United under SAP

Table of content

Table of figures

Table index

Table of abbreviations

1 Introduction
1.1 Motivation
1.2 Objective
1.3 Thesis structure

2 Disambiguation
2.1 SAP System
2.1.1 SAP ERP w/ ECC 6.0
2.1.2 Accelerated SAP (ASAP)
2.2 Information
2.2.1 Information flow
2.2.2 Information island

3 Company introduction
3.1 ThyssenKrupp Group
3.2 ThyssenKrupp Elevator
3.2.1 Business Unit Structure
3.2.2 ThyssenKrupp in Zhongshan

4 Influence of Chinese Culture on the business company
4.1 Language and mindset
4.2 Corporate culture and Chinese work attitude
4.2.1 Systematic approach
4.2.2 Interpersonal relationships (Guanxi)

5 The process of implementation
5.1 Prearrangement
5.1.1 System Requirements
5.1.2 (Project) Management organization and requirements
5.2 Actual analysis (as is)
5.2.1 Business processes at present
5.2.2 Currently used applications and procedures
5.2.3 Current problems
5.3 Target / Analysis (to be)
5.3.1 Project plan
5.3.2 Scheme of improvement
5.4 Realization of the project
5.4.1 Project Preparation
5.4.2 Blueprinting
5.4.3 Realization
5.4.4 Final Preparation
5.4.5 Go Live and Support

6 Reaches & Results
6.1 Project appraisal
6.1 Reaches in relation to the process of eliminating information islands
6.1.1 Disclosing information islands
6.1.2 Discovered existing information islands
6.1.3 Method of treatment
6.2 Comparison: “as is” – “to be”
6.3 Assets & Drawbacks

7 Conclusion

Reference list

Appendix

Table of figures

Figure 2.1-1: SAP ECC Modular System

Figure 2.1-2: Example Sub-System PP

Figure 2.1-3: ASAP Roadmap

Figure 2.2-1: Information filter

Figure 3.1-1: Graphic representation of the group structure

Figure 3.1-2: Plants worldwide (including Corporate)

Figure 3.2-1: Business Unit Structure (Segment Elevator)

Figure 3.2-2: TKE ESC Production Growth

Figure 3.2-3: Zhongshan Company structure

Figure 3.2-4: TKE ES/PBB plant Zhongshan

Figure 5.1-1: Network configuration

Figure 5.1-2: SAP project organization chart

Figure 5.2-1: High level “as is” process

Figure 5.2-2: Simplified process for IQC

Figure 5.3-1: Strategy and targets

Figure 5.3-2: Project time schedule

Figure 5.3-3: TKE Business Process – SAP Module Mapping

Figure 5.4-1: Stages as CPA (Critical Path Analysis) with resource planning

Table index

Table 2.2-1: Overview of potential motives

Table 4.2-1: Differences between Chinese and German

Table 5.4-1: BPR: Key activities and planned results

Table 5.4-2: RLZ: Key activities and planned results

Table 5.4-3: FLP: Key activities and planned results

Table 5.4-4: GLS: Key activities and planned results

Table 6.2-1: Comparison: “as is” – “to be” 1/3

Table 6.2-2: Comparison: “as is” – “to be” 2/3

Table 6.2-3: Comparison: “as is” – “to be” 3/3

Table of abbreviations

illustration not visible in this excerpt

1 Introduction

Nowadays, companies all over the world face incredible pressure in global markets. To survive and to stay competitive, procurement of every description needs to be developed as a major leverage to save cost in the recent years. To achieve competitive differentiation with advantage, companies have to empower information workers. Business processes are the key to unlock the potential of these strategies.

1.1 Motivation

A supportive IT structure may play a decisive role for business processes and can make a great deal of difference. The implementation of an ERP system provides an opportunity of a ‘‘configurable information system (IS) package that integrates information and information-based processes within and across-functional areas in an organization’’¹. In information system areas, implementation is defined as ‘‘the process that begins with the managerial decision to install a computer-based organizational information system and is complete when the system is operating as an integral part of the organization’s information system’’ ² . After implementation, significant benefits such as improved customer service, better production scheduling, and reduced manufacturing costs can accrue from successful implementation of ERP systems as well as staying competitive against competitors in matters of flexibility and adaptively. But especially, more transparence through a common used system enables the opportunity of increasing inner-company’s processing and working flows with fast and convincing criteria of decisions.

1.2 Objective

In the scope of this thesis the methods and concepts of SAP implementation for ThyssenKrupp Escalator in Zhongshan (in the South of China) have to be investigated and presented. This investigation has to include both the project approach and before-after situation in order to increase the practical relevancy.

However, ERP systems are expensive and time-consuming, and once ERP systems are implemented, management should evaluate whether it is successful and delivers promised benefit. The successful implementation is extremely coupled on the predetermined goal(s). Furthermore, Chinese culture is quite different from Western countries; so is organizational culture imbedded within national culture and it is a core attribute to discern between the Chinese view of satisfaction and the Western view.

The SAP implementation project in Zhongshan cut both ways: for ThyssenKrupp Co. (China) Ltd. and ThyssenKrupp Airport Systems Co. (Zhongshan) Ltd., which means both companies – N.B. based in the same location – will be united from the IT point of view. Finding existing information islands and to see the effect of improvement by implementing SAP needs a research of the whole project’s analysis. Target is to find out potential of improvement of the company’s business processes according to eliminate existing information islands. The specific aspects of business in China have to be shown and the main barriers pointed out, as well as possibilities emerging. With these facts as basis, a result of implementation success has to be worked out, which provides enhancement to the existing methods of capability improvement by considering the local requirements.

1.3 Thesis structure

In order to attain meaningful results, this thesis’ approach is primary based on an attending survey on issues of the implementation project of SAP directly in situ at ThyssenKrupp Escalator in Zhongshan, in respect of practices in China.

In the beginning of this work, definitions are given on the main terms required, so e.g. “SAP system” and “Information island”. “Information island” may be confused, since that term may not be defined in other works. Further, explanations are given to show the considered aspects.

After that, from ThyssenKrupp Group down to the company’s plant ThyssenKrupp Escalator in China (Zhongshan) is introduced with thoughtful details such as the organizational structure and facts and figures.

In the following, Chinese culture on the business company is focused. The fundamental circumstances to consider are explained. This chapter has been involved due to the site survey according to the matter of relative importance about information treatment. The Chinese culture aspect contains special characteristics and can be of strategic and operative influence. The basic indicators are introduced and illustrated.

As next, the main activities are focused: the process of implementation with its goals, including actions and responsibilities. This is concluded by the requirements in aims, a strong focus on the actual analysis with current used processes and software as well as the scheme of improvement. The differences between the “as is” and “to be” are shown by that and the specific approach analyzed, in order to understand the importance for a structured approach like the relevant one for this thesis: ASAP. The actual analysis based primarily on a representatively chosen core process. The accelerated SAP roadmap during the realization phase is presented with its key activities and deliverables as it is the method of choice for the project approach.

In chapter 6 the survey results are presented, reaches are described. Researches of internal information islands are discussed, the general issues presented and evaluated upon applicability in China. The SAP implementation plays the essential role, so its utility is emphasized as well. Reaches and results in form of a once more comparison between the “as is” and “to be” is a useful extension and derivation to show the major drivers for success. Assets and drawbacks is the discussion for possible improvements but also for barriers after going live. After the description of results, a summary and an outlook for the future conclude this work.

2 Disambiguation

Before dipping into the matter, a description of the thesis’ two main topics will be now examined in this chapter. One core point is the implementation of the Enterprise Resource Planning (ERP) software from SAP. The second is the field about information (rather information islands). The thesis deals with these terms and therefore a brief introduction about “SAP System” as well as an explanation of the term “information” is given.

2.1 SAP System

SAP AG is an international enterprise founded in Germany in the year 1972. The developer of proprietary software for business solutions used to focus chiefly on middle and large sized enterprises but now starts to actively target small sized enterprises. It aims to support and improve everyday business processes in different industry sectors. Amongst others, SAP ERP is one of the main products and for this thesis the one of importance.

SAP stands for “Systems, Applications and Products in data processing”³. SAP R/3 was first released in 1992 and is still core of SAP products. The “SAP R/3” version gives references about its system structure. This means that “R” stands for “Real-time” and “3” is related to the 3-tier (Client- Server) architecture: database, application server and client.⁴ A great leap forward was made by upgrading the product using SOA technology (Service-Oriented Architecture) which offers a more and quicker flexibility.⁵

Enterprise Service-Oriented Architecture

Independent of the operating system, enterprise SOA provides a reusable runtime environment and enables to link stand-alone processes to quickly compose new end-to-end processes and selectively combine and/or redesign existing processes. Beside the advantages of adaptability and flexibility, the possibility to automate many process steps that used to require human intervention. It also empowers information workers to gain a plus in cost efficiency.⁶ In this context, the application server provides the technical basis between enterprise SOA and the business process platform, on which it is built on.⁷

2.1.1 SAP ERP w/ ECC 6.0

ECC 6.0 is the latest up-to date version and the successor of SAP R/3 Enterprise. The token “ECC” stands for ERP Central Components, hence, in SAP ERP ECC are the central ERP functions included.

Software library

SAP’s successful concept is running in a modular system. SAP offers all financial, logistic, supply chain and human resource modules which are very tightly intertwined and integrated:

illustration not visible in this excerpt

Figure 2.1-1: SAP ECC Modular System

Source: ThyssenKrupp ES/PBB, PowerPoint presentation SAP_Kick-Off.ptt, 2008

Each of these modules is so complex and deep, they are further divided to sub modules⁸ shown in the example of a PP module:

Figure 2.1-2: Example Sub-System PP

illustration not visible in this excerpt

Source: ThyssenKrupp ES/PBB, PowerPoint presentation SAP_Kick-Off.ptt, 2008

It shows that such modular system provides a high degree of cross-functional integration (amongst: operations, manufacturing, marketing, sales, logistics, purchasing, finance, human resources, etc).⁹

2.1.2 Accelerated SAP (ASAP)

Purpose of Accelerated SAP (ASAP) is a comprehensive solution for implementing SAP ERP Software quickly and efficiently. A large drawback of SAP is that it takes too long to implement. Long-term implementation means higher costs. SAP developed ASAP methodology and shall cut the implementation time and reduce costs.¹⁰

ASAP includes and combines several accelerators and tools, such as templates, forms, check lists, “Q&A” and examples¹¹. The ASAP Roadmap constitutes a key part of the implementation assistant. Each level of the Roadmap structure stores documents. These contain recommendations for implementing SAP software as well as links to helpful accelerators (tools).¹²

The roadmap below visualizes the ASAP methodology:

illustration not visible in this excerpt

Figure 2.1-3: ASAP Roadmap

Source:http://www.uky.edu/IT/AdminApps/IRISTechPortal/asap/roadmap-horizontal.gif,20.08.08

It divides the implementation process into the five phases: (1) Project Preparation, (2) Business Blueprint, (3) Realization, (4) Final Preparation and (5) Go Live & Support. This will be further explained in chapter 5 “The process of implementation”.

2.2 Information

It is important to clarify the term information. According to the Duden and encyclopedias, the term “information” has its origin from the Latin word: “informatio”, “in” and “forma” respectively meaning “to give something shape”, “to deal”, “to outline”.¹³ The definition further outline the term and fits even better:

“By information we mean data that have been shaped into a form that is meaningful and useful to human beings. Data, in contrast, are streams of raw facts representing events occurring in organizations or the physical environment before they have been organized and arranged into a form that people can understand and use.”¹⁴

[...]

---

¹ Kumar, K., Hillegersberg, J.V.: “ERP experiences and Evolution”, pp. 23–26, 2000

² Burns, O.M., Turnipseed, D.: “Critical success factors in manufacturing resource planning implementation.”, pp. 5-19, 1991

³ Muir, N., Kimbell, I.: “Discover SAP”, pp. 31-43, 2008

⁴ Hansen / Neumann: “Wirtschaftsinformatik l“, Stuttgart, pp. 544, 2005

⁵ SAP R3 Architecture: “interview questions and answers”, 2008

⁶ SAP Enterprise Serviceoriented Architecture from a Business Perspective: “Differentiate, Accelerate, and Simplify Your Business”, pp. 9-13, 2008

⁷ SAP Deutschland AG & Co. K: “IT-PRACTICES UND IT-SCENARIOS MIT SAP NetWeaver®“, 2008 6 SAP Enterprise Serviceoriented Architecture from a Business Perspective: “Differentiate, Accelerate, and Simplify Your Business”, pp. 9-13, 2008

⁸ SAP R/3 and Enterprise, http://www.sapmmexpert.com/sap_r3.htm, 11.08.2008

⁹ Ghosh, A., asp alliance, 2008

¹⁰ Dr. Andijani: “Industrial Information Systems (061)”, 2008

¹¹ SAP AG: “AcceleratedSAP”, p. 5, 2008

¹² SAP AG: “AcceleratedSAP”, p. 5, 2008

¹³ Duden: “Information“, http://www.duden.de, 28.07.2008

¹⁴ According to Laudon (l997) as cited in Rolf Alexander Teubner (2008): “Grundbegriffe der Wirtschaftsinformatik”, p. 5, 2008