestigious wine-producing regionsin Spain (Cava, Penedés, Rioja, Costers del Segre, Ribera delDuero, Priorato, and Conca de Barberà), as well as abroad(Napa Valley in the United States and Mendoza in Argentina).Furthermore, Codorníu is the Spanish wine-producing groupthat owns the largest surface area of vineyards, with a total ofmore than 3,000 hectares (7,410 acres).

Additionally, the group distributes internationally recognizedproducts in Spain, such as wines from E&J Gallo, Campari,Cinzano, and various prestigious brands of Scotch whisky.

CODORNÍU’S STRATEGIC COMMITMENT

In 1996, Codorníu became one of the first Spanish companiesto implement the SAP® R/3® System. Since then, the system hasbeen progressively introduced into different areas of the organi-zation, completely covering the back-office processes – includ-ing sales, production, materials management and purchasing,human resources, finance management, and controlling.


Once its back-office processes were running smoothly,Codorníu again put its trust in SAP to help manage its front-office processes and Internet environment and began making

“Once the back-office phase had been

successfully covered, Codorníu again

put its trust in SAP by acquiring the

e-business mySAP.com® platform for

the front-office and Internet environ-

ment. Its SCM, CRM, enterprise portal,

e-procurement, and business informa-

tion warehouse solutions allow

Codorníu to collaborate with its

customers, suppliers, and business

partners using the Internet and

extranet.”

Jaume Mariné, Director of Internal Organization, Codorníu

plans to implement mySAP™ Supply Chain Management(mySAP SCM), mySAP Customer Relationship Management,mySAP Enterprise Portal, e-procurement with mySAP SupplierRelationship Management, and the SAP Business InformationWarehouse (now a part of SAP NetWeaver™). Codorníu’sultimate goal is to have the means to successfully collaboratewith its customers, suppliers, and business partners usingInternet and extranet technology and to ensure its continuedsuccess.


THE mySAP SCM PROJECT

Codorníu’s first undertaking in the long list of proposedimplementations was the mySAP SCM project, which broughtthe company face to face with technological and organizationalchallenges. Technologically, although Codorníu was a pioneerin implementing state-of-the-art management tools, the mySAP SCM implementation involved new and unfamiliarprocesses. And on an organizational level, integrating the company’s supply chain meant that all the departments in-volved would need to be bolstered. In particular, the companyknew it had to strengthen its team responsible for demand fore-casting: The team, which comprised marketing, production,and purchasing managers, took on a new member, the demandplanner, who was responsible for coordinating the entireprocess.

The design team then set about developing a statistical modelof demand behavior, which would enable the company to makemore accurate projections of future sales according to product,channel, and geographical area. During the design phase, work-shops and presentations were provided to help users familiarizethemselves with the new system. Once the model had been de-fined, the team developed a prototype and designed the report-ing system in the SAP Business Information Warehouse.SAP and Cap Gemini Ernst & Young’s total commitment as implementation partners helped ensure the project’s success.

THE IMPROVEMENT OF THE SUPPLY CHAIN

For the Codorníu Group, improving its supply chain was key toachieving excellence of service. “With total integration into theSAP R/3 System, mySAP SCM enabled us to manage our entiredemand-planning cycle – and reduce costs at the same time,”says Jaume Mariné, director of internal organization. Codorníuused the SAP Business Information Warehouse to help tracksales and generate reliable forecasts in a simple and flexible way.Planners also used the demand-planning capability of mySAPSCM as a central tool to define the annual budget. Today,Codorníu uses mySAP SCM for the short-term planning of the bottling process. It also helps the group determine how best to use the different crop varieties and facilitates procure-ment (medium-term planning). In addition, the group usesmySAP SCM for more accurate long-term planning of its grapeproduction.


A MULTITUDE OF TANGIBLE BENEFITS

The implementation of mySAP SCM has brought Codorníumany tangible benefits: The centralized demand-planningmodel, which is integrated with the ERP system, enables greatersynchronicity between marketing departments and the produc-tion team. Forecasting can be carried out based on particularcharacteristics of the industry: the pronounced seasonal natureand the impact of cannibalization during the introduction ofnew products, for example. Because the master data for SAPAPO and the SAP R/3 System is integrated, planning tasks arefast and the company can avoid data redundancies and errors.

NEW BUSINESS MODEL

With the new system, Codorníu can manage forecasts at different hierarchy levels and view the effects of the changes in planning, which can be grouped according to product families or disaggregated to the finest detail. The solution alsoensures that each agent along the supply chain has access to information from a single source and is immediately alerted to any change in the forecast – a critical factor in the wine business. As a result, the entire Codorníu supply chain can react readily to short-term changes in demand.

A SOUND FUTURE

For the Codorníu Group, the mySAP SCM demand-planningcapabilities have provided the basis for building a sound future.With key mySAP SCM functionality and tools at its fingertips –such as supply network planning (SNP) and global available topromise (ATP) – the group can continue to integrate andoptimize its supply chain and meet order delivery dates, whiletaking capacities and restrictions into account. The bottomline? mySAP SCM enables Codorníu to fulfill its policy of con-tinual improvement companywide – and get a better returnon its investments.


AT A GLANCE

SAP® solutioncomponents mySAP™ SCM

Hardware platform Hewlett-Packard

Operating system Unix

Database Informix

Number of users 20

Implementation SAP andpartners Cap Gemini Ernst & Young

Degussa AG is a multi-

national chemical company

with a strong focus on de-

centralized management by

its 5 divisions, comprising

21 business units. In keeping

with this strategy, the com-

pany opted to introduce a

new IT solution for business

consolidation to deliver con-

sistent external and internal

financial information in a

timely manner. SAP® Strate-

gic Enterprise Management

Business Consolidation

(SAP SEM-BCS) provides

integrated legal and manage-

ment consolidation with

highly flexible reporting.

DEGUSSA AGDEGUSSA ACCELERATES CONSOLIDATION ANDSTREAMLINES REPORTING WITH SAP® SEM-BCS

A GLOBAL PLAYER WITH AMBITIOUS PLANS

Mergers and acquisitions generate dramatic change, and theyusually leave companies with multiple, often incompatible, systems that must somehow work together. Degussa AG, Germany’s third-largest chemical company and the worldleader in high-yield specialty chemicals, faced just such achallenge.

As the product of a merger between Degussa-Hüls AG and SKW Trostberg in February 2001, Degussa has dramaticallygrown and changed in structure in recent years. In 2002, Degussa had 435 subsidiaries and 47,623 employees, posting salesof �11.7 billion. With multiple international subsidiaries anda commitment to decentralized management, Degussa neededa solution that could consolidate financial information frommultiple systems and provide accurate reports for decisionmaking. That solution was SAP® Strategic Enterprise Manage-ment Business Consolidation (SAP SEM-BCS).

As Dr. Jürgen Hörtig, vice president of Degussa corporateprojects, explains, “We ran separate software systems formanagement and legal reporting. This often meant the samedata had to be entered two or more times at different locations– a costly, time-consuming, and inefficient process. In the wakeof dramatic expansion, the group found itself with a variety ofdiverse IT systems and an urgent need to standardize reportingprocesses.”


Given Degussa’s commitment to enterprise-wide, decentralizedmanagement, the company needed a single, efficient process for producing consolidated internal and external reports. Thegroup was looking for a way to link accounting systems in eachof its international subsidiaries without disrupting legacy soft-ware or compromising compliance with local standards and legal obligations. Because of this requirement, support for U.S.Generally Accepted Accounting Principles (U.S. GAAP) was atop priority.

DEGUSSA OPTS FOR ALL-IN-ONE FUNCTIONALITY

SAP Strategic Enterprise Management Business Consolidation(SAP SEM-BCS) produces consolidated information for compa-nies with complex organizational structures and large numbersof subsidiaries like Degussa. “This all-in-one functionality wasvery attractive to Degussa,” says Hörtig. In addition to meetinglegal requirements and complying with a wide variety ofaccounting standards, including U.S. GAAP and InternationalAccounting Standards/International Financial Reporting Standards (IAS/IFRS), SAP SEM-BCS provides highly customiz-able management reporting for improved strategic decisionmaking. Managers can view information at any time by using a standard Web browser.


DEGUSSA AND SAP: A PROVEN TRACK RECORD

AND FUTURE-DRIVEN APPROACH

SAP SEM-BCS was a natural fit for Degussa. “We already hadmany years’ excellent experience with SAP technology, and SAPhas always proven itself to be a reliable and expert partner,” saysHörtig. “Easy integration with our legacy SAP systems was alsoimportant. As a pilot customer, we were fully aware of the risksinvolved, and we knew that it would need to be a team effort.”

Beginning with intensive consultation, the ambitious project –dubbed Financial Redesign and System Transformation, orFIRST – required intensive collaboration between Degussa’s in-house experts, SAP consultants and developers, and consult-ants from BearingPoint, Degussa’s implementation partner.“The first step was to agree on standard methods and termi-nology in German and in English,” explains Hörtig.

“Because it was a global project involving a minefield ofaccounting practices and concepts, laying down solid groundrules in the form of the ‘Degussa Reporting Manual’ was a considerable task.”

After agreeing on methods and terminology, the team estab-lished standard processes for transferring data from worldwidesubsidiaries into the central system. “We worked hard with SAPConsulting and BearingPoint to prepare the terrain for the SAPsolution. This was a major project in itself,” says Hörtig.

With these foundations successfully laid, Degussa was ready toimplement SAP SEM-BCS. “We set our sights high and wereaware that a pioneering integration project of this scale neverruns entirely smoothly. It is a great tribute to the collaborationof all three parties that SAP SEM-BCS is now fully operational.It really was an example of excellent teamwork, and we aregrateful for the dedication of everyone involved,” says Hörtig.


Integrating reporting and the corporate finance function, SAP SEM-BCS revolutionized Degussa’s reporting strategy, allowing managers to generate consolidated figures quickly and easily. To reap the full benefits of the new solution, Degussa restructured its external and internal reporting according to its organizational structure and processes. It also completely integrated all international subsidiaries into the reportingprocess. Using SAP SEM-BCS, subsidiaries validate their dataand transfer it over the Web directly into the corporate con-solidation system.

The FIRST project has been a great success. “SAP SEM-BCS handles incoming figures from a wide variety of heterogeneousaccounting systems, dramatically reducing manual interven-tion and accelerating the entire process. The time taken to pro-duce monthly reports for the total group has now been reducedto eight working days,” says Hörtig.

Degussa has also aligned its reporting processes with its globalstrategy. “The lion’s share of the work is performed locally inkeeping with Degussa’s [decentralized management] philo-sophy. This allows changes to legal entities and managementstructures to be handled more flexibly, and it minimizes theburden on central administrative staff,” explains Hörtig. Standardized figures flow directly into the system, eliminatingredundant data entry and manual validation and making thenew solution far less prone to human error and inconsistency.The solution works from one common set of data. That meansSAP SEM-BCS can automatically derive key performance indi-cators for legal and management units from financial state-ments during consolidation. “The common platform is basedon standardized data, processes, and content, which in turn allows the information to be universally understood and usedin a variety of ways,” says Hörtig. By providing quick and reli-able information from a single database, SAP SEM-BCS not onlymeets all of Degussa’s business requirements, it also providesthe necessary flexibility and scalability to meet Degussa’s futuregoals.


Extensive training of 400 users was the final milestone on theroad to success. Training ensured that users companywide understood and accepted the new system and process changes.

The groundbreaking project is a significant step forward for theDegussa group. As Hörtig points out, “As the first organizationto implement SAP SEM-BCS, we are also the first to reap the re-wards of increased speed, efficiency, and quality of our report-ing. This represents a very definite competitive advantage for Degussa in terms of administrative efficiency, stockholdertransparency, and internal decision making.”

THREEFOLD VALUATION AT DEGUSSA

Next on the horizon for Degussa is the implementation ofIAS/IFRS accounting practices. Starting in 2005, the EuropeanUnion (EU) will require EU companies listed on a regulatedmarket to prepare their consolidated accounts according toIAS/IFRS. For Degussa, this means threefold valuation: GermanGAAP, U.S. GAAP, and IAS/IFRS. SAP SEM-BCS will positionDegussa to handle this requirement. SAP has more than 10 years of experience in parallel valuation and is fully preparedto face the challenges of handling local GAAP, U.S. GAAP, andIAS/IFRS simultaneously.


A SOLID PLATFORM FOR THE FUTURE

Hörtig is delighted with the results of the SAP SEM-BCS imple-mentation. “It was not always easy, but the commitment andhard work of the teams involved have borne fruit,” he says. “We now have an enterprise-wide, fully integrated platform on which to build for the future.” The ambitious project has delivered flexibility, scalability, and, above all, transparency to Degussa’s global operations. In a company with as many sub-sidiaries and business units as Degussa, this is an impressiveachievement.



Dow Corning is a global

leader in silicone-based

technology and innovation.

To enhance planning and

execution of production and

logistics, the corporation

has installed SAP® R/3® and

the mySAP™ Supply Chain

Management (mySAP SCM)

solution, with SAP Advanced

Planner and Optimizer (SAP

APO) at its core. This power-

ful combination has enabled

Dow Corning to respond

faster and more flexibly to

the ever-changing pattern of

market demand.

END-TO-END SUPPLYCHAIN MANAGEMENTAT DOW CORNING DOW CORNING – A WORLD LEADER

Dow Corning Corp. provides performance-enhancing solu-tions to serve the diverse needs of more than 25,000 customersworldwide. It is a global leader in silicon-based technology andinnovation, offering more than 7,000 products and services. Operating in Europe, Asia, and the United States, the enterprisehas approximately 9,000 employees in 25 countries around theglobe. Annual sales are U.S.$2.6 billion. In order to maintainand strengthen its market position, Dow Corning has embarkedon introducing a state-of-the-art IT infrastructure that wouldgive the company greater control over its supply chain and im-prove customer satisfaction.

THE CHALLENGE – THE NEED FOR MORE INFORMATION

AND GREATER RESPONSIVENESS

Dow Corning’s legacy IT systems, primarily mandatory based,were hitting hard against the limits of their capabilities, espe-cially in an area vital to the competitiveness of a manufacturer: supply chain management. A major obstacle was lack of inte-gration, coupled with system redundancy. In many instances, itwas simply not possible to access and analyze much of the dataneeded for effective planning. This hampered decision makingacross the entire extended enterprise.

It became clear that more powerful client/server hardware andcutting-edge software were needed if Dow Corning was goingto improve data transparency and, ultimately, responsiveness.

56


RICH FUNCTIONALITY AND TIGHT INTEGRATION –

SAP® APO AND SAP R/3®

SAP® software offered Dow Corning the functionality, flexibility,and tight integration it sought. The first step was to create astate-of-the-art enterprise resource planning backbone, basedon SAP R/3®. The second step was to introduce the mySAP™Supply Chain Management (mySAP SCM) solution, with SAPAdvanced Planner and Optimizer (SAP APO) at its heart. Thiscreated an end-to-end environment, seamlessly linking all keyprocesses from order generation, to production planning, towarehouse procedures, to transportation moves through to delivery and billing. The SAP APO solution enables the SCORmodel: Plan, Source, Make, Deliver.

SAP APO provides manufacturers such as Dow Corning withanalysis, planning, and simulation tools that can draw on up-to-the-minute data from diverse internal and external sources, increasing transparency while decreasing errors and costs.What’s more, the SAP environment allows those plans to be put into action.

Implementation of the SAP APO pilot solution in a targetedsupply chain took just nine months from design to delivery. In a collaborative effort by a team of SAP consultants and DowCorning employees, business requirements were transformedinto system requirements and design. Six of the nine monthswere spent on installing the enabling tools, prototyping, andstress testing. The supply chain environment went live without a hitch.

57

Manufacturing Industries58

INCREASED EFFICIENCY AND CUSTOMER SATISFACTION

Since then, SAP’s cutting-edge software has increased efficiencyacross the entire supply chain. Dow Corning has been able to establish a structure that enables supply and demand to be balanced around the world for this pilot.

With access to global, real-time facts and figures, decision makers can now coordinate people, plants, and processes withfar greater ease, matching production to market requirementson a global scale. The company expects to realize major savings,particularly in the area of materials management costs, whenall supply chains are enabled.

One of Dow Corning’s major objectives was to raise the qualityof customer service. Here as well, mySAP SCM has brought tangible improvements. Providing customers with reliable delivery commitments, evaluating new market share with confidence, and supplying on time all contribute to overall customer satisfaction. The supply planning capabilities of mySAP SCM enable the corporation to rebalance and optimizedemand forecasts according to various criteria, including trans-portation costs, order destination, and so on. Dow Corning cannow deliver more precisely what its customers need, when they need it.


ENTERPRISE-WIDE ROLLOUT TO FOLLOW SHORTLY

The remaining 25 supply chains across the enterprise have beenimpressed by the improvements in cost-effectiveness and ease of use, and are naturally anxious to gain the same benefits. Thesupply chains are “pulling” the need for this enabling toolset. Inthe longer term, the corporation intends to take advantage ofthe other enabling components of SAP APO, as well as othercomplementary solutions, such as SAP Customer RelationshipManagement (SAP CRM), to round out its end-to-end supplychain solution.

59

Forbo is living proof of the

fact that a manufacturer of

a basic product like floor

covering can develop into

a sizeable multinational. The

company was founded in

1928 and has since grown

into the market leader in

vinyl and linoleum, with

5,700 employees worldwide.

Forbo also has sales offices

worldwide. Forbo chose

SAP® R/3® to facilitate global

integration of production,

sales, and logistics and to

bring transparency to the

whole organization. This was

an important, but difficult,

step towards streamlining

operational management.

FORBO GROUPON FIRM “GROUND” UNDERNEATHBUSINESS PROCESSES WITH SAP

WORLDWIDE ROLLOUT

Forbo’s head office is in Zurich, Switzerland, and it hassubsidiaries throughout Europe and the United States. Beforechoosing SAP for its flooring business, Forbo had its own solu-tion, consisting of a mainframe environment, which had itsdrawbacks. Dietmar Böhm, Forbo CIO, recounts: “The main-frame environment was expensive and made huge demands onsupport and maintenance. Furthermore, the system could notbe expanded. For this reason, Forbo went in search of a new solution, to be rolled out worldwide. The solution had to beable to support and integrate order processing, logistics, sales,production, and distribution. SAP® R/3® was chosen, because of the flexibility and integration the software offers. It is perfectfor tracking information flows. Moreover, it is the embodimentof future-oriented technology. We initially chose SAP R/3, withthe aim of enhancing it with SAP for Mill Products in a secondphase.”

PERFECT COLLABORATION BETWEEN SAP AND FORBO

Böhm outlines the scope of the project. “The implementationis worldwide; most of the Forbo Group, like the subsidiaries inFrankfurt, Brussels, and the sites in the Netherlands, alreadyuse SAP R/3. It will also be rolled out in Scandinavia, England,Spain, Italy, Switzerland, Austria, and the United States. Allsales offices worldwide are already linked to the system. Theimplementation started in February 2001, and in May 2002 thefirst subsidiaries went live. The project went less smoothly thanexpected. At first we made some typical implementation errors,like not giving our users adequate training.


“It is also important to strictly adhere to the project plan. Inaddition, consulting quality is decisive. I would nevertheless liketo give the overall project a B, because SAP Consulting demon-strated a lot of competence, especially in the later phases, inbringing together all system elements. The go-live required agreat deal of effort from all those involved, and the cooperationbetween SAP Consulting and Forbo employees could not havebeen better.”

ONLINE INSIGHT INTO STOCKS

“SAP R/3 offers flexibility and quality,” states Böhm. “It providessecurity in difficult economic times. It is essential to Forbo formaintaining its market position. All subsidiaries worldwideenter sales orders. Thanks to SAP R/3 and SAP for Mill Products,these orders trigger production and delivery. This is efficient

“SAP R/3 provides flexibility and quality.

It provides security in difficult economic

times.”

Dietmar Böhm, CIO, Forbo

and ensures better use of raw materials and semifinished prod-ucts. It is a fully integrated system that offers transparency andinsight. The figures it provides are more exact and clear. Before,for example, we had little real-time information on stocks inthe Netherlands. Now every subsidiary worldwide can see on-line what is in stock. All information flows are perfectly visible.And our financial administrators are very satisfied, because theycan track all cash flows with the available reporting options.Control has become simplified, because there are fewer inter-faces and less diversity in the software.



“The financial administrators are very

satisfied. They can track all cash flows

with the available reporting options of

SAP R/3.”

Dietmar Böhm, CIO, Forbo

“The software also offers flexibility. Current, optimal financialdata not only makes for decisive market approach; it also allowsyou to carry out internal reorganizations, such as opening ormerging subsidiaries quickly and thus cost-effectively in SAPR/3. In my opinion, the market leadership of SAP is justified,especially because of the high level of software integration.”

CONSIDERABLE DECREASE IN COSTS

IN THE LONG TERM

“The implementation project was a difficult one, and we had toovercome many obstacles,” concludes Böhm. “We are thereforeproceeding carefully. I am down-to-earth and advise others totake the same approach. You should first make sure that thetechnology is up and running before improving your business processes with the software. For example, Forbo will not intro-duce corporate functionality until the worldwide implemen-tation has been completed. We will first round off this project,then we will carry through improvements, and after that wewill decide which step to take next. More tips? Set up small teams and take it one step at a time. Stick to your original proj-ect plan, and do not forget that there is no money to be madeon the software itself. The benefits are indirect and only notice-able in the long term.

“If, for example, you take the reports our financial administra-tors are so happy with, if you see how many hours work theysave, they make quite an impressive profit through efficiency.Hence, in the long term, this will decrease costs considerably.”


AT A GLANCE

SAP solution SAP® R/3® 4.6b,SAP for Mill Products(FI-CO, MM, PP-PI, QM, PS, PM, IS-Mill 2.0, SD, LES)

Hardware platform IBM AS/400

Operating system OS 400

Database IBM DB/2

Number of users 450

Implementationtime 15 months

Implementationpartner SAP Consulting

Goodrich is using lean

manufacturing in its quest

to achieve Enterprise

Excellence – perfection

in how it serves all its

stakeholders. The company

turned to mySAP™ Business

Suite – a key part of the

SAP® for Aerospace &

Defense portfolio of soft-

ware and services – to help

it quickly adapt its business

systems to support not only

the initiative, but an increas-

ing emphasis on e-business.

Using the new software,

Goodrich can also now react

flexibly to the ever-changing

requirements and pressures

that characterize the aero-

space industry.

GOODRICHCORPORATIONGOODRICH SELECTS mySAP™ BUSINESS SUITE TO QUICKLY ADAPT TO CHANGING BUSINESS MODEL

Goodrich Corporation’s Aerostructures division designs andmanufactures aircraft engine components – such as nacelles,pylons, and thrust reversers – and also provides maintenance,repair, and overhaul (MRO) services for these components.The division is headquartered in Chula Vista, California, withadditional manufacturing and MRO facilities worldwide.

ENTERPRISE EXCELLENCE

The company is using lean manufacturing in its quest toachieve Enterprise Excellence – perfection in how it serves allits stakeholders. Goodrich turned to mySAP™ Business Suite –a key part of the SAP for Aerospace & Defense portfolio of soft-ware and services – for a comprehensive information solutionto support its lean manufacturing initiative, along with the restof its business.

“The rate of change in the aerospace business is increasing, especially in the e-business area,” says M. Thornton, productdata management/enterprise resource planning (PDM/ERP)project manager at Goodrich. “We couldn’t change or modifyour 200-plus legacy systems fast enough to respond to ourrapidly evolving business model. SAP and our PDM solutionprovide us with the ability to quickly make changes to oursystems to support the changes taking place in our business.Additionally, mySAP Business Suite also provided a readyplatform for e-business.”

When Goodrich says it can now make changes quickly,it means it.


“We can literally make these changes in days or hours,” saysGary Coleman, vice president for information technology.“Each time we change one of our business processes, it requiresa systems change. For example, as we co-locate people andoperations around a product, this causes movement of ma-chines and people and requires system changes to reflect wherethe new tasks and activities are taking place. If you don’t have aresponsive system that you can quickly, flexibly, and easilychange, it becomes difficult to make those changes to the busi-ness. In the past, we would have to rely on programmers andwait months for the modification.”

RAPID GLOBAL IMPLEMENTATION

The company rolled out mySAP Business Suite quickly, inonly 14 months. Goodrich went live simultaneously at sixmanufacturing facilities on two continents. The implementa-tion included a new time and attendance and shop-floor datacollection system and impacted 4,500 users with changes tovirtually every single transaction in their day-to-day activities.

Goodrich credits the assistance of SAP Labs, SAP AG, SAP SI,and Xansa – a business consulting, information technology,and outsourcing organization with extensive experience inaerospace and defense – for its on-time, on-budget rollout.Xansa worked closely with Goodrich and the SAP partnersto deploy virtually the entire mySAP Business Suite platformin a remotely hosted and managed configuration, includingfunctionality for financials, project management, manufactur-ing, sales and service, procurement, warehousing, and businessintelligence.


SAP: A CLEAR CHOICE

Goodrich undertook an extensive testing process beforeselecting SAP.

“SAP provided, first of all, a full suite and an integrated system,”Coleman says. “We also looked at a matrix of key players in theaerospace and defense industry. Many of them are using SAP;that validated our decision and facilitates synergy down theroad. Moreover, we also wanted a healthy company with a trackrecord that would be a valuable business partner for a longtime.”

Goodrich is not only going to use mySAP Business Suiteto run its business, it’s also going to use the system – alongwith mySAP™ Business Intelligence (mySAP™ BI) – to predictwhere it is going.


“Most business information is results-related – it tells you whatyou did yesterday,” says Jim Harmon, director of the GoodrichSAP Customer Competency Center. “We have a strong effortunderway to identify and collect what we call ‘driver’ informa-tion. This is information that is going to help us predict whatthe results are going to be. We want to get this information –for example, the correlation between inventory and productionbuild rates – in the hands of our people quickly, to take correc-tive action before something becomes ‘a result.’”

Goodrich linked mySAP Business Suite to a product datamanagement system for a complete life-cycle managementsolution. And, its internal competency center will helpGoodrich continue to refine and enhance its ongoing businessrequirements with the SAP® solution, so as the company’s busi-ness changes, it can quickly make system changes to meet itsbusiness needs.


Henkel Group’s reporting

systems were outdated and

inefficient, and the advent of

International Accounting

Standards (IAS) heightened

the need for standardized

global accounting practices.

Henkel was quick to act,

replacing five legacy systems

with SAP® Strategic Enter-

prise Management. The

solution has already born

fruit; the group completed

its 2002 IAS-based annual

report in just over one

month, two weeks earlier

than in previous years.

HENKEL GROUPSAP® STRATEGIC ENTERPRISE MANAGEMENTSTREAMLINES INTERNATIONAL REPORTING

HIGH-QUALITY PRODUCTS FOR A GLOBAL MARKET

The Henkel Group, headquartered in Düsseldorf, Germany, is a multinational giant specializing in household, personalcare, and cleaning articles, as well as adhesives, sealants, andsurface-treatment products. Brands include such famousnames as Persil, Fa, Loctite, Duck Tape, and Sellotape. Thegroup has subsidiaries in 75 countries and employs approxi-mately 46,000 people, some three quarters of whom are basedoutside Germany. In 2002, the group posted total consolidatedsales of �9.6 billion.

INCREASED TRANSPARENCY AND

COMPARABILITY WITH IAS

As a global player, Henkel was quick to recognize the benefitsof adopting the International Accounting Standards (IAS). IASwas developed by the IASC, the International Accounting Stan-dards Committee, set up in the 1970s by the accountancy bodiesof a number of industrialized countries. Henkel was one of thefirst German companies to embrace these principles, which willbecome compulsory by 2005 for about 7,000 listed companies inthe European Union (EU). According to Michael Rauch, direc-tor of management reporting at the Henkel Group, “Workingwith internationally accepted standards increases transparencyand improves comparability of financial information across na-tional borders. Even without the latest EU requirements, this isvitally important to multinational organizations of our nature.For this reason, we adopted IAS well before most other Germancompanies.”

CREATING A SINGLE, COHERENT SYSTEM

However, as Stephan Rutter, IT corporate account manager at Henkel, points out, “The obvious advantages of the inter-national standards were not our only motivation for imple-menting a new solution.


“We were looking for a single system to harmonize both inter-nal and external reporting processes throughout the organiza-tion.” The company looked to SAP for the answer.

Prior to implementing SAP® Strategic Enterprise Management(SAP SEM), Henkel was hampered by a variety of inefficient and outdated accounting and reporting solutions. In total, the

“SAP’s intuitive, browser-based

user interface delivers the information

they want, whenever they want it.

This improves and accelerates

decision making on all levels.”

Michael Rauch, Director of Management Reporting, Henkel Group

Henkel Group used five different applications, each requiringdata to be entered independently, and each with its own uniquequirks. “We were running several separate systems for manage-ment reporting and statutory accounting. And to make mattersworse, our two file-transfer-based systems for internal report-ing were both 25 years old – a replacement was long overdue.Equally, statutory accounting processes were not automatedand relied on e-mail – leading to inevitable confusion, timelags, and losses in accuracy and efficiency. There was clearlyroom for improvement,” explains Rutter. “With SAP StrategicEnterprise Management, we were able to create a single, coherent reporting solution that seamlessly integrates with our enterprise-wide IT environment.”


PARALLEL VALUATION WITH SAP

Although Henkel already had an SAP system in place, accord-ing to Rauch, “We didn’t choose IAS with SAP just because itwas easier to integrate with our existing enterprise solutions;SAP has more than 10 years of experience in parallel valuationand offers tailored functionality. In addition, comprehensivesupport for IAS 14 ‘segment reporting,’ which deals with seg-mentation by line of business and geographical area, is particu-larly important to a global organization like Henkel.”

Rutter adds, “With the SAP R/3® implementation in 1998, welaid ground for parallel valuation at Henkel. We opted for theconcept of parallel accounts, creating IAS accounts whereneeded – and this was the right choice for us.”

The Top Accounting and Reporting System (TOPAS) project,driven by Rauch and Rutter jointly, began with a blueprintingphase in May 2001, initially concentrating on SAP SEM businessconsolidation capabilities. In the course of 2002, the projectteam tailored the solution to Henkel’s unique needs. “This was a painstaking but unavoidable process that required the cooperation of experts from all areas of the organization,” saysRauch. “We invested 360 man days for 18 months to successfullycomplete the project. For a project of this scale, that’s prettygood going.” Henkel chose SAP Consulting to support the go-live.

The group successfully accomplished international rollout in July 2003 to all 270 subsidiaries around the world within 6 months.

User acceptance is essential to ensuring the success of a projectof this kind. “We devoted a lot of effort in face-to-face training,but when you see the cost and time savings, no one can arguethat it was not worthwhile,” explains Rauch.

GREATER SPEED AT LOWER COSTS

Henkel expects significant savings as a result of streamlining theclosing process with SAP SEM. According to Rutter, “The num-ber of employees responsible for administration work relatingto the reporting process is going to be reduced by a third. Withone system replacing five legacy applications, data no longerhas to be entered more than once and there is no need to com-pare and check information across systems. In addition, a vari-ety of routine processes have been automated and streamlined.


“Most important of all, reports can be created around 30% faster.For instance, the time taken to generate a monthly report hasnow been reduced to just five days. Similarly, the 2002 annualreport according to IAS and local GAAP was ready in just over a month, compared to seven or eight weeks under the previoussystems.” But SAP Strategic Enterprise Management has led tomuch more than just streamlined financial-reporting process-es. Because the input data is standardized, a large number of

“The number of employees responsible

for administration work relating to the

reporting process is going to be reduced

by a third. . . . In addition, a variety of

routine processes have been automated

and streamlined. Most important of all,

reports can be created around

30% faster.”

Stephan Rutter, IT Corporate Account Manager, Henkel Group

processes can be automated throughout the organization. Inconjunction with SAP Business Information Warehouse – acomponent of SAP Business Intelligence, a key offering withinthe SAP NetWeaver™ integration and application platform –these important facts and figures are now available for a varietyof reporting and analysis tasks. Decision makers and plannersbenefit from richer data delivered in a more practical, electron-ic form. “SAP’s intuitive, browser-based user interface deliversthe information they want, whenever they want it. This im-proves and accelerates decision making on all levels,” saysRauch. It also eliminates the need to distribute expensive printed reports.

LONG-TERM SUCCESS

SAP SEM opens up a world of possibilities for Henkel. “SAP SEM is the ideal starting point for Henkel. It makes it easyto integrate new planning functionality to enhance reportingand analysis,” explains Rutter. “In global companies as large andcomplex as Henkel, this kind of integration is the key to long-term savings – and long-term success.”


The pressure to lower prices

in a weak marketplace is

forcing companies in the

semiconductor industry to

introduce long-ranging,

cost-cutting measures. With

the help of SAP® Business

Information Warehouse

(SAP BW) – a key compo-

nent within SAP Business

Intelligence – the German

semiconductor manufactur-

er Infineon Technologies AG

managed to improve the

transparency of its procure-

ment processes company-

wide. SAP BW also provided

the foundation for a supplier

relationship management

system at Infineon.

SAP® BUSINESS INTELLIGENCE AT INFINEONSAP® BUSINESS INFORMATION WAREHOUSE HELPSIMPROVE TRANSPARENCY OF PROCUREMENTPROCESSES WORLDWIDE AND REDUCE COSTS

Headquartered in Munich, Germany, Infineon Technologieswas founded in 1999 to continue Siemens’s business activities,inheriting a legacy of innovation begun by Siemens Semicon-ductors in 1952. Today, Infineon’s 30,000 employees develop, design, manufacture, and market a wide portfolio of semicon-ductor products and complete system solutions – for wiredcommunication, computer, security, and chip-card technology,as well as automotive and industrial electronics.

MASSIVE PROCUREMENT VOLUME

“Infineon purchases goods and services that total between �3and �4 billion every year. To increase purchasing transparencyand achieve further cost savings, we implemented a procure-ment analysis project, based on SAP,” says Peter Reischl, pur-chasing manager at Infineon.

It used to take a lot of effort to retain a monthly overview of theentire company’s purchasing volume. Although Infineon hadbeen using SAP® R/3® companywide, the different systems werenot integrated. Each location would create evaluations usingSAP R/3 tools and then send them as Microsoft Excel sheets toInfineon’s headquarters in Munich for compilation. “We usedto generate global reports by manually consolidating Excel ta-bles containing data from nine local systems,” says Thomas Uhlik, project manager for spend analysis at Infineon. That’swhy the company decided to integrate purchasing data fromthe SAP R/3 Materials Management and Financial Accountingcomponents used around the world into a single datawarehouse.


FUTURE-PROOF SOLUTION

Infineon chose SAP Business Information Warehouse (SAP BW)to do so. SAP BW is a component within SAP Business Intelli-gence, a key offering of the SAP NetWeaver™ integration and application platform. “We decided on SAP BW because the SAPdata warehouse is a future-proof solution that can be easily in-tegrated using standard interfaces across different releases andforms,” says Uhlik. Plus, SAP BW supports the data universalnumber system (DUNS) from Dun & Bradstreet (D&B). DUNSallows identification and qualification of more than 70 millionbusinesses worldwide. This means, for example, that companies

“SAP BW will have amortized within

a year, which means a fast return on

investment – that’s real business value.”

Peter Reischl, Head of Purchasing, Infineon Technologies AG

can easily consolidate and update supplier data – or third-partydata – on a regular basis and keep track of which businesses be-long to which company. SAP BW also includes a user-friendlyWeb reporting feature. “Being able to access reports and evalua-tions on the Internet was an important criterion for pragmaticreasons, because it meant that we didn’t have to install specialpresentation software on our PCs that were being used all overthe globe,” says Uhlik. “Web reporting allows users to access theinformation with a regular Web browser.”


EFFICIENT CONSULTING

In collaboration with Infineon, SAP Consulting carried out afeasibility study to show SAP BW’s cost-effectiveness. The studyclearly showed process improvements and the potential for savings.

Preparation for the project began in October 2002. Using the AcceleratedSAP™ (ASAP) implementation method, the systemwent live in just under four months – in February 2003.“Through close collaboration with SAP Consulting, we were

“We decided on SAP BW because

the SAP data warehouse is a future-

proof solution that can be easily

integrated using standard interfaces

across different releases and forms.”

Thomas Uhlik, Spend Analysis Project Manager, Infineon Technologies AG

able to stick to the schedule and come in well under our bud-geted costs,” says Reischl. “The SAP consulting team, whichprovided support during every project phase, partly via remotesupport, helped us reduce our consulting costs – by about 30%.”

The project team implemented spend analysis functionality using SAP Consulting’s proven methods and tools. This, cou-pled with the use of SAP BW business content, which Infineonwas able to use almost in its entirety, meant the project could be completed swiftly and smoothly. “The preconfigured reportand analysis scenarios helped us immensely,” says Uhlik. Withextremely complex operations in a multitude of countries, andmaterial master data that differs from location to location, Infi-neon needed to tailor business content companywide. Masterdata should be harmonized in one to two years.



COMPLETE SOLUTIONS – ALL UNDER ONE ROOF

The implementation, however, involved some challenges. “Accommodating nine SAP R/3 Systems, releases 4.0 to 4.6, indifferent languages, and with each needing to be customized,was not an easy task,” says Uhlik. Infineon also standardizedaround 450 product categories during the project. Today, some 100 employees use SAP BW – including 25 core productmanagers around the world, employees in purchasing and controlling, and purchasing managers.

Infineon loads data on all product groups from the MaterialsManagement application – transaction data every week, master data every four weeks. And, once a month, data onsome 30,000 creditors is synchronized with the D&B database.

COMPREHENSIVE REPORTS FOR TRANSPARENCY

Today, using six standard reports available in SAP BW, Infineoncreates the necessary transparency to optimize procurementprocesses and save costs. One type of report, which determinespurchasing volume, contains the volume/number of invoicespaid and the amounts paid. The total purchasing volume at Infineon can be sorted by vendor, purchasing organization (by client), purchaser, product group, and month.

A second type of standard report enables invoice-to-order com-parison. This provides an overview of number/volume of ordersand the number/volume of invoices received for these orders. It also makes payment for outstanding purchasing volumesmore transparent and makes it easy to see when a large numberof transactions with a low volume are made to a single vendor.

One important issue at Infineon includes the monitoring andoptimization of its business relationships with the top 20 vendorsfrom around the world. To address this need, the company usestools within SAP BW to create reports that enable high-valuevendor analyses. With the SAP solution, the company willalways have at its fingertips a clear overview of its vendors, displayable by location, product group, and invoices paid.

Finance reports (FI reports) provide the volume of all paid invoices and credits – which means that invoices without Materials Management orders or without involvement of the purchasing department are also included. FI reports give Infineon the necessary information to maverick buy – withoutinvolving the purchasing department.

The DUNS family tree provides information on which corpora-tions/groups individual vendors belong to. This information isimportant for contract negotiations because this is the only way

“With SAP BW, we get detailed, clear

information on the entire purchasing

volume at the touch of a button – instead

of the difficult-to-consolidate Excel lists

we previously had.”

Martina Kamm, Purchasing Department, Infineon Technologies AG

that Infineon can determine the total volume it purchases froma single corporation.

And, finally, duplicate vendor analyses use companies’ DUNSnumbers to identify and merge (or delete) duplicate creditorsstored in local SAP R/3 Systems. This allows Infineon to reducethe number of creditors.

REAL BUSINESS VALUE

“With SAP BW, we get detailed, clear information on our entireprocurement volume at the touch of a button – instead of thedifficult-to-consolidate Excel lists we previously had,” says Martina Kamm, a power user in Infineon’s central purchasing department in Munich. Employees, who especially like the intuitive navigation and excellent usability of the Web reportingfunction, also say that SAP BW’s overall performance is verygood.



As a result of its SAP BW implementation, Infineon expects to begin showing quantifiable savings in the 2003/2004 financialyear, which starts on October 1, 2003. “We know in advance exactly what we are going to buy, how much, and from whom,and we certainly benefit from the new level of transparency,”says Reischl. “We can bundle purchase volumes with individualvendors more effectively than previously, which gets us betterprices.” Infineon expects savings of 3% to 5% through volumebundling and by reducing the total number of vendors. “SAP BW will have amortized within a year, which means a fastreturn on investment – that’s real business value,” says Reischl.

THE NEXT STEP

After the successful SAP BW implementation, Infineon wants to implement other SAP tools this year. For example, it plans tointroduce an electronic, catalog-based procurement system forselected products based on SAP Enterprise Buyer.

The company also wants to extend the use of SAP BW by theend of 2003 to create and distribute consignment reports. Thiswill support Infineon’s consignment model for procurement,where vendors deliver goods to Infineon warehouses, and

“Through close collaboration with SAP

Consulting, we were able to stick to the

schedule and come in well under our

budgeted costs.”

Peter Reischl, Head of Purchasing, Infineon Technologies AG

Infineon pays only for the goods that are used. This dynamicapproach of combining innovative procurement processes withSAP BW will allow Infineon to save on capital goods.

With the help of SAP BW, Infineon can continue to empoweremployees, streamline purchasing – and above all, reduce costs.

In 1997, Janssen-Cilag and

SAP worked together to

implement an enterprise

resource planning system –

SAP® R/3® – at the com-

pany’s facilities in Greece.

The collaboration continues

with the recent installation of

the SAP Strategic Enterprise

Management solution

(SAP SEM), which is helping

Janssen-Cilag turn its busi-

ness strategy into a reality.

The first step of the SAP

SEM implementation, an

efficient solution for setting

up and monitoring business

planning, went live in

mid-spring 2003.

JANSSEN-CILAGSAP® SEM ENABLES EFFICIENT, INTEGRATED PLANNING AND BUDGETING

Janssen-Cilag Hellas is a member of the Johnson & Johnsongroup of companies. It was established in Greece in 1973 as a scientific office with 20 employees. In 1979, Johnson & Johnsonexpanded its operations in Greece with the establishment of Janssen Pharmaceutica AEBE, which began producing medi-cines with third parties in 1980. In 1994, Janssen Pharmaceuticaand Cilag merged to form Janssen-Cilag Pharmaceutical AEBE.

Today, Janssen-Cilag is one of the five biggest pharmaceuticalcompanies in Greece and produces the greatest percentage ofmedicines in the country. It has facilities in Athens and Thessa-lonica and a workforce of more than 200 employees.

The company’s financial track record over the past six years is impressive. From 1997 to 2002, its revenue quadrupled from �43 million to �163 million (a 280% increase). Moreover, its pretax income during the same period rose from �570,000 to �15.6 million. The company’s workforce doubled (from 113 employees in 1997 to 217 in 2002) as new positions opened up for Greek scientists.

Janssen-Cilag produces, imports, and trades Johnson & Johnsonpharmaceutical products, which cover many medicinal fieldsincluding hematology, nephrology, oncology, psychiatry, neurology, mycology, gastroenterology, and chronic pain.

The company has been using SAP® R/3® as its primary tech-nology platform since 1998, following a decision by Johnson &Johnson. The original project, which included almost all of themain modules of SAP R/3, focused on the enhancement of in-ternal procedures and administrative information. As a result,Janssen-Cilag relies on SAP R/3 to support its purchasing andsales cycles and to monitor production to third parties. The administrative information provided by the solution enablesmanagers to make decisions at a local level.


It also helps them manage reports to the parent company,Johnson & Johnson. Now the company has extended SAP support into the strategic enterprise management (SEM) arenawith the installation of SAP SEM technology. The first SAP SEMmodule implemented covers planning and budgeting.

THE CHALLENGE: INTEGRATED PLANNING AND

BUDGETING PROCEDURES

An efficient planning and budgeting strategy is critical toJanssen-Cilag’s continued success. Planning/budgeting coversevery aspect of the business, from normal day-to-day activity tostrategic decision making. As a process, it is divided into threeclosely related procedures: targeting, regular budgeting, andstrategic planning. In order to fully support these procedures,all departments of the organization must participate in them.

However, for a planning process of this scale to be successful, several factors must be ensured. The most important of these are:

• Business communication between parties

• Joint developments between budget holders

• Interactions between departments

• Independence for budget holders

• Flexibility

• Bottom-up and top-down information flow

It was obvious to Janssen-Cilag decision makers that most ofthese factors had to be monitored within a collaborative, flexi-ble, and transparent planning environment that would enableall the process-related parties to work from the same page.

Janssen-Cilag wanted a budget system that would allow someflexibility in a complex local environment but – most impor-tantly – would be structured in such a way that it expresses corporate strategy and procedures.


“Only in this way could we ensure the accuracy and security ofthe budget process and results,” says Kostantinos Kostandinides,information management director at Janssen-Cilag. The com-pany decided to empower its planning-related organizationalactivities with SAP SEM technology, beginning with BusinessPlanning & Simulation (SEM-BPS).

SAP SEM: A TURNKEY SOLUTION

Currently, SEM-BPS provides a unified, flexible, and uniqueplanning environment for the whole Janssen-Cilag organiza-tion. Most of the firm’s corporate procedures are integratedinto the system. All budget holders have their own space forplanning and submit their budget to the next level of approval

“We decided to reconstruct our existing

planning process in order to give the

company a system that not only covers

all the information and functions needed

for complete budgeting, but also reflects

corporate procedures for recording and

managing budgeted data.”

Kostantinos Kostandinides, Information Management Director,Janssen-Cilag Hellas

through an established submission process. A “status & trackingsystems” function ensures that the process is monitored con-tinuously, while predefined, system-generated alerts fulfill corporate requirements for deadline management, possible extensions, and time limits.

The solution brings with it complementary benefits in the area of corporate reporting, which is crucial to the company’sbusiness development and is now handled automatically by thesystem. Actual data (stored primarily in the SAP R/3 System)and plan data (stored primarily in SAP SEM) are now using thesame reporting engine, SAP Business Information Warehouse(SAP BW).

Another complementary benefit of the new system is a decreasein system maintenance procedure and planning procedurecosts.


This results partly from the new SAP technology, but mostlyfrom the fact that every participant in the planning process hasto complete only a small piece of work while the system itselfensures integration, information delivery, and data protection.

The implementation of the SAP SEM project began in September 2002 and went live in spring 2003 at the company’sGreek facilities. It is considered a pilot for Janssen-Cilag opera-tions across Europe. The implementation team consisted ofpersonnel from Janssen-Cilag and SAP Consulting. “With thesupport of SAP Consulting, we successfully implemented a demanding project, covering all our requirements, within ashort period of time,” says Kostandinides.

COMMITMENT TO SUCCESS

Janssen-Cilag has already invested several days for training and familiarizing employees with the new planning/budgetingmodel. The company’s final strategic map, a product of hardwork by many project teams, was presented to all employees at a seminar.

“We are now ready to proceed to the final phase of the SEM project,” Kostandinides says. During this final phase, the company must ensure that:

• All company goals are properly represented and that the appropriate interface is in place

• Quantitative determination of the goals is clear, based on allthe factors specified as necessary when the plan was drawn up

• Results are accurate and easy to analyze, and the analysisdemonstrates that the business warehouse solution and itsproperties reinforce the supply of information – not onlyfrom SAP systems, but also from others

NEXT STEPS: ONE PROJECT LEADS TO ANOTHER

Performance measurement has always been a challenge forJanssen-Cilag. Now that the SEM-BPS budgeting project hasbeen completed and had a successful production run, the company is ready to consider the implementation of CorporatePerformance Monitor (SEM-CPM) for its corporate balancedscorecard development. This will strengthen its internal processes and complete the corporate vision of effective enter-prise management. “In the contemporary IT world,” saysKostandinides, “corporate strategy support and development in the broader area of an organization is the new strategic challenge.”


PLANNING/BUDGETING PROJECTAT A GLANCE

SAP solution SAP® SEM

Hardware platform Compaq

Operating system Windows 2000

Database Oracle

Number of users 58


Implementationpartner SAP Consulting

The Loewe trademark is syn-

onymous with outstanding

consumer electronics of the

highest quality. This image

did not evolve by chance.

It is the result of innovative

product development and

meticulous customer care.

Since January 2002, the

tradition-based company

has relied on its modern

customer-care center and

the special capabilities

of mySAP™ Customer Rela-

tionship Management to

strengthen its brand position

and provide comprehensive

support to its authorized

dealers.

LOEWESERVICE AT THE HIGHEST LEVEL WITH mySAP™ CUSTOMER RELATIONSHIP MANAGEMENT

THE ULTIMATE IN HOME ENTERTAINMENT

Loewe has earned its reputation by offering only first-class products and first-class service. The company has received high acclaim on numerous occasions for the innovative design of itspremium consumer electronics. Today it offers the whole range of devices for home entertainment: televisions, DVD players,VCRs, audio systems, and multimedia Internet TVs. Loewemanages approximately 50 international branches from its headoffice in Kronach, Germany. In Germany alone, the companyemploys more than 1,200 people. In 2001, it generated sales of�392 million worldwide.

CUSTOMER CARE: THE CUSTOMER AS FOCAL POINT

Loewe offers its customers the highest quality not only in the technology and design of its products, but also in service.The most important component of its highly developed service concept is the newly implemented customer-care center(CCC). Loewe started the center with the aim of offering thebest service in the industry – in order to consolidate the com-pany’s brand position with customers and provide comprehen-sive support to its authorized dealers. “The customer-care center should be the central contact point for customers whohave problems or questions,” says Jens Härtel, who heads up the CCC. “We absorb the time-consuming problems that thedealers would otherwise have to deal with, which frees up moretime for consulting and allows us to gain valuable feedbackfrom customers. It is a win-win relationship for everyoneinvolved.”


A HIGHLY INTEGRATED SOLUTION

The mySAP™ Customer Relationship Management (mySAP CRM) interaction center forms the basis of the Loewe customer-care center. As one of the key capabilities of mySAPCRM, the interaction center links front- and back-office pro-cesses. Complete integration with the SAP® enterprise software,already implemented at Loewe, enables seamless informationflow and supports the CCC processes. With the mySAP CRMimplementation, Loewe created the foundation for an enterprise-wide solution based on the mySAP Business Suiteplatform.

CENTRAL CONTACT POINT FOR

ALL CUSTOMER REQUIREMENTS

Loewe customers contact the CCC for a number of different reasons, for example, questions about guarantees, complaints,company information, or user support. Thanks to a standard-ized and up-to-date overview of the information, most ques-tions can be answered directly on the telephone. Call agentsforward the more detailed inquiries to a demo room. Here, acustomer service representative works through the problemstep-by-step with the end user until the problem is solved. Ifthis is not possible, technical customer service is also available.“Today, 80% of customer inquiries can be processed directly byexcellently trained CCC staff,” says Klaus Riedel, IT area man-ager for Loewe. “Only 20% of inquiries have to be forwarded.”


DETERMINING MARKET REQUIREMENTS

The mySAP CRM interaction center also helps Loewe deter-mine market requirements. The SAP solution supports all media, such as telephone, fax, or e-mail. Customer informationand history is systematically collected, logged, and analyzed,and then saved centrally. Loewe’s product-development andimprovement team can then take this customer feedback andmake modifications to products or use the information to develop new product lines. In the long term, Loewe plans to use mySAP CRM to strengthen its ties to customers – whichwill ultimately help the company increase profits.

SUCCESS THROUGH COMPETENCY AND TRUST

With the support of SAP Consulting, the Loewe customer-carecenter went live in January 2002 after only six months. In May2002, the company made an upgrade to SAP CRM 3.0, whichconverted the flow of activities from Loewe to the customer.SAP consultants, who brought sound knowledge of customer-service processes and industry-specific know-how to the table,worked together with Loewe to successfully implement theproject on time and within budget. Plus, the close connectionwith the SAP development team enabled SAP consultants tomake enhancements to the SAP standard system – for example,speeding up data transfer from the database to the CCC. Lastbut not least, expert training provided by SAP consultantshelped make certain that Loewe employees could soon work independently with the new software. Riedel sums up the situation: “A careful step-by-step procedure, along with effec-tive teamwork between SAP and Loewe, ensured a successfulimplementation.”


Today, mySAP CRM provides Loewe with an optimal solutionthat enables streamlined processes and superior customer care – all of which helps ensure the success of the company’senterprise strategy and gives Loewe a lasting edge over its competitors.

SOLUTIONS WITH PERSPECTIVE

The next step for Loewe includes enhancing the system by implementing mySAP CRM marketing capabilities. Then, afterthe trial period in Germany, the company will consider imple-menting mySAP CRM in Belgium and the United States. ForLoewe, the SAP solution has made a world of difference. “With-out mySAP CRM, we would not be able to realize our vision,”says Härtel. “We are now in a far better position to target our resources more effectively and offer the customer a fast andqualified answer.”


Marico Industries Ltd. is a leading India-based consumer goods company with sales of Rs 6.96 billion (approximately $142 million) for the fiscal year ending March 2002. With six factories and about 1,000 employees, it has maintained steadyrevenue and profitability growth over the past 10 years. Maricooffers a range of products to the local and export markets (primarily South Asia and the Middle East), including refinededible oils, food products such as jams and sauces, niche fabriccare products, and hair oils.

Marico was incorporated in 1988 and began commercial opera-tions in 1990 when it acquired the consumer products divisionof Bombay Oil Industries. A key strength of the company sinceits inception has been its ability to build brands.

Marico has pursued a rigorous approach to creating and sus-taining its brands, focusing on understanding and anticipatingconsumer needs, innovating in distinct ways, developing ad-vertising campaigns to reinforce value delivered to consumers,and tracking metrics that support product positioning strate-gies. The company’s approach has enabled it to pioneer poly-ethylene packaging for coconut oils, a cold-water clothesstarching product, and other unique developments. Maricofaces competition from large, well-capitalized international rivals such as ConAgra Foods and Unilever, and from domesticbrands, and non-branded products. Nevertheless, Marico’s ap-proach has enabled the company to create unique value forconsumers and thereby to build significant market share inmany product categories. Of Marico’s nine brands, three aremarket leaders.

mySAP™ SUPPLYCHAIN MANAGEMENTAT MARICOENHANCING BRAND EQUITY BY IMPROVING DISTRIBUTION PERFORMANCE


A key attribute of Marico’s brands is the widespread availabilityof the company’s goods throughout India. Marico’s distributionnetwork is key to ensuring that its products reach about 100 million people throughout the Indian subcontinent eachmonth. Marico produces 125 stock-keeping units (SKUs) at itsown factories and through 15 subcontracting manufacturers. Itstores products at 32 warehouses and sells to 3,500 distributors.These distributors in turn provide products to 1.6 milliondomestic retail outlets.

Marico’s peer companies in other countries recognize itsstrength in distribution; consequently, Marico has secured adistribution alliance with Indo Nissin Foods and a distributionagreement with Procter & Gamble.

Though Marico experienced robust expansion throughout the 1990s, the company realized that it would face challenges tocontinued profitable growth. Greater rivalry in its core marketsmeant it had to increase marketing expenditures. The companyalso was unable to sustain the performance of its supply chainas its scale of operations grew. Marico was increasingly experi-encing inaccurate forecasts, excess inventory, stock-outs, anddelays in response to market requirements. These supply chainperformance issues were reducing Marico’s cash flow and didnot support the product brand images the company had takencare to develop.


In order to achieve sustained profitable growth, given marketfactors and the need to maintain its distribution effectiveness,Marico determined that it must improve its supply chain capabilities. Specifically, the company focused on customer-facing business processes as well as on its internal operations.After a careful analysis of alternatives, Marico selected mySAP™ Supply Chain Management (mySAP SCM) to enablethe reengineering of its associated planning and executionprocesses.

Marico’s goals included improving forecast accuracy and delivery performance in order to sustain the widespread avail-ability of its products in the market and the associated positiveperceptions of its brands. By concentrating on internal opera-tions, Marico has been able to lower inventory and supply chain operating costs, particularly those expenses that could bereduced through better planning in areas such as intracompanystock transfers. The company has achieved improved cash flowto fund future growth, sustained the viability of its independentdistributor network, and maintained those elements of itsbrands’ images that are tightly coupled with high availability of its products to its customers.

CHALLENGES AND OBJECTIVES

Although Marico had achieved a compound annual growthrate of about 18% during the 1990s, the company recognized in the latter part of the decade that it must renew its focus onprofitability in order to participate in long-term growth opportunities.


The company had become highly dependent on its three lead-ing brands for generating revenue and earnings, and was facingincreasing competition in the associated edible oil markets aswell as in other product categories. This meant that Maricowould have to increase its advertising expenditures to defendthe market positions of its various products and continue to invest in product development to ensure continued growth.

Moreover, even though distribution was a core strength forMarico, the performance of its supply chain network was notkeeping pace with the growing scale of its operations. For example, the company had a planning cycle of 30 days, and,during this period, was unable to respond to changes in de-mand. The bucketed time horizons for manufacturing and distribution were not synchronized and distribution levels were uneven, with a weighting of 15%, 32%, and 53% for the first, second, and final third of each month. This suboptimal skewingof distribution activity over time, coupled with low levels offorecast accuracy, led to a mismatch of supply and demand, inventory build-ups at Marico and at its distributors, expiredproducts, and stock-outs – all of which adversely affected end-consumer perceptions. Total delivered costs were increasingdue to storage capacity constraints, which often required inter-warehouse stock transfers, temporary renting of additionalstorage space, and truck demurrage. Also, spreadsheet-basedplanning methods and multiple, nonintegrated transaction systems inhibited widespread visibility into essential data, further compounding planning-process problems.

Thus, key goals for Marico included improved forecast accuracyand more uniform distribution levels throughout each month.The company also needed to reengineer its planning processesto more effectively match supply and demand. As a result, costs would be more in line with best-in-class operations in the consumer industry. Inventory carrying costs and total supplychain costs would be reduced, freeing cash flow to reinvest ingrowth-generating activities. Marico targeted improvements in stock-out reductions and on-time delivery that would be aconsequence of better planning processes. These actions wouldsupport the company’s branding initiatives as well as help ensure the profitable operation and continued viability of its distributor network.


IMPLEMENTATION

In 1999, Marico initiated a detailed evaluation of its supply chain operations to determine how best to reduce costs, satisfycustomer needs, support its brands’ images, and position thecompany for long-term growth. The company concluded thatsourcing and manufacturing were straightforward, while itsdistribution operations were the key source of opportunity.Marico procured only a few commodity raw materials (for example, vegetable oils and safflower seeds), had no majormanufacturing capacity constraints, had no sales seasonalityassociated with its products, and minimized artificially induceddemand surges by avoiding the use of promotions. However, the distribution network was complex, with SKU/distributionpoint combinations numbering in the millions.

Marico focused on business processes that addressed internalcollaborative forecasting between its manufacturing sites andwarehouses. The company defined clear responsibilities to ensure that distribution from its warehouses to distributorswould meet service-level and inventory objectives. Also, thecompany implemented policies to distinguish the relative priority of SKUs and of distributors.

After a careful evaluation, Marico selected mySAP SCM to enable the associated planning and execution processes.These processes included calculation of monthly shipment requirements from its plants to its warehouses to supportmake-to-stock operations, electronic transfer of stock-level data from the distributors to Marico, and push distribution of products from Marico to distributors based on forecasted retail-level demand and distributor inventory levels.

Implementation of SAP® R/3® capabilities in finance, costaccounting, materials management, production planning,quality management, and sales and distribution was started inJune 2000 and went live quickly in a “big bang” implementationin April 2001. Implementation of the demand-planning andsupply-network-planning capabilities of SAP Planning & Opti-mization, a key component of mySAP SCM – along with theSAP Business Information Warehouse (SAP BW) – began in August 2000 and went live in a “big bang” implementation inMay 2001.


Twenty-six staff members and 20 consultants from SAPConsulting and its partner Siemens Information Systems Ltd.(SISL) assisted in the project, using AcceleratedSAP™ (ASAP)methodologies to ensure a rapid implementation. The scopeincluded all company factories, warehouses, and businessoffices; distributors; and contract manufacturers; and the implementation achieved systems integration that efficientlysupported the new planning and execution processes.

The implementation produced quick results. By early 2002, forecast accuracy was improved by 14%, and the levels of ship-ment activity through each third of a month had become moreeven (25%, 32%, and 43%). The planning-cycle time was reducedfrom 30 days to 15–20 days, and enhanced reporting facilitatedmanagement decision making. These results led to reduced in-ternal and distributor inventory, fewer stock-outs, lower levelsof lost sales, and reduced supply chain exception-handlingcosts.

In the future, Marico plans to implement vendor-managed inventory (VMI) processes by making use of Internet-based integration of distributors’ stock levels into the company’s SAP R/3 system. This VMI implementation will enable Marico to further reduce the planning cycle to 10 days and ensuregreater visibility into distributor operations, reduced inventory,lower supply chain management costs, and higher levels of delivery performance. These results will continue to reinforcethe company’s branding initiatives and position Marico for long-term, profitable growth.


AT A GLANCE

Strategic goals

• Enhance long-term value of company brands by achieving excellence in distribution performance

•Maintain market share growth in a competitive environment with much larger, offshore rivals

•Scale supply chain operations to sustain customer service as the business grows

•Reduce total delivered costs

Approach

Marico shortened its planning cycle from 30 daysto about 15 days; revised its demand-planningprocess to forecast “sales out” (shipment fromdistributors to retailers); and implemented an improved process to replenish its distributors. The company focused on achieving relatively even shipment levels throughout each month and developed internal collaborative processes to support planning. This approach was enabled by mySAP™ Supply Chain Management software,which includes demand planning and supply network planning capabilities coupled with SAP® R/3® and SAP Business Information Warehouse (SAP BW).

Results achieved during 3Q01 to 1Q02

•Decreased stock-outs associated with distributorsales to retailers by 33%

•Reduced lost sales due to stock-outs by 28%,thereby improving total revenue by 1.5%

• Lowered excess distributor inventory by 33%

•Reduced late deliveries to distributors by 37.5%

•Reduced costs associated with supply chain exceptions by 25% (for example, intracompanystock transfers, and truck detention costs)

•Positioned the company for a vendor-managedinventory implementation and further perfor-mance improvements

PRODUCTS IN DEMAND

Founded in 1994 with the merger of three domestic appliancecompanies – Brastemp, Consul, and Semer – Multibrás is theleading manufacturer of household appliances in Brazil, withsales in 2001 exceeding U.S.$708 million. As the leader in thismarket, Multibrás serves thousands of customers. Its productsare in high demand by most households and are sold through-out the country in retail outlets of all sizes. As the sole manu-facturer of a complete family of “white line products,”Multibrás sells retail merchandise including refrigerators,chest and upright freezers, stoves, washing machines, dryers,dishwashers, microwave ovens, air conditioners, and air puri-fiers. With its Brastemp brand of goods, the company alsooffers small kitchen appliances such as mixers, coffee machines,blenders, and food processors.

SUPERIOR SERVICE IS A TOP PRIORITY

Serving customers with increased efficiency and higher qualityservice in presales, sales, and postsales activities was a high priority for Multibrás. By improving the ability to respond tocustomers, the company’s management knew the result wouldbe added customer loyalty and retention. To accomplish thatobjective, it decided to implement Internet Sales with mySAP™Customer Relationship Management (mySAP CRM). InternetSales covers the entire process chain associated with online selling through the Internet – from creating appealing onlineproduct catalogs to price promotions, order processing, securepayment transactions, and order status checking.

92 Consumer Industries

Multibrás is the Brazilian

market leader in home

appliances. To ensure its

continued success, the

company wanted to provide

its retailers, both large and

small, with improved effi-

ciency and higher quality

service. That’s why

Multibrás implemented

Internet Sales with mySAP™

Customer Relationship

Management (mySAP CRM).

Now, the company offers a

new online sales channel to

customers, where they can

get product information,

place orders, and monitor

order status anytime and

anywhere.

MULTIBRÁSMULTIBRÁS MAXIMIZES CUSTOMER SATISFACTIONWITH INTERNET SALES FROM mySAP™ CUSTOMERRELATIONSHIP MANAGEMENT


Multibrás first introduced its online-shopping capabilities toa pilot group of retailers through its Web portal. This phase ofthe project was met with great success. “[With mySAP CRM],retailers can count on accessing a large variety of self-serviceinformation through Multibrás’ corporate portal, without timelimitations or the restrictions of working hours,” says RenatoFaure, Multibrás director of information technology. “This en-hances our relationship with our trade partners.”

As an added benefit, the company has seen more efficientuse of its support staff in the customer service center. Now,these employees can be more proactive, rather than reactive,to problem-solving on behalf of customers.

A SOLUTION THAT MEETS INTEGRATION

REQUIREMENTS

From the viewpoint of Multibrás executives, choosing mySAPCRM was a natural next step. “We have been using SAP® R/3®since 1998, with 1,400 of 3,500 stations in our network runningSAP,” says Faure. “We opted for this [CRM] solution with integration in mind. This solution is an ideal match for our requirements.”

Implementation took only three months, with softwarelocalization done on the fly. “We relied on the support of SAPConsulting and SAP Global Custom Development Servicesteams based in Germany and India to adapt the solution to theBrazilian tax system,” Faure explains. At Multibrás, four peoplewere directly involved with the implementation – two from theIT group and two business specialists. Four SAP Consulting pro-fessionals from SAP’s Brazilian subsidiary were also committedto this project.


Multibrás wanted to make sure that the online implementationwould meet customer expectations. To ensure this, it initiateda program to get user comments. “For the initial stages, wechose companies that would give us honest feedback and makesuggestions, providing us with a true picture of this onlinecapability from their point of view.”

NEXT STEPS

Looking ahead, Multibrás sees the benefits of mySAP CRM.“During the coming months, we will analyze the potentialof expanding the project and at the same time plan to widenit to a larger group of customers,” says Faure.

Multibrás is developing a service project using mySAP CRMto support authorized dealers with technical assistance throughits portal. Plans are being made to publish an electronic catalogof parts, manuals, and technical newsletters on the Web. “Atthat point, we will start to accept orders for spare parts throughthe portal, and give customers access to information about thestatus of each of their orders.”


NATO Helicopter Industries (NHI) was formed at the beginningof the 1990s when four NATO member countries – France,Germany, Italy, and the Netherlands – decided to join forces to design and build a new military helicopter, the NH90. In February 1992, the four member nations set up the NATOHelicopter Management Agency (NAHEMA). The purpose ofNAHEMA was to manage the product development project and engage four industrial enterprises to carry it out:Eurocopter France, Eurocopter Deutschland (Germany),Fokker (the Netherlands), and Italy’s Agusta. As part of its firstmission in 1992, NHI designed five prototypes that, with morethan 1,000 hours of flying time to their credit, are now used asdevelopment and testing tools. In June 2000, NHI, which bythen had more than 60 partners, signed its second contractwith NAHEMA for the serial production of the helicopter.

“We already have an order book of 300 firm orders and anorganized industrial outfit. The NH90 will be assembled atthree production facilities – Milan, Marignane, and Munich –and each of the four industrial partners will be responsiblefor buying or manufacturing the various components of thehelicopters,” says Jean-Michel Poulier, operations manager atNHI. “We also decided to centralize two strategic functionswithin NHI: helicopter configuration and production planmanagement. That was why we decided we needed a flexiblemanagement system.”


NATO Helicopter Industries

(NHI), a joint venture

between four industrial en-

terprises in the aerospace

and defense sectors, chose

mySAP™ Product Lifecycle

Management (mySAP PLM)

to manage the development

process, from concept to se-

rial production, of its NH90

helicopter. “Only a tool as

structured and functionally

rich as mySAP PLM could

have enabled us to carry out

the tasks set by France, Ger-

many, Italy, and the Nether-

lands,” says Jean-Michel

Poulier, operations manager

at NHI. “Only SAP was able

to guarantee us assistance

in implementing and hosting

the solution.”

NATOHELICOPTER INDUSTRIESBUILDING HELICOPTERS WITH mySAP™ PRODUCTLIFECYCLE MANAGEMENT


EXTREMELY DEMANDING REQUIREMENTS

NHI organized a tender among software developers and pre-sented them with extremely demanding terms: the system hadto be integrated and structure-defining in order to optimize theinternal decision-making process. In addition – due to NHI’slimited IT resources – customization of the system had to beeasy and fast.

“We also wanted it to be one of the standard systems used in the aerospace industry, so that we could benefit from upgradesresulting from advances in the sector,” says Poulier. “Finally, weweren’t just seeking a software developer. What we needed was a partner who would be prepared to help us set up the systemand look after hosting and operating it. SAP was the only com-pany that met our long list of criteria. The mySAP™ ProductLifecycle Management (mySAP PLM) solution is the perfectsolution to meet our functional requirements.”

OPTIMAL CONFIGURATION MANAGEMENT

NHI and SAP signed a deal in December 2000. By May 2001, the configuration management function was up and running,followed by the configuration change tracking capabilities,and the integration to production planning. “The deadlinesand budgets were totally respected, thanks to four factors: arigorous investigation of our processes and objectives beforethe project – which enabled us to get started with a clear setof ideas; the hands-on experience of the SAP consultants,their excellent knowledge of the aerospace industry, and theirefficiency; the fact that we placed the implementation of thesolution in the hands of professionals with a track record; andfinally, our decision to stick to the mySAP PLM standards,”says Poulier.


NHI began serial production of two models of the NH90 in the summer of 2001: one for troop transportation and onefor coastal surveillance work. The configurations requestedby the project’s clients (the four original member nations,recently joined by the Scandinavian countries) are managed inSAP, which automatically generates component requirementsand production plans to be submitted to the four industrialpartners. “The SAP solution is an excellent tool for enhancingproductivity,” said Poulier. “It enables us to manage our twocomplex activities, multisite configuration and planning, onvery limited resources: only three people for configuration andtwo for production planning.” NHI calculated that the savingsrealized with respect to these two functions alone, which arenormally highly resource intensive, meant that the solutionwould pay for itself in less than two years, with operating costskept under control, thanks to hosting. Moreover, the flexibilityof mySAP PLM meant that NHI could modify configurationsright up to the last minute. This enables NHI to offer a tailoredapproach to its clients’ evolving needs and constraints, whilekeeping track of the product structures for the 16 years alreadycovered by its order book.


A STRONG ADVANTAGE

NHI opened up its system to its clients at the beginning of 2002,so they can now review their orders and monitor how theirconfiguration data is changing in real time. “Our clients arevery impressed at the structure and stability that mySAP PLMinjects into our production programs,” says Poulier. “The SAPsolution is a real sales advantage for us, as it gives our clientsconfidence in our ability via our industrial partners to deliverthe configurations they require – on time.”

mySAP PLM is only the first stage, however. NHI has alreadybegun implementing other mySAP Business Suite solutions, for example to improve pricing procedures as it prepares toexpand its client base. NHI also has long-term plans to imple-ment collaboration tools based on the integration of NHI’ssystem with those of its industrial partners. Eurocopter Franceand Eurocopter Deutschland run SAP® R/3®, and Agusta runsSAP R/2®. Fokker is the only one to run a non-SAP system. AsPoulier says, “Our objective is to arrive gradually at a situationwhere we are making full use of the potential offered by mySAPBusiness Suite.”


Anticipating the further

integration of the European

market, Lamps Europe, the

European business unit of

Philips Lighting, began to

restructure its organization

in 1996 by forming three

market groups. In the future,

marketing and pricing policy

would be decided centrally

in Eindhoven, the Nether-

lands, while product distri-

bution would be handled

by three main distribution

centers. An important

objective of the restructure

was to optimize internal pro-

cesses to achieve integrated

European logistics planning.

To accomplish its new orga-

nization structure, Philips

Lighting chose to replace its

local European computer

systems with the integrated

software of SAP.

PHILIPS LIGHTINGCENTRALIZED LOGISTICS SYSTEM INTEGRATES MANAGEMENT INFORMATION, CRM, AND PURCHASING

BASIS FOR EUROPEAN INTEGRATION

Lights are the product that has made Philips one of the world’sbiggest electronics companies. And today, Philips Lighting is astable and profitable business division of Philips. The divisionserves three markets: retail (the consumer as end buyer), pro-fessional wholesale (electrical contracting firms), and OEMs(original equipment manufacturers). Each of those markets has its own needs.

“An ordinary bulb is very different from, say, a cooking lamp or a stadium lighting system,” explains Louis Luijten, chief in-formation officer and SAP manager at the business unit LampsEurope. “We operate in different markets, with a very broadproduct range. All these products are manufactured with awide array of techniques that require many different base materials. In other words, at Philips Lighting you’ll find all conceivable logistics concepts in the industry.

“People don’t always appreciate what it takes to manufactureand sell a simple light bulb. To retain the small margins thatkeep our business alive we have to constantly optimize our internal processes.” In the mid-nineties, when Philips Lightingsaw that more and more businesses were reorganizing them-selves on both a European and a global level – and gainingstrength by bundling their buying power – it realized that it was time to regroup.

However, it recognized that its existing automation environ-ment would be a hindrance. All branches were using their ownsystems, interconnected by Electronic Data Interchange (EDI).Therefore, in 1996, Philips decided to replace all local systemswith a single integrated system.


And Philips chose SAP. “It was a strategic choice,” explains Luijten. “SAP is a stable partner who can take our enterpriseinto the future. Their software has the scope and robustness a multinational such as Philips needs.

“The next question was: Do we opt for integration or best ofbreed? The transparency and simplicity of the integration con-cept eventually swayed our decision. We chose SAP® Business Information Warehouse (SAP BW) to extract the required man-agement information, and, in a later stage, mySAP™ CustomerRelationship Management (mySAP CRM). We never even considered other suppliers. As long as SAP can fulfill more than80% of our wishes, that’s good enough for us.”

STEADFAST PARTNER AND SUPPLIER

In 1997, Lamps Europe embarked on a five-year plan that wouldlead to the full implementation of SAP R/3® at all Europeanbranches. SAP partner Cyber Solution Partners was brought onboard to support the implementation process. Was Luijten everafraid that the megaproject might be too ambitious? “ Every big IT project is a high-risk affair. Nevertheless, we’ve been ableto keep the promise that we made in 1997, by connecting allbranches with a total of 5,500 employees to SAP R/3, on timeand within budget. How did we manage? First and foremost,thanks to the high level of commitment within theorganization.


“A project like this needs vision from management, an under-standing of the reasons, and a willingness to promote that understanding in the organization. Also, it’s crucial to makethe necessary human and material resources – time, money,and attention – available. And, since you’re dealing with a five-year project, patience and a constant focus on the future are indispensable.

“SAP is a stable partner who can

take our enterprise into the future.”

Louis Luijten, Chief Information Officer and SAP Program Manager, Philips

“The quality of project management and continuity of the project team are a second prerequisite. Because the Europeanmarket organization was new and we had zero experience withSAP R/3, our partner and supplier played an important role. It also explains why we were eager to set up a European com-petence center so quickly. And, when dealing with the localorganizations, it’s important you stick to your guns. This callsfor determination on the part of one’s partner and supplier.Sometimes our consultants went into the field, knife clenchedbetween the teeth, adamant to defend the objectives of the project: a single European organization with a single IT system.”

CRUCIAL FIGURES ROUTINELY AVAILABLE

Lamps Europe has experienced many concrete advantages of its SAP R/3 implementation. Centralized distribution, which could not have happened without an integrated IT system, has already yielded considerable cost savings. The integrated planning system within SAP R/3 has optimized theentire supply chain. “We’ve been able to structurally reducestocks by 35%. On the organizational level we’re already enjoy-ing the benefits of SAP,” notes Luijten. “It’s all very well to con-vert your company to a European market group organizationthat can establish a price policy and a marketing vision central-ly, but you can do that only when you have the right informa-tion at hand.

“That’s why we not only replaced all local systems but also thecentral consolidation systems. In their place, we implemented a central management information system based on SAP BW. In the old days, each country had anywhere from five to sevenlocal information systems.


“It was impossible to extract simple, uniform information on sales, performance, financial performance, and – veryimportant – profitability per customer. With mySAP BusinessIntelligence (mySAP BI), those figures are routinely availablenow.”

EASIER DOING BUSINESS

In early 2001, Lamps Europe decided to extend its SAP portfoliowith mySAP Customer Relationship Management and mySAPSupplier Relationship Management (mySAP SRM). Philips onceagain chose to work with Cyber Solution Partners,

“Our stocks have been structurally

reduced by 35%.”

Louis Luijten, Chief Information Officer and SAP Program Manager, Philips

along with SAP Nederland and SAP AG. The CRM solutionserved the double purpose of enabling mobile access to sales information for field staff and providing an extranet applicationfor customers. In addition, a pilot for e-procurement of partsand machinery was set up for the manufacturing plants. As Luijten explains, “The efficiency of the order desk has been increased and customers now find it easier to do business with us. The CRM solution of SAP has replaced some 20 localapplications.

“The extranet, which is especially for smaller retailers andwholesalers that are not ready to invest in EDI, is now up andrunning in four countries. The product is not received enthu-siastically everywhere – some customers are very reluctant touse this technology, while others, like those in Scandinavia,readily embrace it – but we’re aiming principally at long-termcustomer retention. It made sense to get the system going assoon as possible because technology strides ahead fast, and thesedays you don’t get much time to respond.”

Philips Lighting has plans to extend its adoption of the mySAPBusiness Suite family of business solutions. Looking to the future, it wants to deploy mySAP Supply Chain Managementworldwide to maximize supply chain efficiency at a global level.


AT A GLANCE

SAP solution •SAP® R/3®•SAP BW•mySAP™ CRM•SAP Enterprise Buyer

Professional (mySAP SRM)

•SAP APO

Hardware platform IBM RS/6000 R80 and S80

Operating system IBM AIX

Database Oracle 8

Number of users 7,500

Implementation • 5 years time (SAP R/3 and SAP BW,

50 plants)• 1 year (mySAP CRM)

Implementation •Cyber Solution Partnerspartners •SAP Nederland

•SAP AG•SAP Consulting

Services

Over the last 25 years, ratiopharm has transformed the Germanpharmaceutical market. The company, based in Ulm, Germany,develops, produces, and markets generic products: preparationswith active agents whose patents have run out. Its slogan, “yourhealth – our commitment,” is backed by ratiopharm’s commit-ment to offer low-cost, high-quality medication across numer-ous branches of medicine – a cheaper alternative to the originalproducts. The company is enjoying visible success: ratiopharmranks as the largest pharmaceutical manufacturer, with themost-prescribed brand of medication in Germany today.

However, forward-looking strategies are needed to maintainthis success in the hotly competitive pharmaceutical market,with cost-cutting measures and deregulation already pushingdown the margins. “The profit margins in our industry sectorwon’t always stay at the present level,” says Peter Prock, chieffinancial officer at ratiopharm. To actively meet the challenge,ratiopharm has devised an aggressive strategy: the companyintends to extend its current role as a market-leading manu-facturer of generic products to become a significant medicalsupplier in Europe. ratiopharm plans to achieve this by shiftingthe emphasis from products to customers.

CRM: FUNDAMENTAL COMPONENT

OF STRATEGIC CHANGE

The use of progressive information technology is of funda-mental importance for ratiopharm’s strategy. The companyneeds flexibility just as much as the ability to adapt to thedynamic conditions of the pharmaceutical market. As theinherent requirements change, the role of the participantsis also redefined. Pharmacies, for instance, have becomeincreasingly significant as a result of deregulation of pre-scription-only medication.


In order to ensure a future in

the dynamic pharmaceutical

market, comprehensive and

up-to-date knowledge of

customer requirements is

becoming increasingly im-

portant, along with product

excellence. With the help

of mySAP™ Customer Rela-

tionship Management

(mySAP CRM), ratiopharm

has access to this knowl-

edge, which enables it to

tailor its sales activities

more specifically to the

most important customer

segments, improve customer

retention, and intensify its

efforts to gain new

customers.

ratiopharmMAXIMIZING REVENUE WITH TAILORED CUSTOMERMANAGEMENT AT GERMANY’S LARGESTPHARMACEUTICAL MANUFACTURER


It often lies at the pharmacy’s discretion whether a patient isgiven a biological equivalent or the therapeutic preparationprescribed by the doctor. But, that’s all changing: consumerscan now demand what preparation they receive. “The inter-actions have become much more complex,” explains StefanLangthaler, head of business systems at ratiopharm.

Against this background, systematic customer relationshipmanagement is becoming more of a focal point, which meanscomprehensive data must be available in order to supportrelations with doctors, pharmacies, hospitals, and consumers.

“Collaboration with SAP will definitely

enable us to develop and refine our cus-

tomer strategies, which will not only se-

cure our competitive advantage in

today’s pharmaceutical market, but also

pave the way for future growth.”

Peter Prock, Chief Financial Officer at ratiopharm

For example, analytical evaluation to direct sales activities atcustomer segments can help companies improve their chancesof generating greater profits – which is why ratiopharm decidedto use mySAP™ Customer Relationship Management (mySAPCRM) and its mobile sales capability to support the company’sexternal sales force.


CONSULTING BY SAP: COMPETENT AND RAPID

INTERNATIONAL IMPLEMENTATION

In keeping with the ratiopharm policy of rapid reaction, thisdecision was soon followed by action – the company equippedits German primary care sales team with mySAP CRM and itsmobile sales capability within five months. The rollout for thefull sales team in Spain followed two months later, and, afteranother four months, the entire German sales organizationbegan working with the new solution. Throughout this tightschedule, ratiopharm relied on the extensive knowledge of the

“mySAP CRM enables us to provide

more tailored support for customers,

significantly increase the efficiency of

the external sales force, and react more

quickly to the dynamic pharmaceutical

market.”

Stefan Langthaler, Head of Business Systems at ratiopharm

industry and detailed product experience of SAP® Consulting.From the start, the consultants impressed the company withtheir competent and goal-oriented project management.Their direct cooperation with SAP product development con-tributed to the successful and effective realization of customerrequirements. The success at ratiopharm reflects favorably onthe all-encompassing SAP services portfolio, which includesinnovative SAP software and proven consulting services. Thedays of struggling with difficult process and data integrationand incomplete customer information are over at ratiopharm;mySAP CRM ensures that ratiopharm’s external sales force hasthe full and latest picture about its customers and their poten-tial and requirements – anytime, anywhere.

CUSTOMER INFORMATION AT YOUR FINGERTIPS

Today, mySAP CRM provides ratiopharm’s external sales forcemembers with everything they need to address target groupseffectively – comprehensive knowledge about pharmacies,doctors, and clinics. Information about products, prices, andcompetitors is also available at the touch of a button, and a linkbetween mySAP CRM and an external address pool producesup-to-date information on customers and contacts.


The solution also increases productivity by helping sales forceemployees prepare for customer visits. Various functions helpsimplify the whole sales process, including arranging appoint-ments and completing correspondence, selecting experts, andplanning trips, as well as generating follow-up reports andanalyses. mySAP CRM then goes even further by forwardingorders that the sales force entered while in the field into theinternal processing system. And finally, order managementcapabilities provide comprehensive coverage of every stage inthe sales process.

“With mySAP CRM, we can provide more tailored support forcustomers, significantly increase the efficiency of the externalsales force, and react more quickly to the dynamic pharmaceu-tical market,” says Langthaler. “The technology supports ourstrategy of moving away from a solely product-oriented vision,in order to focus considerably more on our customers.”

RAPID ROI

According to a CRM return-on-investment (ROI) reviewpublished by Peppers and Rogers, a firm that specializes in cus-tomer-oriented strategies, ratiopharm can expect 63% effectiveinterest on its capital expenditure over a three-year period –with an amortization period of only 16 months – as a resultof implementing mySAP CRM. According to the analysis,ratiopharm can also expect a considerable increase in salesfigures in the next three years – a 46% increase in sales to themost valuable customers (category A customers) and 32% tocategory B customers. The review also states that ratiopharmwill raise its total number of customer contacts by 17% andcustomer churn will be minimized by analyzing and fulfillingcustomer expectations.

“We have calculated that even a 1% reduction in customerchurn will pay for our entire investment,” explains Prock.“Collaboration with SAP will definitely enable us to developand refine our customer strategies, which will not only secureour competitive advantage in today’s pharmaceutical market,but also pave the way for future growth.”


AT A GLANCE

Software mySAP™ CRM mobilesales capabilitiesSAP® R/3®

Hardware Fujitsu Siemens (server)Compaq (clients)

Operating system Windows NTWindows 2000

Database Oracle

Number of users 510


One of the largest corpo-

rations in the world, the

Royal Dutch/Shell Group

was founded in 1907 when

N.V. Koninklijke Nederland-

sche Petroleum Maatschappij

merged with Shell Transport

and Trading Company plc.

A diverse group of energy

companies with operations

in over 140 countries, its

businesses include oil and

gas exploration and pro-

duction; power generation;

manufacturing, marketing,

and shipping of oil products

and chemicals; and renew-

able energy projects includ-

ing wind and solar power.

ROYAL DUTCH/SHELLGROUPmySAP™ SRM FUELS SHELL’S CORPORATE VISION


PURCHASING POWER

Shopping is fun – especially if there’s an occasional bargain tosnap up. But if you’re really serious about getting high-qualitygoods at reasonable prices, then you need to be able to seeexactly what all manufacturers and suppliers are offering. WithSAP’s support, the Royal Dutch/Shell Group of Companies willsoon be able to systematically manage their suppliers across theworld.

Shell’s daily purchasing bill runs into millions. This huge cor-poration produces approximately 3% of the world’s oil supplyand holds interests in 55 refineries in 33 countries. Keeping itsfacilities operational means ensuring a constant supply of spareparts and equipment. From ballpoint pens to high-tech drillingplatforms, Shell has to keep supplies flowing to operating com-panies in over 140 countries – and this is precisely the challengethat the company’s procurement experts are currently tackling.

Shell’s long history of success (the company will celebrate its100th anniversary in 2007) has left the company with a some-what problematic legacy. Numerous mergers and acquisitionshave created a diverse system landscape consisting of more than100 back-end systems running different versions of ERP applica-tions – JD Edwards and, principally, SAP. Inevitably, the compa-ny’s purchasing processes have not remained immune to thissituation; each local operating unit is responsible for procuringits own goods and services. What’s more, information gaps anddiffering requirements in the various business units have so farstymied any attempts to introduce systematic supplier relation-ship management at the global level.

But this situation is set to change. In a project that it calls Trans-actional E-Procurement, Shell is aiming to enter a new era insupplier relationship management. By deploying SAP® solutionson its existing ERP systems, the company plans – among otherthings – to streamline its procurement processes and cut itscosts accordingly. But it needs to do some basic preparationfirst: This will consist of achieving data synchronization acrossthe system landscape and providing analysis tools to generatevital management information. After all, if both the procure-ment people and the business management teams don’t haveall the facts, they can’t be expected to evaluate supplier relation-ships objectively, let alone embark on effective strategic planning.

TRUSTING SAP TECHNOLOGY

“To me, implementing the Transactional E-Procurement project is like building a new gas processing plant,” says SteveIveson, Shell’s e-procurement project manager and a memberof the team responsible for leading the project out of corporateheadquarters in London. “You have to invest in both the tech-nology and the associated change before you reap the benefits.”Currently, Shell’s main investments are in two core elements of mySAP™ Supplier Relationship Management (mySAP SRM):the SAP® Enterprise Buyer procurement application and the exchange infrastructure. In addition to functioning as a privateexchange to provide an integration hub for Shell’s procurementoperations, this exchange platform will run key applications for evaluating and optimizing supplier relationships and for integrating content.


The project plan envisions installing separate SAP EnterpriseBuyer installations for the JD Edwards and SAP back-endsystems and using XML messaging to link them to the privateexchange. From here, orders will be transmitted to Trade-Ranger, a global e-procurement hub for buyers and suppliers

“E-procurement enables us to make

radical changes to the way we buy, the

speed at which we buy, the way we and

our suppliers work together, and the

way we can use information to manage

our business in the connected

economy.”

Chris Miller, Shell Group Adviser, Strategic Sourcing

in the oil and petrochemical industries. Trade-Ranger is set to play a key role in Shell’s procurement architecture. In fact,Shell wants its purchasing volume through Trade-Ranger toapproach several hundred million U.S. dollars by the end of2002, and to process 50% of its procurement business via thischannel in just a few years thereafter. Already Shell and othermajor corporations from the energy and petrochemical sectorshave positioned Trade-Ranger’s hub as the central axis for theirelectronic purchasing.



With the establishment of a new global procurement infra-structure, Shell is building on its existing strategic partnershipwith SAP. Shell was impressed by two strategic capabilities ofmySAP SRM: options for integrating it with Shell’s installedERP systems and its uniquely open and scalable technology.Moreover, SAP and Shell are working together to implement a number of new enhancements.

Iveson states, “When it comes down to it, we’re both pursuingthe same vision.” He then adds, “Most importantly, the infra-structure we’re putting in place will give us the ideal platformfor realizing our goal of fully integrated systems that supportreal collaboration both internally and externally.”

JOINT STRATEGIC DEVELOPMENTS

The focus of this close collaboration is a group of strategic development projects (SDPs) that fulfill Shell’s businessrequirements and will also influence future SAP components.The projects include constructing a cross-system of master datamanagement (content integration solution from SAP), imple-menting the analytical functionality of mySAP SRM to Shell’sspecifications in the company’s private exchange, and integra-ting JD Edwards’s back-end systems into the SAP-based procure-ment environment. After all, if global spend reporting is to beeffective, Shell’s managers need an accurate breakdown of pur-chasing expenditures across categories such as business units,suppliers, supplier families, and material groups.

Iveson is particularly impressed by the analytics for breaking purchasing data down to the level of individual articles so thatmanagers, for example, can identify the best supplier for a spe-cific article. In Shell’s case, aggregating purchasing data at theERP level is difficult because of the different data structures intheir disparate back-end systems. Among its other advantages,the private exchange infrastructure offers enhanced masterdata management, which enables synchronization of masterdata for both internal and external suppliers. The content inte-gration solution from SAP, for example, provides invaluablesupport when it comes to standardizing distributed content.Among other things, it helps identify identical or similar products and goods, no matter where the relevant informationis stored.

Shell Information Technology International is responsible forinstalling the private exchange at one of Shell’s own IT centersnear Kuala Lumpur in Malaysia. Frans Liefhebber, Shell’s globale-procurement IT manager and a colleague of Steve Iveson, explains: “We’ve already got several hundred people there looking after Shell’s IT infrastructure. What’s more, they alsohandle key parts of Shell’s worldwide desktop support. So itmade perfect sense to set up the private exchange at thislocation.”

The company’s e-procurement hub went live with its initialfunctions in mid 2002. “The key challenge for us is working outhow we can provide optimal support for this high-availabilityinfrastructure,” says Liefhebber. “Deciding what tools we needand which teams will be responsible is all part of the learningprocess.”

SUCCESSFUL PILOT PROJECTS

SAP Enterprise Buyer, on the other hand, has already earned its place at Shell. Following a pilot last year at SEPCo (Shell Exploration & Production Company), the U.S. upstream sub-sidiary of the Royal Dutch/Shell Group, SAP Enterprise Buyerhas been implemented at the Dutch upstream company NAM.“This was a real showcase project,” says Iveson. And there isnow nothing to stop the planned rollout from proceeding rapidly, business unit by business unit. In many instances, therollout will be accompanied by key ERP standardization initia-tives currently underway in various business areas. Shell plansto have SAP Enterprise Buyer up and running in all the mainoperating units by 2004. “We’re looking at approximately 20,000users in the exploration and production business alone,” Ivesonestimates.


They’ll benefit from being able to access online catalogs toquickly and easily order goods direct from selected suppliersrather than having to take the tortuous and time-consumingroute through the more traditional procurement processes. This means that the purchasing people will be able to devotemore time to vital tasks such as strategic sourcing.

Iveson and Liefhebber are enthusiastic about the deployment of electronic procurement for services, which accounts for 70% of all Shell purchases and thus offers enormous potentialfor optimization. Information about costly routine mainte-nance, which counts as service purchases, is stored in SAP PlantMaintenance components in Shell’s SAP back-end systems,where it can be accessed via SAP Enterprise Buyer. When itcomes to procuring more complex services, though, the twoShell managers agree that the existing applications need furtherwork, which they know that SAP is addressing.

So far, both Iveson and Liefhebber are satisfied with the progressof Shell’s Transactional E-Procurement project and with SAP as a partner. The ongoing challenge, as Liefhebber explains, remains how to respond effectively to the constant stream ofchanges that take place both inside and outside the project environment. For his part, Iveson remains confident that SAPwill work with Shell to overcome these challenges.


SCHWARZ PHARMA Deutschland values its customerrelationships. Their goal is to become the pharmaceutical company with the most satisfied customers in Germany. Theyintend to achieve this by diligently following the principles ofbusiness excellence, and striving for constant improvement inall business areas and services. Excellence is no stranger to thecompany. It develops and markets innovative drugs for unmetmedical needs with a focus on the therapeutic areas of neurol-ogy and urology, as well as cardiovascular and gastrointestinaldiseases. In 2002 the company, which is headquartered inMonheim, Germany with a workforce of approximately 600 employees, had global sales of �964 million.

Implementing mySAP™ Customer Relationship Management(mySAP CRM), from the portfolio of solutions offered with SAP for Pharmaceuticals, represented an important milestoneon the path towards continuous optimization for SCHWARZPHARMA. One of the deciding factors in selecting mySAP CRM,along with its functionality, was seamless integration intoSCHWARZ PHARMA’s existing SAP® environment. SAP scoredadditional points for being a single-source provider, with soft-ware and consulting from SAP Consulting as an integratedpackage.

STANDARDIZED AND INTEGRATED VIEW

OF ALL CUSTOMER DATA

mySAP CRM succeeded in unifying customer data that hadpreviously been managed in a decentralized way. “As a result,we have a complete picture of our customers across all productsand communication channels,” explains project manager HorstBeeck. This had not been the case previously, particularly foroffice-based personnel.


SCHWARZ PHARMA

Deutschland selected

mySAP™ CRM from the port-

folio of solutions offered by

SAP® for Pharmaceuticals to

create a standardized view

of all customer-related data.

The project is part of the

company’s business excel-

lence initiative, which it uses

to enable a more strategic

focus on customers. Besides

creating a stable data plat-

form, mySAP CRM helps the

company to better identify

profitable customers, in-

crease the quality of service,

and tailor marketing cam-

paigns more appropriately.

SCHWARZ PHARMAGUARANTEEING CUSTOMER SATISFACTION WITHmySAP™ CUSTOMER RELATIONSHIP MANAGEMENT


With its new CRM solution, the customer care center (CCC),the medical science department, and marketing have a clearand unified focus. SAP has also helped the company leverage itsexisting resources. The non-SAP system still used by field salesstaff communicates seamlessly, via an interface, with the SAPsolution in the office. This enables smooth data exchange forcustomer addresses, customer calls and samples, and directlyintegrates field sales employees into business processes.

Approximately 120 employees are already using mySAP CRM at SCHWARZ PHARMA. The CCC registers all inquiries andorders received by post, fax, or telephone in the mySAP CRM

“The commitment of SAP consultants,

and intensive and close collaboration

within the project team, enabled us to

successfully implement our ambitious

goals.”

Horst Beeck, Project Manager, SCHWARZ PHARMA

interaction center. A user-specific entry screen facilitates directaccess to customer and product information, and facilitatesrapid processing of tasks, including outbound telemarketing.Embedded multimedia call center technology by Cycos is ableto identify incoming telephone calls using the phone number,and automatically forwards them to the appropriate staff. This feature is particularly useful for the medical sciencedepartment, whose members deal with highly specialized subject areas.


mySAP CRM also supports the marketing department in plan-ning and implementing approximately 600 events and 200direct marketing campaigns every year, each of which targets30,000 to 80,000 doctors. mySAP CRM, together with SAP R/3®,facilitates these activities, from the process of selecting target groups, through preparing addresses, to processingresponses. Measuring the success of these activities is accom-plished with analytical CRM functions that interact with mySAP Business Intelligence to evaluate campaigns, contacts,orders, and customer relationships.

PARTNERSHIP FOR A SUCCESSFUL SOLUTION

Thanks to extensive product expertise and proximity to SAPdevelopment, SAP Consulting offered solutions characterizedby efficiency and flexibility. “The commitment of SAP consul-tants, and intensive and close collaboration within the projectteam, enabled us to successfully implement our ambitiousgoals,” says Beeck.


Integrated customer support from SAP, which covered extensive consulting services and appropriate training, helped promote easy acceptance of the new CRM solution by the company’s employees.

For Jürgen Willas, director of finance, mySAP CRM proved tobe the driving force behind the implementation of the businessexcellence initiative at SCHWARZ PHARMA. “We see ourselvesas the pioneer in CRM in the pharmaceuticals market, leadingthe way with vision and courage,” says Willas. Optimizations arealready in the pipeline; the next priority is to incorporate faxand e-mail as communication channels in the CRM system.

CONVINCING BENEFITS

SCHWARZ PHARMA has seen measurable improvements withmySAP CRM in its goal of enhancing customer service and cus-tomer satisfaction. It now has a complete view of all customers,

“We see ourselves as the pioneer in

CRM in the pharmaceuticals market,

leading the way with vision and

courage.”

Jürgen Willas, Director of Finance, SCHWARZ PHARMA

products, and communication channels. There is also greatertransparency across customers, orders, and contacts throughanalytical CRM. Higher response rates in marketing haveincreased profitability, while quicker and slimmer processing,thanks to SAP R/3 integration, has reduced costs. With a solidfoundation upon which to build, SCHWARZ PHARMA is onestep closer to becoming the pharmaceutical company with themost satisfied customers in Germany.


AT A GLANCE

Company name SCHWARZ PHARMA Deutschland

Industry Pharmaceuticals

Challenge Improve companywide view of customers, orders, and contacts to enhance customer relationships and marketing activities.

Implementation partner SAP® Consulting

Solutions - mySAP™ Customer Relationship Manage-ment

- mySAP Business Intelligence

Implementation - Over 120 employees highlights using mySAP CRM

- Created centralized customer database

- Supports 600 events and 200 direct mail campaigns, which targetup to 80,000 doctors

Benefits - Complete view of cus-tomers and products across all channels

- High marketing response rates

- Improved communica-tions and operational efficiency

- Increased responsive-ness to customers

Swarovski is the world’s leading manufacturer of cut crystal.The family-owned company, established in 1895 in Wattens, Tyrolia, is managed by the fifth-generation descendents of thefounder, Daniel Swarovski. Some 13,400 employees contributedto consolidated company sales of CHF 2.55 billion (�1.64 billion)in 2001.

Swarovski cut crystal is used in the fashion, jewelry, and light-ing industries. Since the seventies, its crystal can be found in an array of articles such as gifts, collectibles, decorative objects,and jewelry. It maintains a strong presence in the luxury mar-ket with its crystal art objects, exclusive jewelry, and accessories.Swarovski’s product palette also includes precision opticalinstruments, abrasive materials, and other industrial goods.

In 1995, to celebrate its centenary, this notable companyreleased the biggest crystal “gem stone” in the world: the“Swarovski Centenar.” With a diameter of 40 centimeters, a weight of 62 kilograms/310,000 carats, and 100 facets, this gemsecured a place in the Guinness Book of Records. In contrast,the company also produced the smallest cut crystal in theworld; the gem has a diameter of only 0.8 millimeters. Both canbe viewed in the Swarovski “Kristallwelten,” the multimediacrystal-themed attraction created by Andrè Heller in Wattens,Tyrolia.


With the implementation

of the e-procurement tool

within mySAP™ Supplier

Relationship Management

at this family-owned,

Austria-based company,

Swarovski significantly

improved the efficiency of

its procurement processes.

Even after just a few months

of productive operation,

this leading manufacturer

of cut crystal experienced a

dramatic reduction in errors

and in related costs. And

now with e-procurement,

Swarovski can stay ahead

of the competition.

SWAROVSKI TAKES NEWSTEPS IN ELECTRONICORDERING AND GAINS A COMPETITIVEADVANTAGETHE WORLD MARKET LEADER IN CUT CRYSTAL


STREAMLINING PURCHASING WITH E-PROCUREMENT

In spite of the company’s impressive track record, Swarovskiknew it had to modernize its procurement strategy. It onceagain looked to SAP – and mySAP™ E-Procurement (which has now been incorporated into mySAP Supplier RelationshipManagement). “As a decade-long customer of SAP, we not only had trust in its products, but the result of a cost/benefitsanalysis showed that implementing the e-procurement solu-tion would be extremely positive for us in purchasing,” saysGünther Streit, project head.

“E-procurement with SAP puts us ahead

of the competition, even if we have only

reached 50% of our target so far.”

Günther Streit, Project Head, Swarovski

The company also chose SAP® software based on its compre-hensive range of functions, its openness, and easy integrationwith the company’s SAP R/3® back-end system. “E-procure-ment features for very specialized purchasing departmentapplications – that are not available in any other standard software – can be easily integrated,” adds Streit.

SAP Consulting from Austria came on board to help with the implementation. “The main challenge was to meet thecomplex requirements of the purchasing departments,” says Franz Hinterberger, project lead from SAP Consulting.“Through perfect teamwork with our colleagues from Swarovski, we were able to reach our objective quickly.”


ACCESSIBLE PRICING INFORMATION

“One important advantage of the solution is the option to create mixed shopping carts,” says Streit. “In other words, theordering party can use an intranet connection to include anitem selected via the material number, as well as a free-text order at the same time. There is no more time-consumingsearching through paper pamphlets.” Users can now accesscomprehensive online catalogs that list product descriptionsand prices. “Being able to find information regarding esti-mated/fixed price has been very useful for price negotiation,whereas in the past, the purchasing department often did nothave pricing information. After entry of the material group and account assignment, automated G/L account determina-tion considerably accelerates the procurement process and prevents errors. Previously, G/L accounts had to be added manually to the order.”


MORE POTENTIAL SAVINGS IN THE FUTURE

According to Streit, “E-procurement with SAP puts us ahead of the competition, even if we have only reached 50% of our target so far. Currently, we have achieved the first cost savings in the procurement process. Once we have fully automated our processes for order confirmation, shipping notification,and invoice creation (credit memo procedure) for vendors, wewill increase efficiency and reduce process costs even further.”

In the meantime, the implementation of the new solution hasmore than doubled the number of electronic purchase ordersin just a few months – which means reduced administrativeload for individual orders, and a high level of acceptance amongusers. In June 2002, some 500 employees began the final trainingphase to familiarize themselves with the new e-procurementsoftware using an online learning tool.


AT A GLANCE

Software mySAP™ E-Procurement(capabilities now inte-grated into mySAP SRM)

Hardware SNI Primergy 8704 x PIII XEON 450(1 MB SLC, 3 GB RAM)

Operating system NT 4.0 SP5 Enterprise

Database Oracle 8.1.7/2.1

Number of users 500 to 600 at the Wattens location

122 Service Industries

123Service Industries

SERVICE INDUSTRIES

AMERICAN EAGLEOUTFITTERS AND THECHILDREN’S PLACEAMERICAN EAGLE OUTFITTERS AND THE CHILDREN’SPLACE USE SAP® StaffWorks™ TO IMPROVE SCHEDULINGEFFECTIVENESS AND INCREASE SALES

American Eagle Outfitters and The Children’s Place aresuccessful North American retailers that are growing rapidlyand launching new stores to keep pace with customer demandfor their retail merchandise. American Eagle Outfitters, a$1.4 billion company that designs, markets, and sells theAmerican Eagle brand of relaxed, clean, and versatile clothingfor 16- to 34-year-olds, provides high-quality merchandise ataffordable prices. The Children’s Place is a $575 million leadingspecialty retailer of high-quality, value-priced fashion appareland accessories for children from birth to age 12.

Both companies picked SAP® StaffWorks™ – a key applicationwithin the SAP for Retail portfolio of software and services. Using the solution’s workforce management capabilities,these companies could ensure that, as they grew, they didso efficiently and profitably while continuing to enhancecustomer service.

“We wanted what many retailers desire in this area: to bemore effective and more efficient through scheduling work-force talent to the business needs,” says Joe Kerin, executivevice president of store operations at American Eagle Outfitters.“Our business is fairly labor-intensive. Employee count andhours worked are significant relative to sales volume. We want-ed to give managers at the store level – who may or may not beskilled in scheduling a retail calendar, with its many twists andturns in traffic patterns – a tool to save them time and developthe most effective schedule.”

Adds David Collignon, director of strategic store operationsat The Children’s Place, “As we grow, we want to focus onstandardization and efficiency to be as productive as possibleand maintain profitable stores.


American Eagle Outfitters

and The Children’s Place

picked software from the

SAP® for Retail portfolio of

solutions and services to

ensure that, as they grow,

they do so efficiently and

profitably while continuing

to enhance customer

service. Both companies

use SAP StaffWorks™ –

a key application within the

portfolio – to schedule asso-

ciates based on store traffic

and business needs and to

download productivity stan-

dards information to stores.

“We are unit-driven as an organization and, as a result, tend tobe task-driven in our stores. It’s important to be efficient so wecan put more time into interacting with customers and do abetter job of converting every customer that walks through ourdoor into a buying customer.”

American Eagle operates 700 American Eagle Outfitters storesin 48 states and the District of Columbia, 52 American EagleOutfitters stores in Canada, 110 Bluenotes/Thriftys stores inCanada, and its American Eagle Outfitters online store, ae.com.The Children’s Place operates 520 stores in 46 states and sells itsmerchandise through its virtual store at childrensplace.com.Both companies use the SAP StaffWorks scheduling capabilitiesto schedule their associates based on store traffic and businessneeds. The Children’s Place uses the time and attendance capa-bilities of SAP StaffWorks to automatically collect payroll data;American Eagle Outfitters uses an SAP gateway to its existingtime and attendance solution. Both companies also use theparameter manager feature in SAP StaffWorks to downloadstandards information to their stores.

Both are getting measurable returns.

“From a cost-savings standpoint, we expect to see a return oninvestment within the first year,” says Collignon of TheChildren’s Place.

“We’ve had a 50% increase in schedule effectiveness using SAPStaffWorks. We are scheduling the right people at the righttimes and in the right quantities,” adds Kerin of AmericanEagle Outfitters. “Our productivity this year is up nicely overthe preceding year, and SAP StaffWorks is an important enablerof that improvement.”


Not only is productivity up at American Eagle Outfitters –so are sales and customer service.

“By improving our schedule effectiveness we have reduced ourlabor costs while maintaining, or in some cases improving, cus-tomer service,” adds Tracy Benaman, director of store supportat American Eagle Outfitters. “To be successful in today’s retailenvironment, we need to equip our field personnel with thebest tools; SAP StaffWorks is a good example.”

REPLACING TEDIOUS MANUAL PROCESSES

American Eagle Outfitters and The Children’s Place had beenscheduling their staffs manually.

“Managers worked with pen and paper, making a list of names,day by day, hour by hour, plotting it manually on a grid forstores of upwards of 70 people,” Kerin says. “Schedules were

“SAP StaffWorks prompts you for

information and doesn’t require you

to navigate countless screens and

windows. We received very good

feedback from our store teams that

the system was easy to use and that

they liked it.”

David Collignon, Director of Strategic Store Operations, The Children’s Place

filled with flaws and based on emotion and guesswork.Managers didn’t have sufficient facts at their fingertips to makeor qualify their judgment calls.”

Collignon of The Children’s Place agrees. “It was very time-consuming, with a lot of inaccuracies and redundant work.” Both companies evaluated a number of solutions before select-ing SAP.

“We knew that our competitors were using this solution andachieving improvements in scheduling effectiveness,” Kerinsays. “We felt we could get a payback over a reasonable periodof time.”


Says Ken Watts, vice president of information services at Ameri-can Eagle Outfitters, “We looked at the major players that hada solution that would help us in the stores and give us a quickpayback. SAP quickly came to the top of our list for function-ality, ease of use, and ease of implementation.”

Ease of use, in particular, was crucial to store acceptance. TheChildren’s Place involved its end users heavily in the selectionprocess. It asked each vendor being evaluated to input specificstore data and generate schedules, which the users then tried out.

“We put the system through its paces and validated that the in-formation was accurate and that the schedules were effective,”Collignon says. “With 520 stores, we needed to be certain thatevery one of our end users would be comfortable with theproduct, would not be intimidated by it, and would give uscomplete buy-in.

“SAP has expertise in its product and is

developing the solution in the right way

for our stores. SAP has also been very

responsive – the company has been

there when we’ve asked it to be.”

David Collignon, Director of Strategic Store Operations, The Children’s Place

“If you have a product that people don’t feel good about, theywon’t use it. SAP StaffWorks prompts you for information anddoesn’t require you to navigate countless screens and windows.We received very good feedback from our store teams that thesystem was easy to use and that they liked it.”

SCHEDULING WORKFORCE TO MEET

SPECIFIC BUSINESS NEEDS

Managers at both companies use the system to generate weeklyschedules for their stores. SAP StaffWorks automatically evalu-ates scheduling variables like customer traffic, floor coverage,employee skills and availability, point-of-sale data, workloads,budgetary constraints, and payroll objectives. The system thencreates the optimal schedule for each location.


“SAP StaffWorks maintains information about your history aswell as your employees and their availability,” Collignon says.“It prompts you to really look at your business for the followingweek and consider the scheduling needs based on historicaldata and current trends. This enables us to focus on what’sgoing to drive our business, rather than just scheduling to eachperson’s availability. We anticipate a significant improvement inour scheduling effectiveness – SAP StaffWorks producesforecasts based on business history, not on emotion.”

Schedules are synchronized with the time and attendancecapabilities in SAP StaffWorks to gather employee clock-in andclock-out information for in-store control of employee timeaccounting and payroll procedures. Both companies run thesystem on IBM Netfinity servers, linked to store registers, foremployee time and attendance functions as well as store man-ager use.

The parameter manager is used in the home office of both cor-porations. American Eagle Outfitters might use it, for example,during Thanksgiving week, to alert the SAP StaffWorks applica-tion to look at that particular day or week in history and usethe information from that previous time interval to schedule,rather than looking at the last six weeks. The Children’s Placesimilarly uses the parameter manager feature to downloadstandards changes to the stores. “We can change a group ofstores seamlessly, overnight, at any time,” Collignon says.“This enables us to make changes to stores’ configurationswithout the store managers having to make the changes at thestores themselves.”

FREEING MANAGERS TO IMPROVE

STORE PERFORMANCE

The reduction in store manager work has been a big benefit forboth companies.

“It really reduces workload and frustration,” Kerin says.“This enables managers to focus on merchandising, recruitingpersonnel, and providing best-practice training on customerservice, receiving, and replenishing.”

Managers also have more time – and information visibility – toattend to customers and track what’s happening in their stores.They can compare payroll and sales performance, manage by exception, and make changes to improve performance.


“Managers are now taking the time they previously devoted todeveloping schedules and processing payroll and spending it onthe sales floor, focusing on their customers and their business,”Collignon says. “They’re looking at reports on a daily basis that, until now, they haven’t had access to. When they come in each

“We looked at the major players that

had a solution that would help us in the

stores and give us a quick payback.

SAP quickly came to the top of our list

for functionality, ease of use, and ease

of implementation.”

Ken Watts, Vice President of Information Services, American Eagle Outfitters

morning, they’re reviewing yesterday’s sales and payroll spend-ing, looking at projections for the rest of the week, and makingadjustments accordingly. They can now do this each day –rather than midweek or at the end of the week – so they don’thave to suddenly scramble to adjust payroll.”

BEST-PRACTICE TEMPLATES

As American Eagle Outfitters and The Children’s Place gatherall this information, they can identify successful templates ofbest practices at their leading stores.

“We are gaining the ability to see which stores are performing effectively and understand why,” Collignon says. “We will beable to hone in and look at their schedules, see how they’reusing the system, and understand why they’re more effectivethan others. This will enable us to develop best practices for therest of our rollout; we’re planning to open another 120 storesnext year.”

SAP will continue to play a role in enabling that growth.

“SAP has expertise in its product and is developing the solutionin the right way for our stores,” Collignon says. “SAP has alsobeen very responsive – the company has been there when we’veasked it to be. SAP has been very available to us throughout ourimplementation.”


According to Philippe Deconinck, business-to-supplier (B2S)program manager at Brussels-based Belgacom NV, the com-pany’s traditional purchasing processes were exceedingly complex. “Even for buying a simple item such as a screwdriveror a pencil, the purchasers had to go through multiple steps; a time-consuming and expensive activity,” he says. “For certainitems, the administrative and logistics costs were often higherthan the purchase cost. In order to rein in this expenditure, weneeded to enhance our electronic purchasing processes.” To dothis, the company chose SAP® Enterprise Buyer (SAP EPB), theprocurement component within mySAP™ Supplier RelationshipManagement.

Belgacom NV is the Belgian market leader in the field of globaltelecommunication solutions. The Belgacom group supplieslocal, interzonal, and international communication and dataservices via fixed and mobile networks and satellite carriers. Italso offers a variety of Internet services. At the end of 2002, theBelgacom group employed some 19,000 people, with an annualturnover of �5.22 billion.

FOCUS ON INTEGRATION

After just a few years, Belgacom realized its original e-procure-ment solution could not keep up with the company’s require-ments. “Everything went well at first; we could produce digitalcatalogs quickly and made progress,” explains Yves Brène, ITproject manager at Belgacom. “However, when we wanted toautomate the more complex purchasing procedures, such as forordering the less popular products, we experienced problems.”


In spite of its success and

an annual turnover of some

�5.22 billion, Belgacom NV

needed to streamline its

purchasing processes. For

certain items, the admini-

strative and logistics costs

were often higher than the

purchase cost. This leading

Belgian telecommunications

company chose SAP® Enter-

prise Buyer – a key applica-

tion within mySAP™ Supplier

Relationship Management –

to help it meet these chal-

lenges. Now, purchasing

is much simpler, which helps

the company save time,

money, and resources.

BELGACOMTELECOMMUNICATIONS GIANT BELGACOM OPTS FORSAP TO OPTIMIZE ALL PURCHASING PROCESSES


Deconinck continues: “The main sticking point was the integra-tion of the e-procurement solution with our back-end SAP R/3®System. We needed a powerful interface to integrate the package,which meant a heavy investment. In the meantime, we also noticed that the functionality of the existing system was too limited.”

In 2001, Belgacom made the decision: it would purchase a new e-procurement solution. A detailed selection process followed,which involved analyses of different options. Ultimately the SAPe-procurement solution appeared to be the best choice. “A big

“The number of employees involved

in transacting a purchase has been

reduced from five to one. Now that our

purchasers are not buried beneath a

mountain of paperwork, they have time

to do other tasks.”

Yves Brène, IT Project Manager, Belgacom

advantage of the SAP package included its easy integration withthe SAP R/3 backbone,” says Brène. “In addition, SAP also offeredall the functionality that a large company such as Belgacomneeds.”


EIGHT MONTHS TO GO LIVE

The implementation team kicked off the project on February19, 2002. “The first step for the SAP project involved transferringthe digital catalogs to SAP, which we accomplished quickly,”says Brène. “On September 30, eight months later, the systemwent live. We began using the SAP EBP solution for about 50% of our orders.”

SAP Consulting provided support during the implementation.“Two to three committed SAP consultants worked full-time on the project,” says Paul Rits, project manager at Belgacom. “If there were questions or if things weren’t clear, the consul-tants called the head office in Walldorf. In addition, four IT staffmembers from Belgacom and five from our business depart-ment came on board for the implementation.”

When asked if employees were skeptical about the changeover,Rits says that it was “quite the opposite.” He goes on to say thateverybody who previously worked with the e-procurement solution clearly saw its limitations, and understood the need for a new solution.


“Additionally, the SAP component is very user-friendly and logical, and has a comfortable search engine,” says Rits. “Eventhe most critical users quickly accepted the system. To help the users become more confident with the new solution, weprovided a number of demos and organized an e-learning project.”

The company’s suppliers easily adapted to the system, as well. “They had received thorough training for the previous e-procurement solution and many had produced the catalogsthemselves,” says Deconinck. “The suppliers’ ability to workwith e-procurement, for that matter, also influenced our decision.”

SHORTER CYCLE TIME AND

A NEW ORGANIZATIONAL STRUCTURE

By implementing the SAP e-procurement solution, Belgacomsaw many benefits. “Thanks to SAP, purchasing has becomemuch simpler, so we can order more quickly and ultimately deliver more quickly, too,” says Deconinck. “SAP EBP will helpus drastically shorten our cycle time.”

“In addition, our people in the field, such as the technical staff,receive their material much more quickly. This results in betterservice. They used to order material ‘on reserve,’ so the ‘blackstock’ disappears.”

Brène continues: “The number of employees involved in trans-acting a purchase has been reduced from five to one. Now thatour purchasers are not buried beneath a mountain of paper-work, they have time to do other tasks. The nature of their jobs has changed dramatically; instead of spending time on ad-ministrative/organizational duties, they can now focus on more strategic tasks such as negotiations with suppliers.”

ONWARD TO 100% E-PROCUREMENT

By the end of the year, purchasing processes should be 100% automated. “This presents somewhat of a challenge,” says Deconinck, “because the remaining 50% are more difficult totransfer; this mainly involves special orders where no catalogsare available. In fact, according to Brène, transferring over to100% e-procurement is considered quite innovative for a com-pany in Belgium. “However,” concludes Deconinck, “the SAPpackage contains sufficient functionality – and is so perfectlyintegrated with the backbone – that we have complete faith in it.”


Bell Canada is Canada’s national leader for communications.The company provides connectivity to residential and businesscustomers through wired and wireless voice and data commu-nications, high speed and wireless Internet access, IP broadbandservices, e-business solutions, and local and long distancephone and directory services.

That means a lot of equipment – more than 55,000 stock-keep-ing units (SKUs) for modems, telephone sets, PBX equipment,wiring, jacks, and so forth. In an ongoing effort to improvecustomer service and automate its supply chain, Bell Canadaprovided 4,000 field services technicians with mySAP™ MobileBusiness, a solution for mobile procurement. The solutionenables them to order materials accurately and quickly froma customized service catalog.

“We are continuously adding SKUs for the new types of equip-ment coming into the telecommunication world,” says DenisCourchesne, project director on the supply chain reengineeringteam. “It’s too costly and time-consuming to print new catalogpages. We used mySAP Mobile Business to provide our techni-cians with connected and disconnected access to these rapidlychanging parts to simplify and accelerate material ordering.”Bell Canada got the mySAP Mobile Business solution up andrunning in four months and realized a return on its investmentin just under six months. Technicians search by SKU, descrip-tion, or key word, view item pictures and cost information, loada shopping cart, and specify delivery location. Orders over a certain value or quantity threshold, or within a restricted mate-rial group, trigger a workflow request for manager approval.


Bell Canada outfitted the

4,000 field technicians

that handle the installation,

maintenance, and repair of

its more than 55,000 SKUs

with mySAP™ Mobile Busi-

ness. The solution provides

its technicians with access

to parts to simplify and

accelerate material ordering.

Bell Canada got the solution –

which allows technicians to

search at their laptops by

SKU, description, or key

word and view graphical

information – up and running

in only four months.

BELL CANADABELL CANADA IMPLEMENTS mySAP™ MOBILEBUSINESS IN FOUR MONTHS TO SIMPLIFY MATERIALORDERING FOR FIELD SERVICES TECHNICIANS


Minutes later, the technician gets feedback – quantity available,delivery date, ship-from location. Out-of-stock situationslaunch a purchase order and provide lead time informationfor delivery.

“It’s quick and it’s easy,” Courchesne says. “Our techniciansneed to be in the field and working – we don’t want to tie themdown to their desks or the telephone searching for materials.

“Our technicians need to be in the field

and working – we don’t want to tie them

down . . . searching for materials. Tech-

nicians estimate they can spend

30 minutes to 2 hours a day on these is-

sues. mySAP™ Mobile Business helps us

reduce this search time.”

Denis Courchesne, Project Director, Bell Canada

“Technicians themselves estimate they can spend 30 minutesto 2 hours a day on these issues. mySAP Mobile Business helpsus reduce this search time. The technicians are really satisfiedwith it.

“Technicians now know when they are going to get the mate-rials, ensuring that they are ready for each customer appoint-ment,” Courchesne says. “If there is a problem getting thematerial, they know about it right away and can search for analternate source of supply.”


Managers also have better information. Previously, they didn’tknow what the technicians were ordering until they received reports at the end of each month. Now management has that information as soon as a technician order triggers the work-flow, along with a consumption report that tracks orderedparts and inventory levels.

A key selection criterion for the system was the ability to workin a disconnected mode. When the technician reconnects on-line, he simply clicks on a button and mySAP Mobile Businesstransmits the shopping cart contents automatically andupdates the catalog.


“We wanted the technicians to be able to work in off-site en-vironments where they didn’t have online access,” Courchesnesays. “We also chose mySAP Mobile Business because we needed a system that would interface easily with our SAP® R/3® back-end system and material masters.”

Bell Canada next plans to deploy mySAP Mobile Businessto other technicians in the company. It also plans to take

“We used mySAP Mobile Business . . .

to simplify and accelerate material

ordering.”

Denis Courchesne, Project Director, Bell Canada

advantage of additional capabilities with mySAP MobileBusiness, such as confirmation of goods receipts in the field.

“SAP in partnership with CGI, our IT group, did a good joband worked hard with us throughout the process,” Courchesnesays. “It was a good team – good spirit and efficient, qualifiedpeople, all working together. SAP really understood the impor-tance of this project and did its best to deliver according to plan.”


Service Industries

BKW FMB Energie AG,

a major Swiss utility com-

pany, successfully aligned

its SAP® R/3® System data

structures with its industry-

specific software for utilities

from SAP. This virtual inte-

gration enabled BKW to

optimally model key busi-

ness processes across

several systems. The System

Landscape Optimization

(SLO) group, a part of SAP

Consulting, helped imple-

ment this ambitious project.

BKW FMB ENERGIE AGSAP® CONSULTING’S SYSTEM LANDSCAPE OPTIMIZATION (SLO) HELPS CONSOLIDATE AND OPTIMIZE SAP INFRASTRUCTURE

BKW FMB Energie AG (BKW) supplies electricity to a millionpeople in 400 communities from the Alps to the French border – efficiently, safely, and ecologically. Revenues of more than CHF 2 billion (�1.29 billion) and a workforce ofapproximately 2,000 reflect the national standing of this long-established, major Swiss utilities company.

With the rapid development of the European energy marketsand the prospect of deregulation in Switzerland (which rejectedproposals for energy-market legislation in a referendum in September 2002), BKW decided back in 2001 that it was time to prepare for the future. Changing customer requirementsmeant that it needed to refocus its business strategy – morespecifically, BKW needed to break down company codes intogreater detail and adapt its existing SAP® system.

SECURING COMPETITIVENESS

WITH INTEGRATED INFORMATION SYSTEMS

Until the end of 2000, BKW had operated SAP R/3® and industry-specific SAP software for utilities on the same system. However,early in 2001, it implemented core SAP R/3 components on anew system with a different company code structure. Due toother projects that were going on in parallel, the company didnot have the time or resources to immediately migrate the in-dustry-specific data. This made it impossible to model all busi-ness transactions throughout the new system infrastructure.

The company then analyzed various proposals for combiningthe two systems. To maintain flexibility and minimizemigration effort, BKW decided to retain the two systems andoptimize the interfaces. This involved integrating SAP R/3 with the SAP industry-specific software for utilities.

138

Service Industries

It was also important that the two systems share the same organizational structures in order to accommodate ApplicationLink Enabling (ALE) standard interfaces. The company wantedto complete the project between April 2002 and September 2002,in order to avoid interfering with upgrades and the other projects already in progress.

OPTIMIZING SYSTEM LANDSCAPE WITH THE HELP

OF SAP CONSULTING

After thorough market research, BKW tapped the System Landscape Optimization (SLO) consulting team from SAPConsulting to help implement the complex consolidation project, since the SLO approach offered substantial advantages

“We selected SAP Consulting because

SAP was the only provider with

excellent references. Our choice of

consulting partner turned out to be the

right one: despite the time constraints,

the implementation was on time, within

budget, and of high quality.”

Klaus-Dieter Löffler, Project Leader and Manager, SAP Customer Competence Center, BKW

over a classical data-transfer solution. Furthermore, the SAPconsulting team provided conversion services that have beentried and tested in a wide range of projects. For example, SLOhelped adapt internal orders and object numbers according to the company’s requirements in the SAP R/3 Controlling application.

139

Service Industries

The tight time frame demanded high levels of flexibility, commitment, and expertise from the project team. Following a detailed planning phase, the definition of requirements andtranslation rules, and extensive tests, a big-bang implementa-tion took place in August 2002.

The sheer volume of data involved illustrates the complexity of the project: the team carried out changes to general-ledgeraccounts, cost centers, orders, and profit centers at the databaselevel in less than seven hours net runtime. Nearly 400 tables and around 104 million data records had to be processed. Thesecond phase comprised migration of technical master data, reclassification of regional structures, and the creation of busi-ness partners in the industry-specific SAP software for utilities.This process involved running 68 batch and online jobs. By reorganizing the work processes, the total runtime was reducedfrom 312 hours to 72 hours. The team also implemented role-authorization capabilities.

140

Service Industries

LEVERAGING FULL POTENTIAL

OF SYSTEM CAPABILITIES

Reto Willi, director of treasury/cash management, expressed ahigh degree of satisfaction with the results of the consolidationproject: “SAP Consulting demonstrated a high level of techni-cal and problem-solving expertise. The logistical integration of two physically different systems enabled us to implement a cross-system and cross-application solution that is mission-critical for modeling our business processes.”

141

Canada Post, winner of the

2002 Gartner CRM Award

of Excellence, faced many

challenges associated with

a rapidly changing market-

place brought about by new

Internet technologies. In its

most ambitious initiative

ever, one of Canada’s largest

providers of physical and

electronic delivery solutions

turned to mySAP™ Business

Suite to help it revamp its

business processes and

expand its offerings, with the

goal of delivering superior

customer service. Today,

SAP helps Canada Post

remain competitive and

create value for all its stake-

holders.

CANADA POSTAN INNOVATIVE LEADER IN THE GLOBAL POSTAL COMMUNITY ACHIEVES BUSINESS TRANSFORMATIONWITH mySAP™ BUSINESS SUITE

Canada Post Corporation, Canada’s seventh largestemployer, provides physical and electronic delivery solutionsto more than 30 million Canadian residential customers andone million Canadian businesses and public institutions. Eachyear, the corporation delivers more than 10 billion messagesand parcels to over 13 million addresses in Canada via 15,000mail carrier routes, 6,000 contractors, and 25 major plants. The150-year-old organization is one of the most visible in Canada,and is the only one that does business with virtually everyhousehold, business, and government in the country. In addi-tion, Canada Post is recognized for innovation in the globalpostal community, having signed over 133 contracts to provideconsulting services in 54 countries.

BUSINESS TRANSFORMATION INITIATIVE

In the late 1990s, the corporation faced numerous challengesassociated with a rapidly changing marketplace. Fierce compe-tition from new Internet technologies became both a threat andan opportunity to the traditional business and revenue base.Evolution and growing acceptance of these new technologiesdrove the rapid expansion of e-commerce and shaped customerdemands for greater speed, flexibility, and information.Furthermore, a global trend among private couriers and otherpostal organizations to expand product offerings (both physicaland electronic) and geographic reach compounded thesechallenges.

These marketplace dynamics prompted Canada Post to embarkon its largest-ever initiative. Known as the “Business Transfor-mation Initiative,” this bold initiative aims to change the wayCanada Post conducts business and to expand Canada Post’selectronic service delivery offerings, with the goal of deliveringsuperior value to customers.


Since its inception in September 2000, the Business Trans-formation Program has been Canada Post’s top priority, as itrepresents the future of the corporation. This comprehensiveenterprise-wide initiative was designed to transform CanadaPost from a function-based organization into a process-basedorganization, and from an information-rich environment toa knowledge-rich environment. To help it make this transition,Canada Post needed to find a comprehensive e-business solu-tion that would enable it to reduce costs while significantlyimproving quality and accessibility of information for all stake-holders, customers, employees, partners, and vendors. It alsoneeded a highly integrated solution that would enable it tostreamline supply chains, gain a holistic view of the product lifecycle, and enable online buying and selling, while at the sametime empower its employees and improve customer relation-ships. This was a tall order to fill.

A COMPREHENSIVE PLATFORM AND COMMITMENT

TO SUCCESS

During the selection process, SAP distinguished itself byoffering the most comprehensive and flexible enterprise ande-business solution platform available – as well as a commit-ment to work closely with Canada Post and partners to ensurea successful implementation.

“The SAP business case development team provided us withexpertise and accelerators to determine the benefits that mySAPBusiness Suite could bring to Canada Post. The team did this ina number of ways throughout our phased decision-makingprocess, ranging from providing ROI toolkits and method-ologies, to assisting with executive workshops. In addition, theteam supported us with a repository of ROI metrics that can bemapped specifically to SAP industry solutions,” says Cal Hart,Canada Post vice president of business transformation.


Without a doubt, the mySAP Business Suite platform couldprovide the engine to tightly link all of the organization’stechnologies and systems, its people and processes, and itsintranet and the Internet to form one collaborative businessenvironment. “The other vendors had what we needed, butno one vendor had an integrated solution suite including therange of functionality that SAP could provide,” says Hart.

And, according to Phil Lemay, Canada Post executive vicepresident of business development, “mySAP Business Suiteoffered the most cost-effective approach to supporting CanadaPost’s five strategic priorities: (1) defend our current business,(2) grow our competitive business, (3) achieve operationalexcellence, (4) make employees a competitive advantage, and(5) enhance corporate equity.”

BUSINESS IMPROVEMENT AND VALUE CREATION

Since the inception of its strategic program, Canada Post hastaken advantage of mySAP Business Suite and its breadth ofcapabilities, world-class best business practices, and endlessopportunities for business improvement and value creationby implementing a wide range of SAP® solutions: mySAP Enter-prise Portal; mySAP Customer Relationship Management(mySAP CRM); mySAP E-Procurement; mySAP Financials;mySAP Human Resources (mySAP HR); mySAP Business Intel-ligence (mySAP BI); and industry-related applications from theSAP for Retail and SAP for Technology portfolio of software andservices.


With the help of SAP, Canada Post was able to implement theseintegrated offerings quickly and efficiently and has purchasedmySAP Business Suite licenses for all 61,000 of its employees.Users adapted quickly to the platform and the results so farhave been impressive. For example, to date, 12,600 travel andexpense claim employees use the system to help eliminatehand-offs and paperwork. As a result, internal processing costshave decreased and the time between submission and paymenthas been reduced from over two weeks to one day.

OPERATIONAL EXCELLENCE USING

mySAP E-PROCUREMENT

mySAP E-Procurement (which has been superceded by mySAPSupplier Relationship Management, a solution that builds onthe capabilities of mySAP E-Procurement) is used by some7,100 employees, and has enabled Canada Post to streamlinethe purchasing process and minimize maverick buying.Furthermore, 21,000 suppliers have converted and more than10,000 contracts have been entered into the system, with50,000 items from 185 suppliers in the e-catalog. And, morethan 30,000 “auto POs” (orders sent electronically withoutsourcing intervention) were generated in the first four monthsof use. Such business process improvement helps Canada Postachieve its strategic priority of operational excellence, makingthe corporation “easier to do business with” and providinga better workplace for employees.


WIDE RANGE OF BENEFITS WITH mySAP CRM

Client and customer satisfaction, as well as effective manage-ment of stakeholder relationships, are at the core of CanadaPost’s business success. While the Business TransformationProgram is an enterprise-wide initiative involving a fullspectrum of processes, customer relationship managementremains the cornerstone of the program. According to AaronNichols, general manager of business transformation, “We feltmySAP Customer Relationship Management would enable usto provide a rich, uniform customer experience across allchannels and help us differentiate service levels based oncustomer value. Additionally, we saw mySAP CRM as a wayto leverage the knowledge gained through our customer inter-actions, and to integrate CRM tightly with the overall core SAPenterprise system.”

The benefits of mySAP CRM are wide-ranging. With mySAPCRM, commercial customers can place orders and create ship-ping documents electronically, which helps reduce paper-work,

“The SAP business case development

team provided us with expertise and

accelerators to determine the benefits

that mySAP Business Suite could bring

to Canada Post.”

Cal Hart, Vice President of Business Transformation,Canada Post

save time, and improve transaction accuracy. The company’sonline store at www.canadapost.ca gives customers more con-venient access to products and services, and provides Internet self-service (package tracking, rate calculations, outlet location,online account access, and so on). Canada Post customer ser-vice agents and delivery supervisors can easily access details ofcustomer transactions (inquiries, complaints, claims, orders,and so on) from a Web browser.


With eight contact centers handling approximately sevenmillion calls each year, Canada Post uses mySAP CRM toprovide 700 customer service agents with details of customertransactions from a single screen. Prior to mySAP Business Suiteand mySAP CRM, which comprise one central source of cor-porate data, Canada Post had six sources of customer data.SAP workflow functions route cases to delivery depots oremployees, and SAP phone technology supports queuingcustomer inquiries, automatic “screen pop-ups” for customerservice agents, and fax, e-mail, and voice-back options forcustomers.

IMPROVED DATA COLLECTION/CONSISTENT SERVICE

mySAP Business Suite has helped Canada Post transform itsbusiness by improving data collection processes and eliminatingmore than 80 legacy systems, functional silos, and fragmenteddata pools. Access to a single, comprehensive, unified sourceof data helps the corporation dramatically streamline clientinteractions. mySAP CRM permits Canada Post to align accesschannels with customer needs, and in so doing, optimizes thesales and service functions. As a result, the sales force has beenrelieved of time- and cost-intensive customer interactions.“We have been able to take a large number of our middle-tiercommercial customers and move them to the phone or Inter-net instead of servicing them face-to-face. Overall, this migra-tion is driving costs down while servicing customers moreeffectively,” says Nichols.

And, with mySAP CRM, service for the individual consumeris more reliable, too. “As with other large organizations, thecustomer experience with Canada Post in the past was notalways consistent. A customer could call several times on thesame issue and receive different responses from call agents,”says Hart. “The sales force automation systems were stand-alone, and there was no integration of customer and callinformation. Now, when the customer calls, the message is thesame. There is a history of the cases related to this customer,and frequently asked questions are referenced from the mySAPCRM solutions database.”


REDUCTION OF ADMINISTRATIVE ACTIVITIES

FOR SALES FORCE

Prior to mySAP CRM, the commercial sales force spent aconsiderable amount of time on administrative activities. Thefully integrated SAP enterprise system and e-business platformsubstantially reduced time spent on administrative tasks andfollow-ups, enabling the sales force to devote more time torevenue-generating activities. Plus, mySAP CRM’s contractmanagement feature allowed Canada Post to monitor com-pliance levels with volume levels as stated by each customercontract. When a customer fails to achieve the contractedvolume level, pricing is adjusted to reflect actual volume levels.

“With a comprehensive, integrated

solution, powered by mySAP Business

Suite, we are firmly in the driver’s seat

on all aspects of change – exactly what

we need to make business transforma-

tion a success and realize our goals.”

Cal Hart, Vice President of Business Transformation,Canada Post

The company can now eliminate revenue leakage throughtighter controls and verification of customer documentationat the time of receipt. With the new integrated CRM processes,information can be captured and verified at the source and ad-justments to declared values billed and collected. When adjust-ments are required, mySAP CRM generates a supplementaryinvoice to bill or credit a customer.


As a result of its successful mySAP Business Suite implemen-tation, Canada Post has been rewarded with global industryrecognition: in March of 2002, Canada Post received Gartner’sCRM Award of Excellence, given to “the organization demon-strating best practices in their use of CRM to solve real-worldbusiness challenges.”

EXPANDING THE SAP FOOTPRINT

Based on its high degree of satisfaction with SAP, Canada Postcontinues to expand its SAP footprint. “mySAP CRM is onlyone part of our business transformation powered by mySAPBusiness Suite, but as the conduit to our customers, it is vitalto our business success,” says Nichols. “Because of it, we arenow in a position to move forward with a full suite of e-businessservices for future business growth.”

Canada Post is now evaluating new upgrades and is in theprocess of adding new functionality to its strategic mySAPBusiness Suite e-business platform: employee self-service,supply chain management, and new processes for e-procure-ment and customer relationship management. In addition,SAP is poised as a leading candidate to provide Canada Postwith an e-learning environment, which will leverage the orga-nization’s investment on the back end (human resources,billing, reporting, and so on).

Hart credits SAP for much of Canada Post’s recent accomplish-ments. “SAP’s complete solution started us off in the right di-rection,” he says. “With a comprehensive, integrated solution,powered by mySAP Business Suite, we are firmly in the driver’sseat on all aspects of change – exactly what we need to makebusiness transformation a success and realize our goals.”


SUPPORTING BUSINESS OPPORTUNITIES

WITH mySAP MARKETPLACE

CenTrade seized upon an exciting business opportunity. It realized that companies within the Czech Republic wanted to expand their businesses by linking buyers and suppliers inopen, real-time trading communities. By having an electronicmarketplace available to them, large and small companies could greatly benefit by accessing new channels of commerce.CenTrade needed a way to support these new trading ex-changes. That’s when it selected SAP to provide an efficientbusiness-to-business (B2B) solution.

The CenTrade project was initiated by CESKÝ TELECOM, thelargest telecommunications company in the Czech Republic.CenTrade chose mySAP™ Marketplace to provide the infra-structure and applications it needed for creating virtual tradingexchanges, and Citibank as a partner for providing financialservices. Delivered through MarketSet™, a joint solution fromSAP Markets Inc., and Commerce One Inc., the mySAP Market-place solution was able to connect multiple CenTrade businesspartners using an online trading community platform.

With MarketSet, CenTrade provides services that combine collaborative design, planning, procurement, fulfillment, andselling capabilities with collaborative services from third parties– such as for content management, financials, and logistics – toprovide a comprehensive solution for the entire procurementvalue chain.

CenTrade is the Czech

Republic’s largest indepen-

dent business-to-business

(B2B) electronic market-

place. The company imple-

mented mySAP™ Market-

place, which helps it provide

a robust B2B environment,

enabling companies to con-

duct online trading as buyers

and sellers. Due to its excep-

tional growth, CenTrade also

realized that providing high-

quality customer service

was a top priority. To ensure

that it could meet this re-

quirement, CenTrade also

selected mySAP Customer

Relationship Management.

Now, not only is its customer

service more responsive, but

more business opportunities

are being secured with im-

proved contact management.

CENTRADECENTRADE SELECTS mySAP™ MARKETPLACE ANDmySAP CUSTOMER RELATIONSHIP MANAGEMENT AS KEY PLATFORM FOR CZECH REPUBLIC’S FIRST ONLINE TRADING COMMUNITIES


“Having completed this task successfully and with the exten-sive professional support of SAP® Consulting, we are focused on bringing many new customers to CenTrade,” says Petar P.Stancev, CenTrade general manager. “Based on our experience,the benefit of any electronic marketplace increases with thegrowing community of suppliers and customers trading onlineand CenTrade will be very attractive to Czech companies.” CenTrade allows suppliers to upload product catalogs onto the virtual marketplace and buyers to browse these catalogs, create purchase orders, and process purchase orders with suppliers. The company announced its first electronic businesstransaction in February 2001 and the first electronic auctions in April 2001. After three months of pilot operations, CenTradebegan commercial trading on the live platform.

QUALITY CUSTOMER RELATIONS A KEY TO SUCCESS

From the outset, CenTrade intended to implement a customerrelationship management system. It wanted to use this systemnot only as a key tool to support customers, but also as a centralapplication that would provide a range of customer interactionand engagement capabilities for all CenTrade employees.

After a thorough evaluation, the company selected mySAP Customer Relationship Management (mySAP CRM) as the bestsolution for managing customer relationships. First of all, the solution could support the complete cycle of customer care,ranging from contact management and exploring potentialbusiness opportunities, to selling its trading services, through offering relevant products from third parties and CenTrade partners. Moreover, mySAP CRM allowed the company to per-form a detailed analysis and segmentation of its customers andpartners according to various criteria.


“Consolidated data about customers and new projects are critical for the success of a business organization,” says RobertOpletal, CenTrade direct sales manager. “mySAP CRM is a solution from a steady company that provides consistent functionality.”

A SMOOTH IMPLEMENTATION

“The mySAP CRM implementation was problem free,” says Dawood Hla Shwe, CenTrade project consultant and manager.“First, we didn’t need to involve a lot of staff with this projectand second, the checkout phase was very short. The main

“Based on our experience, the benefit

of any electronic marketplace increases

with the growing community of

suppliers and customers trading online

and CenTrade will be very attractive to

Czech companies.”

Petar P. Stancev, CenTrade General Manager

reason for the implementation’s accuracy was that the standardfunctionality of mySAP CRM accommodated our require-ments, and major adjustments were not needed. We also highlyvalue our teamwork with SAP Consulting, which was our onlyimplementation partner in the project.”

Preparations for implementing mySAP CRM were made in thebeginning of May 2001 by developing a requirements plan. Theplan defined the priorities for customer relationship processes as well as requirements for system functionality. The imple-mentation was designed and scheduled as a two-stage process.


The first stage included implementing mySAP CRM, mappingpartners, creating a central business-partner registry, support-ing interaction center processes, and managing business activi-ties. This stage lasted a little less than two months. As a result, mySAP CRM went live in July 2001.

The second stage was completed in October and included implementing mySAP CRM opportunity management capa-bilities. Opportunity management provides sales tracking andsales forecasting, identifies key decision makers, and estimatespotential-to-buy and potential closing dates. This set of featuresgives CenTrade’s key account managers a solid tool for support-ing a proactive approach with customers. mySAP CRM alsogives CenTrade staff comprehensive, up-to-date informationabout business partners.

“We greatly appreciate our collaboration with SAP,” saysStancev. “mySAP CRM is just more proof of the sophisticationof this exceptional company. We are quite happy that this par-ticular technology can help us find a better way to support ourcustomers every day, as well as focus our activities on meetingtheir needs.”

A RICH ASSORTMENT OF mySAP CRM CAPABILITIES

CenTrade uses mySAP CRM to administer a complete databaseof companies and contact persons and associated activities andopportunities. In cooperation with the interaction center oper-ating Green Line – the company’s toll-free telephone numberwhere customers get information about products or services –CenTrade also monitors all communications in its customercare department. This includes incoming and outgoing calls as well as electronic mail. Incoming calls currently make upabout 80% of the calls CenTrade handles.


However, outgoing activities that leverage new opportunitiesusing proactive customer engagement are growing as CenTradetakes advantage of mySAP CRM capabilities that support cam-paign management, telemarketing, and e-marketing.

The quality of customer support has also been greatlyimproved. With mySAP CRM, operators can choose froma variety of scripted scenarios to resolve a wide range of situations. Responding procedures for complaints, inquiries, technical issues, and other situations can be predetermined, including the obligatory time limit for answering a call, as guaranteed by CenTrade to its customers.

CenTrade has gained a better overview of its incoming commu-nications and the reasons why customers call Green Line. Addi-tionally, it now has an overview of customers’ problems with the name of the CenTrade person who handled the call and themethod they used to address the situation.

“CRM solutions are becoming more and more crucial for thesuccess of companies in today’s competitive world,” says JiríDonát, CenTrade director of strategy. “Our experience provesthat mySAP CRM is the leader in this industry.”

In the near future, CenTrade plans to create a knowledge basebuilt on existing customer responses and experiences. The basewould serve as a resource for generating more scenarios to helpoperators give customers faster and better-quality responses.


VISIBLE BENEFITS IN OPPORTUNITY MANAGEMENT

Before implementing mySAP CRM, opportunities were diffi-cult to monitor and track. Staff members contacted dozens ofpeople and had great difficulty remembering the status of eachbusiness case. Now, with mySAP CRM, capitalizing on businessopportunities is more efficient and profitable. CenTrade cannow assign a staff member to each opportunity, along with the

“CRM solutions are becoming more and

more crucial for the success of compa-

nies in today’s competitive world.”

Jirí Donát, CenTrade Director of Strategy

subsequent activities for which they are responsible in a givenperiod. Time frames are designated for a client or partnerresponse. Every opportunity is accurately documented, whichmakes it easy to quickly monitor its status. Moreover, mySAPCRM ensures that opportunities are not missed. With the op-portunity management capabilities of mySAP CRM, CenTradehas noticed a great rise in efficiency compared to previous periods, and sees a substantial improvement in the quality of its business-cycle management.


The Danone Group is the food industry’s world leader in freshdairy products, bottled water, and is number two in cookiesand crackers. In 2001, it generated sales of nearly �15 billion.With more than 100,000 employees, the group markets its foodproducts in some 120 countries worldwide. However, in spiteof the group’s success, Danone International Brands (DIB) –the export company of the Danone Group – faced an interest-ing business challenge. Since 2000, it had been looking for a wayto better manage some 400 distributors and importers spreadaround the globe in several different time zones, whilestrengthening customer relations. “Setting up a B2B site,where customers can consult product catalogs, place orders,and follow them up and take advantage of sales offers online,seemed like the right solution to us,” says Claire Thomas,DIB customer service manager.

EMPOWERING CUSTOMERS

WITH NEW ONLINE TECHNOLOGIES

In response, the company’s IT department began to study state-of-the-art B2B technologies currently available on the market.After considering a variety of vendors, DIB narrowed it down totwo solutions: mySAP™ Customer Relationship Management(mySAP CRM) and its Internet sales capabilities and a customsolution from a start-up company. “We opted for the mySAPCRM solution, reassured by SAP’s stability and its strong R&Dpotential,” said Agnès Simard, information systems managerfor DIB. Close integration of this front-office tool with thecompany’s future back-office system also influenced DIB’sdecision, according to Simard.

With 100,000 employees,

nearly �15 billion in sales,

and a global distribution

network, the Danone Group

is the world leader in fresh

dairy products and bottled

water, and ranks second for

cookies and crackers. To re-

inforce its accomplishments,

the group’s export company,

Danone International Brands

(DIB), realized it needed to

strengthen relations with its

network of importers/distrib-

utors. DIB chose mySAP™

CRM with its Internet sales

capabilities to help meet

this challenge. Today, at

www.dib.com – the export

company’s new Web site –

customers can place orders

or obtain product informa-

tion anytime, from any place

in the world.

DANONE INTERNATIONALBRANDS OPTIMIZESDISTRIBUTIONWITH mySAP™ CRM


In June 2000, DIB specified functional parameters with theassistance of Computer Sciences Corporation (CSC), which hadbeen selected for its in-depth knowledge of DIB acquired whileworking on a previous project that same year. “CSC was alsoable to show us concrete, completed B2B projects and demon-strate its responsiveness by putting together a team that couldmeet our aggressive deadlines while fulfilling a competitivecommercial proposal,” says Simard.

Three experts from SAP, four CSC consultants, and five inter-nal employees made up the project team. In late July, an initialtest was performed in Japan, and in early September, thewww.dib.com site went into production with five pilot DIBcustomers. According to Simard, four major factors contrib-uted to meeting these ambitious deadlines: “The thoroughinvolvement of SAP; the quality of relations between SAP andCSC; the availability and genuine e-business expertise of theintegration team; and the assistance with the changeover insidethe company, supported by the human resources department,helped ease any fears and bolstered real enthusiasm for theproject.”


INCREASED SALES AS A RESULT OF NEW WEB SITE

Since January 2001, the site has been open to all DIB’s exportcustomers. “Already, 50% of the sales are generated throughthis new sales channel, and we are aiming for 80%,” says Simard.“This success is explained by customer satisfaction. For them,this site is much more than an electronic purchase ordersystem. With a unique, secured access code, each one of themhas their own custom home page, with contact details andphotos of their contacts and targeted messages sent to themin their own language by the sales staff. This human factoris highly appreciated.” At the new site, the customer canaccess catalogs that are adapted to their own business needsand receive targeted promotions through a “push” system,especially information regarding new products.

Customers can place orders using shopping carts that arepre-configured according to the customers’ profiles, and ifrequested, according to previous orders. Not only do they savea lot of time, but customers can also optimize the containerfill rate. The site offers precise order progress tracking, so cus-tomers can anticipate when shipments arrive and plan forproduct distribution. For the importers whose business involveslocal promotion to their own distribution networks, technicalinformation, photos, and product endorsements are availableonline.


SERVICES THAT BUILD LOYALTY AND

STIMULATE PURCHASING

DIB has realized several benefits from mySAP CRM and itsInternet sales capabilities. First of all, the solution helps thecompany meet customer expectations for flexibility and avail-ability: customers can place orders or obtain product informa-tion at any time, regardless of where they are connected. Inaddition, with more information available about the status oftheir orders, customers can take more responsibility for makingsure that their orders are accurate and moving ahead. And,thanks to the “push” system and user-friendly tools, customersare placing more orders. All this boils down to increasedcustomer loyalty.

Other benefits include optimized business processes. The sales,marketing, sales administration, and IT staff all work togetherto update and manage the site, which has resulted in greaterefficiency and cooperation between departments. The companyhas also realized major gains in productivity. “We have seen asignificant reduction in administrative tasks, linked to the de-crease in the number of order confirmations and pro formainvoices that have to be entered and approved,” says Thomas.“Sales assistants now have more time for added-value activities.That means that agents can focus on customer relations, whichis another excellent way for us to increase customer loyalty.”


A BUSY INTERNATIONAL HUB

A leading business driver and challenge for the internationalairport business is keeping expenses down while providingquality. That was just what Fraport AG, owner and operator ofFrankfurt Airport, wanted to do. Fraport AG handles the entirelogistics chain supporting all airport and airline operations forFrankfurt airport, which is one of the world’s largest airportsand a major international hub for the movement of goods andpassengers. In 2001, Fraport – with close to 16,000 employees –handled almost 50 million passengers and some 1.5 million tonsof freight, generating revenues of $1.9 billion. Fraport’s opera-tions are extensive, and groups like traffic and terminal man-agement, ground crew services, freight logistics, real estatemanagement, and information and communications servicesall require supplies of every type. To better manage costs andordering processes for close to 40,000 items, its legacy purchas-ing system needed to be replaced. That’s when Fraport selectedmySAP™ Supplier Relationship Management (mySAP SRM)with SAP® Enterprise Buyer, for its e-procurement solution.

REPLACING A CUSTOM SOLUTION

Fraport AG recognized the benefits of an electronic orderingsystem back in 1997. These benefits included lower processingcosts, decentralized procurement activities, a reduced workloadfor the procurement department, and faster replenishment.Unfortunately, there were no mature standard products onthe market. This led the company to develop and implementa custom in-house solution, with an active interface to its SAPback-end system.

Saving money on procure-

ment, while providing ex-

ceptional service was key

for the company that owns

and manages Germany’s

Frankfurt Airport – Fraport AG.

That’s why it chose mySAP™

Supplier Relationship Man-

agement with SAP® Enter-

prise Buyer as the central

e-procurement component

of the SAP solution. Now,

almost 360 users order

thousands of items like

books, office equipment,

and furniture simply and

without unnecessary paper-

work. Better yet, the solution

saves the company an

estimated $130 per order.

FRAPORT AGSEAMLESS PROCUREMENT AND REDUCED COSTS WITHmySAP™ SUPPLIER RELATIONSHIP MANAGEMENT


While the custom procurement solution fulfilled many of thecompany’s functional goals (mostly due to the process modifi-cations it mandated), Fraport AG did not have a truly seamless,end-to-end electronic procurement chain until it switched to

“Thanks to online purchasing and leaner

processes, we have cut ordering costs

by up to 87%.”

Matthias Schulmeyer,Manager of Strategy Development and E-Procurement, Fraport AG

the e-procurement solution provided by mySAP SRM with SAP Enterprise Buyer, which integrates fully with SAP back-endsystems.

INTEGRATION IS THE KEY

Fraport’s focus on continuous improvements has always beenpart of its strategic objectives. What’s more, streamlining andintegrating front- and back-end business processes are criticalparts of this effort. With this in mind, Fraport AG introducedthe latest version of SAP Enterprise Buyer as part of the 2002companywide project, ProSAP, to take advantage of new capa-bilities. The project began with the analysis and optimizationof the administrative software. Then came the migration fromSAP R/2® to SAP R/3®. Thanks to intensive support from SAPconsultants and the SAP skills available within the company,Fraport AG completed the migration in record time.


“E-commerce solutions only bring real benefits if they arefully integrated into a company’s system platform,” says DieterBurmeister, spokesman for central purchasing and construc-tion bids. “Integration is the key.” Today, the procurement solu-tion is fully integrated into Fraport AG’s 17 back-end systems.

EXPANDING ITS PURCHASING RANGE

Thanks to the integration of SAP Enterprise Buyer intoFraport’s back-end business processes, the company can nowcollaborate with its internal suppliers completely electronically.This means, for example, that the in-house printing service(that prints visitors’ passes) and Airport Cater Service (whichsupplies Fraport employees with refreshments) can bill theircustomers electronically.

Meanwhile, Fraport AG has begun using SAP Enterprise Buyerto purchase much more than office supplies. The companyplans to procure all items that can be cataloged electronicallythrough a clearly laid-out catalog, created by an SAP partnercompany, Wallmedien AG, and maintained by Fraport itself.The catalog gives users a choice of 100,000 items and includesoffice supplies, electrical goods, office equipment, furniture,and more. Additionally, employees interested in purchasingbooks, magazine subscriptions, or specific documents (forexample, legal documents) have access to an external catalogfrom VUB Printmedia GmbH, a company that provides special-ized publications. This catalog is directly linked to SAPEnterprise Buyer.


ELECTRONIC PROCUREMENT STREAMLINES

PROCESSES

Making procurement easier and streamlining the buyingprocess has had an additional benefit. Costs are reduced, sinceadministrative overhead and paperwork have been eliminatedfor non-strategic goods. Under the new system, a superior’ssign off and controller’s approval are no longer needed for pur-chases. This has resulted in a significantly leaner – and shorter– procurement chain. Fraport AG also introduced self-billing,making invoices a thing of the past. Under the self-billingsystem, a credit memo is generated in the back-end system afterthe customer has confirmed delivery. The memo is then sent tothe supplier electronically.

“It didn’t take [the finance department]

long to recognize the benefits of the new

system.”

Matthias Schulmeyer,Manager of Strategy Development and E-Procurement, Fraport AG

The finance department was initially skeptical, but this quicklychanged. “It didn’t take them long to recognize the benefits ofthe new system,” says Matthias Schulmeyer, manager of strate-gy development and e-procurement. “Self-billing does awaywith a large number of small bills and this helps to reducecosts.” Moreover, the solution includes a budget control mech-anism that prevents departments from overspending. Addi-tional savings have also been realized with detailed analysisof purchasing behavior gained through mySAP SRM. Nowthat the central procurement department has accurate figures,Fraport is in a better position to negotiate discounts withsuppliers.


INCREASED VOLUME REDUCES COSTS

Users of the system provide the biggest cost benefits by em-bracing the SAP system and moving away from traditional andexpensive purchasing methods. The electronic procurement system now handles a purchase volume of around $1.8 million a year. But it’s the transaction volume that really expresses thescale of the new system. It currently handles about 9,000 ordersper calendar year, comprising almost 40,000 different purchaseorder items. This volume is increasing: User acceptance hasrisen significantly since the changeover of the procurementsystem to the mySAP SRM solution with SAP Enterprise Buyer.Compared with usage under the previous system, Fraport AGreports a fivefold increase in the number of orders placed.Fraport AG attributes this to the standardized SAP user inter-face, an improved search function, and faster system responsetime. “Thanks to online purchasing and leaner processes, wehave cut ordering costs by up to 87%,” says Schulmeyer. Thisaverages about $130 per order. “We have freed our procurementdepartment employees from routine tasks so they can concen-trate on more added-value activities. Moreover, we have madecollaborative procurement for Fraport AG possible throughoutEurope.”


FULL SPEED AHEAD

The introduction of SAP Enterprise Buyer at Fraport AG hasproven a complete success, and the company is now lookingat further savings. Fraport plans to integrate external suppliersinto its electronic procurement processes so that orders, pay-ments, and requests for services from outside vendors can beconducted electronically. The supplier portal – SAP® SupplierSelf-Services, which is a component of mySAP SRM – will serveas the link between Fraport AG and these business partners.To safeguard seamless communication between its multiplesystems, Fraport AG also plans to implement SAP ExchangeInfrastructure – a part of the integration and applicationplatform SAP NetWeaver™ – to support collaboration bothwithin and beyond the enterprise.


For more that 150 years, Berliner Gaswerke Aktiengesellschaft(GASAG) has been part of Berlin’s history. On January 1, 1847,gaslights erected by the company lit up the inner city. In 1992,GASAG converted to a stock company and, one year later,merged with the East Berlin gas company Berliner Erdgas AGto create the largest municipal gas supplier in Western Europe.GASAG was fully privatized in 1998.

Today, the company has more than 700,000 customers.It supplies 600,000 Berlin apartments with environmentallyfriendly natural gas, giving GASAG a market share of morethan 40% in the Berlin heating market. In 2001, GASAGemployed 1,184 people and generated revenues of �654 million.

WINNING NEW MARKET SHARE WITH mySAP CRM

In spite of its impressive history, however, not too long agoGASAG realized that although its previous customer informa-tion system, IKIS (developed in-house), was perfectly suited tointernal requirements, it could no longer meet the company’sincreased demand for reports and evaluations. It was not linkedto the central SAP® R/3® System and the SAP IS-U system, including the company’s billing solution. This resulted inredundant data, poor quality of data, and high processing timesfor inquiries because the customer service staff members wereconstantly switching between different systems.

Faced with the ever-growing

fierce competition of the

liberalized energy market,

utility companies are coming

up with all kinds of ideas to

attract new customers and

retain their existing ones

with high-quality services.

GASAG, located in Berlin,

Germany, has taken the

first step to win new market

share by replacing its in-

house customer information

system with the highly inte-

grated mySAP™ Customer


(mySAP CRM).

GASAGmySAP™ CRM PROVIDES PERFECT SUPPORT FOR CAMPAIGNS AT THE LARGEST MUNICIPAL SUPPLIEROF GAS IN WESTERN EUROPE


But these weren’t the only reasons it wanted to replace itssystem; GASAG also wanted to further bolster its presence inthe marketplace. “A market share of around 42% is great, butwe think we have even more potential and are aiming for amarket share of over 50%,” says Michael Adamczyk, CRMproject leader. In order to support its ambitious goals, GASAG turned to SAP Business Information Warehouse (SAP BW) andmySAP™ Customer Relationship Management (mySAP CRM)

“Our colleagues in marketing now

have complete autonomy, thanks to

mySAP CRM. And, our reduced rate of

returns is a sure sign that we have been

able to increase the quality of our data.

In GASAG’s marketing department,

mySAP CRM is already firmly asso-

ciated with making work easier.”

Michael Adamczyk, CRM Project Leader, GASAG

to help it improve its quality of data, increase efficiency,manage marketing campaigns – and ultimately to acquirenew customers.


Berlin Dat and SAP Consulting came on board as GASAG’simplementation partners. IBM provided qualified support inthe realization of SAP BW. And thanks to expert support, themySAP CRM implementation was rapid, taking only sixmonths.

ONE VIEW OF ALL DATA

What is now better than before? “Everything,” says Adamczyk.“Previously, we had the data on the customers but it wascontained in two different systems and no one could access itwithout encountering problems. Every time we wanted to dosomething, it required the efforts of a developer to write anevaluation program. Our plan to integrate mySAP CRM withthe SAP utilities industry solution billing function means wewill have one, uniform view of all our customer data. Ourcolleagues in marketing now have complete autonomy, thanksto this application. And, our reduced rate of returns is a suresign that we have been able to increase the quality of our data.In GASAG’s marketing department, mySAP CRM is alreadyfirmly associated with making work easier.”


REALIZING VISIONS WITH SAP

GASAG is still a long way from fully realizing the potential ofmySAP CRM. As part of the company’s internal transformationto an “active service provider,” GASAG is focusing on new cus-tomer services, which are to be supported by the highly inte-grated SAP solutions. GASAG has two main projects in thepipeline: role-specific enterprise portals for employees, callcenter agents, and customers, as well as fully comprehensivecomplaints management.

Today, GASAG feels confident it can gain new market sharein the private sector by utilizing mySAP CRM marketing cam-paign functions. All knowledge generated as a result of thecampaigns can be entered in mySAP CRM and made immedi-ately available to all the required employees for further process-ing. For example, the company is currently using mySAP CRMto identify target groups based on sophisticated selection crite-ria – which means it takes only a few mouse clicks for employ-ees to link a tailored e-mail campaign with the addresses of atarget group. Plus, return correspondence containing feedbackfrom potential prospects can be entered in the system and thenautomatically archived.


INFORMATION SERVICES FOR THE ENERGY INDUSTRY

Experience and innovation, competence and partnership: these are the qualities that is:energy brings to the table. TheHannover-based joint venture company of E.ON Energie andCap Gemini Ernst & Young resulted from the amalgamation of Gedos GmbH and Synergis GmbH. is:energy, which employssome 1,000 people, looks after more than 90 energy serviceproviders in 220 locations. These are predominately companiesof the E.ON Energie group, although public service and region-al supply companies also form part of its customer base.

MAIN FOCUS: EFFICIENT CUSTOMER SERVICE

is:energy chose the mySAP™ Customer Relationship Manage-ment (mySAP CRM) solution to help it gain a competitive advantage through targeted customer service. However, the ITservice provider is not just seeking to optimize in-house custo-mer relationship management with mySAP CRM: As a certifiedSAP® Customer Competence Center, the company also sees itself as an implementation and consulting partner for itsdemanding customer base. “Our experience of the mySAPCRM pilot installation should also serve as a multiplier. We can also recommend to customers what we are runningsuccessfully ourselves,” says Frank Schepke, project lead atis:energy.

SAP CHOSEN FROM LONG LIST OF CONTENDERS

Before is:energy made the decision to go with mySAP CRM, itconducted an extensive selection during which 17 bidders weretested; of those 17 tested, 3 were short-listed. “We didn’t just decide on SAP because of our successful, long-standing partner-ship,” says Alexander Urtel, project lead. “The first-class func-tionality of mySAP CRM convinced us, and, on top of that, theseamless integration it offers with software from the SAP forUtilities portfolio.”

To support and optimize

its sales and marketing pro-

cesses – as well as its cus-

tomer-centric energy-supply

processes – Germany’s lead-

ing full IT service provider

for the energy industry,

is:energy, decided to imple-

ment mySAP™ Customer


(mySAP CRM). Just months

after the go-live, the compa-

ny began realizing benefits –

including reduced manual

labor and a consistent,

transparent view of

customer information.

IS:ENERGYFIRST-CLASS SERVICE AND EFFICIENT SALES ANDDISTRIBUTION PROCESSES WITH mySAP™ CRM


And there were other plus points: “This integration primarilyallows continuous support of all the customer-centric energysupply processes. Because of that, we expect a strong demandfrom our internal and external customers.”

ALL REQUIREMENTS FULLY MET

The project started mid-2001 and was realized as a stand-alonesolution, with SAP Consulting providing their expertise. At the time, as one of the first companies in the world to use thenewest version of mySAP CRM, is:energy truly placed itself at

“The provision of comprehensive

customer information in marketing,

sales and distribution, and

consulting increases the service quality

and guarantees universal sales

and distribution processes.”

Alexander Urtel, Project Lead, is:energy GmbH

the cutting edge. The go-live in January 2002 was a special dayfor the 100 employees in 13 sites in Germany and Austria, whenall functions were rolled out simultaneously. And, the rolloutwent smoothly and according to plan. “The positive feedbackshows that our employees have adapted to the new solutionvery quickly,” says Schepke. By the final stage, all is:energy employees will use mySAP CRM.


CONSISTENT VIEW OF CUSTOMER INFORMATION

For is:energy, customer service in the past involved a lot ofmanual effort. Now, SAP’s comprehensive CRM solution provides employees with all the functions and tools necessaryfor efficient customer relationship management. And, coopera-tion between customer-oriented departments has improvedenormously. mySAP CRM supports the entry and transfer ofsales inquiries to account management and helps employeesplan all customer-related activities. “We support the entire quotation process with mySAP CRM, including opportunitiesand project description,” says Schepke. With the click of amouse, users can access all the current information on businesspartners, opportunities, contracts, competitors, and campaigns;marketing, sales and distribution, and back-office staff obtainexactly the customer information that they need for their dailywork. The company’s consultants also benefit from access toextensive, transparent information. The result: fewer consul-tation calls with shorter processing times guarantee optimalcustomer service – in the acquisition phase and beyond.


Following the successful introduction of mySAP CRM, is:energy is already considering further implementations, with SAP Enterprise Portal high on the list of priorities. TheSAP portal solution will provide is:energy employees with a single point of access to vital information, applications, and solutions such as mySAP CRM via a role-based portal work-place – all of which can help the company continue to deliversuperior customer service and streamline its marketing andsales and distribution processes.


LINZ AG was founded against the backdrop of energy-marketderegulation in Austria. The company consists of four sub-sidiaries (Linz Strom GmbH, Linz Gas/Wärme GmbH, Linz Service GmbH, and Linz Linien GmbH) plus the managementcompany that services them, Managementservice Linz GmbH.These subsidiaries were brought together in an effort to reducecosts and secure profits through synergies. This merger estab-lished the forward-looking, market-oriented company that hassince developed into a multi-utility provider.

LINZ AG recorded total assets of �1.36 billion for fiscal year2001/2002 (ending in September 2002) – up 15.4% from the previous year. Business activity generated an estimated�29.87 million in profits. The utility company employs approxi-mately 2,600 people.

THE CHALLENGE

One-stop service: This is the mission of the utility companyfounded on October 1, 2001. And one-stop service means onecentral database; hence the project “Call Center Realization,”part of the reorientation process that followed the merger ofthe SBL and ESG companies. These companies specialized innatural gas, water, wastewater, waste, and local heating; andelectricity, long-distance heating, and public transportationin Linz, respectively. The project aimed not only to improvecustomer service response times, but also to attract newcustomers and win back former ones.

Since October 2002,

customer service at LINZ AG

has been operating out

of a new call center. This

new customer center,

responsible for handling

inquiries from the Austrian

utility company’s approxi-

mately 425,000 customers,

has been outfitted with

mySAP™ Customer Relation-

ship Management. Using

this system, the 55 employ-

ees working in the customer

center, plus an additional

60 specialists, have instant

access to a central database

containing various customer

data.

LINZ AG ONE-STOP CUSTOMER SERVICE WITH mySAP™ CUSTOMER RELATIONSHIP MANAGEMENT


In parallel, the company carried out another project with thegoal of merging the SBL and ESG SAP® R/3® Systems and imple-menting a new industry-specific system based on SAP at LINZAG. This meant the company needed a powerful CRM softwaresolution that would easily integrate with these systems. Thecompany referred to the project as “Alpha.”

LINZ AG also required a solution that was flexible enough forits call center – and one that was suitable both for the initialphase of transition (during which old billing systems wouldstill be operating) and for the final stage of transition to the uni-form industry-specific applications from the SAP for Utilitiesportfolio of software and services. But that was not all: LINZ AGwanted a solution that would require minimal costs during thetransition.

THE WINNING SOLUTION

mySAP™ Customer Relationship Management (mySAP CRM)met these criteria. At the end of a rigorous selection process,the company chose SAP not only to supply the software, butalso to implement it, making SAP an important player in thecompany’s ambitious project. Merging the company’s old sys-tems presented a major challenge for SAP’s utility team. AlfredAllram, account manager at SAP, and Raimund Höfinger, SAPsolution architect, were thrilled with the project’s success:“This is quite a milestone for SAP Consulting,” says Allram.Thanks to mySAP CRM’s high level of integration with LINZ’sexisting billing system and work processes, complex customerrequests can now be handled by one call center in a simple,straightforward manner. Workflows have also been dramati-cally streamlined.


ONE-STOP SHOP

Now that the systems have been merged, call center employeeshave access to the same data that is available to the cost allo-cation center, for example. The call center receives both tele-phone and e-mail inquiries. Telephone-computer integrationmeans that customer inquiries are handled with maximum

“With mySAP CRM, we can answer

customer inquiries quickly and are

better able to meet our customers’

needs. In addition, the system enables

us to document customer requests as

they are being processed, providing us

with important information for product

development.”

Stefan Gintenreiter-Kögl, LINZ AG

efficiency: Today, 32 call center employees process upto 1,000 calls and approximately 100 e-mail inquiries daily(regarding, for example, electricity bills; natural gas and wateruse/rates; and annual tickets for public transportation). BothLINZ AG and its customers now enjoy the benefits of instant access to a variety of customer data. Gone are the days ofswitching systems and transferring customer calls to specialists.mySAP CRM makes it possible to process and document all customer requests in one single step.


“With mySAP CRM, we can answer customer inquiries quicklyand are better able to meet our customers’ needs. In addition,the system enables us to document customer requests as theyare being processed, providing us with important informationfor product development,” says Stefan Gintenreiter-Kögl,LINZ AG.

HIGHLIGHT: 300 NEW CUSTOMERS

LINZ AG’s targeted program to win back customers has alreadyproven to be a success. Three hundred customers have switchedback since the mySAP CRM solution was implemented on

“The CRM project had to be carried

out under a great deal of time pressure.

Success would not have been possible

without the expertise of SAP consultants.”

Georg Gratzl, LINZ AG

October 1, 2002. Plus, the success of the CRM project confirmedthe know-how and high-quality standards of the SAP team.Georg Gratzl, LINZ AG, confirms, “The project had to becarried out under a great deal of time pressure. Success wouldnot have been possible without the expertise of SAPconsultants.”


AT A GLANCE

Software mySAP™ CRM

Database Oracle

Users 330


With revenues of around �50 billion, the Metro Group is thefifth largest retail company worldwide. It divides its businessinto four areas – one of which involves operating some400 retail outlets called Metro Cash & Carry (MCC). Thesestores, which are disbursed throughout the globe, generatemore than 45% of the group’s total sales.

To help manage a staff of more than 72,000 people (as of busi-ness year 2002) who work for Metro Cash & Carry, the group

“Once consolidated and processed, the

quantitative and qualitative key figures

provided a transparent picture of the

operative and strategic potential per

application area and for the company

overall.”

Ute Riemann, Head of Benchmark Project for MCC

chose mySAP™ Human Resources (mySAP HR). Upon success-ful implementation of organization management, administra-tion, and payroll applications in countries such as Poland,Austria, Russia, Slovakia, and the Czech Republic, the MetroGroup brought SAP Business Consulting on board to helpevaluate the potential costs savings and benefits of a moreextensive mySAP HR rollout.

Service Industries

With its Metro Cash & Carry

stores, which are managed

under the brand names

Metro and Makro, the Metro

Group remains the interna-

tional market leader in

self-service wholesaling.

A benchmark analysis per-

formed by SAP Business

Consulting showed that,

by implementing mySAP™

Human Resources through-

out its network of stores,

the group would experience

significant savings and

benefits.

METRO CASH & CARRY INTERNATIONAL GMBHmySAP™ HUMAN RESOURCES IMPLEMENTATION HELPSMETRO MANAGE RETAIL ACTIVITIES WORLDWIDE

178

BENCHMARK ANALYSIS BASED ON

SAP BEST PRACTICES

Ute Riemann, head of the benchmark project for MCC, describes how the team created its analysis: “We first selected industry-neutral and industry-specific figures by using the keyperformance indicators (KPIs), and used them as the basis forquantitative evaluations, such as by cost, for example.”

However, qualitative aspects were also included in the analysis.“We used SAP® Best Practices to evaluate the performanceof current processes and to determine the optimization poten-tial of mySAP HR,” says Riemann. “Once consolidated andprocessed, the quantitative and qualitative key figures provideda transparent picture of the operative and strategic potentialper application area and for the company overall.”

For example, the analysis showed that mySAP HR wouldsignificantly reduce the workload of routine tasks in theHR department, allowing employees to perform more strategi-cally important ones. It also concluded that mySAP HR couldsignificantly reduce the administration workload for MCChuman resources personnel.

“One of the key findings for us was the fact that the implemen-tation of further modules will enhance the benefit of thesystem considerably,” commented Udo Stauber, head of HRcontrolling and SAP HR project manager, on the results ofthe analysis.

Service Industries 179

NEW APPLICATIONS

In addition, the analysis showed MCC management that implementing new applications – such as e-recruiting and e-learning – could dramatically increase savings, while reducing costs. And how long did it take the team from SAP Business Consulting to perform the benchmark analysisfor MCC? “A study of this kind can be completed within 12 days,” says Riemann.

Service Industries180

GREEN LIGHT FOR FURTHER GLOBAL ROLLOUT

Based on the positive results, the group gave a green light forfurther rollout of mySAP HR at its Metro Cash & Carry stores.

Service Industries 181

AT A GLANCE

Company Metro Cash & CarryInternational GmbH (MCC)

Project Benchmark analysis for global implementation of mySAP™ HR at MCC

Goals Support decision makingthrough quantitative andqualitative determinationof potential costs andbenefits based on internaland external benchmarks

Implementation SAP Business Consulting

The result Decision to implement mySAP HR worldwide

SFR decided to reorganize

its supply chain processes

in order to meet the chal-

lenges of a rapidly expand-

ing mobile telecommunica-

tions market. With sales of

�5.3 billion in 2001, the

company opted for mySAP™

Supply Chain Management

(mySAP SCM) to anchor its

new processes and synchro-

nize its supply chain. After a

rapid, trouble-free implemen-

tation, SFR began seeing

results: a 98% service per-

formance rate, an average

three-month drop in inven-

tory, and improved collabo-

ration with its distributors.

SFRAN EFFECTIVE SUPPLY CHAIN POWERED BY mySAP™ SUPPLY CHAIN MANAGEMENT

In the late 1990s, the mobile telecommunications sector, untilthen limited to the professional-users market, began to targetthe general public. “Suddenly we were confronted with a mar-ket in full expansion driven by the forces of fashion and heavilyinfluenced by promotions,” says Claire Carpentier, director ofproduction and logistics at SFR. “As we were accustomed to aclient base consisting almost exclusively of professional users,we were forced to rethink our whole mobile business, whichmeant developing and marketing mobile-phone packages – cellular phone, plus SIM card, plus services, all in one package –for the public.”

To succeed, SFR needed to strategically deploy its products, develop imaginative marketing strategies, and manage increased volumes throughout its entire supply chain – all theway from package-assembly subcontracting to distribution toend users – in order to respond to the changing demand of theretail outlets. In order not to lose any potential clients, SFRknew it had to be sure of having the right product in the rightquantity at the right place at all times, with very little marginfor error. As the cellular phone itself was subsidized by the operator, and the cost of each cell phone is relatively high, thefinancial impact of having either too much or too little stock at the retail outlets would have been severe; only by expandingits subscriber base could SFR recuperate its huge initial investment.

“We decided to reorganize our supply chain processes all theway from cellular-phone and SIM-card procurement to deliv-ery to our distribution clients,” says Carpentier. “At the sametime, we were careful to keep up with the pace at which thenetwork was developing by ensuring the availability of the twovirtual components of the pack: the telephone number and thevoice mail account.”


The core objectives of the reorganization project involved implementing sales-planning processes within SFR in order tocreate a demand-driven supply chain; enhance and acceleratedemand forecasting for both end products and raw materials;

“The savings provided by mySAP SCM

in terms of enhanced efficiency and

reduced costs mean that the return on

our investment in the solution is less

than one year.”

Claire Carpentier, Director of Production and Logistics, SFR

ensure faster reaction to market changes and variations; speedup stock rotation; and, finally, improve collaboration with distributors and optimize their stocks via better-tailored allocation plans.

EASE OF INTEGRATION A DECIDING FACTOR

SFR began evaluating three major supply chain management(SCM) solution vendors. “It was not an easy choice to make,”says Carpentier. “We finally selected SAP primarily because of the ease with which the solution could be integrated withour existing SAP environment. Other factors included itsergonomic user interface, and, especially, the fact that it madesense for us to integrate this planning solution with our exist-ing SAP® R/3® management system, which we use for purchas-ing, sales, production, and finance.”


After six months developing the pilot configuration, SFR began implementing SAP Advanced Planning & Optimization(SAP APO) – a key component of mySAP™ SCM. The projectteam consisted of about 50 people, including several SAP con-sultants. The project was divided into 13 subprojects: 4 involvedthe new processes being implemented (planning, distributiondemand management, production planning, stock allocation);another 4 were devoted to reengineering existing transactionalprocesses (purchasing/supply, manufacturing order manage-ment, order acceptance and available-to-promise checking, andtechnical data management); 3 were project-wide subprojects(change management, performance indicators, IT architecture);and 2 were focused on new activities (notably, mail-order salesfor renewal of clients’ cellular phones).

A SOLUTION THAT SYNCHRONIZES TASKS AND

MEETS ALL NEEDS

After 3 months of general design work and 5 months of detaileddesign and prototyping, SFR was in possession of a functioningpilot system. The project was put on hold at that stage to makeway for another more urgent project: that of combining the SAP systems used throughout the group into a single system.The company deployed SAP APO within 5 months, which completed the supply chain project. The entire project took 12 months, exactly the duration allocated in the project sched-ule. Carpentier believes that the rigorous project-managementmethodology had a lot to do with the successful and timely project rollout. “It also had to do with the way in which theproject was strategically positioned as an enterprise-wide proj-ect, sponsored by general management, and the fact that fromthe very outset it called upon all supply chain players to helpbuild a set of new processes based on true synergy and synchro-nization of tasks.”

The 40 users of the new solution adopted it quickly, as it corre-sponded perfectly to their needs. One year later, it had alreadyformed an integral part of their daily lives. “Motivated by therealization that this solution was going to help them improvetheir performance, all of the users have now achieved a high degree of expertise,” says Carpentier. “SAP APO is fully func-tioning as a steering, planning, and decision-making tool, and it has become vital to our business. It enables us to create eco-nomic indicators for our flows.”


The company experienced numerous and measurable benefitsthroughout the supply chain as a result of implementing mySAP SCM. Upstream, it manages 6,000 different raw-materialitems, and downstream, it manages some 2,500 finished prod-ucts of all types (various packages, SIM cards, recharges, and

“We started off with nothing in regards

to processes and tools, and now, at the

end of a thrilling project, we have an

open-ended solution that will enable

us to move from the old market of

conquering new ground to the new

market of renewal.”


so on) and 15,000 retail outlets. The two are linked by an opti-mized flow, due in part to the new processes, but also as a resultof the full-scale integration of mySAP SCM’s supply chain planning functions and SAP R/3.

SAP APO focuses on strategic issues and operational planning,while SAP R/3 handles after-process execution. At the tacticallevel, the demand-planning functions enable sales planning atthe most detailed level: for each product-retail outlet pairing.The new solution also enables SFR to work collaboratively withits distributors. The supply-network planning capabilities with-in SAP APO calculate end-product and key component require-ments for the extended logistics network, taking account ofSFR’s stocks and those of its distributors, without the distribu-tors needing to intervene.

A SUPPLY CHAIN DRIVEN BY THE NEEDS

OF THE MARKET

“Before, we had no way of obtaining such useful and accuratevisibility of our needs, or of taking our projections into accountat all levels,” says Carpentier. “Thanks to these new capabilities,we now have a supply chain that is genuinely driven by the needsof end clients, a supply chain that is therefore much better correlated with market reality. The fact that we can update our forecasts as frequently as we like with SAP APO – withcorresponding updates of demand planning – means that wecan respond more rapidly to market uncertainties and suddenchanges in demand.”


At an operational level, the forecasts are used by SAP R/3 to calculate requirements for finished products, production, anddistribution, taking into account SFR’s stocks and those of itsdistributors. Supply-network planning is used to establish aninitial stock allocation plan, which also considers orders fromretail outlets entered in the SAP R/3 System. The sales-depart-ment employees adjust the stock allocation plan to account forany events or promotions taking place that were not originallyscheduled.

MORE ACCURATE AND BALANCED STOCK ALLOCATION

“The solution provides our stock handlers with a reliable toolfor tracking distributor stocks on an individual outlet basis,”says Carpentier. “They know exactly how much each distribu-tor needs, where they need it (which retail outlet), and when.The transparency of stock availability allows them to keep ourdistributors informed of delivery schedules. All of this meansthat our stock handlers can communicate much better andmore effectively collaborate with our clients.”

The supply-network planning capabilities provide productionplans for two production sites and one distribution center.They provide data for the production-planning capability inSAP R/3, which in turn generates SIM card and package manu-facturing orders for SFR’s subcontractors. “This process is tailored to the needs of our planners,” says Carpentier. In thefuture, SFR will use the available-to-promise (ATP) functions in SAP APO to compare stock-allocation plans with deliveries to retail outlets, thus further refining allocation planning andoptimizing distributor stocks. “This means much more co-herent stock allocations to our distributors than before,” saysCarpentier. “They have a much clearer view of our deliveries,and, accordingly, of their own stocks. This enables them to plantheir sales better, and reinforces the collaboration between us.”Improvements achieved in the logistics process and stock allo-cation as a result of the implementation have enabled the com-pany to improve its service performance rate, which is now at98% or more, with more than 80% of retail outlets having thetarget stock levels on hand in order to execute sales plans.


FASTER STOCK ROTATION

FOR COMPETITIVE PROMOTIONS

SFR has not only accomplished its original objective of havingthe right product available at the right time for each potentialclient; its new solution has also enabled a significant reductionin finished-product stock levels throughout the logistics

“SAP APO is fully functioning as a steer-

ing, planning, and decision-making tool,

and it has become vital to our business.”


network. Better planning accuracy and optimized stock allo-cations and processes have brought down stock levels at SFRfrom two months to one month, and from six months to twoor three months for SFR’s distributors, depending on the product.

“This has had a direct impact on inventory costs – and hencethe cost of our finished products – and on product rotation,which is now better coordinated with our monthly promo-tions,” says Carpentier. “The fact that a particular productmight have been sitting on our distributor’s shelves for sixmonths or more made it difficult for us to play this competitivecard in the past.”

Reduced stock levels at SFR also mean better stock manage-ment: mySAP SCM provides good visibility of undersupply andoversupply risks and enables the company to take swift action.This applies also to upstream operations, on the supply end,where inventory needs can be revised at any time and pro-duction planning revised accordingly. If problems arise withsuppliers, such as nondelivery of cell phones, SFR can deploy a substitute product faster.

“SAP APO is now an integral part of our daily life at SFR. Theprocesses it supports and its tools have facilitated much morefluid information flows, both internally and externally, and im-proved our global performance thanks to the synergy it createsat all levels: sales, logistics, stock allocation, distribution,” saysCarpentier. “Our ultimate goal would be to have all of our dis-tribution clients connected into our system in order to ensureeven closer integration of their procurement processes.”


AT A GLANCE

Software mySAP™ SCM (SAP® APO)

Hardware HP Superdom

Operating system UNIX

Database Oracle

Number of users 40

Since its establishment in

1984, Tele Atlas has grown

into a world leader in digital

navigation data. The com-

pany currently operates

establishments in more

than 21 different countries,

employing 1,900 people.

As a dynamic multinational

concern, Tele Atlas continu-

ously endeavors to flexibly

respond to the needs of the

rapidly changing market.

The company, which has

been using SAP® software

since 1999 to optimize its

internal business processes,

decided to harness the

power of mySAP™ Customer

Relationship Management to

enhance customer loyalty.

TELE ATLASTELE ATLAS GETS CLOSER TO THE CUSTOMER WITHmySAP™ CUSTOMER RELATIONSHIP MANAGEMENT(mySAP CRM)

Tele Atlas generates a major part of its turnover through thecommercialization of navigation CDs for in-car navigation systems. The company sells the CDs through a global networkof garage owners and car accessory shops. “Until recently, ourdealers were forced to place their orders at the Navigation Service Center (NSC), an external call center located in Edin-burgh,” explains Geert Bert, sales service manager for Europeand head of the business planning department. “This type ofoutsourcing was very expensive. Moreover, the people at theNSC had little or no affinity with our company. Too often, their product knowledge was too limited to properly respond to customer questions. This inefficiency slowly but steadilytranslated into declining turnover figures.” In addition, the lack of communication between the NSC and Tele Atlas wasconsidered a serious problem. “As a result, management oftenhad to make wild guesses about our customers’ identities andneeds,” says Bert. To bridge the gap with its dealers, and at thesame time reduce costs, Tele Atlas made the decision to handlethe dealer database and the orders internally: the Business Service Center (BSC) was born.

mySAP CRM, A LOGICAL CHOICE

Once the BSC had been established, the need arose for an IT system that would help employees manage customer rela-tions. A careful comparison of several packages proved mySAP™Customer Relationship Management (mySAP CRM) to be thesolution that best met the criteria of Tele Atlas. “We had beenusing SAP for some time to manage all of our other businessprocesses, with excellent results. Therefore we felt especiallyconfident about the mySAP CRM solution. Moreover, this soft-ware provides all of the functionality that our company needs,today and in the future. Also from a purely technical point ofview, mySAP CRM seemed like the best solution, as it allowedus to easily expand our existing software package with asolution from the same supplier.”


The actual implementation went smoothly. “In September2001, we began the implementation of mySAP CRM,” says Bert.“The system was already operational in March 2002. To success-fully complete such an elaborate project in such an astonish-ingly short time span, very strict planning was required. Our

“mySAP CRM provides us with a clear

overview of our dealers’ orders, of the

quantities bought, and of the different

peak periods. This information enables

us to orchestrate our promotional cam-

paigns in a far more target-oriented and

customer-specific manner.”

Geert Bert, Sales Service Manager for Europe and Head of the Business Planning Department, Tele Atlas

accomplishment is, first of all, a tribute to the efforts of ourhigh-quality and greatly motivated project team. In addition,the team from SAP® Consulting demonstrated dedication tothe project and commitment to excellence.”

INCREASED TURNOVER AND COST SAVINGS

“mySAP CRM provides us with a clear overview of our dealers’orders, of the quantities bought, and of the different peak periods. This information enables us to orchestrate our promo-tional campaigns in a far more target-oriented and customer-specific manner,” Bert explains. The SAP solution also offersnumerous advantages with respect to complaint handling. “Inthe past, dealers who had complaints could only appeal to theNSC.


“Their grievances were only rarely or never passed on to Tele Atlas,” says Bert. “Thanks to mySAP CRM, we now have adirect channel to our customers and we can personally followup their complaints. As a result, we also get a lot more feedback

“Thanks to mySAP CRM and our new

way of working – through the Business

Service Center – the cost price per CD

was reduced by not less than 40%.”

Geert Bert, Sales Service Manager for Europe and Head of the Business Planning Department, Tele Atlas

on our products, allowing us to better address our customers’needs when developing new CDs. As a consequence of ourimpressive service improvement, we’ve already experienced aremarkable increase in the number of calls. In addition, ourturnover has also grown slightly during the last few months.Taking into account the current economic malaise, this is, toput it mildly, a welcome bonus.”

The SAP solution also helped Tele Atlas reduce costs. “mySAP CRM allows us to distribute our resources more efficiently among our individual customers. Moreover, a greatdeal of administrative costs have been eliminated. Thanks tomySAP CRM and our new way of working – through the Business Service Center – the cost price per CD was reduced by not less than 40% in seven months’ time,” Bert proudly indicates.


READY FOR THE FUTURE

“At present, the SAP software contains all the informationabout our European B2B customers,” says Bert. “However, wealso aim to include information about our end users in the longterm. In the near future, we even want to use mySAP CRM tomanage our many different partnerships with telecommunica-tions companies, service providers, and application designers,”Bert points out. “Thanks to the flexibility and the functionalityof the package, we are sufficiently armed to take up these challenges. We might even consider the idea of starting up aWeb shop.”

Bert provides the following advice for businesses that plan toswitch to SAP: “Prior to taking the first step toward a new software platform, it is crucial to thoroughly consider exactlywhat you want to achieve. As an SAP implementation project isquite a heavy investment, you also have to gain insight into thereturn on investment from the very beginning. SAP is a packagethat provides almost unlimited possibilities. Therefore, youhave to ask yourself what exactly you want from the system andwhat aspects you want to emphasize. This requires a thoroughanalysis of the different business processes. However, if you follow this advice, you will be rapidly convinced that SAP is anincredibly multifunctional and very advantageous partner.”


AT A GLANCE

Software mySAP™ Customer Relationship Management

Hardware Compaq

Operating system Windows 2000

Database Informics

Number of users 20


Implementationpartner SAP® Consulting

UTA’s existing solution for

managing accounts receiv-

ables lacked effective inter-

faces to the company’s core

SAP® R/3® environment.

In addition, UTA’s legacy

system offered only limited

functionality for managing

open items and dunning and

reporting processes. Thanks

to SAP Revenue Manage-

ment – Contract Accounting

(SAP RM-CA), the Austrian

telco now has a fully inte-

grated, industry-specific

solution that streamlines

business processes, and

delivers a range of powerful

new functions.

UTA TELEKOM AGSAP HELPS UTA MANAGE KEY ACCOUNTING PROCESSES

Headquartered in Vienna, Austria, UTA Telekom AG is thecountry’s leading new provider of telecommunications and e-business services for enterprises and private customers. Leveraging state-of-the-art technologies and its own cutting-edge fiber-optic network, the company delivers a wide range ofhigh-quality services for landline voice telephony, cell phones,the Internet, and corporate networks. UTA employs a work-force of 620. In 2002, it posted revenues of �248.2 million.

INTEGRATED SYSTEMS AND

CUTTING-EDGE FUNCTIONALITY

With 460,000 telephony and 330,000 Internet customers, UTA is a major player in the Austrian telecommunications market.But keeping tabs on accounts-receivables (A/R) data for this volume of business presents a major challenge – for any com-pany. And, not too long ago, as its customer base continued to expand, UTA became fully aware of the shortcomings of its existing system. “There had always been a problem with systems integration,” recalls Elmar Hassler, head of the SAPcompetence center at UTA, and jointly in charge of the imple-mentation project. “But when our auditors criticized our pro-cesses, we knew it was time to take action.” In response, UTAwent looking for a solution that would not only help it managelarge amounts of A/R data; it also needed a solution that wouldseamlessly integrate with its core SAP® R/3® System and supportother key accounting processes. “Our legacy system lacked effective, integrated functions for managing open items, whichmade it very difficult to keep track of receivables,” says Hassler.


In an attempt to overcome some of these problems, UTA hadinterfaced its billing system to SAP R/3, allowing billing data to be entered in the general ledger. However, this was purely astopgap measure, and did not fully resolve the issue of systemsintegration. The lack of communication between the legacysystem and SAP R/3 particularly affected UTA’s sales profession-als, who could not easily access consistent data on customersand the status of their accounts.

PARTNERING FOR SUCCESS

Since 1998, SAP R/3 has been at the very heart of UTA’s businessprocesses, handling a wide range of tasks, including general-ledger accounting, payroll, and logistics. So, when it came time

“Thanks to SAP, we have the integration

we so badly needed – plus a range of

powerful, industry-specific functionality

that streamlines our day-to-day

processes.”

Elmar Hassler, Head of SAP Competence Center and Project Lead at UTA

to select new software, the company made the obvious choice:SAP. “Partnering with SAP not only ensured optimized integra-tion with our core system,” says Hassler. “It also gave us the ex-pert support we needed to streamline our dunning, reporting,and payment processes.”


RAPID, EFFECTIVE IMPLEMENTATION

Preparations for implementing SAP Revenue Management –Contract Accounting (SAP RM-CA) – an application in the SAPfor Telecommunications portfolio of software and services – began in August 2001 when UTA and SAP Consulting in Austriajointly conducted a preliminary study into the strengths andweaknesses of the telco’s IT infrastructure and business process-es. “At this stage, we realized that SAP not only offered excellentsupport for our existing processes; its industry-specific solutionalso provided a range of completely new capabilities,” statesHassler. These included user-friendly installment planning,automatic handling of untraceable incoming payments, andcalculation of interest on open items – none of which had beenpossible with UTA’s legacy system.

To ensure the implementation went as smoothly as possible,UTA set up three subprojects, focusing on accounts-receivablesmanagement, integration of general ledger and controlling,and infrastructure and interfaces.

The SAP implementation at UTA centered on migrating thetelco’s accounts receivables from its legacy system to the newSAP solution. This meant transferring core processes and master data for customer accounts. In addition, the projectaimed at creating a unified view of customer data across varioussystems, user-friendly open-items management, more efficientdunning, and more effective reporting. It also included imple-mentation of a call-center solution to give agents rapid accessto UTA’s optical archives via SAP BAPI® interfaces. Other goalsincluded enhanced integration of general and subledgers, andprovision of reliable data for downstream reporting, cash man-agement, and controlling (profitability analysis).

An analysis phase began in January 2002, and in February thecore team received training. From March to April, the imple-mentation team set up a prototype to demonstrate how thenew functionality could be integrated into UTA’s day-to-dayoperations. “Our people were very enthusiastic about what the SAP solution had to offer, and were keen to put the newfunctionality to use in their departments,” says Hassler.


Following testing and user training, SAP RM-CA went live atUTA on August 12, 2002 – a little over eight months after kick-off, and right on schedule. Close collaboration between UTA’sin-house project team and SAP Consulting played a decisiverole in ensuring quick and effective implementation.

MADE-TO-MEASURE FUNCTIONALITY

FOR TODAY’S TELCOS

SAP Revenue Management – Contract Accounting is a sub-ledger accounting system geared to the specific requirements of players in the telecommunications industry. The solution isspecially designed to automatically handle large numbers ofcustomers and high volumes of documents, where manualprocessing would be unfeasible.

SAP RM-CA capabilities for receivables and collections man-agement support all payment methods used by telcos – for example, bank debits, bank transfers, checks, credit cards, andcash.

Integrated dunning functionality monitors customers’ payment histories, and initiates action where appropriate. SAP RM-CA allows telcos to define various dunning levels andhow to determine them. In addition, the solution can calculatedunning charges in accordance with the dunning level of theopen items and the customer’s credit history.

And if dunning fails to bring the desired results, the SAP in-dustry solution supports transfer of data to external collectionagencies. Where customers are unable to pay, an installmentagreement or a deferred payment agreement can be set up forone or more receivable items.

Furthermore, a receivables- and collection-management posting causes an immediate posting in the SAP treasurysystem, ensuring that the liquidity forecast and data in thecash-management system is always up-to-date. SAP RM-CAalso includes a range of online query, reporting, and analysistools. An account display function provides users with anoverview of debit and credit items for a particular customer account. The data displayed can be selected according to various criteria, allowing users to home in on precisely the information they require.


In addition to the functions for individual accounts, SAP RM-CA includes powerful capabilities for aggregatedreporting. These include statistics for drawing up financialstatements, such as open items on balance sheets. The solutionalso enables the volume of open items at the end of the workingday to be analyzed according to various criteria – such as over-due receivables.

SAP Revenue Management – Contract Accounting also inter-faces seamlessly with the SAP controlling system, allowing in-depth profitability analysis, for example. An additional inter-mediate document (IDoc) interface enables users to view the

“At this stage, we realized that SAP

not only offered excellent support for

our existing processes – its industry-

specific solution also provided a range

of completely new capabilities.”

Elmar Hassler, Head of SAP Competence Center and Project Lead at UTA

receivables and collections postings associated with certain bills.This link to the optical archive is an invaluable source of infor-mation when call-center employees have to deal with bill in-quiries from customers.

To ensure the highest standards of customer service, SAP RM-CA exchanges data with SAP and non-SAP customer-care and CRM systems, providing essential information for customer-centric tasks.


A HOST OF TANGIBLE BENEFITS

The SAP solution has brought UTA a host of tangible benefits.“The new solution provides us with quick and easy access to awide range of up-to-the-minute information,” explains Hassler.With SAP software, UTA can now deal with customer inquiriesmore quickly and efficiently. Sales staff can view the latest details on customer accounts with point-and-click simplicity,exploring the data according to a variety of criteria. “All in all,the system has greatly improved the quality and quantity of in-formation available to our employees,” says Hassler. In addition,the new functionality provided by SAP RM-CA has enabledUTA to streamline its business processes. And the integration of accounts receivable into the telco’s core system has simplifiedthe IT infrastructure, making for easier maintenance and lowercosts.

A RESOUNDING SUCCESS

At present, a total of 40 to 45 users work with the new solution.While it is still too early to quantify the effects of the implemen-tation, Hassler is more than satisfied with the results: “We areall very happy with the new solution. Thanks to SAP, we havethe integration we so badly needed – plus a range of powerful,industry-specific functionality that streamlines our day-to-dayprocesses.” In the wake of the successful implementation, UTAis now in the process of integrating the SAP sales and distribu-tion (SD) functions into its IT environment. A test system is already in place, and the telco plans to incorporate aspects ofbilling into SD in the near future – all of which will go towardfurther enhancing the quality of the company’s customer service.


AT A GLANCE

Software •SAP® RM-CA•SAP R/3®

(for financials, control-ling, project system, materials management, sales and distribution, human resources)

•SAP Business Informa-tion Warehouse

Operating system Windows 2000Advanced Server

Number of users 40 to 45

Duration of implementation Approximately 8 months

198 Financial & Public Services

199Financial & Public Services

FINANCIAL & PUBLIC SERVICES

For Banco Urquijo, effective

customer relationship man-

agement is more than just

one of many ways to enhance

the bottom line – it’s a funda-

mental success factor.

To meet ever-increasing

demands for service, the

bank needs effective tools

for managing customer

information and increasing

productivity.

BANCO URQUIJOUSES mySAP™ CUSTOMER RELATIONSHIPMANAGEMENT TO SATISFY DEMANDING CUSTOMERS

mySAP™ Customer Relationship Management (mySAP CRM)provides a number of benefits – from better marketing infor-mation to enhanced productivity at all levels – giving BancoUrquijo the tools it needs for success in a competitive industry.

Madrid-based Banco Urquijo’s primary business is in privateand personal banking, commercial banking, and capital mar-kets. A subsidiary of the KBL Group, Banco Urquijo maintainsa banking network of 57 offices in Spain and 1 in Argentina.It has agents in Frankfurt and holdings in KBL Switzerland,CDC Urquijo (a Madrid-based bank specializing in handlingsecurities), and various Internet portals. It also operates avirtual banking service that allows customers to make manytypes of bank transactions and queries online or by phone.

The KBL Group, headquartered in Luxembourg, is composed ofa number of subsidiaries that specialize in managing investmentfunds, pensions, assets, stocks, and insurance.

CUSTOMER RELATIONS: A CRITICAL SUCCESS FACTOR

Today’s banking industry is highly competitive, with a hugenumber of financial institutions competing for customers whodemand superior service. Effective customer relationship man-agement is a fundamental success factor for Banco Urquijo anda guarantee of the bank’s growth. To help itself meet growingdemands, Banco Urquijo implemented mySAP CRM.


WHY mySAP CRM?

mySAP CRM not only enhances the bank’s ability to manageimportant customer information, but also helps it to manageits commercial banking division more efficiently and effectively.“The decision to adopt the SAP® solution for customer relation-ship management, mySAP CRM, is in line with the evolutionthe banking industry is experiencing,” says Pedro Martínez,organization and virtual banking manager for Banco Urquijo.“The Spanish financial system is now highly competitive.What’s more, because the market has attained a certain matu-rity, it’s becoming necessary to adopt more effective manage-ment methods and tools that increase resource productivity.”

IMPLEMENTATION

The entire implementation was completed in just five months. The project was mapped out in February 2001, initial imple-mentation lasted from March to June, and the system went live in July. The implementation lived up to Banco Urquijo’s expectations and delivered a quick return on investment.

SAP Consulting from Spain implemented mySAP CRM,with consultants from CSC Ploenzke assisting with technicalmatters. The mySAP CRM technological platform included a set of IBM AIX servers and a DB2 database.


FUNCTIONAL COVERAGE IN ALL AREAS

mySAP CRM provides a variety of tools to meet the bank’srequirements:

• Agenda managementAgenda management tools help both account managersand supervisors plan their commercial activity.

• Customer managementCustomer management tools provide general informationon customers. This includes, among other functions:– Queries on customers’ overall financial accounts– Display of customer activities– Display and management of various customer

opportunities, along with other functions

• Potential-customer managementThe potential-customer management tool provides adatabase of potential customers that includes both generalinformation and relevant commercial activity and associatedresults. It helps managers perform such tasks as assigningpotential customers to a particular manager or creating andmodifying potential-customer records. It also provides statis-tics on potential-customer action taken and action pending.

• Product managementProduct management tools give the bank the ability to designand update product catalogs. Reporting, sales arguments,and access to both internal and external information aredone through the mySAP Enterprise Portal solution.


• Activity and commercial action management Activity and commercial action management tools helpagents and other employees manually activate internalactivities and support them in activities designed to increasethe bank’s business, such as scheduling customer visits. Thestatus, phase, and information regarding the person in chargeof specific activities and actions can be accessed at any timeand are available in a report form.

• Alarm managementSpecial tools within mySAP CRM were integrated with the financial institution’s alarm system, which automaticallyalerts the appropriate employee of customer situationsthat require immediate attention. The alarms createdusing the mySAP CRM special tools alert employees to idleaccounts, negative balances, declines in commissions, andrisky operations.


BENEFITS OF USING mySAP CRM

The mySAP CRM solution provides Banco Urquijo withnumerous benefits that help to make the bank more competi-tive in a tough marketplace:

• Accurate real-time information that is available throughoutthe entire company

• Enhanced productivity and analytical capacity at every level

• Improved knowledge and tracking of opportunities

• Increased sales action

• Enhanced motivation and discipline throughout the salesforce

• More reliable customer and marketing information

• Increased profits from sales and reduced associated costs

• Improved management of customer knowledge

MARKETING PLANNING AND CAMPAIGN

MANAGEMENT

mySAP CRM enables the bank’s marketing department to runcampaigns at any level and through any channel. Using the campaign generation tool, the bank can manage informationabout a campaign’s description, the definition of its targets andphases, and its economic objectives, terms, and environment. Italso sends the information to Banco Urquijo’s data warehousesystem, where it can be used in decision making.

Using the campaign tracking tool, the sales force can execute acampaign and help sales representatives generate commercialactions, activities, or tasks. The sales staff has immediate accessto campaign documentation. Information generated during acampaign’s execution can also be sent to the data warehouse.And reports can now be generated to review campaign tracking,the extent of campaign fulfillment, and the objectives achieved.


INTEGRATED ACCESS TO IMPORTANT

CUSTOMER INFORMATION

mySAP Enterprise Portal, the SAP role-based enterprise portal,gives the bank’s 360 users from the commercial and marketingdivisions access to both mySAP CRM and the bank’s preexistingsystems. A role or profile is assigned to each user, depending on

“The decision to adopt the SAP solution

for customer relationship management,

mySAP CRM, is in line with the

evolution the banking industry is

experiencing. The Spanish financial

system is now highly competitive.”

Pedro Martínez, Organization and Virtual Banking Manager, Banco Urquijo

the individual user’s department and responsibility. That roledetermines what set of activities the user can access. In thecommercial banking management division, assigned rolesinclude commercial banking manager, business area manager,territorial manager, office manager, and agent. The marketingdepartment has a similar series of roles.

Users can also personalize mySAP Enterprise Portal to meet their individual needs. For example, they can add Internet addresses and often-used transactions. And Banco Urquijo wasable to customize mySAP Enterprise Portal screens to reflect the institution’s corporate image.

205

AT A GLANCE

SAP® solutioncomponents mySAP™ CRM

Operating system IBM AIX servers

Database DB2 Universal Database

Number of users 360

Number of sites 1

Lengthof implementation 5 months

Desired change A single point of access to information systems forall the commercial area to improve efficiency in rela-tionships with customers

Implementation SAP Consulting partners and CSC Ploenske

Financial & Public Services

The Bank of Ireland faced

the difficult challenge of

maintaining profitability

in an unpredictable global

economy. It needed to in-

crease profits through better

management of resources

and by cutting costs. To

realize operational savings,

it streamlined core business

processes in finance, pay-

roll, human resources, and

procurement by choosing

software from the SAP®

for Banking portfolio of

solutions and services.

The result: reduced costs,

integrated information, and

standardized processes

across the organization.

BANK OF IRELANDSAP® FOR BANKING SOLUTIONS INCREASEPROFITABILITY AND DELIVER GREATER CONTROL

With assets of �87 billion and more than 18,000 employees, theBank of Ireland is the number one banking institution in thecountry. Although the bank has been in business since 1783 and has a long history of success, times have changed and sohave the challenges of maintaining profitability in a highlyvolatile global economy.

Like most banks today, the Bank of Ireland was being asked to show increased profits through better management ofresources and by cutting costs. The bank realized it needed integrated solutions to help streamline core business processesin finance, payroll, human resources, and procurement. In response, the Bank of Ireland turned to industry-relevant SAP®solutions from the SAP for Banking portfolio of software andservices.

BETTER PROCESSES YIELD RESULTS

The Bank of Ireland needed improved control within key areasof the organization because it was hampered by fragmented, disparate business processes. Finance and human resources hadmultiple systems that were not integrated, and processes suchas payroll were not standardized throughout the group. As for purchasing, there was no group procurement system inplace to enable proper monitoring of expenses and suppliercontracts. The bank took action by implementing a compre-hensive banking portfolio from SAP, the first of its kind in Ireland.


SAP has worked with banking customers worldwide to under-stand their business challenges. The portfolio of solutions thatthe Bank of Ireland selected has a proven record of success,thanks to SAP’s efforts to listen and react to customers’ require-ments. Each solution applies best-practice business processes tosolve banking problems effectively. Moreover, SAP provides acost-effective and adaptable approach to integrating multiplesystems throughout an organization.

“Given the focus on cost control in

financial services these days . . . we

see SAP and the application of SAP for

Banking as the key enabler of improved

cost-effectiveness going forward.”

Hugo Flinn, General Manager, Finance and Business Services,Bank of Ireland

“Before we decided to go with SAP, we had a wide range of sys-tems in place,” says Hugo Flinn, former general manager for finance and business services at the Bank of Ireland. “One of the key elements of our vision was to provide information morequickly and to enable faster action. The main business driver behind the project was to improve productivity in both financeand HR through the implementation of shared services. From aprocurement point of view, we wanted a better way of buying.”With SAP, the bank set its goal to reduce head count in financeand HR, along with cutting nonstaff costs.


Although other systems were considered, SAP was recom-mended as the best choice for a single, integrated system. “The key message is integration; that’s what we bought,” saysFlinn. “The bank decided to rigorously standardize processesacross the group using a single system. We didn’t want the costof building interfaces between separate systems and the expenseof maintaining them.”

GAINING CONTROL IN FINANCE

Finance was especially in need of integration and better visibility.“We had perhaps 30 general ledgers, several payroll and HR sys-tems, and no overall procurement system,” says John Crabtree,the bank’s program manager.

“There was no integration with payroll, no agreement with HR,and data was always input twice,” adds Flinn. “Our objectivewas to achieve a significant increase in visibility groupwide, andunderstand what drives our costs.”

The Bank of Ireland applied the SAP finance solutions first before addressing other internal process challenges. “We imple-mented the entire suite of financial applications that exist within mySAP™ Financials – general ledger, fixed assets,accounts payable, and so on,” says Mary Rice, finance team lead at the Bank of Ireland.

Within a short time, the bank realized clear advantages fromthe deployment. “The implementation of SAP provided peoplewith an integrated system for the first time ever,” says Rice,“which means that instead of going in and manually diggingaround to find pieces of information, it’s now all available realtime on the system. That is a huge advantage.”

“Now we have one accounts payable system, one payrollsystem, one general ledger, and one chart of accounts,” saysFlinn. “SAP enables us to close the books faster and to provideaccurate, consistent information more quickly.”


EMPOWERED HUMAN RESOURCES

The Bank of Ireland next chose mySAP Human Resources(mySAP HR) to extend its SAP finance solution. “In HR, we had an opportunity to enable shared services,” says Flinn. “The issues we overcame were duplicated, diverse processes,multiple HR systems, a lack of integration with payroll, and MIS [management information system] unreliability – whichpresented a real challenge.”

With mySAP HR, the bank took advantage of software applica-tions for organizational management, recruitment, personneladministration, payroll, and time management – all integratedinto one system. The Bank of Ireland also rolled out employee

“Return on investment is happening.

We’ve seen tangible benefits in procure-

ment. Plus, we’re starting to see the

same results in finance and HR.”

Aidan Long, Program Director, Bank of Ireland

self-service (ESS) capabilities to extend the functionality of SAPto employees, enabling them to view, create, and maintain information related to their jobs. Expense reports are one areain which ESS has proven particularly successful. “One of the keybenefits of the HR solution is that employees can answer an awful lot of questions themselves through ESS,” says Flinn. “If you take employee expenses as an example, we’ve got 96%compliance.”


BOTTOM LINE FOR BUYING

Without a central system and process for managing procure-ment, the Bank of Ireland lacked important controls. Orderscould not be consolidated for better pricing and relationshipswith suppliers were more difficult to form.

“Prior to the implementation of SAP, we didn’t have a group-wide procurement system,” says Aidan Long, program directorat the bank. “So we didn’t have visibility of costs, standard best-practice procurement procedures, and uniform purchaseorders.”

The bank chose SAP Enterprise Buyer, an application from mySAP Supplier Relationship Management (mySAP SRM). With this new procurement solution, the bank can reducecosts, increase purchasing efficiencies, monitor buying

“I think the beauty of the system is that

it is completely scalable. It is a highly

integrated platform on which to do

business, and the seamlessness makes

it transparent to all users. It’s a robust

and very stable platform.”

Michael Rabbitt, IT Project Manager, Bank of Ireland

behaviors, and better collaborate with business partners. An online catalog is also available from which employees can browse and purchase items. Using a standard Web browser,bank employees can access electronic catalogs to quicklyprocure items within the bank’s established business rules and pricing policies. And with a global view of procurement activities, the Bank of Ireland can negotiate better contractswith suppliers.


“We’ve implemented [SAP] Enterprise Buyer as the front end of the procurement system,” says Olivia Sinnott, procurementteam lead at the Bank of Ireland. “The catalog-based concept is excellent. It’s just like Internet shopping, which everybody’sfamiliar with, so that’s worked really well for the users.”

The SAP procurement solution has also enforced higher com-pliance, improved supplier selection, shortened cycle times, focused sourcing strategies, and lowered process costs. “We areseeing benefits from process efficiency and visibility,” says Flinn.“We have enabled management to challenge costs on a trans-action-by-transaction basis. Plus, we are realizing benefits frombetter supplier management.”

SMOOTH IMPLEMENTATION

The Bank of Ireland’s management approached the SAP imple-mentation with well-thought-out planning. A stable projectteam, with clear, visible backing from senior management,added to the success and speed of the rollout. “We imple-mented SAP out of the box,” explains Flinn. “Putting togetheruniform business processes to build the system reflected wherewe wanted to go with our processes.”

The implementation was divided into phases. “Phase onefocused on four business units, about 1,500 users,” says Flinn.“We had a full-time team from the beginning that came from HR, finance, procurement, and IT.”

Anne Murray, HR team lead, adds, “In phase one, we launchedwith nearly all the functionality and scope. We actually wentwith a big-bang approach, so we would have personnel adminis-tration, work management, personal development,recruitment, training and events management, everything, onday one.”


“Phase two was a larger implementation, approximately 10 business units with 10,000 users in total and the samefunctionality,” says Aidan Long, program director. Adds Flinn,“Phase two went in on time and on budget. Phase three was essentially more of the same – taking on more business units.”

During the deployment, SAP acted as the bank’s implementa-tion partner, developing a mutual relationship based on trustand professionalism. “The support from SAP Consulting wasvery good,” says Flinn. “We felt that SAP was on our side, and Ithink that’s key.” Michael Rabbitt, IT project manager, agrees:“The SAP team has been superb from the start. They’ve showna lot of professionalism.”

SAP also empowered the bank’s staff to expand their skill sets to take more responsibility for maintaining SAP for Banking solutions. “For phase one and two, we had full support fromSAP,” says Long. “In phase three, we needed only limitedsupport. This phase is the first one that the Bank of Irelandgroup has done by itself.”


BANKING ON THE FUTURE

The Bank of Ireland continues to expand its use of SAP forBanking solutions to gain maximum profitability by stream-lining internal business processes. Says Flinn, “Given the focus on cost control in financial services these days – and the Bank of Ireland is no different in that respect – we see SAP and the application of SAP for Banking as the key enabler of improvedcost-effectiveness going forward.”

“Return on investment is happening,” notes Long. “We’ve seentangible benefits in procurement. Plus, we’re starting to see thesame results in finance and HR.”

“I think the beauty of the system is that it is completelyscalable,” says Rabbitt. “It is a highly integrated platform on which to do business, and the seamlessness makes it transparent to all users. It’s a robust and very stable platform.”

“One of the things we are particularly pleased about is beingone of the largest SAP implementations in Ireland,” adds Flinn.


In order to improve its

customer service – and

remain competitive –

the BKK Landesverband

Baden-Württemberg

chose mySAP™ Customer


(mySAP CRM) and the SAP

role-specific enterprise por-

tal. As a result, the company

can now provide customer-

focused service and effec-

tively recruit new members

and ensure their long-term

ties with the BKK.

BKK LANDESVERBAND BADEN-WÜRTTEMBERGmySAP™ CRM HELPS ENSURE HEALTHYRELATIONSHIPS WITH BKK MEMBERS

HIGH-QUALITY HEALTHCARE

With more than 10 million members, health-insurance funds(also known as BKKs in Germany or health insurers in theUnited States) make up one of the largest statutory insurancegroups in Germany. For more than 150 years, 20 of the largestcompanies throughout Germany, as well as many small andmidsize businesses, have relied on these insurance providers.Today, faced with intense competition, health insurers are looking to capitalize on innovative concepts that will enablethem to provide high-quality service for their members. Thismeans enhancing relationships with insured members, as wellas with prospective customers and partners.

SATISFIED MEMBERS AND FIRST-CLASS SERVICE

In order to improve its customer service and remain com-petitive, the BKK Landesverband Baden-Württemberg – which is a federation of independent regional providers – chose mySAP™ Customer Relationship Management (mySAP CRM). The SAP® customer relationship managementsolution, along with the SAP role-specific portal, enables thecompany to provide customer-focused service and effectivelyrecruit new members and ensure their long-term ties with theBKK. Heinz Kaltenbach, head of corporate development andcompetition at the BKK Landesverband Baden-Württemberg,stresses the goals of the CRM project: “satisfied members andfirst-class service.”


IMPLEMENTATION IN RECORD TIME

The implementation of mySAP CRM at the BKK LandesverbandBaden-Württemberg started as a pilot project involving, amongothers, the BKK Zollern-Alb, which is a member of the Landes-verband group. Under SAP’s project lead, the new SAP solu-tions went live in a record time of just four months. More than50 staff members of the BKK Zollern-Alb use the SAP solutionin the BKK service center and in regional branch offices. All1,700 employees will eventually work with it.

A COMPREHENSIVE RANGE OF SERVICES

The BKK Landesverband Baden-Württemberg chose SAP as its consulting partner because of its comprehensive range ofservices and expertise. SAP helped ensure a seamless integrationwith the BKK’s existing system and helped optimize the com-pany’s business processes. In-depth knowledge of the product and continual collaboration with the CRM development teamat SAP also guaranteed that customer-specific requirementscould be realized quickly. Plus, SAP made sure it kept to thetight time frame. “Collaboration between all the team mem-bers was good and contributed significantly to the success ofthe project,” says Gert Bellmann, SAP project lead at BKKZollern-Alb. “SAP consultants helped BKK employees workwith increasing independence, so we could gain maximumcontrol of the rollout ourselves.”



“With mySAP CRM, we can improve

our service significantly and increase

our ability to compete.”

Thomas Bodmer, Chairman, BKK Zollern-Alb Board

INNOVATIVE CUSTOMER SERVICE WITH mySAP CRM

Today, mySAP CRM provides the BKK call centers in Baden-Württemberg with real-time, integrated information. All external customer data received from customer correspon-dence, telephone calls, e-mails, or the Internet is saved in a customer database and is always available to BKK employees in an up-to-date and standardized format. That means BKKemployees can respond efficiently to member inquiries andprovide advice tailored to their needs. And, with mySAP CRMactivity- and campaign-management capabilities, employeescan not only deliver effective customer and prospect care, butcan also help the health insurer acquire and retain new mem-bers. All of this quickly translates into significant added value.

TAILORED USER-FRIENDLINESS

Using mySAP CRM, the BKK Landesverband Baden-Württem-berg employees access all information, applications, and servic-es they need for their work via the SAP portal. The role-specificlayout of the interface, which is supported by the Web browser,allows the employees to access precisely the data they require.The solution integrates both internal company information aswell as external information from the Internet.

In the intensely competitive health-insurance market, the BKKLandesverband Baden-Württemberg is now in a position to consolidate relationships with its members and respond to newprospects with high-quality offerings.


AT A GLANCE

Software mySAP™ CRM

Hardware Fujitsu Siemens Computers,Primepower

Operating system Solaris

Database Informix 7.3.1 ux9

End users 1,700 employees

With SAP’s help, the Swiss

city of Biel implemented a

bilingual portal that enables

online transactions between

the city’s administrative

departments and those who

live and work there. Thanks

to software from the SAP®

for Public Sector portfolio

of solutions and services,

the administration now

has seamless, end-to-end

automated processes that

enable it to prevent mistakes

and save valuable time for all

concerned.

CITY OF BIELCITY OF BIEL CHOOSES SAP® SOFTWARE TO ENABLEONLINE TRANSACTIONS FOR BUSINESSES ANDCITIZENS

A CUTTING-EDGE PORTAL FOR A FORWARD-LOOKING

ADMINISTRATION

With a population of almost 50,000, the city of Biel in the canton of Bern is Switzerland’s largest bilingual community.Biel justifiably calls itself “The City of Communication”: It ishome to the Federal Office of Communications (FOCOM), andit was also one of four venues for the Swiss national exposition,Expo.02.

Biel’s highly decentralized administration consists of 6 large and30 smaller offices employing some 500 people. True to the city’sideals, it pursues e-government strategies that emphasize thequality of communications with its citizens. Rudolf K. Spiess,chief information officer, describes the vision: “Citizens shouldbe able to order a parking permit round-the-clock, seven days aweek, from their own homes – and print it out themselves.”

A FRESH START

Biel launched its first Web site in 1997, but the project failed togain sufficient in-house support to really make an impact. “We didn’t have enough personnel to really push it,” says Spiess.“After two or three years, the only feedback we received wascomplaints about out-of-date or missing information.” Spiess continues: “We decided to make a fresh start. With thenew bilingual portal, Project eBienne, we wanted to enhancethe city’s attractiveness, and provide an extremely practical tool both for the administration and for all who live or work in Biel. We wanted to let citizens and businesses conduct online transactions with us. Old-style administration has had its day.Citizen services need redesigning. This e-government projectgave us an opportunity to rethink and modernize the under-lying processes.”


Biel,which was already using SAP® software for financialaccounting and human resources management, chose to workwith SAP once again. “We wanted to automate business process-es from end to end, and SAP makes that possible,” says Spiess.

A UNIFIED SYSTEM

From front office to back office, software from the SAP for Public Sector portfolio of solutions and services – which in-cludes a comprehensive array of e-government capabilities –

“We wanted to automate business

processes from end to end, and SAP

makes that possible.”

Rudolf K. Spiess, Chief Information Officer, City of Biel, Switzerland

provides seamless integration, linking Web-based forms to workflow and electronic records. It supports internal processing by linking online payment systems and accountingfunctions. Open and flexible, SAP software helps public ad-ministrations build a unified system that combines data fromlegacy and third-party solutions.

RAPID IMPLEMENTATION

SAP Consulting helped conduct an initial study in the summerof 2001, with an administration-wide survey to increase aware-ness of the portal initiative and to identify key processes to beput online. The contract was signed in September. After aneight-month implementation phase, the new portal went livein early May 2002.


“Both internal and external team members showed great com-mitment. The project was completed very rapidly,” says Spiess.“Stage one is now in place, enabling online ordering of permits.Stage two will support automated payment, and by stage three,citizens will be able to print out permits themselves.”

The system infrastructure includes a portal platform and a Web content management system. mySAP™ Customer Rela-tionship Management (mySAP CRM), a core component of the SAP e-government framework, provides the link betweenthe front and back office.

AUTOMATED, END-TO-END PROCESS

Obtaining a dog license provides a good example of how thenew system works. Formerly, police officers would visit homesto collect the fees due. Now, owners can register their pets on-line. The entire process is automated. The police officer receivesnotification, checks the facts, and confirms the application.This triggers the billing process. When the invoice has beenpaid, the license is mailed to the dog owner. This end-to-endprocess chain saves time and prevents mistakes.


EXTREMELY CITIZEN-FRIENDLY

Biel’s portal is designed to be extremely citizen-friendly, withnavigation oriented around life events (for example, movinginto a new house or the birth of a child). This way, citizens donot need to understand the internal workings of the adminis-tration to find the information they need.

The new online service has received plenty of positive feedbackfrom the local population and the media, while administrationstaff members are very satisfied with the software’s user-friend-liness. Spiess believes that improving the design of internalprocesses will boost productivity. “We are seeing signs of this already. The system reduces staff workloads, enabling them to concentrate on other tasks,” he says.

MORE IN THE PIPELINE

This project is by no means finished; the city wants to improveother business processes – with the help of SAP software. Plansinclude an intranet solution for procurement and material dis-tribution, a staffing solution, and an Internet-based procedurefor processing construction-permit applications.


As with any large munici-

pality, the city of Ghent’s

activities extend into many

realms – from education to

social issues to culture –

which involves many depart-

ments and complex process-

es. In order to integrate

these processes and stream-

line its accounting proce-

dures, the city turned to

SAP. Today, it runs a full

range of solutions from

mySAP™ Business Suite to

help it meet these challenges

and enhance its services to

citizens.

CITY OF GHENTGHENT OPTS FOR THE FUTURE WITH SAP

Any municipality is active in numerous realms, from educationto culture to social issues to sports, and so forth – which meansits organizational structure is quite complex. The city of Ghent,which employs more than 7,000 people spread across 86 differ-ent departments, is no exception. And today, innovation and aforward-looking approach remain key guiding principles in thecity of Ghent, which does everything in its power to optimize itsservice offerings. With the aim of bringing itself even closer tothe citizen, the city implemented software from the mySAP™Business Suite family of solutions. As a result, Ghent benefitsfrom transparent administrative procedures, greater accessibili-ty to services, and e-government.

THE NEED TO OPTIMIZE AND AUTOMATE PROCESSES

It was in 1989 that Daniel Verbeken, tax collector for the city,realized that Ghent needed to optimize its processes. The situa-tion had gotten out of control, especially in the case of the mu-nicipal treasury and other fiscal departments. “All departments

“Our information became richer and

better integrated. SAP also enabled us

to use our financial resources more

effectively. It has given us a clearer

picture of our major expenditures.”

Daniel Verbeken, Tax Collector, City of Ghent

were maintaining paper accounting records and entering datainto the system manually,” recalls Verbeken. It was obvious thatGhent needed a software solution to automate its processes.However, the solutions that the city subsequently deployedfailed to provide the desired improvement in efficiency. Theproblem in short: isolated islands of information.


A PIONEERING ROLE

Finally, in 1997, the city of Ghent set out to find a solution thatwould enable it to fully integrate its processes across depart-ments. It conducted an in-depth analysis to determine require-ments, such as tools for effective tax and revenue management.“We conducted market research and launched a Europe-widetender for an ERP system,” says Verbeken. “Six candidates sub-mitted bids, but only two could meet our requirements.”After assessing each product in terms of functionality andexpandability, SAP® software came out on top. “SAP was a stra-tegic choice,” says Verbeken. “We were satisfied that we coulduse this platform over the long term and expand it to matchthe city’s increasing scope of services.” Ghent became one of thefirst European cities to deploy software from mySAP BusinessSuite.

SAP: MAIN PILLAR FOR GHENT

SAP and Ghent sealed a deal on January 14, 1999, and theproject was launched on June 11. “We opted for a phasedapproach and created task forces comprised of key users foreach SAP component that we wanted to deploy,” says BrunoVanneste, project coordinator. The collaboration both withinand between the task forces went smoothly. “Everybody under-stood that the SAP project was more than just the deploymentof an accounting system,” says Vanneste. “We also set up a steer-ing committee made up of representatives from the variousdepartments, our partners, and the deputy mayors.” The com-mittee met once a month to assess the project’s progress. Thecity of Ghent worked together with SAP Consulting and itspartners to implement the project, to ensure that every depart-ment’s needs were met. “Thanks to SAP Consulting and itspartners, we now have a system which allows us to share infor-mation across departments and to increase the efficiency of ourdaily work,” says Vanneste.


Ghent, which finally abandoned its legacy systems, implement-ed SAP with an eye toward the future. “SAP will be the mainpillar supporting our city administration in years to come,” explains Vanneste. “We also opted for the most standard imple-mentation possible. SAP’s broad functionality met most of ourneeds, and only a few issues required special programmingeffort.”

Vanneste was satisfied with the outcome and grateful to thecore users for their enthusiasm and motivation. In fact, theusers were key factors in the success of the project. “Thesepeople dedicated between 60% and 70% of their time to SAP and

“We hope to make our services

more accessible to citizens using

e-government. Our portal should also

become an information channel for the

city’s partners. Thanks to SAP, all this

has become possible.”

Bruno Vanneste, Project Coordinator, City of Ghent

have even become experts in the system,” he says. “The citymade a tremendous effort to familiarize the future users withthe system; the results were well worth it.” After an intensiveround of testing on January 1, 2001, the city’s financial depart-ments launched the SAP software using a ‘big bang’ approach;the software included Financial Accounting, Controlling, Ma-terials Management, Sales and Distribution, Cash Management,Project Systems, Funds Management, and Asset Management.


USING RESOURCES MORE EFFECTIVELY

The city immediately saw the advantages offered by SAP. “Task duplication was eliminated. Employees no longer had anyproblem sourcing the information they needed without havingto phone other departments,” says Verbeken, the city’s munici-pal tax collector. “Thus, our information became richer and better integrated. SAP also enabled us to use our financialresources more effectively. It has given us a clearer picture ofour major expenditures.”

The city of Ghent is confident that the advantages of runningSAP will become even more apparent as it continues to extendmySAP Business Suite to other city departments. “While wedon’t have a set timetable,” says Vanneste, “we see the SAP project as an ideal opportunity to bypass and restructure exist-ing procedures.”

A SOLID FUTURE WITH SAP

As a result of its success with SAP, Ghent opted for othersolutions from the worldwide leader in collaborative businesssolutions. “We deployed software from the SAP for Real Estateportfolio (of software and services) to manage city housing,”says Vanneste. The city also set up its customer interactioncenter using mySAP Customer Relationship Management.But there’s more to come: “By integrating SAP Business Infor-mation Warehouse, we hope to use the huge amount of datacontained in mySAP Business Suite for analyses and reports,”says Vanneste. “And, even though our departments are nowreachable by e-mail, and our Web site is up and running spec-tacularly well, we are not yet making full use of the possibilitiesoffered by the Internet. We hope to make our services moreaccessible to citizens using e-government. Our portal shouldalso become an information channel for the city’s partners.Thanks to SAP, all this has become possible.”


AT A GLANCE

Software mySAP™ Business Suite

Hardware platform NCR

Operating system Windows NT

Database Informics

Number of users 160 to 170

Implementationtime 1.5 years

Implementation SAP Consulting partners PricewaterhouseCoopers,

Cevi, Ardatis,Oasis Consultants

Four years ago, the Dutch

Ministry of Education,

Culture, and Science

(OCenW) decided to reor-

ganize its financial systems,

which lacked flexibility and

were expensive to maintain.

The ministry chose to re-

place its old system with

software from SAP® for

Public Sector, a state-of-the-

art portfolio of solutions

and services that were

developed by SAP for

governments and public

organizations. Today, the

software helps OCenW’s

Ministry of Finance and

Economic Affairs manage

its accounting, budgeting,

and funds-management

processes, and provides

comprehensive support

for policy makers.

DUTCH MINISTRY OFEDUCATION, CULTURE, AND SCIENCEMINISTRY USES SAP® FOR PUBLIC SECTOR SOFTWARE AS INTEGRAL FINANCIAL SYSTEM FOR CENTRAL GOVERNMENT

Until recently, the Dutch Ministry of Education, Culture, and Science (abbreviated in Dutch to OCenW) used a custom-built system, called GEFIS, to process all its financial matters.GEFIS was specially developed at the end of the 1980s for thecore departmental processes: funding, budgeting, and financialaccounting. This robust system had certainly proven its value,but the cost of maintenance weighed heavily on the internalbudget. In addition, it always involved a long, drawn-out pro-cess to make adjustments to the system – which were necessarybecause of changes in legislation and business practices.

For example, not only has the number of schools decreaseddrastically in recent decades, but the funding regime in mosteducation sectors has also changed from an advance paymentsystem to a system of preallocated budgets. Furthermore, in2000, the Ministry of Finance made plans to implement a newcross-departmental financial model (called KFI). “Together thatwas enough reason for us to look forward to a new financialsystem,” says Marcel Smits van Waesberghe, deputy director of OCenW’s Ministry of Finance and Economic Affairs (abbre-viated in Dutch to FEZ). “We were looking for a simple andflexible system that we could adjust and expand one module at a time.

“Moreover, it had to be standard software, because we wantedto save time and money we previously spent on maintainingthe GEFIS system.”


FLEXIBLE SOLUTION FROM THE BEST,

MOST COST-EFFECTIVE PROVIDER

In addition, the provider’s system had to be set up according to the KFI model. SAP was one of the few vendors that couldmeet these needs. After a call for tenders in Europe, SAP forPublic Sector – a portfolio of cross-industry and industry-specific software and services – proved to be the best and mostcost-effective. SAP® Consulting was appointed main contractor,with SAP business partner Align – now part of CtacAlign – asimplementation partner.

For OCenW, a key consideration in choosing SAP included the possibility of a phased implementation. “By not beingdependent on a big bang, it was possible to implement new

“All budget proposals and correspond-

ing statuses can be accessed directly

from anywhere in the ministry.”

Marcel Smits van Waesberghe, Deputy Director, FEZ, OCenW

functionality one component at a time,” says Teun van Dijk, internal project leader at the Ministry of Finance. “After all, the technology was completely new to us, so it was importantto learn step-by-step.”


The first phase of the implementation covered the relativelysimple process of managing the administrative costing activities,which involves processing approximately 25,000 invoices a year.It also included replacing the existing general ledger and the expenditure accounting system with mySAP™ Financials, one of the cross-industry solutions within the SAP for Public Sectorportfolio. Subsequently, the implementation team begandesigning and configuring SAP for the complex and cyclicalbudgeting process. The ministries’ internal budget is adjustedon a monthly basis, whereas draft budgets have to be presentedto parliament every quarter. Preparing these budgets involves aconsiderable workflow. Because of the demographic, social, and

“The transparency of the system leads

to fewer mistakes. . . . SAP is flexible

and dynamic – something the old system

was not – and that is precisely what is

important in an organization that

demands quick and clear changes.”

Marcel Smits van Waesberghe, Deputy Director, FEZ, OCenW

political consequences of budget proposals, ministries also need to calculate many alternatives, due to the fluctuating political climate. That fluid character, accompanied by verymeticulous approval procedures, required a special SAPsolution: SAP Strategic Enterprise Management (SAP SEM).This solution was originally developed to offer the businesscommunity a strategic tool for calculating alternative budgets,and accommodated the process of preparing departmentalbudgets extremely well. SAP SEM uses the data from SAP Business Intelligence, which in turn extracts data from mySAP Financials. “We appreciate the effort SAP has put into making SAP SEM/SAP Business Intelligence suitable for government objectives,” says Smits van Waesberghe. “Thiseffort has since then attracted great interest from other depart-ments, because of the fact that this solution was implementedin only eight months. SAP has always been very willing to help.SAP stands out positively with reference to both lead time andcosts.”


The third phase involved policy-making processes, in otherwords, converting legislation into concrete policy – or forOCenW, allocating and paying subsidies to schools, universities,and cultural institutions. The SAP SEM/SAP Business Intelli-gence workflow is also used for that purpose. Culture, thesmallest department within OCenW, has already completedphase three. “We will have reached the ultimate goal, of course,once all managers are working with SAP and we can finally takethe old GEFIS system out of service,” says Smits van Waesberghe.“Schools are by far the most important target group, with morethan 100,000 commitments and 700,000 payments, togetheramounting to more than �20 billion. We are now going to getcracking with SAP to set up a solid solution for subsidy manage-ment and payment. I have a lot of faith in this, especially in view of the enormous potential for SAP in the public sector inEurope as well as in the United States.”

REDUCING OPERATING COSTS

Every day, the ministry realizes the difference SAP has made to the budget preparation process. “Before, the process was primarily characterized by a ‘document procession’ throughthe organization,” says Smits van Waesberghe. “Changes wereoften notes scribbled in the margins. If information was storedelectronically, it was usually in personal spreadsheets. A central database for recording data was only ever set up in the finalstages of the process.” Now, the ministry has a fully automatedsystem, which can be accessed locally and managed centrally.As a result, all draft budgets and corresponding statuses are directly accessible from anywhere in the ministry.

“The transparency of the system leads to fewer mistakes,” says Smits van Waesberghe. “In addition, the workflow dictatesthe speed at which documents are processed. Moreover, thebudgeting process is integrated with the financial accountingcomponent of mySAP Financials. SAP is flexible and dynamic –something the old system was not – and that is precisely what is important in an organization that demands quick and clearchanges.”


According to van Dijk, one of the biggest advantages of SAPSEM/SAP Business Intelligence is the vastly improved reportingfunctionality. “Reporting is now an integral part of the process:status overviews, consolidations, draft budgets – they all rollout at a push of a button,” he says. “Actually, you could call it continuous management reporting.” Finally, Smits van Waesberghe ventures an estimate of how much the departmentwill save once GEFIS is no longer in the picture. “I foresee us reducing our operating costs by a factor of five.”

GRADUAL AWARENESS

OCenW, which experienced quick success with its SAP implementations, put a lot of effort into training and post-implementation support to help users adjust to the newsystem. “Of course, it takes some getting used to: from paperfiles to an inbox where you can find everything,” says van Dijk.“There was actually very little time for users to get acquaintedwith the new system; the budget has to be ready on time. I amtherefore very happy that we decided on a phased approach.This meant that we could keep the project team small, workdecisively, and acquaint our people with the new functionalityone step at a time.”


Van Dijk also explains that the organization has graduallybecome aware of how well SAP performs. “Now everyone wants SAP,” he says. Smits van Waesberghe acknowledges:“There are still quite a few systems that need replacing in ourorganization. We will soon start on personnel administration(human resource management), for example. We chose to im-plement SAP there, too. I think we’ll do the same for contractmanagement. With SAP, administrative tasks can be performedseparately, but the information can be easily consolidated. Theway we invite in tenders has changed, too. Before, we asked forsystem providers; now we ask for system integrators.”


AT A GLANCE

Software SAP for Public Sector software•mySAP™ Financials•mySAP Business

Intelligence•SAP® SEM

Hardware platform HP L2000 (production)HP L1000 (development and test environment)

Operating system HP 11.21

Database Oracle 8.2

Number of users 170

Implementation 1 year (phase 1)time 8 months (phase 2)

1 year (phase 3a)

Implementation SAP Consulting,partner CtacAlign

After a highly intense evalua-

tion process, the prestigious

Hospital Britanico de Buenos

Aires (HBBA) implemented

SAP® Patient Management –

a key application from the

SAP for Healthcare portfolio

of solutions and services.

The goal: to deliver better

service to patients and to

improve efficiency of its

administrative processes.

The hospital also made plans

to implement SAP Business

Intelligence to help it

analyze the wealth of data

captured with SAP Patient

Management.

HOSPITAL BRITANICO DE BUENOS AIRES(HBBA)HBBA ONCE AGAIN CHOOSES SAP® SOFTWARE TO HELPSTREAMLINE PROCESSES AND OFFER BETTER SERVICE

On July 1, 2002, Hospital Britanico de Buenos Aires (HBBA), one of the most prestigious hospitals in Argentina – and an SAP customer since 1997 – began using a new information system based on SAP® Patient Management, a key applicationwithin the SAP for Healthcare portfolio of solutions and services. This is the first implementation of its type in LatinAmerica, although many hospitals around the world have been using SAP Patient Management since 1994, particularly in Europe.

“Our initial aim was to have a tool that would enable us to offerour patients higher-quality service. We wanted to modernizeand speed up patient care, and make administrative processesmore efficient, by improving the quality of the documentationsubmitted to healthcare payers and welfare-fund offices,”explains Osvaldo Mauro, director of the IT project at HospitalBritanico.

HBBA was founded in 1844. It now boasts 260 beds, 3 outpatientcare centers, and a health plan with 40,000 members. It also carries out important teaching work. Long-term thinkingforms part of the hospital’s culture. In fact, when it came timeto confirm its choice of implementing SAP software, one of the hospital’s most important criteria included the solution’sability to support continuous improvement. Almost 50 usersparticipated in the highly intense evaluation process, alongwith a systems integration specialist, a business consultant, and the technical staff at the hospital.

Aside from qualifying the functional and technical aspects ofthe software, the evaluation also reinforced HBBA’s strongopinion of SAP as a company. “The result of all the detailedcomparative analyses carried out during the selection processcan be summarized in one word: trust,” declares Mauro.


HBBA implemented SAP Patient Management, which tightlyintegrated with the company’s mySAP™ Financials solution.“SAP Patient Management, which will enable us to sharepatient information across wards and departments, will help us meet our patients’ needs far more effectively by decreasingtime spent on administrative processing,” says Mauro. “SAPConsulting in Argentina successfully managed the implemen-tation and clearly understood our goals, which contributed tothe project’s success.”

Mauro also goes on to explain that “SAP Patient Managementstood out due to its reliability and flexibility. This ensured aminimum number of developments to adapt it to our require-ments. Our previous experience with SAP – the implemen-tation of the financial management and controlling solutions –

“SAP Patient Management, which will

enable us to share patient information

across wards and departments, will help

us meet our patients’ needs far more ef-

fectively by decreasing time spent on ad-

ministrative processing.”

Osvaldo Mauro, Director of the IT Project at Hospital Britanico

was quite positive, in terms of quality of support from SAP consultants.” This time around proved just as satisfying. “Thesolidity of the product and the provider and the seriousness and experience of the consultants inspired confidence; theystood by us during the project and after go-live,” says Mauro.


The implementation project lasted a little under 13 monthsand was carried out using the AcceleratedSAP™ (ASAP) method-ology. Once it completed the implementation, HBBA began introducing changes that had a direct impact on important administrative processes. For example, the hospital started de-veloping the medical fees settlement functionality, which willenable some 500 physicians who work at the hospital to checkthe details of their accounts over the Internet.

HBBA then began preparations for the implementation of SAPBusiness Intelligence, which it would use to analyze data fromSAP Patient Management. The hospital created the InformationManagement Office strictly for the purpose of analyzing thiswealth of patient-related information.


One of the hospital’s immediate objectives includes integratingSAP Patient Management with its main clients’ online treat-ment authorizations system. “We will interoperate with one of the biggest healthcare insurers in Argentina, despite the factthat it uses non-SAP software,” says Mauro. “Online authoriza-tion of treatments will enable better care and greater precisionin the exchange of information. In the short term, we plan touse the same scheme with other companies with a similar technological base.”

Mauro continues, “By taking advantage of the connectivity and security offered by SAP, we can open our system, within the limits of confidentiality, to the medical auditors of certainhealthcare insurers. This will help facilitate their work andmake our activities more transparent.”


AT A GLANCE

Software SAP® Patient ManagementmySAP™ Financials (financial administration, fixed assets management,treasury, controlling)

Hardware HP UNIX

Operating system HP-UX 11.0 (64 bits)

Number of users 130

Length ofimplementation 13 months

Implementation SAP Consultingpartner in Argentina

Hospital San José saw that

by improving efficiency and

visibility of its operations, it

could deliver better care to

patients while improving

business processes. Now

that it selected software

from the SAP® for Health-

care portfolio, patient infor-

mation is centralized and

up-to-date, billing is fast and

accurate, and resources are

optimized for exceptional

patient care.

HOSPITAL SAN JOSÉ –TEC DE MONTERREYSAP® FOR HEALTHCARE PORTFOLIO OF SOFTWAREAND SERVICES IMPROVES PATIENT CARE

Hospital San José – located in Monterrey, Mexico – pridesitself as a medical institution committed to the highest levelof patient care. The 138-bed hospital treats thousands of peopleeach year, with 700 employees and an active staff of close to 200physicians and medical professionals. The medical complex isrecognized nationwide for its innovations in cardiology, cardio-vascular surgery, pediatrics, gynecology, and obstetrics. Alongwith a medical school, it also specializes in ophthalmology,oncology, diagnostic radiology, and radiotherapy.

Providing superior healthcare depends on people and theenvironment in which they work. Hospital San José realizedthat it could offer even higher quality care by centralizinginformation about patients and resources, streamlining ad-ministrative and billing processes, and analyzing key hospitaldata. To add more efficiency and visibility into its operations,Hospital San José selected the SAP for Healthcare portfolio ofsoftware and services – specifically SAP® Patient Managementand mySAP™ ERP – becoming Mexico’s first implementationof the SAP portfolio for healthcare providers.

IMPLEMENTATION TEAMWORK

“It becomes very clear when running a hospital where im-provements can be made,” says Ernesto Dieck Assad, HospitalSan José’s CEO. “A lot of our departments weren’t communi-cating as well as they could. We had billing process problems,patient record and information issues, and resource visibilitychallenges.”


Seeing that its legacy systems, which were developed in-housefor individual departments, needed to be replaced, the hospitalevaluated alternatives and selected software from the SAP forHealthcare portfolio. The board of directors named the SAPimplementation project “Nosotros” (“Us”), and adopted theproject as their own. Jesus Diaz Garaygordobil, marketing andinformation technology director at Hospital San José, rolledout the project in three phases. A dedicated team of users from

“SAP has given our hospital the

opportunity to work with a best-of-suite

technology.”

Jesus Diaz Garaygordobil, Marketing and InformationTechnology Director, Hospital San José

all areas of the hospital took part in the implementation todefine necessary requirements and business processes. Thehospital also had the help of consultants who were responsiblefor adapting the SAP industry-relevant software to Mexicanlaws and healthcare practices.

“When we implemented the SAP software, it forced us tolook at the way we were operating our hospital,” says Dieck.“We went through a process that helped us evaluate and thenstandardize procedures from department to department.We also adopted best practices as a result of implementing thesystem.”


In October 2002 – and in less than four months – mySAP ERPwent live; the payroll capability of mySAP Human Resourcesfollowed in November and SAP Patient Management in Marchof 2003. The transition from the legacy systems was quick,smooth, and almost transparent.

“SAP Consulting, together with its partners, helped to achieve asmooth and fast transition from our legacy systems,” explainedDiaz. “Due to the extensive knowledge transfer, the learningcurve was remarkably short.”

INTEGRATION AND VISIBILITY BRING RESULTS

Having accurate, up-to-date information that was accessible toa variety of hospital staff was a major requirement for HospitalSan José. “When you work in a big hospital like this one, youcannot have different databases,” says Dieck. “You cannot go toone department for patient information and to another depart-ment – such as the laboratory or operating room – and start atthe beginning. Now we have complete patient information thatall departments can use without having to rekey it. SAP saves ustime and information is more accurate. Plus, with integrationyou have centralized data to make better administrative deci-sions as well as make physicians more effective when treatingpatients.”

Visibility into operations is another major benefit that SAPfor Healthcare delivered. Before, with separate departmentalsystems that were not connected, scheduling resources andmanaging supplies were difficult.


“Today, when we ask the employees who manage our equip-ment and inventories if they can see what is needed for tomor-row in the operating room, they can immediately determine ifany special equipment or medicines are required,” says Dieck.“Everybody is informed of what’s going to happen tomorrow –or any other day – and what they will need for the operation. We didn’t have that kind of communication before.”

The hospital also improved how it calculates supply needs tobetter oversee and manage purchasing and procurement. And, it now has a better view of what resources it uses – such as diag-nostic equipment and operating rooms – to coordinate surgeryschedules, diagnostics, and postsurgery care.

KEEPING TRACK OF COSTS AND REVENUES

Hospital San José is a nonprofit, self-funding hospital. As such,it needs to have a clear understanding of what needs to bebilled, where revenues are coming from, and what is purchased.SAP software enables the hospital to handle complex insurance reimbursement and itemized billing requirements.

“The system helps us run the hospital, especially in our financearea,” says Dieck. “The billing process within Mexico’s health-care system is very drawn out. Everything is itemized, and thehospital obviously wants to recover its money as quickly as pos-sible. The SAP solution helps speed up the invoicing and billingprocess.”


SAP also gives the hospital a larger view of its operations, whichis vital from a strategic and planning perspective. “Today, I cango to my computer and see what is happening in any area of thehospital in real time. I look at costs for each department, howmuch money comes in, the income for each department andwhat we expected, versus what we actually realized. This is verygood because people in every part of the organization have visi-bility into all our costs and revenues – and where there mightbe some problem areas.”

Software from the SAP for Healthcare portfolio also providesthe hospital with analytical tools to help it understand resourceutilization and patient demographics.

“We can measure the length of stay for people, revenue perpatient, revenue per hospital stay, and revenue related to diag-noses,” says Dieck. “In the future, we would like to use ouranalyses and compare how we are doing against some hospitalsin the U.S. and around the world. We will also use SAP to helpus plan for capital expenditures to determine whether we needadditional equipment and resources. We need to have that kindof information to make good decisions going forward.”


CONTINUOUS IMPROVEMENTS

Hospital San José sees the SAP solution as a way to make adifference. “SAP has given our hospital the opportunity to workwith a best-of-suite technology,” says Diaz. “At the same time,we have been able to share our own best practices through thelocalization process, which makes us very proud.”

“Hospital San José can focus on

delivering high-quality care to our

patients, leaving the administrative

responsibility to SAP. The biggest gain

is that SAP is helping us to be the most

efficient hospital in Mexico.”

Ernesto Dieck Assad, CEO, Hospital San José

Dieck adds, “Hospital San José can focus on deliveringhigh-quality care to our patients, leaving the administrativeresponsibility to SAP. The biggest gain is that SAP is helping usto be the most efficient hospital in Mexico. We really have theopportunity to be more effective against our competitors – andahead of everybody in Mexico and Latin America.”


Working together with

consultants from SAP, HVB

Real Estate Capital France

implemented a banking solu-

tion that encompasses all

business areas and has set

a new benchmark in inter-

national real estate banking.

Highlights included stream-

lining and automating the

syndication process and im-

plementing new refinancing

functions. This remarkable

project was based on appli-

cations from the SAP® for

Banking portfolio of solu-

tions. Rollout is scheduled

for more subsidiaries in the

future.

HVB REAL ESTATECAPITAL (HVB GROUP)SAP OFFERS A BANKING SOLUTION TAILORED FOR INTERNATIONAL REAL ESTATE FINANCING

A BANK DESIGNED FOR PROFESSIONAL REAL ESTATE

CUSTOMERS

HVB Real Estate Capital France SA – called HVB REC Francefor short – is the Parisian competence center for professionalreal estate financing of the HypoVereinsbank Group. HVB RECis part of the group’s international real estate business, whichhas a loan portfolio of over �30 billion at its disposal and an-other �6 billion of syndicated loans. Due to an increase in business, commissions from securitizations, structurings, andsyndications (similar to those in investment banking) amountto some 30% of the company’s total income. The group isfocused on continuing its expansion in integrated real estatebanking and on strengthening its position in the Europeanmarket.

LAUNCHING INTO A NEW IT ERA WITH SAP

HVB REC is staying abreast of the far-reaching changes in theindustry with extensive consultancy competence and state-of-the-art IT structures. Since April 2001, the company has beenusing SAP® software for financial and cost accounting, and in July 2001, it went live with a banking solution based on the SAPfor Banking portfolio of solutions. The SAP implementation in-cluded key capabilities for core banking mortgage loans (CML),used for loan management and object and collateral manage-ment, and corporate finance management (CFM), used forhandling money market transactions. “Never before has afinancial company processed syndicated loans using the loanmanagement capability offered in the SAP for Banking port-folio, so it’s a first in the area of banking,” says Markus Plenk,project lead at SAP Consulting, who is proud of his team’sachievements.


SUCCESSFUL COLLABORATION:

WALLDORF–MUNICH–PARIS

In November 2000, the project got under way, and the team setto work on the business blueprint, concentrating on processesand user orientation. “The central architecture, the remote

“From marketing to payment trans-

actions, the solution based on the

SAP for Banking portfolio forms the

central pool of information for everyone

involved. I’d particularly like to stress

the system-supported syndication,

which has increased our competitive

edge in this area significantly.”

Ulrike Umkehrer, Departmental Project Lead, HVB Real Estate Capital

connection of branches and subsidiaries, and the individual tailoring performed in the SAP standard system were importantto us,” says Elisabeth Hungley, technical project lead at HVBREC. “Within just eight months, the team from SAP Consult-ing successfully piloted a demanding project – and SAP trulyestablished itself as a strategic partner for HVB.”


OPTIMIZED WORKFLOW WITH AUTOMATED PROCESSES

Before implementing the SAP solution, the group had to dealwith an older system that was extremely inflexible. “A largenumber of manual interfaces and various workflows made itdifficult for us to position new financial products on the marketquickly,” says Ulrike Umkehrer, departmental project lead at HVB REC. Now things are very different. New financial products can be rapidly established because they are easy toconfigure and set up. Unified terminology for transaction data and costing methods has improved global communication.“The optimized electronic workflow and the reduced time andeffort needed for controlling have enabled us to attain over 50% automation,” says Hungley. Redundant data retention is a thing of the past, as are error-prone multiple entries and time-consuming reconciliations. In addition, auditable accessauthorization and security for individual transactions now protect customer and financial data.


CONSISTENT, HIGHLY ACCESSIBLE INFORMATION

The SAP solution plays a key role when it comes to displayingsyndicated loans. All processing, product, and costing data is automatically saved and can be used for productivity andprofitability calculations. What’s more, easy access to data improves risk and liquidity management, and user-orientedreporting allows business data to be consolidated in variousways to meet specific reporting needs. Whether an employeeneeds deal-specific or customer-specific information or a general overview, all data is available at any time. This hasproved to be a great advantage for risk controlling, for example.Reports required by the parent company, which previouslywere very laborious to create, are now available at the click of amouse. This is where SAP really comes into its own; it enablesclear presentation of syndicated transactions plus global profit-group analyses and profitability reports for user departmentsand the executive board.


With an annual revenue

of �4.7 billion and approx-

imately 5,600 employees,

Interpolis is one of the top

five insurers in the Nether-

lands. The head office in

Tilburg can handle impres-

sive transaction volumes

and big numbers. Interpolis

processes more than

12 million financial trans-

actions every year. Phase

three of Interopolis’s com-

panywide SAP strategy

focused on quicker process-

ing and better management

of these incoming and out-

going cash flows. In this

way the company gained a

unique, threefold advan-

tage: a new and efficient

system landscape with

more functionality, a higher

level of quality, and a

12.5% decrease in opera-

tional costs.

INTERPOLIS REALIZING IMPROVED QUALITY AND FUNCTIONALITYAT LOWER OPERATIONAL COSTS WITH SAP

SECOND IMPROVEMENT PHASE

Broadly speaking, insurance companies have two cash flows: incoming payments, consisting of premiums and debt collec-tion, and outgoing payments, such as payment of claims. Interpolis, which is part of Rabobank Groep, processes a lot of transactions – “no less than 12 million per year,” according to Willem van Duijn, director of Concern Finance & Control.“The old payment systems used for this purpose were no longeradequate,” van Duijn says, “which is why we started looking toreplace them at the end of 2001.” This constituted the thirdphase of a big change program introduced by Interpolis in 1999.

“In the first phase we set up a financial service center and cameto a clear definition of services,” van Duijn explains. “Theseservices are mainly focused on the financial processing of in-surance products, which allows our market organizations to focus on operational management and to dovetail with finan-cial processing. The next phase was the implementation of a basic financial system for accounting and reporting. This proj-ect was completed in 2000 with the delivery of SAP® R/3® Finan-cials and Controlling (SAP R/3 FI-CO). After that the focus wason streamlining payment transactions. SAP Financial Services Collections and Disbursements (SAP FS-CD) was a logicalchoice, especially in view of our ‘SAP as preferred supplier policy’.”

DISCIPLINED, STEP-BY-STEP PROJECT SETUP

Thirty-eight of Interpolis’ own insurance applications are inter-faced with the services offered by the financial service center.Consequently, SAP FS-CD also had to be integrated with thissystem landscape. “An implementation with such a wide scopeand long lead time is unique in the SAP insurance world,” saysEric van Mierlo, Interpolis information manager.


“Other companies would have chosen a more modest setup. At the start of the implementation in April 2002, we set our-selves ambitious goals. For example, we wanted to collect twodays earlier and completely replace three old systems. The total

“The scope of this implementation is

unique.”

Eric van Mierlo, Information Manager, Interpolis Verzekeringen

cost of ownership was not to exceed that of the old systems andpreferably be lower. For this purpose, the new software used hadto be kept as standard as possible.

“By means of disciplined, step-by-step project planning, we completed the implementation within 10 months. Theimplementation team consisted mainly of our own people,supported by a few experts from SAP Consulting. Because of the project’s complexity and the high targets, we paid specialattention to the quality of project management, which isabsolutely critical. In collaboration with Brighthouse Manage-ment, an organization specialized in this field, we were success-ful. We had excellent contacts with SAP in Walldorf, and to-gether we developed new changes to the architecture. This fit in with our approach to automation, which stresses the impor-tance of having a very efficient setup and making optimal use of the functionality. Together with SAP, we managed to convertour pursuit of cheaper, smaller, and quicker into results.”


LOWER OPERATIONAL COSTS

Interpolis has derived tangible benefits from SAP FS-CD. “Thisis most noticeable in reconciliation, that is, the automatic link-ing of bank transactions to outstanding receivables,” says vanDuijn. “This is a key efficiency factor in the financial processingof claims and premium payments. Before the implementationof the software we automatically processed only 20% of alltransactions. After the implementation of SAP FS-CD, we wereable to raise this to 75%. The software also enabled us to reducethe lead time of the debt collection process from three days toonly one or two days. At the same time we also implementedSAP Business Information Warehouse (SAP BW) and SAP R/3Cash Management for SAP FS-CD. This gave us an insight into

“Our operational costs have decreased

by 12.5%.”

Willem van Duijn, Director of Concern Finance & Control, Interpolis Verzekeringen N.V

how to realize the service levels of the financial service centerand the actual cash flows per insurance product. Normallysuch improvements in quality and functional enhancementslead to higher operational costs. The costs of the complete system have, however, decreased by 12.5% since the implemen-tation! Especially in view of the large volumes we process, thebenefits can be regarded as extremely impressive. In addition,the functionality available to us has increased considerably andcan be used to expand and improve our existing services. Inter-polis is now also in a position to respond more quickly to theneeds of new customers. When you think that all this has beenachieved at lower operational costs, it only confirms that thiswas the right thing to do.”


STRATEGY CONTINUED

“Our implementation file has two tab pages,” says van Mierlo.“That is the metaphor we use. The third tab page is ready andrepresents the further implementation of SAP BW. At the sametime we are extending SAP FS-CD with Broker Account, whichhas been included in the standard based on the requirements of Interpolis. As a result, the number of processed transactionswill grow to 23 million per year. With the pursuance of its SAPstrategy, Interpolis will gain further insight into the perfor-mance of its organization and products (via SAP BW). SAP R/3Cash Management will be deployed where possible. This insightis essential for a sound investment strategy and to limit the risksinvolved. For Interpolis as an insurer, these factors have a directinfluence on the financial well being of the whole organization.Incidentally, there will no doubt be more tab pages, to use thismetaphor again. In our long-term planning, we always look atour organizational requirements and try to match them withthe SAP software. The end is not yet in sight!”.


AT A GLANCE

SAP software SAP® BWSAP R/3® Cash Management, SAP for Insurance,and SAP FS-CD

Hardware platform Compaq

Operating system Windows NT

Database SQL Server

Number of users 25 operational users,125 informational users


Implementation IBM Business Consultingpartners Services,

SAP Consulting

Berlin was the first federal

state in Germany to intro-

duce mySAP™ Human

Resources globally as part

of its ongoing modernization

of personnel administration

and payroll. The advanced

software replaced two old

batch procedures for pay-

roll, optimizing process

flows and replacing manual

tasks with automated work-

flow. The implementation

became a showcase for pub-

lic sector implementations.

STATE OF BERLINBERLIN LEADS THE WAY WITH STATE-OF-THE-ART PERSONNEL ADMINISTRATION

The Landesverwaltungsamt (LVWA) in Berlin is the central administrative agency for Berlin local authorities, including theBerlin Senate, political entities, public institutions, and founda-tions. LVWA maintains personnel administration and payroll for all civil servants, salaried employees, and wage earners inboth East and West Berlin, totaling around 180,000 employees.

ENTERING A NEW ERA OF

PERSONNEL ADMINISTRATION USING SAP

As part of its strategy to streamline and modernize personnel administration and payroll processes, the LVWA embarked on an ambitious project to deploy mySAP™ Human Resources(mySAP HR) across all departments and to all employees.

The project, called Integrated Personnel Administration (IPA),has a colorful history. It was in 1995 that the LVWA decided tomove its payroll procedures to a state-of-the-art IT platform.After thorough analysis of the initial and subsequent costs, itbecame clear that Berlin required a standard solution thatcould meet all the requirements of a public personnel adminis-tration – a solution that could be implemented throughout theentire federal state of Berlin. Invitations to tender went out tofour different software providers, with market leader, SAP,emerging as the winner.


“We chose a top-performing partner for our ambitious plan,”says Hans-Jürgen Przytarski, director of the Berlin authoritiesand a member of the steering committee. “There are many different positions involved, and the administrative regulationsand collective agreements are much more complicated than onthe free market. SAP’s software functionality was as convincingas its professionalism.”

COMBINED EFFORTS

In January 1996, a team of SAP consultants from Walldorf came on board to help kick off the implementation. The project involved more than 130 business processes and all180,000 employees. While it initially encompassed the change-over to mySAP HR personnel administration capabilities, theproject was subsequently expanded to include the completepayroll administration functionality of the SAP® solution.

The implementation phase proved very demanding on the project managers. At the same time as changes were made to the organizational flow, 8 Berlin senate administrations in 12 local agencies – linked to other public entities, such as thefire brigade and regional revenue office – installed the standard-ized SAP infrastructure. Data security and encryption had to be ensured and access authorizations set up for 4,000 users, whowere subsequently trained to operate the system. At first, theusers were somewhat resistant to the changeover, but they soon began to see the benefits of the new HR solution. In spite of these challenges, the LVWA met its tight deadline. “It was a joint effort. We managed to achieve our goal only through the utmost commitment from each party,” says Przytarski. Since January 1, 2002, all employees in Berlin’s payroll and administrative offices have been running mySAP HR.



“We are not yet using all of the

SAP® software’s capability, but

we have recognized its potential.”

Hans-Jürgen Przytarski, Director of the Landesverwaltungsamtand Member of the Steering Committee

REAL-TIME DATA – EFFICIENT PROCESSES

Before entering personnel data electronically, Berlin employeesfiled paper documents in separate areas for position manage-ment, accounting, and personnel data. This resulted in dupli-cate data, too many time-consuming manual tasks, an excess of paperwork, and frequent errors. The mySAP HR software enabled Berlin to link all positions, accounting, and personneldata entry, resulting in new areas of responsibility and state-of-the-art workplaces. In the area of position planning, auto-mated workflow processes replaced manual tasks and stand-alone applications, making personnel processing much easier.Processors can now execute payroll simulations at the touch of a button, allowing them to check changes to references or avoidincorrect settings. This means that each personnel area has access to uniform and consistent data.

LOOKING TO THE FUTURE WITH SAP

The team is currently working on the third phase of the proj-ect: the implementation of mySAP HR capabilities for fundsand position management. However, Przytarski says that this isnot the end of the project: “We are not yet using all of the SAPsoftware’s capability, but we have recognized its potential.”


The University of Basel in

Switzerland has a strong

commitment to excellence.

In 1996, it became an au-

tonomous institution, spark-

ing a number of key academ-

ic and administrative reforms.

But several legacy systems

were severely undermining

the efficiency and effective-

ness of the university’s

processes and its ability to

provide services to students.

Building on its positive expe-

rience with SAP® Financial

Accounting (SAP FI) and

SAP Human Resources

(SAP HR) capabilities, the

University decided to imple-

ment SAP Campus Manage-

ment. It has now eliminated

many costly manual process-

es and boasts a system

capable of steering the

organization into the future.

THE UNIVERSITYOF BASEL, SWITZERLANDSTREAMLINING ADMINISTRATIVE PROCESSES,

REDUCING RED TAPE, ELIMINATING ERRORS

Universities in many countries face exploding student popula-tions, rising public expectations, and tightening budgets. Theyhave widened their curricula to embrace new subjects and haveintroduced transfer credits to attract overseas students. But,at the same time, more students and more courses of studyinevitably mean more administrative overhead, paperwork, andcomplexity.

There is therefore an urgent need to critically review the wayuniversities are run and students served. Resources must bedeployed in the right place, at the right time, and at the rightprice. Not least because funding policy for higher education isa much-debated issue, with a high public profile. One answerto these challenges lies in putting to work the same technologythat delivers success in the business world: technology thatstreamlines processes, reduces unnecessary costs, and helpsmake the most of staff, equipment, and buildings; technologythat provides decision makers with vital insights into universityactivities, enabling them to analyze their organizations from allpossible perspectives and to respond to changing circumstances.


A DISTINGUISHED PAST, AN EVEN BETTER FUTURE

Founded in 1460, the University of Basel is Switzerland’s oldestinstitution of higher education. Like many other such organiza-tions, the university maintained an IT infrastructure for coreadministrative processes that had outlived its sell-by date – withsystems that had been in place for a good 30 years. It was, to befrank, on the verge of breakdown – massively overloaded andunwieldy. Moreover, there was no integration with othersystems, such as financial accounting applications. As a result,many processes were still manual, causing major errors (for instance, when calculating tuition fees). As a seat of learningwith an enviable reputation for quality, the University of Baselwanted something better.

AN AMBITIOUS UNDERTAKING,

A POWERFUL SOLUTION

By October 1998, it had become clear to university authoritiesthat the legacy infrastructure for student administration hadoutlived its usefulness. The university had to be efficient, agile,and responsive. The existing IT environment just wasn’t up to the challenge. The new solution had to fulfill a range of criteria: It had to streamline administrative tasks (such as collection of fees), reduce manual work, and eliminate errors.Moreover, the university was looking for comprehensivereporting and analysis capabilities – giving an accurate, com-plete picture of activities and of strengths and weaknesses. Improved information flow would help management to ana-lyze, coordinate, and plan university operations at a completelynew level. The ideal solution would also integrate with other IT systems and be a solid basis on which to build in the future.


TIME FOR CHANGE

In November 1998, the university issued a request for proposals,prompting a number of bids from major players. In early 1999,the governing body gave the go-ahead for prototyping SAPCampus Management – which, at the time, was still verymuch in the development phase. However, SAP and Swiss-basedimplementation partner SAP Stäfa, were convinced that SAP®Campus Management would fit the bill. The university was already running SAP FI and SAP HR. SAP Campus Managementwas a natural extension. What’s more, the project offered SAPthe opportunity to demonstrate the full power of its university-oriented software and the benefits of integration – a real differentiator between SAP and competitor products.

Prototyping was completed in late 2000, and a detailed reportwas submitted to the university governing body. SAP Stäfa andSAP presented a comprehensive plan for the introduction ofSAP Campus Management. The two partners invested consid-erable effort in demonstrating to the university the significantopportunities for value and efficiency that the software wouldunlock over the long term. University authorities had experi-enced firsthand the positive impact of SAP software. They alsoknew that, with SAP, they would gain the expertise of a partnercommitted to the higher education sector – and a partner thatwould develop new functions and support new technologies inthe future, too.


SMOOTH, RAPID IMPLEMENTATION

In spring 2001, the governing body gave the go-ahead.Detailed planning and initial user training began immediately.SAP Campus Management was installed between April andJune 2002. The project was divided into three subprojects:applications and admissions, reregistration with fee calculation,and reporting. Three teams, each with two university employ-ees, worked for a period of eight months under the leadershipof external consultants. The consultants invested a total of300 man-days in process reengineering, customizing, andgo-live. For the process design work, the core team was ableto draw on its experience at other universities. Users were giventhorough training and were able to start work with SAP Cam-pus Management in July 2002. User acceptance of the newsolution is high, although there was a need for coaching andcomprehensive process documentation. The students, too,have embraced the new technology.

SAP FOR HIGHER EDUCATION & RESEARCH –

EFFECTIVE IT SUPPORT FOR THE ENTIRE

STUDENT LIFE CYCLE

SAP for Higher Education & Research is a portfolio of industry-specific solutions, applications, and services covering the entirestudent life cycle. It enables higher education establishmentsto handle core student and staff processes more effectively, toenhance service, and, ultimately, to increase satisfaction. Theportfolio allows seamless integration of front-office and back-office processes. It has capabilities for organizational manage-ment, teaching and studies, academic and student services,grants management, records management, human resources,material and services administration, and business support. As Tom Shirk, senior vice president of public services at SAP, explains, “SAP Business Consulting is uniquely qualified toprovide institutions of higher learning with the integration andopenness of a collaborative business environment. SAP CampusManagement uses the latest tools and technology available tosteer institutions into the new educational millennium.”


STREAMLINING FOR SUCCESS

The University of Basel has a total of 8,000 students –6,400 undergraduates and 1,600 doctoral candidates. It hasbeen an autonomous, self-administering entity since 1996.“We needed technology that could seamlessly integrate ouradministrative processes and ensure consistent processes acrossthe university system,” explains Elsa Sutter, the campus man-agement project manager and head of student services at theuniversity.

An overhaul on the legacy system was long overdue. Processesthat could not be automated were too bureaucratic and timeintensive, not only for the staff, but also for the students.Standing in a line was a common and very frustrating featureof studying at the university. Enrolling and amending status orstudy details required a personal visit to the university registry.Paying fees and sorting out official paperwork often meantstudents traipsing to the university more than once.

Communication and transparency between and among inter-nal departments was poor, duplication of effort for certaintasks unavoidable. The various IT systems in place could notcommunicate with each other, meaning a complete lack ofvisibility. As a consequence, internal and external reportingsuffered.

A NEW LEASE ON LIFE

SAP Campus Management has consigned these problemsfirmly to the past. Many key administrative processes are nowcarried out automatically, in a simple, user-friendly environ-ment. Workflows distribute tasks to staff efficiently and effec-tively. And seamless integration with SAP Financial Accountingsoftware provides improved cash flow and eliminates costlyerrors caused by manual processes. It also ensures that accurate,timely figures are available on income, costs, and outstandingpayments, automatically triggering reminders. What’s more,staff no longer need to spend hours of expensive overtime bal-ancing the books at the end of the academic year. Informationis drawn directly from financials systems. The accuracy andquality of data has increased drastically. As a result, the univer-sity can now fulfill reporting obligations, with minimum man-ual intervention, and can analyze all aspects of core operationsas and when required. As Elsa Sutter explains, “SAP CampusManagement eliminates physical boundaries and enhancescommunication.”


A BETTER DEAL FOR STUDENTS

Students also benefit, with access to better, more efficientservices. The new system is based on postal correspondence –drastically reducing the need for personal visits by students.At the beginning of each semester, students now receive a formcontaining their master data and a reply card. They use thisform to notify the university of amendments to their status orof changes in faculty, subject, or personal details. The replycards are then processed by the university, which confirms anyamendments. Invoices for fees are generated automatically –previously a manual process with a 15% error rate.

Students receive their personalized university ID cards,confirmation of enrollment, and forms for details of coursesto be attended, as soon as their fees are received. Paymentreminders are generated and sent automatically. SAP CampusManagement ensures compliance with all data protectionregulations. Data is regularly backed up, and the stable SAPenvironment helps to minimize downtime. The solution alsosupports an internationally recognized transfer credits system.This is crucial in attracting and administering more students,who can now transfer more quickly and easily to Basel.Furthermore, applicants can now download registrationforms from the Internet, and the system generates and sendsautomatic responses.

BETTER SERVICES ALL-ROUND

For the University of Basel, SAP Campus Management repre-sents a new lease on life. Time-consuming manual processeshave been eliminated, with the long lines at the universityregistry removed. Staff can now be redeployed to take care ofother tasks. Moreover, the powerful SAP functionality allowsthe university’s decision makers to identify popular courses,analyze revenue streams, and critically examine cost structures.Most importantly though, the solution provides the universitywith a direct route to its goals and a strong, powerful, scalablebasis for the future.


AT A GLANCE

SAP solution SAP® CampusManagement

Hardware platform Fujitsu SiemensComputers PRIMERGYP200 2-way

Operating system Microsoft NT

Database Oracle

RICH FUNCTIONALITY FOR ALL CORE PROCESSES

SAP solutions are highly flexible. The capabilities installed atthe University of Basel address pressing issues, but representonly a selection of the many features that SAP for HigherEducation & Research offers. This portfolio provides a varietyof powerful functions for coordinating universities andcolleges, including:Teaching

• Academic structure/program of study

• Rules and regulationsEvent planning

• Capacity planning

• Event planning and scheduling

• Room and additional resource planningStudents

• Student master data

• Academic history

• Individual study programsAdministration

• Admissions

• Equivalency determination

• Student account management

• Registration for program of study

• Course registration

• Event, class, online learning, and examination registration

• Examination and grading

• Reregistration

• De-registration

• Progression

• Change of program

• Degree auditing

• Graduation

• AlumniResearch

• Pre-award and post-award handling

• ReimbursementsAdministration

• Integrated funds and position management

• Records management


Customer relationship management (CRM)

• Interaction/call center, with activity management andcontact management, including prospects, applicants,recruitment activities, student information,customer/learner (non-student) activities

• Customer service and support for interaction/call center,with activity management and contact management,including special events for students, alumni, new customers,applicants

• Lead generation and lead management, including identifyingqualified prospects for programs of study

• Campaign management, particularly for university courses


A Before-and-After Comparison of Campus Processes at the University of Basel

• Conventions defined by legal department

• Statutory data protection requirements fulfilled

• One standard data interface

• Manual processData exchange

• Application forms available for download from the Internet

• All applicants receive automatic confirmation• Manual processApplications

• Automatic reminders sent to students

• De-registration details sent automatically to students who have not responded despite reminders

• Fees are calculated by the student administration department, bills are generated by the financial accounting department (integration with SAP FI)

• Students pay fees via bank transfer. When received by the university, they automatically appear in the systems as “paid” and enrollment processes can be completed.

• Batch input of student master data in SAP FI

• Manual checking of payments received

Collection of fees

• Students receive a sheet with their master data, along with a reply card on which they can indicate:– No change in details– De-registration– Change of address

• Students return reply card by mail

• Personal visits required for:– Change of faculty– Change of subject to extended leave– Special cases

• Students receive notice of fees due based on information supplied on reply cards (scanned to an archive)

• Students pay fees

• Students receive ID card and two certificates of student status as soon as fees are paid

• Students send back (or hand in) forms with details of courses to be attended in a prepaid envelope

• Students receive an information sheet and bank transfer form (amount based on data from previous semester) – result: 15% of amounts on bank transfer forms are incorrect

• Personal visits: Students go to university registry to notify:– Change in faculty– Change in status (from undergraduate to doctoral candidate)– Extended leave– De-registration– Special cases

• Students pay fees via bank transfer

• Personal visits:Students go to cashier’s office to:– Verify payment of semester fees– Hand in form with details of courses to be attended– Get documents officially stamped– Pick up certificates of student status

• De-registration, subject to objection, of students who do not pay their fees

Feedback from students for up-coming semester, and enrollment

• Automated administration of students• Manual processStudent administration

With SAP Campus ManagementBefore SAP® Campus ManagementProcess

As resources for higher edu-

cation continued to shrink,

streamlining and optimizing

business processes became

more important than ever for

the University of Nebraska.

It needed improved solutions

to replace inefficient and de-

centralized finance, human

resources, purchasing, and

payroll systems. After a

thorough evaluation, the

university selected mySAP™

Business Suite. Completed

on time and under budget,

the implementation delivered

an integrated solution that

helps the university consoli-

date resources, save money,

and improve a variety of

business processes.

UNIVERSITYOF NEBRASKACREATING A UNIFIED BUSINESS ENVIRONMENTWITH mySAP™ BUSINESS SUITE

The University of Nebraska understood that managing a multi-campus university is just as challenging as managing a globalenterprise. Systems to handle finance, human resources,purchasing, and inventory were spread throughout its fourcampuses and administrative offices in isolated departmentalsilos. A heterogeneous IT system landscape evolved over time,producing inefficient, repetitive processes. Information was in-consistent, with little integration and a reliance on paper-basedreporting. In times when academic budgets were tight and resources stretched, the university saw that business optimiza-tion was a must.

With a clear mission to improve its business environment andstreamline its operations, the University of Nebraska began theconsiderable effort to evaluate business solutions to replaceexisting systems. This included several campus and central ad-ministrative financial systems, as well as a human resources andpayroll system. After a thorough assessment of 10 vendors, theuniversity selected SAP as its business solution provider. It basedits choice on three primary criteria: a solid vendor reputation, astrong technical foundation, and an overwhelming preferenceby university end users. With a team of dedicated professionalsfrom the university and SAP® Consulting, the University ofNebraska completed the implementation not only on time butalso under budget.


CLEAR FOCUS, CLEAR OBJECTIVES

Key decision makers were excited about the benefits that SAPwould deliver. “Implementing an enterprise-wide softwaresystem transformed the business infrastructure of the Univer-sity of Nebraska,” says Walter Weir, CIO at the university. “Forthe first time, we had a fully integrated system supportingfinancial management, human resources, payroll, and relatedbusiness activities.”

The university wanted to create a single business environmentacross four diverse campuses, which presented a significantchallenge: Each campus had its own business processes andadministrative offices supported by legacy systems that did notcommunicate with each other. Each department had its ownfinance, procurement, and human resources specialists. More-over, with a paper-based environment for data entry, reportgeneration, purchasing, and more, processes were slow andinflexible, with resulting resource and process inefficiencies –specifically a lack of access to critical information necessary toproperly run the university.

“Higher education has such a diverse IT landscape,” says LorenBlinde, implementation finance team lead and director of theadministrative systems group. “There are so many differentkinds of ERP solutions out there, and you’ll find a lot of themare homegrown solutions – things that have evolved withinan institution over a period of time. A lot more are probably’80s technology that they’re still struggling with. In fact, that’swhere we were before we implemented SAP.”


SMOOTH DEPLOYMENT AND A NEW APPROACH

The university’s first SAP implementation was for procurementand finance, which took 20 months. It next implementedhuman resources and payroll, which took 24 months. Theresponse at the university to the new system was extremelypositive. In the first year, the number of users across the campusesgrew from 300 to 1,000, with more than 1,600 users today.

Throughout the implementation, SAP Consulting helpedsupport the university’s “one organization” focus – whichcreated an enhanced atmosphere for collaboration and infor-mation sharing among the individual campuses. Decentraliza-tion and departmental isolation were replaced by centralization

“Implementing an enterprise-wide soft-

ware system transformed the business

infrastructure of the University of

Nebraska. For the first time, we had a

fully integrated system supporting finan-

cial management, human resources,

payroll, and related business activities.”

Walter Weir, CIO, University of Nebraska

and integration. Departments took ownership and responsibi-lity for their activities and operating results. By examiningbusiness processes, they launched a new strategy to streamlineoperations. For example, business centers were created in whichseveral departments consolidated their administrative activitiesby pooling resources and giving individual staff members spe-cific operational responsibilities. Consequently, the universityeliminated duplicate systems as departments integrated theirbusiness activities within SAP. By centralizing business func-tions, the University of Nebraska created new efficiencies andreduced administrative costs. “The collaboration between allthe team members of SAP Consulting and professionals fromthe University of Nebraska was outstanding,” notes Blinde. “Wehave a relationship that is focused on the university achievingits goals. SAP Consulting worked hard with us throughout theproject and contributed extensively to its success.”


IMPLEMENTATION BRINGS SPECIFIC BENEFITS

People who are in charge of finance know the importance ofmanaging resources and costs. “With the right ERP systemimplemented the right way, you can do more with less,” saysBlinde. “You can do business better; you can do it with fewerpeople.” Finance was one of the first groups to see benefits fromthe SAP implementation. “We have a very decentralized userbase,” notes Blinde. “SAP allowed us to give users effective toolsfor entering data and the flexibility to extract information inways that make sense for their operation.”

Previously, financial system reporting consisted only of hardcopy reports generated monthly, which was neither flexible nor

“SAP allowed us to give users effective

tools for entering data and the flexibility

to extract information in ways that make

sense for their operation . . . With the

right ERP system implemented the right

way, you can do more with less. You can

do business better; you can do it with

fewer people.”

Loren Blinde, Implementation Finance Team Lead and Directorof the Administrative Systems Group, University of Nebraska

timely. That’s all changed. A large variety of reports are now available online in real time with SAP. Users can drill down toview underlying transaction details. They can also customizethe reports using online reporting functions or by downloadingreports into a spreadsheet for further data manipulation.

The university also greatly improved its procurement processesas a result of implementing SAP. Previously, a time-consumingand cumbersome paper-based ordering procedure required thatrequisitions be mailed to the campus purchasing departmentfor review. Once approved, users had to enter data into a legacysystem before an authorized purchase order could be sent tothe vendor. This entire process would take two days.


With SAP, the electronic requisitioning process can be completedthe very same day. University buyers process and approve pur-chase orders electronically once end users create their orders.The process was streamlined and costs were reduced. Theuniversity uses several “prime” vendors with prenegotiated

“The long-term success of any large

ERP system depends on a continued

commitment beyond the initial imple-

mentation to support both system and

process improvements.”

David Lechner, Vice President for Business and Finance,University of Nebraska

contracts for certain materials and supplies. Staff can makepurchases from specially developed Web sites. Purchase infor-mation is transmitted directly into SAP using Electronic DataInterchange (EDI) format, eliminating data reentry and un-necessary paperwork.

The implementation also enabled the university to improverelations with suppliers. Before SAP, payment to vendors wastime consuming, with authorized personnel having to signevery invoice and then enter it into the system. With anotherSAP feature – the parked invoice – the university streamlinedthe payment process. Today, buyers create a parked documentto begin the payment process. Accounts payable then reviewsthe document online and posts the transaction so payment canbe made immediately.


HUMAN RESOURCES BENEFITS

Effective reporting and accurate information are key to a goodpayroll system. Before the university implemented SAP® payrollcapabilities, payroll results were stored in temporary files thatwere discarded after printing preliminary journals. This madereporting and examination of both individual and group resultsdifficult. Plus, employees had to manually calculate and enterpayroll adjustments, which often required multiple iterationsto get the desired results. Because the SAP system offers multi-ple correction cycles and online access of payroll results, usersnow have more confidence and control of the final payrollresults. Between payroll runs, departmental payroll offices canuse simulations to determine the impact of payroll changes to an employee, reducing the types of payroll errors that previously occurred.

IMPROVED INFORMATION ACCESS

For the university, human resources reporting was, for themost part, a centralized operation with departments submit-ting individual report requests and waiting days for results.Better processes were needed to make managing humanresources more effective. The SAP human resources solutionsolved that information bottleneck by significantly expandingaccess to personnel data. “Virtually every department of theuniversity now has online access to the human resourcesrecords of their faculty and staff,” says Steven Rowley, humanresources team leader at the University of Nebraska. “Previous-ly, this access was reserved for human resources administrativestaff and payroll offices, so paperwork had to be returned fromadministrative offices before departments could verify person-nel activity. Now they can directly query the system to deter-mine the status of employees.”

Thus, human resources reporting has become a more valuabletool for both administrative and departmental users. With SAP,human resources reporting is provided at the department levelwith online submission and results returned in minutes instead of days. Additionally, online access to training and developmentdata, equipment checkout information, and a variety of otheractivities are now stored centrally in SAP. The bottom line: areduction in resource costs as a result of eliminating numerousshadow systems.



“From a technical perspective, SAP’s

foundation is very stable. Its technology

is state-of-the-art, and it’s certainly one

that we will continue to build from.”

Don Mihulka, SAP Technical Lead and Associate CIO,University of Nebraska


NEXT STEPS

It’s been more than four years since the University of Nebraskaimplemented the mySAP™ Business Suite family of solutions –the success of which was reinforced by a dedicated business andtechnical team focused on training and transferring knowledge.Since then, the university has taken advantage of further SAPcapabilities – including time entry, workflow, and employeeself-service. “SAP has given us a business environment that pro-vides a basis for our ongoing growth and development as far aswe can see into the future,” says Blinde. Adds David Lechner,University of Nebraska vice president for business and finance,“The long-term success of any large ERP system depends on acontinued commitment beyond the initial implementation tosupport both system and process improvements.”

Over the coming year, new capabilities such as employee self-service with mySAP Human Resources for benefit enrollmentand personal data maintenance will be fully rolled out. Theuniversity also plans to further implement travel managementand electronic workflow, streamlining key business processes.It also plans to complete a major system upgrade in 2003 formore functionality and to improve usability. The universitywill review and implement additional mySAP Business Suite solutions, such as mySAP Enterprise Portal, providing new,value-added functionality to its business community.

The University of Nebraska experienced real gains with SAP andnow has a solid platform on which to grow. “From a technicalperspective, SAP’s foundation is very stable,” says Don Mihulka,SAP technical lead and associate CIO at the University ofNebraska. “Its technology is state-of-the-art, and it’s certainlyone that we will continue to build from.”

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