Our techno-commercial proposal to CementCo

for providing end to end services on

(a) SAP consulting

(b) IT infrastructure and facilities planning and
deployment
(c) Maintenance services for SAP and IT
infrastructure

Page No. 1 of 62
 Table of Contents

EXECUTIVE SUMMARY ....................................................................................................................................... 4

OUR UNDERSTANDING OF CEMENTCO’S 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

Page No. 2 of 62
OUR DEPLOYMENT METHODOLOGY........................................................................................................... 53

OUR PROPOSED SCOPE FOR SAP MAINTENANCE SERVICES ............................................................... 55

OUR SAP MAINTENANCE SERVICES DELIVERY METHOD .................................................................... 56

EXCLUSIONS FROM MAINTENANCE SCOPE .............................................................................................. 57

COMMERCIAL PROPOSAL FOR SAP PROJECT (PHASE I)....................................................................... 59

COMMERCIAL PROPOSAL FOR ANNUAL MAINTENANCE SERVICES FOR SAP.............................. 60

PAYMENT TERMS................................................................................................................................................ 61
SAP LICENSES ....................................................................................................................................................... 61
SAP CONSULTING SERVICES .................................................................................................................................. 61
ANNUAL MAINTENANCE CONTRACT ..................................................................................................................... 61
BUDGETARY PROVISION FOR OTHER EXPENSES.................................................................................... 62

Page No. 3 of 62
Executive Summary

• We understand that CementCo, a fast growing organization in the business of

trading, cement manufacturing and captive power generation considering
implementing SAP.
• We believe that, with our partnership with SAP for enterprise solutions and a
strong SAP team having 15 to 30 years experience in SAP, we can add value to
your strategic initiative of implementing SAP.
• Based on our overall assessment of ERPs on different parameters like ability to
address key business drivers, industry vertical specialization, Indian statutory
requirement, scalability, market position, add-on products, cost and user
friendliness, we recommend SAP All-in-One Enterprise Solution for CementCo.
• SAP has an impressive credential in Indian and global cement industry for both
large and SMB segments.
• Since this is a proposed green field implementation, CementCo has an additional
advantage of standardizing their business processes and leveraging best
business practices of SAP from day one. SAP’s freely available business process
mapping tool Solution Composer will be of great use in this process.
• This also makes the data migration process substantially less complex resulting
in less business disruption during cut-over. We recommend a phase wise
implementation of SAP enables your ERP to scale-up with time & growth of your
business.
• The scope of the proposed first phase of implementation at CementCo includes
project management including costing, financial accounting (general ledger,
accounts receivables & payables, cash management, asset accounting and period
end reporting), controlling (cost centre accounting, internal orders), management
reporting, human recourse (payroll & timekeeping) and transportation
management.
• Our SAP implementation method is built on ASAP Focus method using pre-
configured SAP system for cement industry. The business blueprint is signed off
before contract signing and project kick-off making the implementation safe,
predictable and affordable for the client.
• CementCo will be buying xx user licenses of SAP All-in-One and additional license
for payroll for a block of 500 employees.
• We estimate an implementation time frame of 12 elapsed weeks for the above
scope.
• Our commercial quotation for SAP product license and consulting services for
implementing the scope of work defined in first phase is Rs. xx lakhs.
• We are also happy to provide annual maintenance services for 3 years for the SAP
system for the scope as defined in first phase at an annual price of Rs xx lakhs for
first year, Rs. yy lakhs for second year and Rs. zz lakhs for third year.
• Apart from SAP implementation and maintenance services, we have capability and
credential to design, deploy and maintain IT infrastructure for CementCo.
• We would be happy to submit a separate proposal on IT infrastructure design,
deployment and maintenance after a detailed site study.

Page No. 4 of 62
Our understanding of CementCo’s requirements
We understand that CementCo is a fast growing organization in the business of trading, cement
manufacturing and captive power generation. The trading business has a turn over of approx.
Rs. xx crore per annum.

CementCo, one of the most successful trading business houses in India, is setting up a xx MTPA
cement plant in Meghalaya with a captive power generation plant. The investment for the cement
plant is approx. Rs xx crore and that for power generation is approx. Rs. xx crore.

With the above business drivers of rapid expansion through setting up of new plants, customer
focus and profitability of the organization, CementCo is considering a world-class integrated ERP
like SAP which will help them to achieve significant business benefits.

We are happy to place our techno-commercial proposal for the SAP ERP implementation and
annual maintenance services for the same. It also includes our capabilities in facilities
management services and IT infrastructure.

We will be happy to place our techno- commercial proposal for IT infrastructure and facilities
management after we do a survey of your site.

Page No. 5 of 62
Our understanding of cement industry scenario and
challenges

1. Indian cement industry is poised for an unprecedented steady growth of 10% YOY

2. Cement exports is poised for a steady 3.5% YOY growth

Page No. 6 of 62
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

Page No. 7 of 62
5. While West Bengal is the 8th largest cement consuming state, it is not one of the highest
cement producing states.

Page No. 8 of 62
6. The Eastern region has the biggest deficit of cement (between production and domestic
consumption)

7. Price of cement is highest in Eastern India

Page No. 9 of 62
 8. The capacity utilization in Eastern India is the lowest

9. Though the net margin has increased, the operating margins have remained same

Page No. 10 of 62
 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

Page No. 11 of 62
• Cement requires around 80 separate and continuous operations.
• Cement prices in India are market driven and volatile. Retrospective changes are routine.
• Prices vary from district to district and customers are invoiced at the specified rate for
consignee’s location.
• Even though cement companies try to create product differentiation, market share is highly
dependent on price and hence cost control in production as well as logistics is very important.
• Prices include taxes and freight and hence realisation calculation is complex.
• Most payments are on-account types and not linked to invoices.
• Complex system of discount and incentives.
• Consignments of both road and rail sometimes need to be reallocated.
• Incentives and associated debit/credit generation is complex.
• Delivery tracking is critical.
• Accounting for damaged cement (bags) is necessary.
• Transporter billing on retrospective basis is necessary.
• Environment, health and safety is increasingly playing a key role in cement industry.

Page No. 12 of 62
The selection of right ERP for a cement plant is based on how the KPIs are getting addressed
through the ERP solution.

Page No. 13 of 62
Our understanding of key business drivers and IT levers
The IT levers of a cement industry need to align to strategic imperatives and ERP
implementation priorities.

Page No. 14 of 62
- 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.

Page No. 15 of 62
Our proposed team for CementCo
One of our strongest value propositions is the credential of our leadership team in SAP
consulting business who have extensive and proven track record in large and complex SAP
implementation specifically in Mill products industry sector.

Besides, they have also strong credentials in global SAP projects having managed various SAP
assignments in India and abroad. We have a strong team of consultants with deep SAP, industry
and business process knowledge supporting our SAP leadership team. Our team comes with
deep industry and consulting background having served global consulting, IT and manufacturing
companies in senior positions in the past.

Most importantly, our leadership team not only provides overall direction to our growing SAP
Practice but also is a team of hands-on SAP professionals who are actively involved in
managing assignments for clients.

In case you choose us for delivering SAP services, this team will be directly engaged in
delivery of your very critical SAP initiative. This is to ensure that we can deliver highest
quality of SAP services to you through this highly experienced team.

Along with this senior leadership team, we have a strong team of consultants with deep SAP,
industry and business process knowledge supporting our SAP leadership team.

Page No. 16 of 62
Summary of relevant projects delivered by our team
members
Projects from mill products industry segment

SAP Implementation at SteelCo

Brief on the Project: SteelCo SAP implementation was one of the largest and most complex
SAP implementations in steel industry in India. The scope of the project involved the following
business functions for SteelCo

• Order generation and fulfillment

• Financial Accounting
• Purchasing and Materials Management
• Production Planning
• Advanced Planning and Optimization for Long Products
• Product Costing at Product-Quality-Section Level
• Profitability Analysis
• Plant Maintenance
• Quality Management

The project involved around 2000 user licenses.

The project was executed in 2 phases – the first phase for order generation and fulfillment
process and the second phase involved the other business processes around the manufacturing
plant in Steel Nagar.

The business benefits from the SAP implementation in SteelCo was published in press few
months after go-live. Following is an excerpt on the benefits, as quoted by SteelCo executives.

Roles of our team members in the project: Our team members were responsible for
managing the project end-to-end and were senior members of the “Core Team” deployed by
SteelCo for the implementation.

SAP Implementation at FirstSteel

Brief on the Project: FirstSteel was one of the first steel companies in India to implement SAP
in its manufacturing facility at Birat Nagar. The implementation was done in 1997. The scope of
the implementation included the following business processes

• Sales and Delivery process

• Financial Accounting
• Purchasing and Materials Management
• Production Planning
• Quality Management
• Plant Maintenance

The project involved around 500 user licenses.

Page No. 17 of 62
Roles of our team members in the project: Our team members played key role as consultant
in production planning and quality management areas.

SAP Implementation at Shakti Tubes

Brief on the Project: Shakti Tubes implemented SAP at Steel Nagar works in 2005-6. This
involved around 400 users.

• Sales and Delivery process

• Financial Accounting
• Purchasing and Materials Management
• Production Planning
• Plant Maintenance

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.

SAP Implementation at Bhuvan Minerals

Brief on the Project: Bhuvan Minerals implemented SAP in its Jaipur works in 2008. This
involved around 100 users.

• Sales and Delivery process

• Financial Accounting
• Purchasing and Materials Management
• Production Planning
• Plant Maintenance

The project involved around 500 user licenses.

Roles of our team members in the project: Our team members were involved as independent
consultant employed by Sarda for quality review of the business blueprint and system testing.

Projects from other industry segments

Apart from Mill products industry sector, our team members have played key roles in major SAP
implementations in other sectors in prestigious clients both in India and abroad.

Our team members have delivered these projects in various capacities like project management,
team leaders, subject matter experts, global roll-out managers, offshore delivery managers, etc.

A sample list of clients in non steel sectors serviced by our team members are given below.

Page No. 18 of 62
Our partnership with SAP

Page No. 19 of 62
Our value proposition for providing end to end SAP and IT
infrastructure implementation and maintenance services for
CementCo
We believe that we can add value to your SAP implementation as well as IT infrastructure
consulting and facilities management because of the following reasons

1. Our partnership with SAP for enterprise solution All-in-One enable us to be a “one
stop shop” for all your SAP services.
2. Deep experience in mill products industry of our team members provide the requisite
industry expertise and best practices knowledge.
3. Deep experience of our team members in implementing complex SAP
implementations in mill products industry helps us to provide high quality
implementation services.
4. Global SAP experience of our team members helps us to bring global expertise in our
implementations.
5. Our extensive service offerings meet most of client’s requirements in SAP space.
6. Our capabilities in associated services like infrastructure management & facility
management help us to provide integrated end to end services in a cost effective way.
7. Our innovative project delivery method built on ASAP Focus method together with
our industry and business process expertise is geared towards a rapid high quality
implementation.
8. Our workshop model of business blueprinting ensures optimal usage of scarce time
of your business managers.
9. Our well defined project governance model and joint responsibility of deliverables
provide an efficient mechanism of managing the project with clear and fast escalation
path for issue resolution.
10. Our templates for project documentation provide standardization and fast
documentation of project deliverables.
11. Innovative Consultants has deep experience in consulting and implementation of new
IT infrastructure and data centers.
12. Our services, starting from load assessment & capacity planning, network design,
security & threat migration, assessment of power system and load, fire alarm and
control, HVAC/precision a/c’s and UPS/gensets, have established us as a single point
nodal agency for large projects.
13. Innovative Consultants’ facilities management services cater to every operational
requirement of an IT services and data centre. Our services cover desk top
management, network management, server management, mail/messaging systems
and security & change management. These facility services are available on-site at
customer location or remotely through our NOC based remote monitoring system.
14. Our expertise in networking technology and products from all major vendors
including Cisco, Lucent, Nortel, HP and 3Com gives our clients the flexibility to
choose the network environment of their choice.

Page No. 20 of 62
Section A: SAP consulting services

Page No. 21 of 62
Our recommendations on right ERP for CementCo

We have assessed ERP solutions for CementCo on the basis of the following criteria

• 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.

• Cost: The ERP deployment and maintenance need to be cost effective.

• User Friendliness: The ERP product should be user friendly for easy training and adaptation

Page No. 22 of 62
Our recommendations on right ERP for CementCo
SAP SAP Other
Category Subcategory Enterprise Business Known
Solution One++ ERPs*
Fitment to address Base functionalities in accounting, sales and distribution,
business drivers materials management, production planning
Key business drivers like multi-level product costing,
profitability analysis, integrated plant maintenance, project
systems and quality management, etc
Industry specific solution Manufacturing industry

Process Industry

Mill products industry

Building materials industry (including cement)

Production, sales and procurement processes addressing

bulk, packaged and serviced cement business processes
Indian statutory Indian statutory requirements related to excise, sales tax,
requirements etc.
Scalability Whether scalable to address advanced requirements like
CRM, SRM, Environment, Health and Safety, Internal Audit,
Compliance, etc
Market Positioning Current position in ERP market

Proven capabilities in the industry segment

Consistent product strategy

State of art technology and timely upgrade

Availability of consulting services and support

Add-on products Best practices repository

Pre-configured client

Accelerators, templates and documents

Business Information system

Business Process Management tool

Cost License cost

Implementation cost through ASAP Focus method**

Maintenance cost

User Friendliness User friendliness

* ERPs who position themselves comparable to SAP Enterprise solutions

++ Including other ERPs positioning themselves with SAP’s Business One solution
** With our deep industry and SAP experienced team and SAP’s ASAP Focus method, we provide an accelerated
implementation path which helps to reduce the implementation costs significantly.

On overall assessment, we recommend SAP All-in-One Enterprise Solution for CementCo.

Page No. 23 of 62
Cement industry specific requirements supported by SAP

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.

Page No. 24 of 62
How SAP supports integrated process flow in a cement plant

SAP has the capability to support the integrated business process flow in a cement plant.

Page No. 25 of 62
Example 1: Cost and profitability management

Cost is one of the key business drivers of cement industry. This example, taken out of one of the
pre-configured scenario documents in SAP, demonstrates how SAP assists in cost management.

The subsequent screenshots show how

• Estimating standard cost estimate including itemization

• Cost component-wise fixed and variable cost estimates
• Activity-wise cost estimate
• Actual costing including multi-level price estimates
• Profitability Analysis

Page No. 26 of 62
 Material Cost Estimate with Quantity Structure

Cost Components showing Fixed & Variable Costs

Page No. 27 of 62
 Costing – full itemization

SAP’s extensive feature on costing allows you to estimate the standard cost, capture the actual
cost and measure variances at the lowest level.

Page No. 28 of 62
Page No. 29 of 62
SAP provides complete visibility at multi-levels on actual cost and profitability thereby assisting in
controlling the cost of production and sale.

Page No. 30 of 62
Example 2: Production planning for cement industry

The preconfigured production planning scenarios for building materials industry

specifically caters to both bulk and packaged production planning requirements of
cement industry.

Page No. 31 of 62
Example 3: Sales and distribution for cement industry

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

Page No. 32 of 62
Example 4: Purchase of raw materials for cement industry

• The preconfigured purchasing and inventory management scenarios for building

materials industry specifically caters to bulk and packaged raw materials procurement of
cement industry.
• It includes features like incoming quality control, invoice verification, etc

Page No. 33 of 62
Successful SAP implementations in cement industry

SAP has an impressive credential in cement industry in India and globally

Page No. 34 of 62
Page No. 35 of 62
Advantages of a green field implementation

Greenfield stage of any company is the right time to implement SAP

• 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

Page No. 36 of 62
“Best Practices” Solution Map of SAP for Cement Industry
• SAP solution map for Cement industry is a multilevel blueprint of processes to
help you understand and implement these processes effectively.
• This tool helps you visualize, plan, and implement a coherent, integrated, and
comprehensive information technology solution.

Page No. 37 of 62
Our proposal for phase wise implementation of SAP at
CementCo
• 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.

Page No. 38 of 62
Our proposed scope for first phase at CementCo

Page No. 39 of 62
• 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 FI
Sales & Financial
Distribution Accounting

MM CO

R/3
Materials Controlling

R/3
Mgmt.
PP TR
Product Treasury
Planning

QM Client/Server
Client/Server PS
Quality Project

PM ABAP/4
Mgmt. System

ABAP/4 WF
Plant Mainte-
Mainte-
nance
Workflow

HR IS
Human Industry
Resources Solutions

SAP’s honeycomb structure depicting the various modules

Page No. 40 of 62
Our Proposed Implementation Method: ASAP Focus

Evolution of ASAP Focus method

“Four Toos” myths about SAP

Page No. 41 of 62
SAP All-in-One – breaking the myths

SAP All-in-One – value proposition

Page No. 42 of 62
 Traditional Deployment

Customer- + SAP
specific Best Practices
requirements + SAP Consulting
Packaged Solution
Roadmap
& Accelerators

„ Rapid installation
„ Fixed scope,
Defined price,
implementation
„ Business expertise

ASAP Focus – Safe, Predictable, Affordable

Generic Generic Business Processes

(e.g. Accounting, logistics, sales, production)

Processes specific to Industry Sectors

(e.g. Manufacturing, Financial Services, Communication, etc)

Processes specific to Industry Groups

(e.g. Mill Products, Automobiles, Oil and Gas, Consumer Products, etc)

Processes specific to Industry Vertical

(e.g. Building Materials, Primary Metals, Forest and Paper, etc )

Processes specific to Industry Mini-vertical

(e.g. Stone, clay, glass and concrete; Petroleum and coal products, etc )

Processes specific to Industry Micro-vertical

(e.g. Cement, Concrete, Flat Glass, etc )

Processes specific to Your company

Specific (e.g. CementCo Pvt. Ltd.. )

In some countries the micro-verticals are standardised e.g. US has around 1350 micro-verticals.

Business processes – generic to specific (example – cement industry processes)

Page No. 43 of 62
 • SAP standard product was available only
SAP standard
at generic business process level.
• Consultants from implementation partners
will configure and customise the rest during
the implementation phase.
• The process was NOT

Configured/
• SAFE: the configuration was done
customised by for the specific project and was not
implementation proven.
partners on project
to project basis • PREDICTABLE: the testing method
was not rigorous as it dependent on
the consultants’ expertise from project
to project.
• AFFORDABLE: the implementation
timeframe and number of consultants
as well as users required were high
leading to high cost.

Traditional SAP implementations (adapted in the 1990s)

• In 2000 SAP came up with industry

SAP standard
solutions e.g. IS-Auto, IS-Oil, IS-Banking,
etc.
SAP Industry solutions • This reduced the degree of configuration/
customisation.
• However, still there was significant
amount of configuration and/or
Configured/
customisation to be done by consultants
customised by during implementation.
implementation
partners on project • The process was still NOT
to project basis
• SAFE
• PREDICTABLE
• AFFORDABLE

SAP implementations with ASAP method (adapted in the 2000s)

Page No. 44 of 62
 • ASAP Focus method and pre-configured industry sub-
verticals has reduced on-site configuration tremendously
tremendously
• SAP Partners like Innovative Consultants, with deep
SAP standard industry knowledge, develops pre-configured micro-
verticals (if not provided by SAP)
• Only process specific to your company (beyond the
SAP Industry solutions micro-vertical your company belongs to) need to be
configured on-site
practices of
• With extensive research from SAP and best practices
sub-verticals and
global companies belonging to the same sub-verticals
micro verticals built-in and India specific statutory
SAP pre-configured requirements also built-in, such cases should be few and
sub-verticals far between
• This process makes SAP implementation

Pre-configured micro- • SAFE: The configuration is proven in other

verticals by SAP/ Partner micro-
industries in the same sub-vertical and/or micro-
vertical
On-site configuration/
• PREDICTABLE: The configuration is tested
customisation
chances of
rigorously at SAP’s lab in Walldorf and chances
failure is minimal
• AFFORDABLE: The cost of implementation as
well as the timeframe is significantly lower as there
is very little configuration to be done on-site for the
project

SAP implementations with ASAP Focus method

(Introduced in 2007 globally and 2008 in India)

Page No. 45 of 62
ASAP Focus method – key stages and deliverables

SAP ASAP Focus Methodology

Evaluation Roadmap Implementation Roadmap

Delta Pre-Project Project Final Go Live &

Evaluation Realization
Requirements Activities Preparation Preparation Support

Present solution/ Present Review data Plan project Validate Refine cutover Monitor live
implementation prototype system requirements and organizational plans environment
Build project
approach data cleansing configuration
Assess data charter Establish long Close open
plan
Validate complexity Validate business term support plan issues
Set up
customer fit Train project processes
Identify Delta Implementation Train end users Start long term
team
Set expectations requirements standards and Realize delta support plan
Create & staff
with customer Prepare procedures requirements
Design Delta help desk Quality check: Go
Organizational
Create Proposal solution Execute kick-off Conduct Live
Change System
Document organizational
Get customer to management System setup management Project closing
Review and (DEV&QA) change
sign off blueprint Execute cutover
Set up project management
submit proposal with Delta
team Production Quality check:
hardware Planning for
Finalize environment Final preparation
installation production
Statement of
Decide system support and Start of
work Quality check:
landscape and cutover production
Install hardware Project
preparation Run Integration &
Order SAP BP acceptance test
Plan end user
training
Internal review

Customer Contract Project Go-

Start qualified signature kick-off Live

time

Key difference between ASAP and ASAP Focus method:

Business Blueprint sign-off happens before contract signing

Page No. 46 of 62
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 CementCo’s 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 CementCo’s 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.

Our value proposition to CementCo by adapting ASAP Focus method

• We offer a SAFE implementation method

o The pre-configured business processes for cement industry provided by SAP is

tried and tested in multiple cement industries in mid-size segment and is
expected to perform without any bugs and problems which are usually
discovered post go-live.
o The experienced consultants from Innovative Consultants with deep experience
in mill products industry configure the minor gaps and demonstrate to the users
before the contract sign-off.
o The post go-live pains are significantly less and user adaption is higher.

• We offer a PREDICTABLE implementation method

o Extensive use of pre-configured client from SAP tested thoroughly at SAP Labs
reduces the “surprise elements” significantly.
o Demonstration of the prototype before the contract sign-off ensures acceptance
of the configured processes by the users before embarking on the SAP project.
o This makes the project timeline predictable and go live issues minimal.

• We offer an AFFORDABLE solution

o There is no financial investment or commitment of funds from CementCo during

the business blueprint stage.
o The commitment of fund happens only after the acceptance of business
blueprint.
o The reduction is project implementation time reduces the implementation cost
significantly (can be upto 50% compared to a traditional implementation)
o The time commitment required from the core users during implementation is
significantly less thereby indirectly saving precious cost and time of key
managers of CementCo.

Page No. 47 of 62
Our Project Governance Model
Our project governance model is based on the following principles

• Joint project team between CementCo and Innovative Consultants

• Shared project deliverable responsibility between CementCo and Innovative Consultants
• Joint high level steering committee between CementCo and Innovative Consultants
• Well defined project status reporting based on pre-defined template
• Easy escalation path for fast decision making and resolution of issues

Director or equivalent
Project Sponsor from Innovative
Consultants
Sr. Execs from
CementCo
Jt. Steering
Committee

Project Lead Project Lead

Normal
Communication
Business Process Channels
Owners

Escalation Route

Team
Members

CementCo SAP Innovative

Project Team Consultants
SAP Project
Team

Roles and Responsibilities of the Project Team

Steering Committee: The Steering committee is the highest decision making body of the
project. Hence the steering committee needs to be represented by senior executives from
CementCo and Innovative Consultants. Innovative Consultants will be represented in the
Steering Committee by one of the Directors or equivalent. We recommend that CementCo
appoints relevant senior executives like Directors/ VPs in the Steering Committee. We
recommend that the overall Project Sponsor be from CementCo.

The Steering Committee provides oversight to project, guidance on efficient management of the
project, resolution of any issues escalated to the steering committee by the project team,
approval to any major change of business process, approval to any major change of scope and
approval of completion of key milestones of the project.

Page No. 48 of 62
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 CementCo’s 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.

Page No. 49 of 62
Our proposed responsibility matrix for project deliverables
We believe a joint responsibility and close teamwork between CementCo and Innovative
Consultants members is a key to success of the project.

Hence all project deliverables need to be jointly owned by CementCo and Innovative
Consultants teams.

However, to ensure that there is accountability in the whole process, we recommend that for
each deliverable there is a primary owner (who can be either from CementCo or Innovative
Consultants, depending on suitability and appropriateness) supported by secondary owner.

Our recommended responsibility breakup for the key deliverables of the project is as follows:

Page No. 50 of 62
Section B: Our capability in IT infrastructure
and facilities planning and deployment

Page No. 51 of 62
Our proposed IT infrastructure model and facilities solution
for CementCo

Routers

VPN

Users
Server
Room
Users

Head Office

Site Office

Our proposed IT infrastructure model for CementCo

- 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 organization’s network.
- For the smooth running of your day to day activity and security of data, we propose
you to create a datacenter.

Page No. 52 of 62
Our deployment methodology
Based on our proposed IT infrastructure and facilities solution, we have segregated our activities
in the following manner,
• Hardware Sizing- This activity includes the understanding the specifications of
hardware required for your SAP implementation. This hardware includes servers, wires
and cables for LAN & VPN, routers, switches etc. As the project office is yet to be
constructed, so we are giving you the specifications for servers only.
o Servers– you may choose either Option a or b for production server
a) Intel based Servers running Windows 2003 or higher Enterprise Edition (for
Production Server)
High availability clustered using 2 x Quad-core Intel Xeon processors, 8 GB
RAM, 2 x 145 GB mirrored HDD for OS, clustering kit, Operating System, 3 x
300 GB external HDD for data in RAID 5 configuration – price would be
approximately 15 lakhs
b) Intel based Servers running Windows 2003 or higher Standard Edition (2 servers
proposed, 1 as Production server and 1 as hot standby)
2 x Quad-core Intel Xeon processors, 8 GB RAM, 2 x 145 GB mirrored HDD for
OS, 3 x 300 GB internal HDD for data in RAID 5 configuration – price would be
approximately 5 lakhs each
c) For Quality and Development / Sandpit servers- x Quad-core Intel Xeon
processor, 8 GB RAM, 3 x 145 GB HDD in RAID 5 configuration – price would
be approximately 3 lakhs each
• Hardware Installation- After the purchase of all required hardware, we will install them
at client’s site.
• Network designing for SAP- The network designing for SAP, both for the site at
Meghalaya and ABC can be determined after detailed survey of the proposed sites.
• Network Deployment for SAP- Soon after the network designing, the deployment of
network will be done.
• VPN Connectivity- After the deployment of required network at your ABC office and site
office at Meghalaya, both of your offices will be connected through VPN (Virtual Private
Network).
• Facilities management services for your datacenter/server room- IT operations are
a crucial aspect of most organizational operations. One of their main concerns is
business continuity. So it is necessary to provide a reliable infrastructure for IT
operation, in order to minimize any chance of disruption.
Our services include,
ƒ Civil & Architecture of the data centre
ƒ Air-conditioning of the data centre
ƒ UPS option creation
ƒ Electrical wiring designing
ƒ Fire detection & alarm system
ƒ Fire suppression system
ƒ Pest control, rodent control, water leak detection
ƒ Building management system
ƒ Networking

Our deployment methodology enables our customers to get the benefit through less disruption in
their day to day work and timely delivery.

Page No. 53 of 62
Section C: Our maintenance services for
SAP

Page No. 54 of 62
Our proposed scope for SAP maintenance services
Maintenance services of SAP involves a set of components

L1 Help Desk (logging calls,

segregating SAP issues and routing, basic
user administration)

L2 Help Desk (solving “how to”

questions, assisting in correcting data errors,
analysing whether the issue is a product or
config/ customisation problem)

Fixing Fixing
Minor
Customi
Config sation
Enhance
Issues ments
Issues
L3 Support

Product Bug Fixing (source code

corrections, identification of patches)

System Maintenance (BASIS)

(performance tuning, user administration,
patch application, etc)

We will be happy to provide all the three levels of support to CementCo.

We have the support of SAP’s global team for any product related issues.

Page No. 55 of 62
Our SAP maintenance services delivery method
• 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 Response Time Resolution Time

1 30 mins 8 hrs 48 hrs
2 4 hrs 1 working day 3 working days
3 1 working day 2 working day 10 working days
4 3 working days None 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

Page No. 56 of 62
Exclusions from maintenance scope
The following services will be excluded from the current maintenance scope of work. Innovative
Consultants is however happy to engage with CementCo for these services through a separate
contract, should CementCo feel any need of the same.

• 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

Page No. 57 of 62
Section D: Commercial proposal

Page No. 58 of 62
Commercial proposal for SAP project (Phase I)
Our proposed price and fees for SAP product license, consulting fees for implementation is as
below.

This price assumes xx user licenses of SAP and licenses for using payroll functionality for a
block of 500 employees. It also includes the last time connectivity hardware costs.

These charges exclude the following

1. Travel and living costs of consultants traveling for project work outside ABC
2. Service taxes and VAT on the price, as applicable.

The above costs will be charged on actual basis.

Page No. 59 of 62
Commercial proposal for annual maintenance services for
SAP
• We propose a consolidated AMC for SAP
• This price includes
o Infrastructure cost of computers, network, related software required for support costs
of the consultants stationed at Innovative Consultants’ premises in XYZ.
o Telephone and other communication costs with the users of CementCo for
consultants of Innovative Consultants located at Innovative Consultants’ office.
o On-site hyper-care supports for 1 month post go live of SAP.
• This price excludes
o Services taxes as applicable
o Computers, network and sitting arrangement of support personnel of Innovative
Consultants located at CementCo’s premises
o Last mile connectivity between CementCo’s office at ABC to Innovative Consultants’
office at ABC
• This price assumes the following
o Project start date of not later than 2 months after license buy
o Project duration of approximately 3 months
• This price assumes the following
o YOY productivity improvement of 10%
o YOY system stabilization factor of 10%
o YOY cost escalation of 10%
• The AMC is effective from the date of sale of SAP licenses.

Page No. 60 of 62
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

SAP consulting services

1. 0% on business blueprint sign-off

2. 30% advance on contract signing and project kick-off for mobilization of resources
3. 40% on completion of realization phase
4. 20% on go live
5. 10% on completion of 1 month of hyper-care support

Annual Maintenance Contract

1. Rs xx lakhs is to be paid one-time every year at the beginning of each AMC year.
2. The remaining amount for the particular year’s AMC is to be paid in equal quarterly
installments at the beginning of the quarter.
3. For the first year, the payment for Item No 2 will be due immediately after go live.

Page No. 61 of 62
Budgetary provision for other expenses
We recommend CementCo to provision for the following expenditure for deployment of SAP.
This estimate is provided purely as assistance to CementCo to make the budgetary provisions.
CementCo will be directly dealing with relevant vendors and/or service providers for obtaining
these products and services and the actual price will depend on the terms and conditions
between the vendor/service provider and CementCo.

We recommend to budget for the following capex. This excludes cost of PCs, LAN and general
software like MS Office, E-mail, which is assumed to be existing or being set up, irrespective of
the project.

Cost Heads Budget (Rs. Lakhs)

Database license (Oracle)
SAP Server
Equipment for last mile
connectivity
Total

Travel expenses of consultants to the project site during realization, go live and hyper-care stage
will be billed on actual. The estimated cost of the same is Rs xx lakhs.

We recommend you to make a provision of Rs. xx Lakhs/annum for annual rental for 256 kbps
connection (last mile connectivity) from our office at … to your office at ...

Page No. 62 of 62