SCM Upgrade & Instance Consolidation

Dennis Marcinek & Christine Johnson, PepsiCo

Disclaimer: The views and opinions expressed in this document and presentation are those of the author and do not necessarily reflect those of the company.

Todays Agenda

Learning Points
PepsiCo Overview
Our SCM Upgrade & Instance Consolidation Project
Key Lessons Learned
Question & Answer

Learning Points

Process of taking an SAP upgrade

project from ideation to approval
Strategies and execution used to
mitigate project cost and risk
Practical lessons learned by PepsiCo
during go-live cutover and
stabilization

Who We Are
PepsiCo is a global food and beverage powerhouse.
Our broad range of more than 3,000 delicious products offers consumers
convenient, nutritious and affordable options in nearly every country around the world.

Global Beverages

Global Snacks

Global Nutrition

Performance

Brands

Scale

People

More than

22

>200 countries

~300,000

$65 billion
revenue

billion-dollar
brands

& territories

employees

Our SAP North American Journey

RELEASE 1

RELEASE 3

RELEASE 5

Indirect
Procurement

Mfg & Logistics

Financials
Equipment Service
Management

Financial Planning

R1

2006

R2

2007

R3

RELEASE 2

RELEASE 4

Order to Cash
Demand Planning

Integrated Supply
Chain Planning

2008

R4

R5

2009

RELEASE 7

Order to Cash

R6

RELEASE 6
Trade - Funds,
Promotions & Claims
Financial Planning
Order to Cash & ESM Upgrade

2010 -12
R9
R7

RELEASE 9

Payroll &
Human Capital
Management

Our project scope: North America ISCP

Landscape

Our project at a glance

Opportunity
Upgrading SCM 4.1 to 7.02 platform creates an SCM landscape simplification opportunity
Enables significant annual labor and infrastructure savings
Additional annual savings through elimination of SAP *CDP maintenance contract

Scope
Upgrade SCM/APO environment from version 4.1 to 7.0 Enhancement Pack 2
Consolidate SCM/SNC Customer Collaboration functionality onto upgraded SCM 7.02 environment
Retire obsolete SCM/SNC landscape

Timeline
32 week project duration; go-live target: P2 2013
Operational necessity as SCM 4.1 currently in extended maintenance until April 2013

Cost Considerations
PepsiCo and contractor labor
Project landscape and consolidated instance sizing requirements
SAP AGS support

Benefits
Inherent performance improvement with upgraded liveCache architecture mitigates SLA risk
Ability to leverage newer SCM 7.02 capabilities
Tailwind for strategy to further simplify ISCP landscape and expand SAP footprint

Risks
Delaying upgrade postpones consolidation savings and prevents benefits realization
Expensive SAP time & material support beyond extended maintenance (4/2013); no Service Packs or patches
Disruption to overall SAP Upgrade Roadmap schedule

*Customer Development Project

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Developing a strong business case

is key to obtaining upgrade project funding

Business Case benefits breakdown

Reduce *Support Costs

Reduce Infrastructure Costs
Eliminate Annual CDP Costs
*BASIS, Security, DBA, UNIX/Storage
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We developed an internal proposal

to compete in Request for Proposal process

Supplier
A

PepsiCo

Supplier
B

Process steps:
1. Develop Request for Proposal
(RFP) and invite suppliers to
participate
2. Evaluate written proposals and
select suppliers for oral
presentations
3. Select preferred suppliers for
deeper dive

PepsiCo

4. Make decision

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In-sourcing the project using internal

PepsiCo resources had many advantages

Deep knowledge of complex ISCP solutions

SAP/SCM expertise
Strong relationships with business partners
Partnerships with integration teams

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Our strategy to mitigate project

cost and risk
Technical upgrade only

Excluded bundling of business funded enhancements

Document simplification opportunities for follow-up

No activation of Enhancement Pack functionality

EHP2 applied with all Business Functions/Switches deactivated

Split-node landscape approach

Share break/fix environments vs. project landscape build-out

Utilize Upgrade Accelerator Tool to expedite custom code

remediation and landscape consolidation
Mixture of Project & Baseline funded resources

Ease transition to Sustainment organization

Partner with SAP AGS

Dedicated upgrade expertise support

OSS escalation
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Split-node approach reduced

project landscape cost

13

An innovative approach was required to deliver our

project within available Center funding budget

Challenge

Approach
Utilize
Upgrade
Accelerator

Reduce
Project Cost

Partnered with Enterprise

Planning & Delivery to
conduct tool evaluation

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We utilized multiple smartShift tools

on our project

15

smartShift provided
bang for the buck value

Additional project savings realized by using smartShift to remediate complex Customer

Development Project vs. SAP
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It takes a village to pull off a

successful upgrade
Functional
Expertise

Portal

SAP
Development
SAP
Security
Middleware
ECC
Integration
(CIF)

SAP BW
BASIS

Project staffing involves multiple teams

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Project Phases Highlights/Recommendations

Blueprint
Software upgrade
Unit test upgrade code remediation
Mocks
At least 2 mock upgrades and a cutover rehearsal
SAP AGS involvement : dedicate days to experts to support
Realization
System Test : Prioritize code remediation
Allows lead time on OSS messages

Regression Test: Quality of solution remains in-tact

2 rounds and involve super users in testing

Performance Test : before upgrade/after upgrade benchmarks are

critical to understand SLA impacts
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Project Execution
Phases Highlights/Recommendations
User Acceptance
Involve key end users
Mock and Cutover Rehearsals
SAP AGS dedicated service plan support
TQM Lead for OSS escalation

Involve super users in check-outs

They know the data and will spot things typical IT support
wouldnt

Go-Live
2-3 Week Hyper-Care
Plan with 24/7 support for all areas
Involve super users and business end users in check-outs
War Room Set-Up
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Key Learning / Best Practices

1. Project environment needs to mirror production as closely as
possible in terms of infrastructure, integration, and data volume
2. Upgrade Accelerator tools are no magic pill. Additional
development work and functional review is required
3. Practice makes perfect. Incorporate as many cutover rehearsals as
possible into project plan
4. Collaborate with business partners to develop a comprehensive
contingency plan
5. Involve business Super Users in testing cycles
6. Dont declare victory until full planning cycle is executed; daily &
weekly
7. Inherent performance improvements are a reality!

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Contact Information

Dennis.Marcinek@Pepsico.com
Christine.A.Johnson@Pepsico.com
www.Pepsico.com

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Questions

Is there anything we can help clarify?

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THANK YOU FOR PARTICIPATING

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