From Nine to Three

Primary Objective: Reduction of IT operating costs by up to €60 million (photo: Jupiterimages)
Primary Objective: Reduction of IT operating costs by up to €60 million (photo: Jupiterimages)

Infineon’s decision to modernize its IT systems was triggered by the sale of Qimonda, the high-tech company’s former DRAM manufacturing division. T-Systems was already Infineon’s SAP service partner when this project went ahead, and neatly separated the joint SAP materials management system of the two companies. The Qimonda data was transferred to a global SAP system of its own.

Operation SAP Sysco

After the split, the managers in the user departments and the IT department at Infineon got together to examine the remaining process and system landscape. “Our primary objective was to reduce IT operating costs by up to €60 million,” says Michael Schmelmer, CIO at Infineon. With this in mind, the business and IT experts identified around 90 steps. The focus was on merging and harmonizing the nine SAP systems worldwide to form three platforms in Asia and Europe. At the same time, the country-specific processes in financials, sales and distribution, and research and development were standardized. The “SAP Sysco” consolidation project was born.

Because the SAP modernization was priority number one, all the other planned measures had to take a back seat – which gave SAP Sysco an even greater sense of urgency. “We had to find a project partner who could guarantee a twelve-month project duration,” explains Schmelmer. “T-Systems was the only bidder that was able to commit to this deadline and provide suitable technologies.”

T-Systems uses special methods and tools for SAP migrations that enable minimum downtime, secure data transfer, and a full audit trail. “All migrations are prepared and performed with a System Landscape Optimization (SLO) Workbench,” says Thomas Giedeck, project lead at T-Systems. “First, we examine the SAP systems to be consolidated in terms of the compatibility of their processes and number ranges. Potential conflicts are solved in the form of rules and are automatically executed using the SLO Workbench.” This automation enables T-Systems to define fast, secure, and documented migration scenarios, which are far superior to the conventional and invariably manual methods.

Next Page: Three subprojects in parallel

Three subprojects in parallel

SAP Sysco kicked off in March 2007. T-Systems went about consolidating the distributed SAP systems in three parallel international subprojects. In total, 600 internal and external employees and 3,000 SAP users were involved. But that wasn’t the only challenge: Different SAP versions and operating systems were in use across the globe. “When the heat was really on, we had seven migrations to production systems in five weeks – and in locations spanning the three regions Europe, Asia, and North America,” says Schmelmer. Before the SAP systems went live, strict quality controls were performed. “Although many people were skeptical at first, we managed to stick to our tight schedule.”

The methods and tools used ensured that almost all the SAP migrations could be completed in less than 24 hours. Because data was always transferred at weekends, day-to-day business could continue virtually unaffected.

Plus a joint venture

But the original project plan had to be revised: In fall 2007, Infineon formed a joint venture with Siemens to drive the development and production of bipolar high-power semiconductors. For SAP Sysco, this meant mapping a new company in another client. “The joint venture represented a major change while we were traveling at full speed,” says Schmelmer. “Although T-Systems could have put the brakes on, our partner looked for solutions to enable us to remain on track.” During the client migrations, more than 300 interfaces were adapted.

Today, SAP runs on just three systems in two regions, resulting in annual savings of around five million euros. Infineon now has to make much fewer investments in licenses, interface management, maintenance, and training. What’s more, the orderly system landscape makes it easier to upgrade to new versions of SAP software. In the future, these upgrades will be performed on a quarterly rather than monthly basis. This means more disciplined testing will be required, but the upgrades will become more straightforward.

Other innovations include adding dedicated development and test systems for projects and change requests to the SAP platforms, as well as optimizing transport and test management. As a result, Infineon can run several projects in parallel on the systems, without causing conflicts within SAP. In fact, the entire environment is now more stable than it used to be.

And thanks to standardization, Infineon managed to cut process costs. The processes in financials and logistics are now faster and not hampered by data inconsistencies.

Next Page: A best practice project

A best practice project

“Although it was highly complex, the SAP Sysco project ran so smoothly that we named it a best practice project throughout the company,” says Schmelmer. T-Systems provided consulting and support not only for the global SAP harmonization, but also for the strategic transformation of the process landscape. “With the new, lean system and process environment, we are well positioned for action and further growth when the global economy picks up again,” Schmelmer adds.

Together with the other 90 IT change projects, the SAP harmonization enabled Infineon to meet its savings target: IT operating costs were reduced by even more than the planned €60 million.