Whether it’s a rambunctious party or a staid meeting of the minds, when the masses pour into Mannheim’s Rosengarten to attend a concert or convention, Mannheimer Kongreß- und Touristik GmbH has worked behind the scenes to ensure that event runs smoothly. Working under the m:con logo, the concert and event organizer employs some 200 staff to support events at the Rosengarten Congress Center. The events include conventions and congresses for scientists and politicians, corporate events (from small meetings to large general shareholder meetings), and last but not least, cultural highlights such as concerts and gala evenings. For these events, m:con handles the complete range of tasks involved, organizes office services, conducts marketing efforts, takes care of sponsorship, and provides a hostess and security service. m:con also handles the bookkeeping, which ranges from establishing a budget to doing the final accounting.
To accomplish this range of tasks, which also includes operating Mannheim’s ticket center, m:con previously used a single software package for asset management and rudimentary cost accounting. The solution had reached its performance limits and was no longer able to support m:con’s rapid growth. “For this reason, we were looking for a successor system that would take over our financial accounting, while it also supported event controlling and project management and provided management with an instrument for controlling the company,” says Rainer Buzengeiger, who is responsible for IT at m:con. The proposed solution was initially to be set up for 16 users, with the ability to grow to accommodate 30 users in the medium term. For this reason, it would need to be easily expandable and future-proof, thus securing the initial investment for the long term.
Not a Difficult Choice
The company chose SAP R/3 because the city of Mannheim was already using an SAP solution, which would make it easier to integrate the two systems in the future. With SAP R/3, planners initially sought to cover only financial accounting, asset management, cost center accounting, and event and company controlling. It quickly became evident, however, that other areas of the company also needed the support of an ERP system. For this reason, company management decided to implement application components for payroll, purchasing, and inventory management as well.
Tantalus Management Consulting was chosen as the implementation partner for the business and logistics application components of Financial Accounting (FI), Asset Management (AM), Controlling (CO), Project System (PS), and Materials Management (MM). In making this selection from among several providers, several criteria played a role. For one, Tantalus already had industry-specific experience with integrating the FORUM and KOMAN systems used by m:con for event management and attendee registration. Moreover, Tantalus offered a fixed price, which was evidence of their distinct understanding of the needs of mid-sized business and a high degree of commitment to the project’s success.
Complex Processes Mapped
July 2002 marked the beginning of the implementation, which proceeded without any significant complications or deviations from the timeline. The primary functions implemented minimize administrative expenses, including easy cost planning, central user administration, SmartForms, fax integration, automated PS results analysis, electronic account statements, and automatic credit card clearing.
However, the focus in the implementation and configuration of the system was on establishing event and area controlling. This scenario centers around the events, which m:con maps via project structure plan elements (PSP) of SAP PS. The elements are the central cost objects of controlling. After the sales department has created a new event in the upstream systems (FORUM and KOMAN), a corresponding PSP element is created for it within the SAP solution; expected revenues and calculated cost are planned.
In the processing phase, the upstream systems (KOMAN and FORUM) generate invoices, such as those for function room rental. They are then booked to the PSP element through an interface with account allocation. The corresponding postings to expense accounts occur via creditor invoices and cost allocation in CATS, the SAP tool for time recording and cost allocation. To keep costs down for the remaining postings to expense accounts, such as the depreciation expense for rented function rooms, an additional module books the rooms.
IT Simplifies Day-to-Day Business
The events sector has its own specific vagaries, because expenses and revenues aren’t always posted at the same time. “Preliminary costs for events are often incurred months, sometimes even years, before the actual date of the event,” explains Reinhard Becker, business manager at m:con. Nonetheless, to be able to present an informative operating result, incurred costs are assigned to individual events. The consultants solved this task by using the results analysis function of SAP PS. Costs and revenues are now assigned to the period during which the event occurs. Moreover, by linking the PSP elements with m:con’s profit centers, the company’s success can be attributed to individual areas such as “internal events” or “external events.”
In the convention segment, planners sought to integrate attendee registrations through the KOMAN system. Today, attendees generally pay their registration fees by credit card. The corresponding invoices are now transferred to and posted in the SAP solution. The system provides the credit card partner with incoming payments in electronic form, while an automatic clearing occurs in SAP R/3 through processing of the electronic account statement.
In-House Instead of Outsourcing
To minimize the risk of system downtime and data loss, m:con installed a RAID system (redundant arrays of independent disks), in which multiple hard drives are linked together to form a system. Even in a worst-case scenario, this ensures that the hardware can be up and running within four hours, and that data is restored. In an extreme case, the company might lose a day’s worth of work, which would not jeopardize m:con’s business. For this reason, only two weeks before going live, Rainer Buzengeiger decided to bring hardware operations in-house; initial plans had the SAP software running on the hardware of an outsourcing partner. This decision enabled m:con to reduce costs and keep its options open in the event of any upcoming changes. “We weren’t able to calculate costs for future enhancements such as additional modules, and these would have exceeded our planned budget,” says Reinhard Becker in explaining his decision on short notice. Within a week, the required hardware was purchased, the test and productive system was installed by Tantalus, and the data previously provided to the outsourcing partner was transferred back in-house.
Know-How Always on Tap
The decision to move operations in-house has proven worthwhile, particularly as the administration concept enabled a clear division of responsibilities for the SAP R/3 installation. Data backup in day-to-day operations is now the responsibility of m:con. Tantalus will perform the remaining basic support, such as tuning, loading of support packages, and implementation of release upgrades. “It makes sense, because for companies the size of m:con it is generally not worthwhile to establish the know-how required for customizing an SAP solution,” says Anita Bauer, who worked on the project at Tantalus. Thus, m:con depends on Tantalus for support of day-to-day operations. User inquiries can usually be answered by telephone; errors within the application are analyzed and corrected by the service provider via remote access.
The system went live only four months ago, but because of the software’s effectiveness, users are now requesting the implementation of additional features. These include the transition to SAP R/3 Enterprise, slated for spring 2004; automating cost planning in the events sector; and integration with a new event system in fall 2003.