Upgrade Strategies for Small and Midsize Businesses
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1 Upgrade Strategies for Small and Midsize Businesses Pat Hickey, Director, mysap All-in-One Solutions Michael Labriola, VP of IT, TriVirix International November 2003
2 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 SAP AG 2003, Upgrade Strategies (Back To Base Sales Training), 2
3 Reasons for an Upgrade Return of investment Risks Advantages Costs Additional functional requirements Reduction of interfaces to legacy systems Technical limitations End of maintenance SAP AG 2003, Upgrade Strategies (Back To Base Sales Training), 3
4 Influenced Areas in an Upgrade Project Organizational Challenges Time planning Budgeting Resource planning Decision about project leadership Business Processes Release customizing vs. delta customizing Migration of modifications back to SAP standard Modification adjustments Testing of customer programs, interfaces Business process testing End-User training Technology Sizing and system configuration Planning of technical upgrade process Execution of technical upgrade Post upgrade activities SAP AG 2003, Upgrade Strategies (Back To Base Sales Training), 4
5 Reasons for an Upgrade Primary Reasons for ERP Upgrade New architecture is better platform for future functionality Need new functionality 27% 30% Necessary (due to maintenance) Support current technology 19% 21% Support more users Other 2% 1% 0% 5% 10% 15% 20% 25% 30% 35% Source: AMR Research, 2002 SAP AG 2003, Upgrade Strategies (Back To Base Sales Training), 5
6 Decisions on the Application Functional Areas Added During the Upgrade Portals 41% Internet-Based Procurement Applications Human Resources/Self-Service Business Intelligence 30% 33% 35% Customer Management 24% Purchasing Financial Management General Ledger, Accounts Payable Inventory Management Maintenance Management/EAM Manufacturing Supply Chain Management Order Management 17% 17% 15% 15% 13% 13% 13% 11% Project Management Professional Service Automation PLM/Product Development Management Other 7% 7% 7% 4% 0% 10% 20% 30% 40% 50% Source: AMR Research, 2002 SAP AG 2003, Upgrade Strategies (Back To Base Sales Training), 6
7 Purchase/Transition Options for Customers mysap Business Suite Customer can buy and deploy mysap Business Suite mysap Business Suite SAP NetWeaver mysap ERP Customer can buy and deploy mysap ERP mysap ERP SAP NetWeaver Combining mysap ERP & Solutions Customer can combine mysap ERP with mysap Solutions mysap ERP SAP NetWeaver mysap SCM mysap CRM SAP Packaged Solutions Combining SAP R/3E & Parts* Customer can combine existing SAP R/3 installations with Solutions, SAP NetWeaver (also parts of it, like Portal or BI) and with SAP packaged solutions *Only for Installed Base SAP AG 2003, Upgrade Strategies (Back To Base Sales Training), 7 SAP R/3 Enterprise + mysap SCM + mysap CRM + SAP NetWeaver + SAP Packaged Solutions
8 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 demanding They have new reporting, regulatory, and transparency requirements They need to integrate multiple, diverse systems with SAP while reducing cost and optimizing system landscape Restructuring activities, mergers, and acquisitions require new target ERP landscapes Some want to go to the mysap Business Suite, but the step is too large and they are looking for a next step Some simply want to extend the scope of their existing ERP functionality mysap ERP provides a solution to these problems! SAP AG 2003, Upgrade Strategies (Back To Base Sales Training), 8
9 SAP R/3 Transition Options to mysap ERP SAP R/3 Pre 4.6c SAP R/3 4.6c Recommended Transition Paths Alternative options SAP R/3 Enterprise This option does not require an upgrade, only a license change mysap ERP SAP AG 2003, Upgrade Strategies (Back To Base Sales Training), 9
10 SAP R/3 Transition Options from mysap ERP SAP R/3 Pre 4.6c SAP R/3 4.6c These options do not require an upgrade, only a license change Recommended Transition Paths Alternative options SAP R/3 Enterprise Package Solutions mysap ERP mysap CRM mysap SCM mysap PLM mysap SRM mysap Business Suite SAP AG 2003, Upgrade Strategies (Back To Base Sales Training), 10
11 Influencing Key Factors for Project Duration Strategy Functional upgrade vs. Upgrade with new implementation New features and functions New features in already used transactions Amount of new functionalities to implement Modifications Amount of modifications which could be returned to SAP standard Amount and complexity of needed modifications in the new release Documentation Level and quality of documentation for modifications and testing Last but not least Range of testing and training Customer and/or partner skills in upgrade projects Available resources and management commitment at customer SAP AG 2003, Upgrade Strategies (Back To Base Sales Training), 11
12 Average Project Duration Project duration in months Months Customer Source: Survey at productive SAP R/3 Enterprise customers by Global ERP Initiative in 2003 SAP AG 2003, Upgrade Strategies (Back To Base Sales Training), 12
13 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 SAP AG 2003, Upgrade Strategies (Back To Base Sales Training), 13
14 mysap ERP Upgrade at TriVirix Michael Labriola Vice President of Information Technology
15 mysap ERP Upgrade at TriVirix Michael Labriola Vice President of Information Technology
16 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 SAP AG 2003, Upgrade Strategies (Back To Base Sales Training), 16
17 Key Business Drivers Why did TriVirix need to upgrade? Preparation for FI / CO Improvement Project Upgrade Validation Requirements equal to Support Packages SAP AG 2003, Upgrade Strategies (Back To Base Sales Training), 17
18 SAP Solution Implemented mysap Business Suite Implemented SAP R/3 Enterprise 4.7 mysap Enterprise Portal Knowledge Warehouse 1. Implementation April 15, 2003 Upgrade Sandbox System for Testing June 28, 2003 Rebuild Sandbox System, Prepare for Upgrade July 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 complete August 4, 2003 Start of Early Watch Session August 15, 2003 Early Watch Session Report and System Review August 22, 2003 All Issues resolved, validation testing complete SAP AG 2003, Upgrade Strategies (Back To Base Sales Training), 18
19 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) SAP AG 2003, Upgrade Strategies (Back To Base Sales Training), 19
20 Moving Forward Next Steps Currently involved in FI / CO improvement project mysap Business Intelligence mysap Customer Relationship Management 4.0 SAP AG 2003, Upgrade Strategies (Back To Base Sales Training), 20
21 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 SAP AG 2003, Upgrade Strategies (Back To Base Sales Training), 21
22 Conversion Policies for 2003 Credit in % of past payment 100 % 75 % 2003 SAP R/3 -> mysap ERP 50 % 25 % 2003 SAP R/3 or mysap ERP -> mysap Business Suite CV New / Past Payment CV = Net Contract Value SAP AG 2003, Upgrade Strategies (Back To Base Sales Training), 22
23 Further Information at SAP Service Marketplace mysap ERP SAP R/3 Enterprise SAP NetWeaver New Release Strategy Development News Release Notes Upgrade Information Center Upgrade Focus Group Online Knowledge Products Safe Guarding Maintenance Strategy Services from SAP Support and SAP Consulting SAP AG 2003, Upgrade Strategies (Back To Base Sales Training), 23
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