Upgrade Strategies for Small and Midsize Businesses

Pat Hickey, Director, mySAP All-in-One SolutionsMichael Labriola, VP of IT, TriVirix International

November 2003

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Agenda

1. Reasons for an Upgrade

2. Decisions on the Application

3. What to Expect on your Upgrade

4. mySAP ERP at TriVirix International

5. Summary

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Reasons for an Upgrade

Additional functional requirements Reduction of interfaces to legacy systemsTechnical limitationsEnd of maintenance

Return of investment

Costs

Risks

Advantages

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Influenced Areas in an Upgrade ProjectOrganizational Challenges

Time planningBudgetingResource planningDecision about project leadership

Business ProcessesRelease customizing vs. delta customizingMigration of modifications back to SAP standardModification adjustmentsTesting of customer programs, interfaces…Business process testingEnd-User training

TechnologySizing and system configurationPlanning of technical upgrade processExecution of technical upgradePost upgrade activities

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Reasons for an Upgrade

Primary Reasons for ERP Upgrade

1%

2%

19%

21%

27%

30%

0% 5% 10% 15% 20% 25% 30% 35%

Other

Support more users

Support current technology

Necessary (due to maintenance)

Need new functionality

New architecture is better platform forfuture functionality

Source: AMR Research, 2002

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Decisions on the Application

Functional Areas Added During the Upgrade

4%

7%

7%

7%

11%

13%

13%

13%

15%

15%

17%

17%

24%

30%

33%

35%

41%

0% 10% 20% 30% 40% 50%

Other

PLM/Product Development Management

Professional Service Automation

Project Management

Order Management

Supply Chain Management

Manufacturing

Maintenance Management/EAM

Inventory Management

General Ledger, Accounts Payable

Financial Management

Purchasing

Customer Management

Business Intelligence

Human Resources/Self-Service

Internet-Based Procurement Applications

Portals

Source: AMR Research, 2002

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+

+

+SAP

NetWeaver

mySAPERP

Purchase/Transition Options for Customers

mySAP Business SuiteCustomer can buy and deploy mySAPBusiness Suite

mySAPBusiness Suite

SAP NetWeaver

mySAP ERPCustomer can buy and deploy mySAP ERP

Combining mySAP ERP & SolutionsCustomer can combine mySAP ERP withmySAP Solutions

+

+

+SAP

NetWeaver

mySAPERP

+ mySAP SCM

mySAP CRM+SAP Packaged

Solutions+

Combining SAP R/3E & Parts*Customer can combine existing SAP R/3 installations with Solutions, SAPNetWeaver (also parts of it, like Portal or BI) and with SAP packaged solutions

+ mySAP SCM

SAP R/3 Enter-prise

+ mySAP CRM

+ SAP NetWeaver

SAP Packaged Solutions+

*Only for Installed Base

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What is the General Situation in the Installed Base?

There are factors that are leading SAP R/3 SMB customers to consider modernization, consolidation, and rationalization of their ERP environment.

They want to improve the overall user experience when business processes are getting more demandingThey have new reporting, regulatory, and transparencyrequirementsThey need to integrate multiple, diverse systems with SAP while reducing cost and optimizing system landscapeRestructuring activities, mergers, and acquisitions require new target ERP landscapesSome want to go to the mySAP Business Suite, but the step is too large and they are looking for a next stepSome simply want to extend the scope of their existing ERP functionality

… mySAP ERP provides a solution to these problems!

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SAP R/3 Transition Options to mySAP ERP

SAP R/3Pre 4.6c

SAP R/34.6c

SAP R/3Enterprise

This option does not require an

upgrade, only a license change

Recommended Transition Paths

Alternative options

mySAP ERP

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SAP R/3 Transition Options from mySAP ERP

SAP R/3Pre 4.6c

SAP R/34.6c

SAP R/3Enterprise

These options do not require an upgrade, only a license change

Recommended Transition Paths

Alternative options

PackageSolutions

mySAP SRM

mySAP Business Suite

mySAP PLM

mySAP SCM

mySAP CRMmySAP ERP

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Influencing Key Factors for Project Duration

StrategyFunctional upgrade vs. Upgrade with new implementation

New features and functionsNew features in already used transactionsAmount of new functionalities to implement

ModificationsAmount of modifications which could be returned to SAP standard Amount and complexity of needed modifications in the new release

DocumentationLevel and quality of documentation for modifications and testing

Last but not least…Range of testing and trainingCustomer and/or partner skills in upgrade projectsAvailable resources and management commitment at customer

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Average Project Duration

Project duration in months

0

2

4

6

8

10

12

1 6 11 16 21 26 31 36 41 46 51 56 61 66 71 76 81 86 91 96

Customer

Mo

nth

s

Source: Survey at productive SAP R/3 Enterprise customers by Global ERP Initiative in 2003

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Agenda

1. Reasons for an Upgrade

2. Upgrade Strategies with SAP

3. Providing Value with mySAP ERP

4. What to Expect on your Upgrade

5. mySAP ERP at Trivirix International

6. Summary

mySAP ERP Upgrade at TriVirix

Michael LabriolaVice President of Information Technology

mySAP ERP Upgrade at TriVirix

Michael LabriolaVice President of Information Technology

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Overview of Company

% Established in 1998, venture capital funded

% Manufacturing and related services for medical device and other life science companies

% Today, 200 TriVirix employees in the US and UK manufacture and service 40 different types of medical equipment for 25 customers

Services:% Product design and launch% Assembly and test, to user-ready condition% Repair, refurbishment, other post-production services

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Key Business Drivers

Why did TriVirix need to upgrade?

Preparation for FI / CO Improvement ProjectUpgrade Validation Requirements equal to Support Packages

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SAP Solution Implemented

mySAP Business Suite Implemented

SAP R/3 Enterprise 4.7mySAP Enterprise PortalKnowledge Warehouse

1. Implementation

April 15, 2003 – Upgrade Sandbox System for TestingJune 28, 2003 – Rebuild Sandbox System, Prepare for UpgradeJuly 4, 2003 – Upgrade over holiday weekend

• Make a copy of production to the Sandbox and start upgrade• Rebuild Development and Test, copy from Production when

completeAugust 4, 2003 – Start of Early Watch SessionAugust 15, 2003 – Early Watch Session Report and System ReviewAugust 22, 2003 – All Issues resolved, validation testing complete

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Key Benefits and Lessons Learned

Benefits

Moved to the latest release before FI / CO improvement project

Lessons Learned:

Don’t deviate from you test environment (SR-1 Issues)Test all of your business transactions (Deprecation Run)

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Moving Forward

Next Steps

Currently involved in FI / CO improvement projectmySAP Business Intelligence mySAP Customer Relationship Management 4.0

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Agenda

1. Reasons for an Upgrade

2. Decisions on the Application

3. What to Expect on your Upgrade

4. mySAP ERP at TriVirix International

5. Summary

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CV New/ Past Payment

2003SAP R/3 or mySAP ERP -> mySAP Business Suite

2003SAP R/3 -> mySAP ERP

Conversion Policies for 2003

Credit in % of past payment

100 %

75 %

50 %

25 %

1 2 3 4 5

CV = Net Contract Value

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Further Information at SAP Service Marketplace

mySAP ERP http://service.sap.com/erp

SAP NetWeaverhttp://service.sap.com/netweaver

Development Newshttp://service.sap.com/developmentnews

SAP R/3 Enterprisehttp://service.sap.com/enterpriseNew Release Strategyhttp://service.sap.com/releasestrategy

Release Noteshttp://service.sap.com/releasenotes

Upgrade Information Centerhttp://service.sap.com/upgrade

Upgrade Focus Grouphttp://service.sap.com/ufg

Services from SAP Support and SAP Consulting

Online Knowledge Productshttp://service.sap.com/okp

Safe Guardinghttp://service.sap.com/safeguarding

Maintenance Strategyhttp://service.sap.com/maintenancestrategy