SAPPHIRE 97

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SAP America, Inc / 1plastilago

ROBERTO ALVAREZPlastilago-Polilago

AN 18 MONTH BIG BANGIN THE VENEZUELAN PETROCHEMICALS INDUSTRY

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COMPANY CARACTERIZATION:

PLASTILAGO AND POLILAGO ARE TWO VENEZUELAN PETROCHEMICAL COMPANIES WHICH PRODUCE 170.000 METRIC TONS OF HIGH AND LOW DENSITY POLYETHYLENE PER YEAR FOR LOCAL AND INTERNATIONAL MARKETS.

YEARLY INCOME: 200 MEGA $. 480 EMPLOYEES. PRODUCTION, SALES AND ADMINISTRATION OCCUR AT

THE PETROCHEMICAL COMPLEX OF EL TABLAZO, CARACAS AND MARACAIBO, RESPECTIVELY.

STOCKHOLDERS ARE STATE OWNED PEQUIVEN, VENEZUELAN INVESTORS GRUPO ZULIANO, ELF ATOCHEM AND MITSUI.

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CONTEXT BY OCTOBER 1995:

INSUFFICIENT APPLICATIONS INTEGRATION: COMPANY APPLICATIONS RESTED ON FOUR SYSTEMS ARCHITECTURES: MVS, VM, X-BASE AND VARIOUS PACKAGES - I.E.: MILLENNIUM.

INSUFFICIENT APPLICATION FUNCTIONALITY: ± 50% OUTSTANDING REQUIREMENTS MET.

PURVEYOR OF ECONOMIC MAINFRAME SERVICES HAD ANNOUNCED DISCONTINUATION OF ITS ARCHITECTURE BY THE END OF 1997.

NECESSITY OF SCALABLE SOFTWARE IN ORDER TO SUPPORT A CHANGING BUSINESS ENVIRONMENT.

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ARCHITECTURE HISTORY:

FOURCONCURRENT

ARCHITECTURES

FOUR SETS OFSPECIALISTS WITH

DIFFERENTBACKGROUNDS

1975 1980 1985 1990

MILLENNIUMSQL/VM

IDMS/MVSX-BASE

S/34

S/3

AR

CH

ITEC

TUR

E

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FUNCTIONALITY EVOLUTION:

MARGINAL RETURNS:

10%

20%

30%

40%

50%

1975-1990 1991 1992 1993 1994

% R

EQU

IRED

FU

NC

TIO

NA

LITY

35%

8%3% 2% 1,5%

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WHY CHOOSE R/3?:

IN FUNCTIONALITY, R/3 COMPARED FAVOURABLY WITH OTHER INTEGRATED SYSTEMS UNDER SCRUTINY.

SEVERAL STOCKHOLDING COMPANIES HAD ALREADY ADOPTED R/3: STATE OWNED PEQUIVEN

ELF ATOCHEM

THE COMPANY HAD ACCESS TO RELATIVELY LOW R/3 PRICES, AGREED BETWEEN SAP-AG AND PDVSA - VENEZUELA’S STATE OWNED OIL CONGLOMERATE AND PEQUIVEN’S HOLDING COMPANY.

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PROJECT PREPARATION:

DEVELOPING AN UNDERSTANDING OF LOCAL AND INTERNATIONAL CONSULTANCY LIMITATIONS FOR R/3 PROJECTS - ASAP AS SUCH YET NON EXISTENT

TAKING ADVANTAGE OF A FOUR MONTH FORCED WAITING PERIOD AS AN OPPORTUNITY FOR: 856 HOURS OF EARLY TRAINING FOR 22 PROJECT MEMBERS

EARLY PROGRESS ON DIVERSE INFRASTRUCTURE STRUCTURAL ELEMENTS:

CONCEPTUAL DESIGN OF NETWORK TOPOLOGY

INSTALLATION OF REQUIRED NETWORK NODES

PROCUREMENT OF INTERURBAN TELECOM LINKS

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PRELIMINARY SCOPE AND PROJECT INVESTMENT MODEL

PRELIMINARY FUNCTIONALITY SCOPE WAS DEFINED ACCORDING TO THE COMPANY PROCESS MODEL

PRELIMINARY PROJECT INVESTMENT ASCERTAINED:

COMPANY IT TEAM32%

CONSULTANTS22%

HARDWARE25%

SOFTWARE12%

RDBMS9%

TOTAL PROJECTINVESTMENT:

$ 2,862,137

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PROCESS OPTIMIZATION AND COMPUTERIZATION RFP STRATEGY:

JOINING FORCES WITH A SYSTEMS INTEGRATOR: COMPANY DESCRIBES PRESENT AND EXPECTED FUTURE

PARTNER DEFINES PATH FROM PRESENT TO FUTURE

DISCOVERY OF A SUCCESSFUL MODAL SOLUTION PROCESS OPTIMIZATION APPROACH MUST FIT R/3 COMPUTERIZATION APPROACH MUST BE COMPACT COST OPTIMIZATION

COMPANY HARDWARE/SOFTWARE PREFERENTIAL PRICES

USE OF COMPANY IT PERSONNEL

PROJECT DIRECTION UNDER COMPANY CONTROL

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SOME PROPOSAL EXPECTED DELIVERABLES:

PURVEYORS’ R/3 EXPERIENCES AND REFERENCES DESCRIPTION OF CONSTRUCTION TECHNIQUE AND

DETAILED PRODUCT STRUCTURE - PBS PROJECT PERT NETWORKS AND GANTT CHARTS ASSIGNED RESOURCE RESUMES AND HISTOGRAMS PROGRAMMED PHYSICAL PROGRESS, MAN-HOUR

INVESTMENT AND CASH FLOW ‘S’ CURVES ECONOMIC DATA: HOURLY RATES, PERDIEMS, ETC. SCOPE CHANGE, PROBLEMS & REPORT PROTOCOLS

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SELECTED PROPOSAL CHARACTERISTICS:

PRIME CONTRACTOR, INTEGRATOR AND BASIS EXPERTISE: DIGITAL EQUIPMENT VENEZUELA

FUNCTIONAL SAP EXPERTISE: SEMA GROUP - A EUROPEAN CONSULTING COMPANY

FUNCTIONALITY: SD, MM, PP-PI, QM, PM, HR, FI, CO, AM PROJECT EXPECTED DURATION: 18 MONTHS APPROACH: SEMA GROUP HOMEGROWN PROTO-ASAP INVESTMENT MIX: 4,700 CONSULTANT MAN-HOURS

AND 80,000 CLIENT MAN-HOURS - 50 USERS AND 13 IT SPECIALISTS

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PROJECT TIMETABLE:

SEMESTER 1 SEMESTER 2 SEMESTER 3

SALES,EXPEDITIONS,INVOICING,WAREHOUSE MGMT.

GENERAL ACCOUNTING,PAYABLES,RECEIVABLES

MAINTENANCE

PRODUCTION,MATERIALS MGMT.,PURCHASING,QUALITY MGMT.

COST ACCOUNTING

ASSET MGMT.,TREASURY MGMT.

PAYROLL AND HUMAN RESOURCES - BEING DEFINED

JUN

E 19

96

NO

VEM

BER

199

7

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COMPACT METHODOLOGY:

PROJECT SUCCESS ASSOCIATED TO STREET-WISE SAP DISTILLATES

COMMON SUCCESS FACTORS WERE: USER

INVOLVEMENT

STERN PROJECT CONTROL

INTEGRATED CHANGE MANAGEMENT

ORGANIZATION AND CONCEPTUAL

DESIGN

DETAILED DESIGN AND

PARAMETRIZATION

PREPARATIONFOR

PRODUCTION

OPERATIONSOPTIMIZATION

CHANGE MANAGEMENT

WELL DEFINEDPRODUCT

STRUCTUREAND

NATURE

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STERN PROJECT CONTROL:

A The Assyrian came down like the wolf on the foldB And his cohorts were gleaming in purple and gold

A The Assyrian came down like the wolf on the foldB And his cohorts were gleaming in purple and goldC And the shhen of his

A The Assyrian came down like the wolf on the foldB And his cohorts were gleaming

A The Assyrian came down like the wolf on the fold

PRODUCTSTRUCTURE &NATURE

PROGRESSREPORTS

PERTDIAGRAMS

‘S’CURVES

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PROJECT ORGANIZATION:

USER LIAISON

USER ANALYST

SYSTEMS ANALYST

FUNCTIONAL CONSULTING

PER R/3 MODULE

INFRASTRUCTURE SPECIALISTS

PROJECT MANAGEMENT

MANAGERS:•SALES•FINANCE•HUMAN RESOURCES•PRODUCTION•LOGISTICS•IT

OTHER DECISIONMAKERS

CHIEF EXECUTIVE50 USERS18 IT SPECIALISTS5.000 HRS CONSULTING

ABAP/4 SPECIALISTS

POOLS

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BLOCK I - JUNE 96/JANUARY 97:

SALES MASTER DATA

PRICES DISCOUNTS BUSINESS PARTNERS

ORDERS CONTRACTS DELIVERY PLANS SALES STATISTICS

BILLING INVOICES

PLANNING FORECAST SOP MPS

SHIPPING DELIVERIES RETURN DELIVERIES REPLENISHMENT

FINISHED PRODUCTS GOODS RECEIPT TRANSFER REQUIREMENT TRANSFER ORDER PHYSICAL INVENTORY VALUATION TRANSPORT ORDER

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BLOCK II - JUNE 96/JANUARY 97:

GENERAL ACCOUNTING GENERAL LEDGER FINANCIAL REPORTING STATISTICS

ACCOUNTS PAYABLE MASTER DATA

VENDOR

BANK

CREDIT MEMO DOWN PAYMENT POSTING PAYMENTS

ADVANCES

TAXES

CHECKS

ACCOUNTS RECEIVABLE CREDIT/DEBIT MEMO REBATES LETTERS OF CREDIT COLLECTIONS DOWN PAYMENTS INTERNAL TRANSFER POSTING AUTOMATIC CREDIT CONTROL

OF SALES ORDERS CREDIT MANAGEMENT INTEREST CALCULATION CLEAR ANALYSIS

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BLOCKS III & IV - FROM JAN 97 TO AUG/OCT 97:

PURCHASING GOODS SERVICES

INVENTORY MGMT (SPARE PARTS, OPERATING SUPPLIES, EMPTIES, SEMIFINISHED PRODUCT, RAW MATERIALS)

RESERVATIONS GOODS RECEIPT TRANSFER ORDER TRANSFER REQUIREMENT PHYSICAL INVENTORY VALUATION STATISTICS

COST CONTROL COST CENTERS PROJECTS SYSTEM PRODUCTION COSTS PROFITABILITY ANALYSIS ABC

PRODUCTION - PROCESS MASTER RECIPES RESOURCES PROCESS ORDERS CONTROL RECIPES PI - SHEET CAPACITY LEVELLING MRP STATISTICS

QUALITY MANAGEMENT INSPECTION PLANNING QUALITY CERTIFICATES PROCUREMENT QUALITY INSPECTIONS STATISTICS

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MARACAIBO CENTRAL COMPLEX:

UPS

REDUNDANTPOWER

SUPPLIES

REDUNDANTSERVERS

DISK MIRRORINGFOR R/3

TAPEBACKUP

CENTRAL COMPLEX:

• 2 COMPAQ PROLIANT 5000 SERVERS WITH STANDBY RECOVERY OPTION •• 2 PENTIUM PRO 200 Mhz •• 640 Mb RAM

• 35 Gb DISC

• 2 DLT TAPE UNITS

• 250 Mbps ETHERNET CARD

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THE NETWORK:

EL TABLAZO COMPLEX

MBO CCS

EXTERNALSTORAGE

x.25 internet

HIGH DENSITY PE PLANT LOW DENSITY PE PLANT

EXTERNALSTORAGE

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SOFTWARE GENERAL ARCHITECTURE:

ABAP/4ABAP/4

INFORMIX ODS 7.20T21INFORMIX ODS 7.20T21

WINDOWS NT 3.51 SP 4WINDOWS NT 3.51 SP 4

MS OFFICE MS OFFICE 4.214.21

& OTHERS& OTHERS

SAP R/3 3.0E+SAP R/3 3.0E+

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DON’T:

SELECT THE WRONG DEVELOPMENT APPROACH SELECT THE WRONG USERS SELECT THE WRONG FUNCTIONAL CONSULTANTS SELECT WRONG PURVEYORS SELECT WRONG BASIS PERSONNEL UNDERESTIMATE IMPORTANCE OF BASIS TRAINING UNDERESTIMATE TIME - AND COST - OF REWORKING UNDERESTIMATE PROCUREMENT/DELIVERY TIMES

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DO:

EXCEL AT CHANGE MANAGEMENT RECRUIT THE COMPANY PRINCIPAL - SINE QUA NON RECRUIT - OR LEVY - TOP MANAGEMENT OBTAIN RIGHT AMOUNT OF THE ABLEST USERS CONFINE CONSULTANT TO PREDEFINED ROLE STERNEST PROJECT MANAGEMENT: TIME, COST, QUALITY R/3 CHOICE-OF-FIT REENGINEERING MINIMIZE NON R/3 FUNCTIONALITY ZERO CHANGES TO R/3 BASE CODE EARLY INSTALLATION R/3 DEVELOPMENT ENVIRONMENT EARLIEST POSSIBLE TRAINING OF USERS & SPECIALISTS

Documents

SAPPHIRE 97