7-Eleven finds SAP applications and IBM i

provide the greatest convenience

IBM SAP International Competence Center

“Running SAP ERP 6.0 and SAP NetWeaver BW 7.0 requires a high-performance infrastructure, and our business model requires continuous availability. We knew that IBM i and Power Systems could provide the right architecture to support our strategic objectives.”

Dennis Lewis

Chief Information Officer

7-Eleven Stores Pty Ltd

“Features like dynamic logical partitioning and integration with Windows-based systems mean that IBM i and Power Systems can provide near-100 per cent availability for our SAP and non-SAP applications, while ensuring high utilization of resources and a very attractive TCO.”

Dennis Lewis

Chief Information Officer

7-Eleven Stores Pty Ltd

3

7-Eleven finds SAP applications and IBM i provide the greatest convenience

Customer Objectives

lConvert 7-Eleven supply chain from a direct to store

model to centralised replenishment and distribution

lImprove the timeliness and transparency of financial

reporting

lImplement an efficient, integrated, enterprise-wide

reporting system

lLeverage years of expertise and efficient operation

with IBM i

lRun the proposed reporting system and existing SAP

retail applications on a scalable, easily managed

platform

lContinue the close integration between IBM i and

Microsoft® Windows® servers that has provided a very

cost-effective management environment.

Customer Benefits

lAchieved quick ROI on the investment in both hardware

and software

lUpgraded from SAP R/3® 4.6C to SAP ERP 6.0 and

NetWeaver 7.0

lUpgraded to IBM i and IBM Power Systems technology

lIncreased revenue and profits through better stock

management

lReduced deliveries into stores from 110 per week to just

30 per week

lImproved financial reporting for 7-Eleven and its

franchisees

lIncreased franchisee satisfaction by reducing

administrative workload.

IBM Solution

lTwo IBM Power Systems servers running IBM i V5R4

with the integrated DB2® database

lVirtualized Windows disk management provided by

IBM i

lSAP ERP 6.0, SAP NetWeaver® Portal, SAP NetWeaver

Process Integration, SAP NetWeaver Business

Warehouse (BW), SAP POS Data Management and

SAP NetWeaver Business Warehouse Accelerator

(BWA)

About this paper

This paper describes an implementation of the SAP® Business Suite on IBM® i logical partitions running on IBM Power

Systems™ servers at 7-Eleven Stores Pty Ltd, Australia. It describes the historical background, the current hardware and

software landscape, and future project plans.

4

7-Eleven’s application software background and current plans

In 1998, 7-Eleven Stores selected ERP software from SAP as its

core application system and went live with release 4.0 running on

an IBM AS/400 in 1999. Over the years since, the SAP footprint

has been extended and new functionality introduced. In the early

days the stores transmitted their sales data over dial-up

connections to the AS/400, which then processed this data

overnight. Now the stores are online, providing the stores’

franchisees the opportunity to query or modify stock orders and

access financial data. In the past, 7-Eleven has run its store

petrol sales separately on another system running OS/400. In

2009, the company plans for the petrol sales to be managed

through SAP too.

7-Eleven has been looking at new functionalities to address the

company’s current strategic objectives, and chose SAP as the

most suitable solution. A number of workshops were held in 2007

to determine business requirements. These requirements were

grouped and analyzed with regards to their business impact and

potential business benefits, and then prioritized. In a second

step, the process and IT implications were derived and a high-

level SAP fit/gap analysis was performed to determine if the

requirements could be met and the benefits achieved. Based on

the priorities, the IT implications were grouped together to

determine a logical sequence of IT and SAP application

changes.

Background and company history

Worldwide

7-Eleven is the largest operator and franchisor of convenience

stores in the world, with annual sales of about US $36billion.

7-Eleven operates more than 34,800 stores in Japan, Australia,

Mexico, Taiwan, Singapore, Canada, the Philippines, Sweden,

Denmark, South Korea, Thailand, Norway, Malaysia and China,

Macau, Hong Kong and the United States.

In Australia

7-Eleven Stores Pty Ltd is a family-owned business in Australia –

owned by the Withers and Barlow families. 7-Eleven was the first

franchised convenience store in Australia and revolutionized

grocery convenience in the country. It celebrated its 30th

birthday in 2007. There are about 380 7-Eleven stores in Victoria,

New South Wales and Queensland. About half the stores also

sell fuel. With annual sales of AUS $1.3bn, 7-Eleven is the market

leader in convenience retailing in Australia.

5

Investment plans

Four phases of SAP investment have been planned to take place

over three financial years, starting in 2008:

1 The highest priority requirement was the need for an efficient,

integrated and enterprise-wide reporting system, which

would be addressed by implementing SAP’s business

intelligence solutions (SAP NetWeaver BW 7.0, SAP POS DM

and the SAP NetWeaver BW Accelerator). The BW component

could be implemented with 7-Eleven’s existing version of SAP

(R/3 4.6C), but the company decided to upgrade to the most

current version (ERP 6.0) before implementing BW.

2 The main reason to upgrade SAP first was driven by

7-Eleven’s aggressive growth strategy and the fact that

maintenance for version 4.6C ends in 2009. The scope for a

functional upgrade was limited to a few very high priority

requirements, such as integrated space management and a

conversion from the EBCDIC to the ASCII code page format –

a decision taken to keep the upgrade on a low risk path to

avoid any additional delays in implementing SAP BW.

These two initiatives formed the first phases of the IT roadmap.

The upgrades from EBCDIC to ASCII and to SAP ERP 6.0 were

carried out in early 2008 on time and without problems.

3 Given the high strategic importance of improving the

communication to franchisees and hence increasing the

franchisees’ satisfaction, an upgrade of the store portal was

defined as the third phase of the roadmap. There may be up to

about 400 users accessing SAP from the stores.

4 The remaining high priority requirements were grouped in a

fourth phase.

Resources and timelines for these four phases were then

estimated to derive a cost/benefit model for the roadmap

activities.

SAP solution landscape

SAP ERP 6.0 and SAP NetWeaver

Until 2008, 7-Eleven used SAP R/3 4.6C as its core business

application. In order to leverage the greatly enhanced

functionality of the newer releases of SAP ERP, the company

upgraded to the most current version, with SAP NetWeaver 7.0

as its base technology platform. SAP ERP and SAP NetWeaver

will provide a stable business application platform for several

years to come.

Over the last three years, 7-Eleven has introduced a new

electronic centralized purchasing and distribution model which

has had significant results. It has:

Reduced deliveries into stores from 110 per week to just 30 •

per week

Eliminated a very time-consuming administrative burden •

from the franchisees

Resulted in better purchasing power for the business•

Increased profit margins, which are shared between the •

company and the franchisee

Today franchisees no longer have to manage orders and

deliveries from myriad different suppliers or pay an employee to

manage these processes. Instead, stock orders are now

automatically created by the 7-Eleven system based on sales

and inventory data. The orders are then made available to the

franchisees for adjustment via the SAP NetWeaver Portal. At an

agreed cut-off time, the orders are sent electronically to a central

distributor and bulk deliveries are made as required into stores.

This new system has proved hugely popular with the

franchisees, freeing them up to spend more time with customers

and improving their bottom line.

6

SAP NetWeaver BW and BW Accelerator

7-Eleven is currently implementing SAP NetWeaver BW to

provide the highest-quality business reporting systems

throughout all operational and category management functions

across the corporation. This will enable 7-Eleven to make smart

decisions in relation to purchasing, forecasting, promotions

measurement, individual purchasing patterns, and store layout.

One illustration of this will be market basket analysis, which

identifies which products individual customers purchase, when

and where.

The new SAP software will make it much easier for 7-Eleven to

manage store cluster pricing across different states and, in the

future, to produce KPI reports for individual stores. This means

franchisees will be able to measure their performance against

stores with similar demographics and identify new opportunities

to service their customers better and generate greater

profitability for their stores.

Significant data volumes

Due to the significant retail data volumes produced by about 380

stores, it is important for 7-Eleven to ensure that the BW queries

perform well. To this end they have chosen to implement the IBM

Systems solution for SAP NetWeaver BW Accelerator.

The SAP BW Accelerator presents itself as a turn-key solution,

because it combines both software and hardware in one

package. To create the BW Accelerator solution, SAP has

partnered with Intel and IBM. In essence, the BW Accelerator is a

highly scalable analytic server with an embedded SAP TREX

search engine that processes queries initiated by users of SAP

NetWeaver BW. Running the BW Accelerator in conjunction with

the IBM blade server architecture offers a uniquely scalable

solution.

SAP BW Accelerator includes indexes that are vertically inverted

reproductions of all the data included in InfoCubes (that is, fact

and dimension tables as well as master data). Note there are no

relational or other database management systems in a BW

Accelerator. There is only a file system, and indexes are

essentially held as flat files.

The second principal component of SAP BW Accelerator is the

engine that processes the queries in memory. The software runs

on a scalable IBM BladeCenter. The operating system used for

BW Accelerator is 64-bit Linux, so in addition to having no

database license cost, there is also no OS license cost. The IBM

Systems solution for BW Accelerator from SAP can help

businesses analyze large amounts of critical information up to

200 times faster than alternative tools.

The hardware components that 7-Eleven chose for this role on

both production and development systems include two

BladeCenter H chassis, four blades for production and three for

development, and two DS4700 storage servers.

7

SAP NetWeaver Portal

7-Eleven also uses SAP NetWeaver Portal to deliver all content

into the stores. This means there are only a few applications

based in the store – Web applications are the preferred

approach. Within the portal, 7-Eleven delivers a range of reports

for the stores, and also runs the goods ordering and receiving

processes for the stores. These functions are performed by the

SAP ERP system, and the ordering and receiving application is

easily the most demanding use of the system. The stores use the

portal to change the quantities of products ordered for their

stores, usually in the morning.

SAP POS Data Management and SAP NetWeaver Process Integration

7-Eleven is also implementing SAP POS Data Management

(POS DM), a specific component of the SAP for Retail solution, in

order to collect, manage and analyze the vast amount of sales

data. SAP POS DM also provides a direct data interface into the

SAP NetWeaver BW system, for subsequent analysis and

extraction of the valuable information contained and hidden in

sales data.

Internal data exchange between 7-Eleven’s various SAP systems

is provided via SAP NetWeaver Process Integration (formerly

called SAP NetWeaver Exchange Infrastructure). This

NetWeaver component facilitates the exchange of data and

information among and across a company’s internal SAP

software systems as well as non-SAP applications.

The unique 7-Eleven eServices application enables franchisees

to offer an entirely new range of products, including customer

gift vouchers or branded gift cards from well-known Australian

retailers, at any time of day or night. In the future, 7-Eleven

expects to be able to offer further ticketing, leisure and

recreational options through this system.

Business solution: hardware and software landscape

7-Eleven’s System i history

From 1998 through to 2006, 7-Eleven used one system (AS/400

or iSeries) with multiple OS/400 logical partitions for

development, quality assurance and production. This system

was upgraded a number of times to keep pace with store growth

and SAP functionality growth. The model history included the

S40, 740, 830 and 840 models.

When the model 830 was installed, 7-Eleven became one of the

few iSeries customers in the world to use hardware disk

compression, which reduced disk hardware costs while

maintaining an acceptable level of performance.

At the end of 2005, 7-Eleven decided to split production and

development/quality assurance into two physically separate

systems so they could be installed in different locations for

greater disaster recovery effectiveness. At this time they ordered

a 9406-550 with two activated POWER5 processors and a

9406-570 with four POWER5 processors allocated to the

OS/400 logical partitions. In 2007, these were upgraded to the

current systems – IBM Power servers running IBM i.

7-Eleven has always appreciated the known IT virtues of

IBM i and its predecessors, most of all its legendary reliability

and ease-of administration. Nevertheless, other alternatives like

Windows or UNIX were also considered multiple times during

7-Eleven’s SAP history. Comparison and business cases were

made, but each time the IBM i family proved to be 7-Eleven’s

best choice, based on its specific values and benefits like

extreme reliability, ease of administration, integrated DB2,

sophisticated integration with Microsoft Windows, powerful

backup capabilities and immense scalability.

8

7-Eleven chooses IBM i on Power Systems

For the same reasons, 7-Eleven chose the IBM i platform and

IBM Power Systems servers to implement the latest round of SAP

application projects, based around an implementation of SAP

NetWeaver BW.

The production system is an IBM Power 570 server with eight

activated POWER6 processors, 128GB of memory and

approximately 14TB of disk running three IBM i logical partitions:

one for SAP production work, one for SAP NetWeaver BW, and a

small one to support the integrated Windows servers. The SAP

production partition runs SAP ERP 6.0 and SAP NetWeaver

Portal 7.0. This system is located off-site in an IBM data center,

which provides facilities management for 7-Eleven.

The development system is a Power Systems i550 with three

activated POWER5+ processors, 48GB of memory and

approximately 15TB of disk running three IBM i logical partitions:

one for SAP development, one for development and testing of

Windows applications, and one for SAP NetWeaver BW project

development. As in production, the development partition is

running SAP ERP 6.0 and SAP NetWeaver Portal 7.0 plus a SAP

Solution Manager instance. This system will be used as the DR

system should one ever be required.

IBM Power Systems dynamic Logical Partitioning (LPAR)

In the past, the production system ran with fixed allocations of

CPU and memory to the two logical partitions because the

second logical partition that manages the integrated Windows

servers has very low requirements of both.

With the introduction of a logical partition for the BW component,

7-Eleven will be able to take advantage of uncapped processing

so that the two SAP LPARs will be able to share spare processing

capacity on an as-needed basis; the company can assign

priorities to the LPARs to suit its business needs.

Production SystemIBM Power 570 with IBM i8 POWER6 CPUs128GB memory14TB disk

Site 1

PartitionsSAP ECC ProdSAP BW ProdWindows

Store controllerPOS terminalsATM

Development SystemIBM Power Systems i5503 POWER5+ CPUs48GB memory14TB disk

Site 2

PartitionsSAP ECC DevSAP BW DevWindows

WANConnection

6 Integrated xSeries Servers (IXS)11 System x servers attached via IXA’s

6 Integrated xSeries Servers (IXS)6 System x servers attached via IXA’s

... ...

380 Stores

7-Eleven Australia IT Infrastructure

9

Integrated Windows applications

7-Eleven has taken advantage of the excellent integration for

Windows applications offered by IBM i on Power Systems

servers. These applications run on either IBM System x servers

attached via an IBM Integrated xSeries Adapter (IXA), or on the

Integrated xSeries Server (IXS), an Intel server on a single

expansion card plugged into a PCI slot in the IBM Power server

itself. In these two environments, the hosting IBM i LPAR

provides the disk resources and management services for the

Intel servers.

Technology deployed

At the production site 7-Eleven uses either IXSs or IXA-attached

servers to provide the following functions:

Two domain controllers•

Email server•

IBM WebSphere MQSeries server•

Microsoft SQL Server database for the Radiant POS system•

Two Web servers for the Radiant POS system•

SAP NetWeaver Process Integration server•

At the development site, IXSs or IXA-attached servers provide

the following functions:

Two domain controllers•

Good Mobile Messaging server, the application that •

provides email, calendars and other functions to 7-Eleven

staff mobile phones

Web server for the Radiant POS system•

EPS Progenesis Server, for property management•

Two SAP NetWeaver Process Integration systems – •

development and quality assurance

File sharing and other applications •

This environment has led to better Windows backups and

simpler disk management as well as higher availability and

reliability for the Windows systems. The other key advantage of

this approach is for DR. After restoring the IBM i LPAR, all the

Windows servers and services are immediately available. No

separate rebuild of the Windows servers is required. When

testing a new application or a Windows patch, this environment

allows greater flexibility and provides greater confidence that

unsuccessful application changes can be more easily backed

out by keeping a disk image before the application or operating

system change is tested. Additionally, 7-Eleven likes the ability to

build a server remotely, as the data centre is located a long way

from the office.

Application LPAR Cores Memory / Disk Production System:SAP Production 1 4.8 60.5 GB / 7 TBWindows Production 2 0.2 1 GB / 1 TB SAP BW Production 3 3 60.25 GB / 6 TB

Development System:SAP Development 1 0.25 / 2.5 24 GB / 8 TBWindows Integration 2 0.25 / 1 1 GB / 1 TBSAP BW Development 3 0.25 / 2.5 23 GB / 6 TB

10

Project Achievements

7-Eleven’s project objectives were completely met. The IBM i

platform and its integrated DB2 database delivered excellent

performance, reliability and cost savings, that fully justified the

decision for the platform:

Smooth upgrade from SAP R/3 4.6C to the latest SAP ERP •

release based on SAP NetWeaver 7.0

Excellent performance and capacity with the new POWER6 •

processor-based IBM Power servers

Consolidation and integration of multiple SAP applications •

onto two Power Systems servers

Excellent integration of numerous Windows-based servers •

and applications via IBM i centralized management

functions

Scalable growth path: from legacy AS/400 via System i to •

IBM Power Systems and beyond

Highly reliable two-server backup infrastructure for disaster •

recovery

Total availability near 100 per cent (less than two hours •

downtime per year)

Extreme CPU utilization of almost 100 per cent through •

efficient hardware virtualization (LPARs)

Low-effort system management through autonomic •

computing features in IBM i and self-management features

in DB2; characteristic“ease of use” of IBM i enables long-

term savings in total costs of operation (TCO).

Disaster recovery and store processing approach

7-Eleven appreciates the legendary reliability of the IBM i

platform (and its predecessor OS/400). As a result, while the

company has a development and DR system to complement the

production system, 7-Eleven has not used either a High

Availability Business Partner product or a disk hardware

replication solution for DR.

Daily backups to an IBM System Storage® 3576 tape library are

sent off-site, and if the production system at the IBM data center

is unavailable for a significant period of time, the tapes are used

for complete system restore onto the DR system. This approach

is possible because the stores retain their pricing data on a back

office PC, and they are able to continue trading for a time without

the backend SAP functions.

While price changes cannot be implemented if the SAP

applications are unavailable, the stores can continue to trade

successfully. For example, when it comes to ordering, 7-Eleven

stores would order similar amounts of products as per the

previous week, using phone support to handle any changes.

11

“Our choice of the IBM i and Power Systems infrastructure for our SAP application environment has met the needs of our business and delivered a rapid return on investment. Every time we have reassessed our IT architecture, IBM i has made a stronger business case than any other platform.”

Dennis Lewis

Chief Information Officer

7-Eleven Stores Pty Ltd

Project Summary

7-Eleven has been running SAP business applications on

OS/400 (now called IBM i) for nearly 10 years.

On a number of occasions through this time, alternative

hardware and software platforms for running SAP were

considered, but on each occasion the characteristic benefits of

the platform – extreme reliability, ease of administration,

integrated DB2, sophisticated Windows integration, powerful

backup capabilities and the scalability of the IBM Power

Systems architecture – meant that 7-Eleven chose IBM i and

Power Systems for the implementation of its upgraded ERP

landscape, which is based around SAP ERP 6.0 and SAP

NetWeaver BW.

For more information:

To learn more about the solutions from IBM

and SAP, visit: ibm-sap.com

To learn more about 7-Eleven Stores Pty Ltd,

visit: www.7eleven.com.au

For more information about SAP products and

services, contact an SAP representative or

visit: sap.com

For more information about IBM products and

services, contact an IBM representative or

visit: ibm.com

Contacts:

IBM

Walter Lang

walter.lang@de.ibm.com

For further questions please contact the IBM

SAP International Competency Center via

isicc@de.ibm.com

SPC03073-AUEN-01 (September 2009)

© Copyright IBM Corp. 2008 All Rights Reserved.

IBM Deutschland GmbH D-70548 Stuttgart ibm.com

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