The eyes of Bayer world-wide were on Bayer HealthCare LLC (Bayer HealthCare) in early 2006. In the U.S., Bayer HealthCare had just launched an ambitious project to upgrade SAP R/3 to the new SAP ERP 2005. In addition, plans were to simultaneously install SAP NetWeaver Exchange Infrastructure (SAP NetWeaver XI) and begin upgrading its SAP NetWeaver Business Intelligence (SAP NetWeaver BI) solution.
All of this had to be accomplished without interrupting Bayer HealthCare’s ongoing business operations. “The analogy we use is we were changing the engine of the airplane while it was in flight,” says Scott Petrak, Director in the North America Information Technology department of Bayer Corporate & Business Services LLC (BCBS), a service unit that provides corporate IT, finance, human resources, and other services for Bayer Healthcare and other Bayer companies doing business in the U.S.
Bayer Healthcare’s activities were noteworthy because other Bayer operating companies planned to follow with their own SAP ERP 2005 upgrades. The lessons – easy or tough – learned by Bayer Healthcare would soon spread throughout the global Bayer organization.
Fortunately, the news was good. The upgrade went very smoothly and met the relatively tight seven-month implementation schedule. Petrak credits success with careful upfront planning, an experienced and highly-skilled internal team from Bayer HealthCare and from BCBS and access to special resources available through SAP Ramp-Up, a unique program offered by SAP that provides customers with early access to new applications and innovations. This program also includes support from dedicated SAP Ramp-Up Coaches to help reduce the cost, time, and risk associated with IT projects. “The SAP Ramp-Up program offered us access to valuable extra resources we felt were needed to achieve a fast-track implementation,” Petrak says.
Modernization of global SAP solutions
Bayer recognized in 2005 that the maintenance contracts of the many SAP R/3 licenses it held throughout the world would be expiring over the next few years. Rather than renew, Bayer decided to initiate a rollout plan for upgrade to SAP ERP 2005 within each region and within each of its businesses, which include not only Bayer HealthCare, but also Bayer MaterialScience, Bayer CropScience, and the services businesses. Bayer HealthCare opted to lead the way with an aggressive schedule for the upgrades initiated first in the US and followed closely by Europe.
Bayer HealthCare itself operates several businesses, including Animal Health, Pharmaceuticals, Hematology/Cardiology, Consumer Care and Diabetes Care. In the U.S., three of these businesses were running on a single instance of SAP R/3 4.6b, the others ran either SAP R/3 4.0b or legacy mainframe applications.
“The Bayer HealthCare strategy in the US was to consolidate into one regional SAP ERP solution between 2006 and 2009 and start by upgrading SAP R/3 4.6b as the initial step,” Petrak explains.
Bayer HealthCare cooperated closely with SAP Ramp-Up during the two quarters preceding the project’s kick off in January, 2006, to define the scope of the effort and to identify technical hurdles. A key decision resulting from those sessions was to focus the initial upgrade solely on a “technical release change,” which would install SAP ERP 2005 and schedule any customizations or implementations of components such as SAP NetWeaver Portal for later phases. This strategy assured project timelines could be met with lowered risk to the operating business.
Taking advantage of extensive SAP Ramp-Up Resources
One of Bayer’s biggest initial concerns was “the fear of the unknown,” Petrak recalls. “We didn’t know exactly what the upgrade would mean in terms of changes in functionality for the end users,” he explains.
Therefore, Bayer created a test environment where experts from the technical team could study the differences between SAP ERP 2005 and SAP R/3, including how any user interface differences might impact end users. “We were pleased to find only some cosmetic changes in the interface – such as buttons people were used to seeing in one position on the SAP R/3 screen might be in another position on SAP ERP 2005,” he says. “But in terms of the day-to-day functionality, we could put the new system in front of SAP 4.6b users and they would see very little change.”
Bayer also took advantage of the SAP Ramp-Up resources. The program allows selected companies access to software prior to its unrestricted shipment. For example, Bayer received SAP ERP 2005 five months prior to the general release. This meant Bayer could do the essential upfront planning and pilot testing and still have the time to be almost halfway through its upgrade before the upgrade programs were available commercially.
Invaluable help from the SAP Ramp-Up Coach
The SAP Ramp-Up Coach spent about 60 percent of his time in North America and the remainder with Bayer in Europe, addressing technical questions that arose during the project. “Because we were taking a quantum leap from SAP R/3 4.6b up to SAP ERP 2005, the SAP Ramp-Up Coach was invaluable to us. He could take our questions and either answer them directly or run them through the SAP organization to identify the appropriate subject matter experts within SAP to get our questions answered,” Petrak says.
The SAP Ramp-Up Coach also was essential in helping Bayer HealthCare simultaneously adopt SAP NetWeaver XI, a decision it made because its Animal Health business preferred to move to XI at the same time of the upgrade, rather than continue use of middleware from a third-party vendor. Bayer also began upgrading its business warehouse environment from SAP NetWeaver BI 2.0B to SAP NetWeaver BI 7.0.
“I can’t imagine how we would have managed all of these efforts without our dedicated SAP Ramp-Up Coach,” Petrak says. “There were many situations during the SAP ERP upgrade, the installation of SAP NetWeaver XI, and SAP NetWeaver BI upgrade where the SAP Ramp-Up Coach was able to contact people at SAP’s headquarters in Walldorf, Germany, to assist us through the process when needed. This was critical because during the early period the installation guides were not yet robust. Our SAP Ramp-Up Coach was instrumental in clarifying and escalating issues that we experienced and in soliciting prompt resolutions from SAP.”
Information from SAP’s internal database
The SAP Ramp-up Program also gave Bayer access to information regarding approximately 17 different third-party programs which also needed to be tested and potentially upgraded in order to accommodate the switch from SAP R/3 4.6b to SAP ERP 2005. Petrak and his team tried speaking directly with the third-party vendors in trying to identify the need for upgrades, but in some cases the vendor could not respond with certainty.
Fortunately, Bayer received information from SAP’s internal databases that shed light on upgrade needs. “If there was an internal SAP note that said a particular application must be upgraded to be compatible with SAP ERP 2004, then we pretty well knew we would have to upgrade that program for 2005.”
A foundation for the future
Now that the first-phase of the upgrade successfully modernized Bayer HealthCare’s SAP infrastructure, opportunities exist to implement new enterprise portal, product lifecycle management capabilities, and business planning and simulation features from the SAP portfolio. And best of all, Bayer HealthCare in the U.S. serves as a model for success that can be replicated throughout the Bayer organization thanks to the efforts of the project team from Bayer HealthCare and BCBS and the service and support received through the SAP Ramp-Up program.