Package Software White Paper Presentation - IDSc 8140 class ...

Package Software Package Software ImplementationImplementation

Presented byPresented by– Carrie Brown Carrie Brown – Tim Brown Tim Brown – Ben Metzler Ben Metzler – Kihoon ParkKihoon Park

Presentation OverviewPresentation Overview

ObjectiveObjective– Complete courseComplete course– Entertain you for 90 Entertain you for 90

minutesminutes– Teach you something Teach you something

about package about package implementationimplementation– Introduction to a Introduction to a

structured methodologystructured methodology– Introduction to the most Introduction to the most

complex packages - ERPcomplex packages - ERP

Presentation OutlinePresentation Outline

Introduction to Package Software - 5 Introduction to Package Software - 5 minutesminutes

Project Analysis - 30 minutesProject Analysis - 30 minutes Project Design - 20 minutesProject Design - 20 minutes Break - 5 minutesBreak - 5 minutes ERP Discussion - 20 minutesERP Discussion - 20 minutes Questions - 10 minutesQuestions - 10 minutes

Package Software TypesPackage Software Types

There are three main different types of software There are three main different types of software packages from an implementation viewpointpackages from an implementation viewpoint– Complete solutionsComplete solutions - packages which are - packages which are

implemented without changeimplemented without change

– Parameter-driven solutionsParameter-driven solutions - packages which - packages which require or enable parameters/options to be chosen to require or enable parameters/options to be chosen to use different featuresuse different features

– Skeleton PackageSkeleton Package- packages with extensive - packages with extensive functionality where the core processes are provided functionality where the core processes are provided together with screen/window, report and file creation together with screen/window, report and file creation software. ERP is the most advanced.software. ERP is the most advanced.

Package Software Package Software Implementation IssuesImplementation Issues

Implement the package vs. install the Implement the package vs. install the software. Avoid the “It’s just a package software. Avoid the “It’s just a package syndrome” syndrome”

Package suppliers do not generally provide all Package suppliers do not generally provide all the areas of support required to fully the areas of support required to fully implement the packages which they sellimplement the packages which they sell

This places great importance on the structure This places great importance on the structure and management of the implementation and management of the implementation processprocess

Package Software Package Software Implementation FactorsImplementation Factors

Need a comprehensive and flexible Need a comprehensive and flexible methodology to handle differences methodology to handle differences in the:in the:– Size of projectSize of project– ApplicationApplication– IndustryIndustry– PlatformPlatform

Package Software Implementation Package Software Implementation SkillsSkills

Must combine with individual Must combine with individual knowledge ofknowledge of– Specific usesSpecific uses– Specific industriesSpecific industries– Specific software packages from Specific software packages from

different suppliersdifferent suppliers– Specific release numbers and specific Specific release numbers and specific

hardware versions of the packageshardware versions of the packages

Package Software Implementation Package Software Implementation ConsiderationsConsiderations

The amount of effort necessary to design The amount of effort necessary to design and implement different systems will vary. and implement different systems will vary.

The fundamental approach should not differ The fundamental approach should not differ because each implementation should because each implementation should consider:consider:– How the package will be used in the businessHow the package will be used in the business

– What training is requiredWhat training is required

– Preparation of user proceduresPreparation of user procedures

– TestingTesting

– All of the normal implementation stepsAll of the normal implementation steps

Package Software Implementation Package Software Implementation ObjectivesObjectives

The objectives in implementing information The objectives in implementing information systems is always to produce what is regarded as systems is always to produce what is regarded as a "good" system. a "good" system. – Meets requirements, i.e., user needs and business Meets requirements, i.e., user needs and business

needs needs

– Developed in the shortest possible timeDeveloped in the shortest possible time

– Developed with minimum costDeveloped with minimum cost

– Easy to maintainEasy to maintain

– Reliable in operation/error free Reliable in operation/error free

– Simple to useSimple to use

– Flexible Flexible

Package Software Implementation Package Software Implementation Objectives (cont.)Objectives (cont.)

Most important one of all: Most important one of all: A good system A good system meets the organization's requirements meets the organization's requirements by solving problems and adding valueby solving problems and adding value.. – Relates to the critical success factorsRelates to the critical success factors

– Part of the strategic mission of the Part of the strategic mission of the business. business.

The methodology should be business-driven The methodology should be business-driven in an attempt help ensure added valuein an attempt help ensure added value

Package vs. Custom Software Package vs. Custom Software ImplementationImplementation

Same overall stages as custom Same overall stages as custom developmentdevelopment

– AnalysisAnalysis– DesignDesign– Construction Construction – ImplementationImplementation

But steps are different for first two stagesBut steps are different for first two stages

Analysis StageAnalysis Stage

Feasibility StudyFeasibility Study System AbstractSystem Abstract Requirements DefinitionRequirements Definition Package EvaluationPackage Evaluation

Feasibility StudyFeasibility Study

Determines the suitability of Determines the suitability of implementing a software package implementing a software package to resolve existing problemsto resolve existing problems

Consists of:Consists of:– Creating project structureCreating project structure– Evaluation of the current systemEvaluation of the current system– Preparation of the system abstractPreparation of the system abstract– Evaluate optionsEvaluate options

Analysis StageAnalysis Stage

Create Project StructureCreate Project Structure

Establish the project management Establish the project management structure for the implementationstructure for the implementation

The project team can be managed in The project team can be managed in two ways:two ways:– By a project steering committee consisting By a project steering committee consisting

of members from all functional areas of members from all functional areas impactedimpacted

– Or by someone in senior managementOr by someone in senior management

Analysis Stage - Feasibility Study and System AbstractAnalysis Stage - Feasibility Study and System Abstract

Steering Committee MembersSteering Committee Members Senior management - delegating or performing a Senior management - delegating or performing a

hands-on function; hands-on function; Information systems personnel - database/data Information systems personnel - database/data

administration, applications development; administration, applications development; Key-end users - all major functional areas. Strong Key-end users - all major functional areas. Strong

individuals with key understanding of the businessindividuals with key understanding of the business Technology personnel - with key understanding of Technology personnel - with key understanding of

the new technology and its impact on the the new technology and its impact on the organization.organization.

Analysis Stage - Feasibility Study and System Abstract -Create Project StructureAnalysis Stage - Feasibility Study and System Abstract -Create Project Structure

Project Team CreationProject Team Creation Project management defines and Project management defines and

creates the project team creates the project team Produce an organization chart depicting Produce an organization chart depicting

the reporting channelsthe reporting channels Assign the tasks and deliverables of the Assign the tasks and deliverables of the

project to specific personnelproject to specific personnel


Prepare the Project Work Prepare the Project Work PlanPlan

Present the work products in a task Present the work products in a task structurestructure

Define the content and completeness Define the content and completeness requirements for each deliverablerequirements for each deliverable

Establish management representatives Establish management representatives who will approve deliverables who will approve deliverables


Identify Milestones for Identify Milestones for Major DeliverablesMajor Deliverables

Schedule tasks considering the following:Schedule tasks considering the following:• Deliverable constraintsDeliverable constraints• Available resourcesAvailable resources• Project budgetProject budget• OverallOverall scheduleschedule


EvaluateEvaluate the Current the Current SystemSystem

Estimate current system operating Estimate current system operating costscosts

Evaluate the quality of the Evaluate the quality of the information producedinformation produced

Document any known problemsDocument any known problems

Analysis Stage - Feasibility StudyAnalysis Stage - Feasibility Study

System AbstractSystem Abstract

A high-level conceptual understanding A high-level conceptual understanding of the system requirementsof the system requirements

Based on CSFsBased on CSFs Used to direct interviews with company Used to direct interviews with company

managementmanagement


Creating the System AbstractCreating the System Abstract

Define Critical Success FactorsDefine Critical Success Factors Prepare Data Abstract Prepare Data Abstract Prepare Process AbstractPrepare Process Abstract Prepare Technology AbstractPrepare Technology Abstract


Critical Success FactorsCritical Success Factors

The few factors, generally four or five, The few factors, generally four or five, critical to the success of the system or critical to the success of the system or the business processthe business process

Determines key decisions and Determines key decisions and processes the proposed system must processes the proposed system must supportsupport

Generally produced through Generally produced through discussions with key senior executives discussions with key senior executives within the companywithin the company

Analysis Stage - System AbstractAnalysis Stage - System Abstract

Alignment of Critical Alignment of Critical Success FactorsSuccess Factors

MissionMission

Goals, Objectives and StrategyGoals, Objectives and Strategy

Critical Success FactorsCritical Success Factors

Performance MeasuresPerformance Measures

Analysis Stage - System Abstract - Define CSFsAnalysis Stage - System Abstract - Define CSFs

Prepare Data AbstractPrepare Data Abstract Results in a preliminary Entity Results in a preliminary Entity

Relationship Model (ERM) Relationship Model (ERM) Derived primarily from an understanding Derived primarily from an understanding

of the existing systemof the existing system Confirmed through interviews with Confirmed through interviews with

management concerning the proposed management concerning the proposed system system


Prepare Process AbstractPrepare Process Abstract

Describes graphically the key Describes graphically the key processes of the required systemprocesses of the required system

Explicitly shows the expected interfaces Explicitly shows the expected interfaces with other existing or future systems with other existing or future systems


Prepare Technology AbstractPrepare Technology Abstract

Documents the desired equipment and Documents the desired equipment and systems software configuration for the systems software configuration for the new systemnew system

Based on the current environment Based on the current environment supplemented with any new supplemented with any new technologiestechnologies


Requirements DefinitionRequirements Definition Determines method to be used to Determines method to be used to

collect and document system collect and document system requirementsrequirements

Involves gathering a detailed Involves gathering a detailed knowledge of the relevant business knowledge of the relevant business processesprocesses

Prioritizes requirements for the Prioritizes requirements for the proposed system (sets scope)proposed system (sets scope)

Maps requirements to CSFsMaps requirements to CSFs

Analysis Stage Analysis Stage

Assess AlternativesAssess Alternatives

Steps:Steps:– Assess the availability of packages to Assess the availability of packages to

meet the requirements.meet the requirements.– Determine technology requirementsDetermine technology requirements– Review implementation alternativesReview implementation alternatives– Identify costs and benefitsIdentify costs and benefits

Analysis Stage - Requirements DefinitionAnalysis Stage - Requirements Definition

Assess Available PackagesAssess Available Packages Review requirements and identify any Review requirements and identify any

that are unlikely to be satisfied by a that are unlikely to be satisfied by a software packagesoftware package

Consider how these unusual Consider how these unusual requirements can be accommodatedrequirements can be accommodated

Analysis Stage - Requirements DefinitionAnalysis Stage - Requirements Definition

Unusual Requirement Unusual Requirement OptionsOptions

Determine if advantageous toDetermine if advantageous to– Restructure organizationRestructure organization– Change processesChange processes– Write custom programs to interface Write custom programs to interface

with packagewith package– Remove requirement from list if non-Remove requirement from list if non-

essentialessential– Make modifications to packaged Make modifications to packaged

softwaresoftware

Analysis Stage - Requirements Definition - Assess AlternativesAnalysis Stage - Requirements Definition - Assess Alternatives

Re-examine Technology Re-examine Technology RequirementsRequirements

Ensure all technology components Ensure all technology components with which the new system must with which the new system must comply have been definedcomply have been defined

Evaluate the impact and usage of Evaluate the impact and usage of new emerging technologiesnew emerging technologies


Review Implementation Review Implementation AlternativesAlternatives

Install a standard as-supplied packageInstall a standard as-supplied package Implement a package as a core system Implement a package as a core system

supplemented with other programssupplemented with other programs Develop a custom systemDevelop a custom system Maintain the existing system and add Maintain the existing system and add

enhancementsenhancements Continue as is with the existing systemContinue as is with the existing system


Identify Costs and BenefitsIdentify Costs and Benefits Outline the costs and benefits of Outline the costs and benefits of

the chosen alternativethe chosen alternative

Analysis Stage - Requirements Definition Analysis Stage - Requirements Definition

Package EvaluationPackage Evaluation Identify potential package suppliersIdentify potential package suppliers Produce RFPProduce RFP Assign weight requirementsAssign weight requirements Conduct evaluationConduct evaluation Assess suppliersAssess suppliers Conduct contractual reviewConduct contractual review

Analysis Stage Analysis Stage

Identify Potential SuppliersIdentify Potential Suppliers Review various sources for candidatesReview various sources for candidates

– Personal contactsPersonal contacts– Internal Information CenterInternal Information Center– InternetInternet– Trade MagazinesTrade Magazines

Develop a short list for detailed analysisDevelop a short list for detailed analysis– No more than 5 No more than 5 – Review with managementReview with management

Analysis Stage - Package Evaluation Analysis Stage - Package Evaluation

Produce RFPProduce RFP To ensure that all relevant requirements are specified To ensure that all relevant requirements are specified To ensure that the evaluation process is conducted in an objective mannerTo ensure that the evaluation process is conducted in an objective manner To allow the sender to supply detailsTo allow the sender to supply details To form initial part of contractTo form initial part of contract


Assign Weight Assign Weight RequirementsRequirements

Assess weight of each detailed requirement Assess weight of each detailed requirement – e.g. Mandatory, Highly Desirable, Desirablee.g. Mandatory, Highly Desirable, Desirable

Define appropriate scoring system Define appropriate scoring system – e.g. 5 Exceeds, 4 Fully meets, 3 Partly meets, 1 Ineffective, 0 Does not have


Conduct Preliminary Conduct Preliminary EvaluationEvaluation

Prioritize the short list to 1 or 2Prioritize the short list to 1 or 2 Use RFP responses ( or other data )Use RFP responses ( or other data ) Use weight assignmentsUse weight assignments


Conduct Detailed EvaluationConduct Detailed Evaluation Inspection of the package documentation and manuals Inspection of the package documentation and manuals Attending supplier education coursesAttending supplier education courses Demonstration of the package Demonstration of the package Visits to existing installation sites (ideally operating on similar hardware) Visits to existing installation sites (ideally operating on similar hardware) Discussions with other users Discussions with other users Processing of test data provided Processing of test data provided Installation and testing of the packageInstallation and testing of the package A pilot system processed using the packager A pilot system processed using the packager Any combination of the aboveAny combination of the above


Assess Suitability of Assess Suitability of SuppliersSuppliers

To ensure that the potential supplier has a stable business base and will continue to provide the appropriate level of service and To ensure that the potential supplier has a stable business base and will continue to provide the appropriate level of service and upgrades. upgrades. – Review financial stabilityReview financial stability

– Review support capabilitiesReview support capabilities

– Review the experiences of current usersReview the experiences of current users Use weighted ranking assessment techniqueUse weighted ranking assessment technique


Conduct Contractual ReviewConduct Contractual Review Identify relevant issuesIdentify relevant issues Some examplesSome examples

– Price and payment for the package and upgradesPrice and payment for the package and upgrades

– Warranty (delivery date vs. usage date) Warranty (delivery date vs. usage date)

– Maintenance and support agreement & conditions Maintenance and support agreement & conditions

– Initial and additional training; Initial and additional training;

– Initial installation (by the supplier); Initial installation (by the supplier);

– Number of Documentation and reproduction rights Number of Documentation and reproduction rights

– Merger/takeover clauses Merger/takeover clauses


Design StageDesign Stage Software InstallationSoftware Installation Design and integrationDesign and integration

Software InstallationSoftware Installation

Confirm System RequirementsConfirm System Requirements Install Package Software (finally)Install Package Software (finally) Obtain familiarization with packageObtain familiarization with package Establish Implementation Establish Implementation

ApproachApproach

Design StageDesign Stage

Confirm System Confirm System RequirementsRequirements

To ensure that the scope of the project To ensure that the scope of the project is adequately defined and documentedis adequately defined and documented

Three separate areas need to be Three separate areas need to be agreed on and documented agreed on and documented – The system requirementsThe system requirements

– The package software capabilities and The package software capabilities and limitationslimitations

– The resolution of the differences between The resolution of the differences between the first two areasthe first two areas

Design Stage - Software InstallationDesign Stage - Software Installation

Install Package Software Install Package Software

To confirm that the selected To confirm that the selected software package will operate on software package will operate on the intended IT environments and the intended IT environments and that the package software is that the package software is capable of functioning and capable of functioning and performing as expectedperforming as expected


Obtain Familiarization with Obtain Familiarization with PackagePackage

To ensure that the project team To ensure that the project team understands how the package understands how the package worksworks– Establish business team contactsEstablish business team contacts

– Arrange for trainingArrange for training

– Establish request for change Establish request for change proceduresprocedures


Establish Implementation Establish Implementation ApproachApproach

Direct implementation (big bang) Parallel operation of both the existing

system and the proposed system Staged implementation such as by location,

store, department, division or product line Modular or phased implementation of

functional components Implementation of the proposed system at

a pilot location


Design & IntegrationDesign & Integration

Define software components to be Define software components to be implementedimplemented

Define package interface Define package interface requirementsrequirements

Define package parametersDefine package parameters Define controls and security Define controls and security

requirementsrequirements

Design StageDesign Stage

Define software Define software components to be components to be

implementedimplemented Define report standardsDefine report standards Establish output report Establish output report

formatsformats Prepare report groupingPrepare report grouping Define screen/window Define screen/window

standardsstandards Establish screen layoutsEstablish screen layouts Relate new Relate new

screen/window and screen/window and report layouts to the report layouts to the business strategybusiness strategy

Establish input/output formatsEstablish input/output formats Define processing jobsDefine processing jobsDevelop physical database designDevelop physical database design Design job submissio9n systemDesign job submissio9n system Confirm workload volumes Confirm workload volumes Assess new hardware impactAssess new hardware impact Discuss and agree to the initial Discuss and agree to the initial

designdesign

Design Stage - Design and IntegrationDesign Stage - Design and Integration

Define Package Interface Define Package Interface RequirementsRequirements

Specify any interfaces, both inputs Specify any interfaces, both inputs and outputs, between the existing and outputs, between the existing systems and the packagesystems and the package

Design each interfaceDesign each interface Discuss and agree to design of Discuss and agree to design of

each interfaceeach interface

Design Stage - Design and Integration - Design and IntegrationDesign Stage - Design and Integration - Design and Integration

Define Package Define Package ParametersParameters

Set package parametersSet package parameters Modify package-supplied command Modify package-supplied command

language language Maintain liaison with computer Maintain liaison with computer

operationsoperations– Implementation plans and schedulesImplementation plans and schedules– Hardware, storage and peripheral device Hardware, storage and peripheral device

capacity needscapacity needs– Access to files for data conversionAccess to files for data conversion


Define Controls and Define Controls and SecuritySecurity

Identify risks of system failureIdentify risks of system failure Document level of control and Document level of control and

security neededsecurity needed Develop access control matrixDevelop access control matrix Define security responsibilitiesDefine security responsibilities Specify the processing control Specify the processing control

softwaresoftware Agree to security designAgree to security design


Analysis and Design EndAnalysis and Design End

Follow through with Construction Follow through with Construction and Implementationand Implementation

What is ERP?What is ERP? Enterprise resource planningEnterprise resource planning An integrated, technology-driven approach to An integrated, technology-driven approach to

managing a company’s resources, whether it is managing a company’s resources, whether it is cash, raw materials, or human capitalcash, raw materials, or human capital

Automating both back office and front officeAutomating both back office and front office Operate on the client-server structureOperate on the client-server structure Midranges and mainframes computersMidranges and mainframes computers Windows-based softwareWindows-based software Grouped into various functional modules such as Grouped into various functional modules such as

accounting/finance, manufacturing, human accounting/finance, manufacturing, human resources, etcresources, etc

Major products - Major products - SAPSAP SSystems, ystems, AApplications, and pplications, and PProducts in data roducts in data

processing processing The largest supplier of business application software The largest supplier of business application software Global focus having multiple languages, as well as Global focus having multiple languages, as well as

multiple currency functionalitymultiple currency functionality Gaining it quick acceptance in countries all over the Gaining it quick acceptance in countries all over the

worldworld The R/3 System consists of application module that The R/3 System consists of application module that

support all of a company’s business transactions.support all of a company’s business transactions. Support for multiple databases (Oracle, Informix, Support for multiple databases (Oracle, Informix,

Others), user interfaces and operating environments Others), user interfaces and operating environments (UNIX, NT, MPE and other European proprietary) (UNIX, NT, MPE and other European proprietary)

Major products - Major products - PeopleSoftPeopleSoft

The second largest ERP vendor The second largest ERP vendor Began in 1987 with a human resource management Began in 1987 with a human resource management

system system Revolutionized two disciplines -- human resources Revolutionized two disciplines -- human resources

and client/server technology.and client/server technology. Dominant in client/server HR marketplace.Dominant in client/server HR marketplace. Provides enterprise solutions for finance, materials Provides enterprise solutions for finance, materials

management, distribution, supply chain, management, distribution, supply chain, manufacturing, and human resourcesmanufacturing, and human resources

Flexible, easily adaptable and less integrated Flexible, easily adaptable and less integrated architecture facilitates incremental implementationsarchitecture facilitates incremental implementations

Major productsMajor products - Oracle - Oracle Dominant position in database area, which it Dominant position in database area, which it

can leverage into applicationscan leverage into applications Significant pool of IS talent in outside world Significant pool of IS talent in outside world

familiar with Oracle technology familiar with Oracle technology One of the earliest UNIX application players - One of the earliest UNIX application players -

has taken advantage of that momentum in the has taken advantage of that momentum in the growing client/server marketplacegrowing client/server marketplace

Oracle Applications comprise 45-plus software Oracle Applications comprise 45-plus software modules modules

Major products - Major products - BaanBaan

Building from strong European base Building from strong European base based in the Netherlands based in the Netherlands

Component-based applications for front Component-based applications for front office, corporate office and back office office, corporate office and back office automationautomation

Developing ERP systems on UNIX Developing ERP systems on UNIX systems since 1981systems since 1981

One of the first vendors to provide true One of the first vendors to provide true multi-level client/server supportmulti-level client/server support

Major products - Major products - J.D. J.D. EdwardsEdwards

Originally founded as a firm specializing in Originally founded as a firm specializing in accounting softwareaccounting software

Strong AS/400 financial applications positionStrong AS/400 financial applications position Functionally strong financial applicationsFunctionally strong financial applications Global presence - strong multi-national position Global presence - strong multi-national position Flexible, integrated software for distribution, Flexible, integrated software for distribution,

finance, human resources, manufacturing and finance, human resources, manufacturing and supply chain managementsupply chain management

Operates in multiple computing environments and Operates in multiple computing environments and Java and HTML enabledJava and HTML enabled

Costs of ERP systemsCosts of ERP systems

Gartner group estimates that ERP Gartner group estimates that ERP customers should plan on spending customers should plan on spending 15% of the projects original 15% of the projects original implementation cost every year to implementation cost every year to keep their ERP systems up to date.keep their ERP systems up to date.

Recent TrendsRecent Trends

ERP vendors are developing strategies ERP vendors are developing strategies for “webifying” their architechtures for “webifying” their architechtures and adding e-commerce applicationsand adding e-commerce applications– In April Baan unveiled E-Enterprise suite, In April Baan unveiled E-Enterprise suite,

and Oracle Previewed Oracle Apllications and Oracle Previewed Oracle Apllications and Front office, featuring a web and Front office, featuring a web interface and e-commerce supportinterface and e-commerce support

– SAP hopes to have a new e-commerce SAP hopes to have a new e-commerce application ready in Mayapplication ready in May

Recent TrendsRecent Trends

Companies abandoning ERP Companies abandoning ERP projects and instead are repairing projects and instead are repairing legacy systems to fix Y2K problemslegacy systems to fix Y2K problems

Financial performance of vendors Financial performance of vendors fails to meet expectations fails to meet expectations – horror stories of ERP implementationshorror stories of ERP implementations– Rush for Y2K fix is overRush for Y2K fix is over

Financial troubles of ERP Financial troubles of ERP vendorsvendors

In January 1999 SAP disclosed that its 4th In January 1999 SAP disclosed that its 4th quarter 1998 pretax profits were expected quarter 1998 pretax profits were expected to drop about 15% from the fourth quarter to drop about 15% from the fourth quarter of 1997. Profit growth for 1998 was only of 1997. Profit growth for 1998 was only 15%--barely half of the increase predicted15%--barely half of the increase predicted

In 3rd quarter 1998 Baan reported a loss In 3rd quarter 1998 Baan reported a loss of $32 million and issued new stock to an of $32 million and issued new stock to an investment firm in return for a $75 million investment firm in return for a $75 million infusion.infusion.

FutureFuture

Future is unclear for all ERP Future is unclear for all ERP participantsparticipants

Segment for large companies is Segment for large companies is getting closer to the market getting closer to the market saturation pointsaturation point

Middle market companies may Middle market companies may offer tremendous growth for ERP offer tremendous growth for ERP vendors in the next 25 yearsvendors in the next 25 years

Package Software White Paper Presentation - IDSc 8140 class ...

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