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Table of Contents
EXECUTIVE SUMMARY ....................................................................................................................................... 4
OUR UNDERSTANDING OF CEMENTCOS REQUIREMENTS.................................................................... 5
OUR UNDERSTANDING OF CEMENT INDUSTRY SCENARIO AND CHALLENGES ............................. 6
OUR UNDERSTANDING OF KEY BUSINESS DRIVERS AND IT LEVERS ............................................... 14
OUR PROPOSED TEAM FOR CEMENTCO..................................................................................................... 16
SUMMARY OF RELEVANT PROJECTS DELIVERED BY OUR TEAM MEMBERS ............................... 17
OUR PARTNERSHIP WITH SAP........................................................................................................................ 19
OUR VALUE PROPOSITION FOR PROVIDING END TO END SAP AND IT INFRASTRUCTURE
IMPLEMENTATION AND MAINTENANCE SERVICES FOR CEMENTCO ............................................. 20
OUR RECOMMENDATIONS ON RIGHT ERP FOR CEMENTCO............................................................... 22
OUR RECOMMENDATIONS ON RIGHT ERP FOR CEMENTCO............................................................... 23
CEMENT INDUSTRY SPECIFIC REQUIREMENTS SUPPORTED BY SAP............................................... 24
HOW SAP SUPPORTS INTEGRATED PROCESS FLOW IN A CEMENT PLANT ................................................................ 25
EXAMPLE 1: COST AND PROFITABILITY MANAGEMENT ......................................................................................... 26
EXAMPLE 2: PRODUCTION PLANNING FOR CEMENT INDUSTRY .............................................................................. 31
EXAMPLE 3: SALES AND DISTRIBUTION FOR CEMENT INDUSTRY ........................................................................... 32
EXAMPLE 4: PURCHASE OF RAW MATERIALS FOR CEMENT INDUSTRY ................................................................... 33
SUCCESSFUL SAP IMPLEMENTATIONS IN CEMENT INDUSTRY.......................................................... 34
ADVANTAGES OF A GREEN FIELD IMPLEMENTATION.......................................................................... 36
BEST PRACTICES SOLUTION MAP OF SAP FOR CEMENT INDUSTRY ............................................ 37
OUR PROPOSAL FOR PHASE WISE IMPLEMENTATION OF SAP AT CEMENTCO............................ 38
OUR PROPOSED SCOPE FOR FIRST PHASE AT CEMENTCO .................................................................. 39
OUR PROPOSED IMPLEMENTATION METHOD: ASAP FOCUS .............................................................. 41
EVOLUTION OF ASAP FOCUS METHOD .................................................................................................................. 41
ASAP FOCUS METHOD KEY STAGES AND DELIVERABLES ................................................................................... 46
HOW INNOVATIVE CONSULTANTS PLAN TO ADAPT ASAP FOCUS METHOD FOR CEMENTCO IMPLEMENTATION ... 47
OUR VALUE PROPOSITION TO CEMENTCO BY ADAPTING ASAP FOCUS METHOD .................................................. 47
OUR PROJECT GOVERNANCE MODEL......................................................................................................... 48
OUR PROPOSED RESPONSIBILITY MATRIX FOR PROJECT DELIVERABLES .................................. 50
OUR PROPOSED IT INFRASTRUCTURE MODEL AND FACILITIES SOLUTION FOR CEMENTCO52
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Executive Summary
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1. Indian cement industry is poised for an unprecedented steady growth of 10% YOY
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3. In spite of consolidations, the growth is largely fuelled by small and medium sector cement
plants. Plants with less than 2 MTPA contribute to almost 50% of the installed base of the
country.
4. While WPI is likely to increase steadily, the industry as a whole is expected to be in a surplus
situation putting pressures on price and profitability
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5. While West Bengal is the 8th largest cement consuming state, it is not one of the highest
cement producing states.
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6. The Eastern region has the biggest deficit of cement (between production and domestic
consumption)
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9. Though the net margin has increased, the operating margins have remained same
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10. Energy, raw materials and freight costs remain the key cost components
11. The gap between the industry best practice and Indian cement plants are increasing with
respect to efficiency
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The selection of right ERP for a cement plant is based on how the KPIs are getting addressed
through the ERP solution.
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All these IT levers mentioned in the above diagram are critical in selection for the right ERP
for your company.
Right kind of IT levers helps you in deciding proper business levers, which in turn helps you
in achieving your profitability objectives.
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Roles of our team members in the project: Our team members played key role as consultant
in production planning and quality management areas.
Roles of our team members in the project: Our team members were involved as team lead in
plant maintenance module having end to end responsibility of business blueprinting, realization,
training and post go-live hyper-care support.
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Ability to address key business drivers: Many ERPs (or nERPs) claim to support the basic
business functions like accounting, costing, sales and distribution, materials management, etc.
But the devil lies in the details!
One has to deep dive into the features and assess whether they achieve to address the
real business drivers of the industry.
Industry vertical specialization: The ERP product must cater to the unique requirements of the
cement industry
Many ERPs (nERPs) have broad category of industry specialization e.g. process
industry, manufacturing industry, mill products industry solution, etc.
But cement industry needs deeper specialization supporting specifically building
materials industry.
Indian statutory requirements: The ERP product need to support Indian statutory
requirements like excise, sales tax, various registers, etc
Scalability: The ERP product should be able to support your expansion and diversification plans
without having to throw away the ERP product and go for a new product in near future.
Market position of the ERP product: This is important from the following perspectives
Investment protection
Proven capabilities in relevant industry segment
Consistent product strategy
State of the art technology and timely upgrade
Availability of consulting services and support
Add-on products: The ERP should provide add-on products like business process
management tools, best practice scenarios, pre-configured clients, templates, documents and
research paper for accelerated implementation.
User Friendliness: The ERP product should be user friendly for easy training and adaptation
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Subcategory
SAP
Enterprise
Solution
SAP
Business
One++
Other
Known
ERPs*
Indian statutory
requirements
Scalability
Market Positioning
Add-on products
Cost
License cost
Implementation cost through ASAP Focus method**
Maintenance cost
User Friendliness
User friendliness
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Solution Composer, a Business Process Management tool provided by SAP, has a special
section on Building Materials with built-in best practices for building materials industry
including cement.
The best practices scenarios are available pre-configured.
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SAP has the capability to support the integrated business process flow in a cement plant.
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SAPs extensive feature on costing allows you to estimate the standard cost, capture the actual
cost and measure variances at the lowest level.
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SAP provides complete visibility at multi-levels on actual cost and profitability thereby assisting in
controlling the cost of production and sale.
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The preconfigured sales and distribution scenarios for building materials industry
specifically caters to both bulk and packaged requirements of cement industry. It
includes features like credit management, transportation management, rush orders, etc
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You have the opportunity to standardize your business processes from day one.
You have the opportunity to leverage best industry practices from day one.
Organizational change management is easy.
Data migration is absent this reduces the implementation time upto 20 30% compared to
brown field projects.
You can phase your implementations according to your project commencement timelines. This
phase out the effort, complexity as well as the cost.
There is no disruption in business during cut-over.
You can manage your project phase through SAP.
Examples of some companies who have reaped the benefit of a green field SAP implementation
Haldia Petrochemicals
Arvind Mills
SteelCo CRM plant
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SAP fits your requirements to manage supply chain, back office, and customer
relationships at macro assessment level, resulting in multiplicity of business benefits.
This phase wise approach gives you enterprise-wide integrated process, from project
execution, production to sales & distribution.
This unique characteristic of SAP enables your ERP to scale-up with time and growing
volume & size of your business.
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Based on the above business scope, we propose to implement the following SAP modules
and sub-modules in first phase
Project Management including Project Costing
Financial Accounting
General Ledger
Accounts Payables
Accounts Receivables
Cash Management
Asset Accounting
Period end reporting
Controlling
Cost center accounting
Internal Orders
Procurement and Inventory Management
Capital goods procurement
Sundry purchases
Management Reporting
Human Recourse Management Payroll and Timekeeping
Logistics Execution-Transportation Management
We propose to implement the following geographical scope
Head Office of CementCo at
Project site at
SD
Sales &
Distribution
MM
PP
R/3
R/3
Materials
Mgmt.
Product
Planning
QM
Quality
Mgmt.
FI
Financial
Accounting
CO
Controlling
TR
Treasury
Client/Server
Client/Server PS
PM ABAP/4
ABAP/4 WF
Project
System
Plant MainteMaintenance
HR
Human
Resources
Workflow
IS
Industry
Solutions
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Traditional Deployment
Customerspecific
requirements
+ SAP
Best Practices
+ SAP Consulting
Packaged Solution
Roadmap
& Accelerators
Rapid installation
Fixed scope,
Defined price,
implementation
Business expertise
Specific
In some countries the micro-verticals are standardised e.g. US has around 1350 micro-verticals.
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SAP standard
Configured/
customised by
implementation
partners on project
to project basis
SAP standard
Configured/
customised by
implementation
partners on project
to project basis
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ASAP Focus method and pre-configured industry subverticals has reduced on-site configuration tremendously
tremendously
SAP standard
SAP pre-configured
sub-verticals
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Implementation Roadmap
Delta
Requirements
Pre-Project
Activities
Present
prototype system
Review data
requirements and
data cleansing
plan
Assess data
complexity
Identify Delta
requirements
Design Delta
solution
Get customer to
sign off blueprint
with Delta
Finalize
Statement of
work
Train project
team
Prepare
Organizational
Change
management
Plan project
Build project
charter
Decide system
landscape and
Install hardware
Realization
Validate
organizational
configuration
Final
Preparation
Go Live &
Support
Refine cutover
plans
Monitor live
environment
Establish long
term support plan
Close open
issues
Set up
Implementation
standards and
procedures
Validate business
processes
Realize delta
requirements
Execute kick-off
Conduct
organizational
change
management
System
management
Planning for
production
support and
cutover
Quality check:
Final preparation
System setup
(DEV&QA)
Set up project
team
environment
Order SAP BP
Project
Preparation
Production
hardware
installation
Quality check:
Project
preparation
Quality check: Go
Live
Project closing
Execute cutover
Start of
production
Start
Customer
qualified
Contract
signature
Project
kick-off
GoLive
time
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How Innovative Consultants plan to adapt ASAP Focus method for CementCo
implementation
1. Innovative consultants will import pre-configured system for cement industry provided by
SAP best practices in SAP system installed at Innovative Consultants premises.
2. Innovative consultants will engage CementCos key users (core team members) in
workshops and demonstrate the pre-configured processes and identify gaps.
3. Experienced consultants of Innovative Consultants will resolve the gaps through
additional configuration and customization.
4. Innovative Consultants will engage CementCos key users for second workshop to
validate and sign-off the prototyped processes.
5. Upon sign-off of the business blueprint, Innovative Consultants will request CementCo to
award the contract and make the first payment.
6. The whole process is expected to take one elapsed month and is expected to engage 10
to 12 core users of CementCo. The expected time involvement of each core user is
expected to be 4 to 5 working days.
o
o
Extensive use of pre-configured client from SAP tested thoroughly at SAP Labs
reduces the surprise elements significantly.
Demonstration of the prototype before the contract sign-off ensures acceptance
of the configured processes by the users before embarking on the SAP project.
This makes the project timeline predictable and go live issues minimal.
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Project Sponsor
Director or equivalent
from Innovative
Consultants
Project Lead
Project Lead
Business Process
Owners
Normal
Communication
Channels
Escalation Route
Team
Members
CementCo SAP
Project Team
Innovative
Consultants
SAP Project
Team
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Project Leader (CementCo and Innovative Consultants): Project Leaders from CementCo
and Innovative Consultants have the overall responsibility of delivering the project end-to-end.
Hence they should be persons with adequate seniority and having relevant knowledge and
experience. The Project Lead from CementCo should also be a person with adequate influence
within the organization to drive this massive organizational transformation exercise.
From Innovative Consultants, the Project Leader would normally be a Principal Consultant or
equivalent. Innovative Consultants always attempts to assign a Project Leader who has deep
experience in SAP as well as in the industry relevant for the client. For CementCo, Project
Leader will be assigned from one of the members whose pen profiles have been shared earlier.
Business Process Owners (CementCo): Business Process Owners are recommended to be
managers/ senior managers from various departments (sales, production, purchasing, materials,
etc) from CementCo. The business process owners are responsible for communicating the
business requirements, validating the to-be processes and owning and communicating the
changed processes for CementCo. Knowing that the time of these senior managers is scarce;
our workshop model ensures that their time is effectively used. Hence they will be required to
participate in the targeted workshops during business blueprinting and they will need to provide
overall guidance to the team members, but their full-time involvement during the full length of the
project will not be required. They would, however, be responsible for the deliverables in their
respective areas.
Team Leaders (Innovative Consultants): Team Leaders from Innovative Consultants will have
responsibility for designing and delivering SAP system one business area (sales, purchasing,
production, etc) jointly with the corresponding business process owners of CementCo. Team
leaders deployed by Innovative Consultants will have deep understanding of business process in
their respective area, will be of relevant industry background and will have relevant SAP
knowledge in the respective areas. Team leaders will work closely with the business process
owners from CementCo. Some of the key members whose profiles have been shared and/or
similar members will be assigned the Team Leader roles.
Team Members (CementCo and Innovative Consultants): Team members of Innovative
Consultants will be SAP consultants with adequate business process and industry knowledge.
The ABAP and BASIS members of the team will have relevant IT experience in programming
and system administration. They will be working under the guidance of their respective team
leads. They will be responsible for assisting the team leads in business blueprinting,
configuration and customization of system as per the blueprint, unit testing and integration
testing, assisting CementCos team members in data migration and training; etc.
The team members from CementCo are recommended to be junior executives/ engineers/
supervisors. They need to be full-time dedicated for the project duration. They will work under
the guidance of their respective business process owners assisting them in providing inputs on
business requirements, documenting the to-be process design, end user acceptance testing,
end user training through train-the-trainer programs, assisting in post implementation hyper-care
support.
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VPN
Users
Server
Room
Users
Head Office
Site Office
For the proposed SAP implementation at CementCo, you will require three servers
for development, quality/testing and production.
Based on the number of user licenses, the servers would be connected with the PCs
through routers.
This LAN connection helps you in sharing the data and information within your
office.
The servers at your site office at Site Office and corporate office at ABC will be
connected through VPN.
A virtual private network (VPN) is a network to provide remote offices with secure
access to their organizations network.
For the smooth running of your day to day activity and security of data, we propose
you to create a datacenter.
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Our deployment methodology enables our customers to get the benefit through less disruption in
their day to day work and timely delivery.
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L3 Support
Fixing
Config
Issues
Fixing
Customi
sation
Issues
Minor
Enhance
ments
(source code
corrections, identification of patches)
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Our maintenance services will include 1 month of hyper-care support at project site and user
locations immediately after go-live.
After 1 month of hyper-care support, we will continue to support the users of CementCo
through an on-site/ off-site model.
We will have one or two support personnel on-site to cater to the Level 1 support
requirements of the users. This will be clubbed with the on-site support for infrastructure.
The Level 2 and 3 support services will be provided from our offshore delivery center
situated at
The Level 2 and 3 support services will be provided by a team of SAP consultants located at
our XYZ office.
The services of the team of consultants are likely to be shared with other companies.
We have the provision of having our consultants sign appropriate non disclosure agreement
to ensure that your confidential data is protected.
In case of Severity 1 and 2 calls, one team will be available in your location based on
requirement.
We propose to provide the SAP maintenance services on the basis of the following service
level objectives.
Severity Level
1
2
3
4
Response Time
30 mins
4 hrs
1 working day
3 working days
8 hrs
1 working day
2 working day
None
Resolution Time
48 hrs
3 working days
10 working days
As per estimate and
mutually agreed schedule
We propose to follow the following definition for the severity levels of the issues
Severity Level Definition
1 Disruption of entire business resulting from a total outage of the SAP system.
Examples - Total outage of SAP production system
2 Disruption of key business functions which might have significant financial impact.
Examples - despatch of goods has stopped, payroll processing at month-end has
stopped, etc
3 Disruption of processes leading to minor inconvenience but business can be managed
through workarounds or manual processes temporarily.
Examples - (a) goods receipt in stores have stopped (2) invoice cannot be printed (3)
purchase documents cannot be printed (4) production orders not getting recorded
4 No disruption in business but the fix is essential for improvement in business process.
This will also include minor enhancements.
Examples - (a) a new customised report (b) adding or modifying a G/L account
changing the layout of purchase order
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Any change of system configuration due to any change of business rules of CementCo
subsequent to business blueprint sign-off.
Additional reports subsequent to those identified during the project implementation.
Implementation of additional modules/ sub-modules apart from those enumerated in the
current scope of work.
Roll-out of SAP in additional plants, warehouses and sales offices apart from those identified
in the current scope of work.
Services related to upgrade of SAP from the current version which is mySAP ERP 2005 on
ECC 6.0
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Payment terms
We propose the following payment terms for the various categories products and services.
We will raise the relevant invoices within 15 days of the completion of the concerned
milestone.
We would request a payment against the invoice not later than 30 days from the raising
of the invoice.
SAP licenses
1. 20% of the license sale value on order booking
2. 80% of the license sale price on delivery of software
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Cost Heads
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