Hosted by Case Study Philips Medical Systems SAP

Hosted by Case Study: Philips Medical Systems’ SAP Global Implementation Larry Simanak Director of Customer Service Philips Medical Systems

Hosted by The Scope

Hosted by Solution architecture for PMS HSG SSD Field Operations Integrated Client SAP 4. 6 c Ro. W Japan ALE PMG Factory Andover SAP 4. 6 c Factory Heart. Stream Factory Zymed Factory Böblingen SAP 4. 6 c

Hosted by Americas Argentina Brazil Canada Mexico Puerto Rico US Factory US Field US Miami Venezuela EMEA ASPAC Austria Belgium Finland France Germany Italy Netherlands Poland Portugal Russia Spain Sweden Switzerland Geneva UK Australia China Hong Kong India Japan Korea Malaysia Singapore Taiwan Thailand United States: Europe: Asia/Pacific: Latin America: Canada: 95 sites, 3000 users 55 sites, 1400 users 40 sites, 540 users 12 sites, 120 users 10 sites, 90 users Complicated Program • Many Users & • Many Countries & • Many Languages & • High Deadline Pressure

Hosted by 2001 Dec Jan Feb 2002 Apr May Mar Freeze IC – Jun July Bus France Gap Master Inegral Res Data Sign Live Testing -off ~20/3 ~29/3 1/6 22/4 22/5 Fixes Yes / New functionality No Aug Tier 2+3 Live Sep Oct Nov Tier 1+4 Live HSG/CMS Rollout Planning - Final CMS Pilot France Live Test Bus W/house USA Tier 1 Canada, Mex 64. 5% Japan Tier 2 UK / HK-Ch Italy 18. 7% Germany Tier 3 Agilent will extract data for all current legal entities. This will cover both current & Day 2 Direct Export countries. Benelux/India Iberia (Sp/Po) / Australia/NZ Tier 4 Direct Export Countries Direct Export Hubs: Merge Centres: SLI: Factory Live Austria-Switz/Swe/Fin/ Tai/Kor/Thai/Mal/Sing Geneva (1/9) : Andover (1/9) Boeb 1/9 : And 1/9 Boeb 1/7 : Memphis 1/9 Poland: Nov or Dec

Hosted by The Restraints

Hosted by HSG IT Separation replaces the IT Business systems under agreement with Agilent. Key Business Driver: Get Off SLAs by September 1, 2002 Situation: CMS/ISY has one year from Day 1 to replace all information technology systems that are maintained by Service Level Agreements with Agilent or HP. Over the same period, CMS/ISY must integrate into the Philips system architecture. This presents an enormous challenge and opportunity to standardize our processes and systems, and improve both customer satisfaction and organization efficiency.

Hosted by We are paying 10 M$ per month to Agilent for SLAs ! 18, 000 Millions $ / Month 16, 000 14, 000 12, 000 10, 000 8, 000 6, 000 4, 000 Total: $154 million 2, 000 0 Aug-01 Sep-01 Oct-01 Nov-01 Dec-01 Jan-02 Feb-02 Mar-02 Apr-02 May-02 Jun-02 Jul-02 Aug-02 Sep-02 Oct-02 If we extend the SLAs beyond September 1 st, we pay substantial penalties

Hosted by Complexity

Rollout Project Plans USA/CA JP Ger IT HK / CH UK FR Note: 0 nly Tier 1 & 2 countries being tracked Global Overview Plan Hosted by Inverse information flow for drill on status exceptions Workstream Project Plans Factory SAP IC Gap Office Moves Infrastructure Comp. Sol. Interfaces Data Extraction SAP IC Rollout Document Index (1/plan): Supports & Explains Statuses for Drill Down Other Emails MS Project Plan Scoping Direct Export BW SLI Rollout Country 1. . 7 Stream 1. . 8 Detailed Cutover Plan Country 1. . 7 Stream 1. . 8 Cutover Tracking Plans Cutover Plan Summary Overview

Hosted by Integrated Client l The SAP Integrated Client is the single SAP standard for PMS • OAP/ORP • Finance • Service Management • Service Logistics International • Direct Export

Hosted by Integrated Client l PMS has decided to develop and implement Integrated Client • To reduce management and maintenance costs • To improve reporting capabilities (speed) • To standardize business processes worldwide while keeping regional flexibility • • To reduce interfacing problems To facilitate connection to worldwide PMS data l Integrated Client v 3. 0 is rolled out to the SSDs.

Hosted by

Hosted by Build Heartstream, Zymed Product Generation Deliver • SSUI • Target Marketing Finance • Fourth Shift • NAP • Epicor • CVR TER/EER HPDL (2) PERSEU S Supply Planning mp • Ne Hermes XMS Performance Mgmt • ER Kronos Web Req Get Smart (EOQ/ SS) HPDL-MT MSM Dly. ED • Upds S MSM-GEM Master Supplier Mgmt = Modify = Interface Other/HR EDI Gateway ssie NOVA MSM Suite (5) DAWG • Va Design Gateway e. DMR NERD D e. DHR /e. DH T TV Freq. Mgmt SAP R/3 4. 6 c Product Data Management KEY: Data Warehouse KEY: = Clone • Bulleted text = Status Quo = New * Waiting on replacement decision • • CDM/CDQS • • TRECS • Defoa • DOA • Laser Labeling • PTM • Jet. Forms Demand Planning Q&R Gecko* Replacemn t Insight Complaint Handling SFC Workplace Services CRS 2000 Replacemen t* Odessa EDM Soli • CAPA Employee Survey • QSMT • CDA Tracking Lotus Notes Various • TEDS Totals Clone = 11 Interface = 6 As of 04/02/02 Modify = 14 New = 1 (excludes 2 D 2+) Status Quo = 25 IPP

Hosted by SAP Factory and SAP IC are closely linked PMG prices basic product info configurable product info PMG product repr. manufacturing product SAP PMG CMS/ISY invoice • • SSD catalogue local/ regional stock SAP SSD IC Ultrasound 4500/5500 CMS Telemetry Codemaster defibs Build to Stock (1 -5 d) Var. Conf. installed base configuration Enconcert Agilent Info Center Care. Vue OBTrace. View Build to Order (2 -6 w) quote management sales order management purch. order Solutions (>6 w) • • sales orders (SD) sales order Sales Order SSD local currency list price calc. Material Master data purchasing orders (MM) Variant Configurator Material Master data • • • Cardiographs AEDs Opti. Go A 1, A 3 monitors Holter Off the shelf (same day) • paper • electrodes • Point-of-Care supplies • defib pads • stethods • AEDs

Hosted by Ying & Yang l What went right l Improvements l Take away’s

Hosted by What went right? l Project Structure • Project team was formed early • • • and experienced as part of previous initiative towards ERP Full-time Project Manager assigned with Key subproject leads assigned full-time at critical point in project Business team and Consultants located together with Project Mgr. Cross-functional team formed at project level with weekly review meetings (Sales, Logistics, Service and Finance) Consistent project review meetings-weekly conference calls with CS project team. Face to face approx. once/mth. Clear ownership for project team-MRC, Field Delivery, Data Migration, etc. l Business • Steering Committee in place made up of Senior Support Management team to provide quick policy decisions and provide direction when needed. • Prototyping allowed testing of processes, although this was done on legacy tools. • Committed team members, willing to work very extended hours based on compressed nature of the project • Commitment to attending training courses • CLIC newsletter developed for Field communications

Hosted by Challenges/areas for Improvement? l Complexity of the project l Project design phase continued well into implementation phase. • Made knowledge transfer difficult • Affected ability to prototype and test • Affected documentation-many work instruction incomplete late into the project, which impacted training. l A large discrepancy in the accuracy of the installed base (clean-up early) l Design flaws in the logistic (SLI/SSD processes) • Logistics process (being redesigned) l Not using SAP l Not enough emphasis on change management as necessary early in the project • Senior Management communication • Focused owner for communication • Early development of most effective tool (CLIC l Design isolated from roll-out teams l Very time constrained project limited time in all phases do to SLA’s l Lack of local control over data cleanup efforts made it difficult to monitor and control status l Competing field activities prevented fully focused field data cleanup efforts Numerous fixes created (issues being resolved by issue management) l Ability of roll-out teams to create effective design changes based on clear SAP practices l l Data migration was not tied to business (migration team being formed for next project phase) Newsletter)

Hosted by Take a ways l Project • Close connection between design and roll-out • Forced completion of issue management within the team l Business • • • Change management Communication Data migration Clean up the installed base Keep consultants and business § Close all transactional data early organized together (centralized) • § § Reduce unnecessary inventory § Clear up Financial transactions • Control of critical path issues within the roll-out teams • • Settle data migration issues early Training § Learn the process § Understand the tools • Committed staff • Training § Learn the process § Understand the tools • Management commitment to the principles and processes

Hosted by “Integrated Client” for Customer Services R