SAP Capital Investment Process Integration at SCA Packaging

1
SAP Capital Investment Process Integration at
SCA Packaging

• Marc Moons, SAP Controller, SCA Packaging
• Olivier Van Gompel, Executive Partner, Opteon
• SAP Lounge, BrusselsOctober 8-9, 2008

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Agenda

• Introduction
• 1.1. SCA Packaging Corporate Highlights
• 1.2. Opteon Corporate Highlights
• SCA Capital Wheel concept
• 2.1 Capital Wheel before SAP Integration
• 2.2 Challenges regarding CAPEX follow up
• 2.2 Capital Wheel after SAP integration
• Project Scope
• 3.1. Phase 1 Scope Implementation - challenges
• 3.2. Phase 2 Scope Implementation - challenges
• Capital Wheel Further Improvements
• Cost savings efficiencies reached
• Lessons learned

3
SCA Packaging Corporate Highlights

• Second largest producer in the European
  Corrugated market with over 200 producing units
  in 25 countries
• Second largest European producer of
  containerboard paper with 7 mills situated in 5
  countries
• Leading global supplier of customized protective
  packaging and high-visibility thermoformed
  plastic packaging
• More than 250 packaging designer engineers
  across Europe
• Worldwide sales in 2007 exceeded SEK 33 billion
  ( 3.6 billion)
• 17,263 employees

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SCA Packaging as part of SCA Group

• Publication paper
• Solid-wood products
• Pulp and timber

• Transport and consumer packaging
• Containerboard

• Toilet paper, kitchen rolls, facial tissue and
  napkins
• Hygiene concepts

• Incontinence care
• Baby diapers
• Feminine care

5
Opteon Corporate HighlightsAchieving Optimal
Use of Your Business Systems

• SAP Life Cycle Align To Strategy
• Necessary framework to achieve and maintain
  optimal use of the system
• Addressing the ongoing need for changes, coming
  from both internal and external triggers within
  the business environment
• Strengths
• SAP ERP functional and business process knowledge
• Project Management Methodology based on PMI/PMBOK
  Best Practices
• Service Management Methodology based on ITIL Best
  Practices

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SCA Packaging SAP Landscape before CAPEX
Integration

• 58 of turnover generated within SAP
• 156 companies with FI/CO
• 47 companies with full SAP FI/CO/SD/MM
• 11 companies with PP
• Number of SAP users 2400
• SAP IM 262 users
• Use of BI (7.0) and Portal (7.0)

SAP R/3
PP
WM
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Capital Wheel before SAP Integration

• ICT based investment processes
• eCapex web application
• Investment approval process
• New request introduction reduces
• allocated budget
• Other processes were Excel based

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CAPEX Processes Challenges

• ICT based investment processes
• Investment approval process
• Approval of new request reduces allocated budget
• Revision of CAPEX approval processes in a changed
  environment different needs and requirements
• One investment, one system
• eCapex application
• Complex support maintenance
• Lack of stability
• Ending support
• Alternatives to eCapex
• SAP Investment Management
• Build upon existing SAP experience
• SAP IM allowed stand alone implementation,
  without necessary integration with costing and
  finances

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Capital Wheel after SAP Integration
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Capex Integration Project Scope Phase 1

• Quick replacement of eCapex
• Required for all entities (SAP and non SAP
  entities)
• Upload historical information (closed ongoing
  investment requests)
• Harmonize SCA Capex approval procedures
  throughout region, but allow differences
• Automated approval process through workflow
• Tracing of approved and rejected requests
• Activate Document Management System

SAP R/3
PP
DMS
WF
WM
HR
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Phase 1 Process Flow
Check Target - Plan
HR
WF
IM
Update IM Plan
Approved
No
Yes
IM
IM
DMS
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Phase 1 Implementation (April 05-July 05)

• SAP Investment Management
• Investment program (controlling area level)
• Activation of appropriation requests
• Activation of appropriation request approval
  workflow
• Usage of partner determination schemes for
  approval hierarchy
• Usage of standard field selection and tab layout
  to customize layout for end user
• Foresee appropriation request entry for non-SAP
  legal entities
• Implementation of phase 1, with phase 2 in mind
• Appropriation request numbering coding masks
  identical to project WBS coding masks
• P-XXXX-YY-NNN

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SAP Portal Approval
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Phase 1 Challenges

• Timing eCapex would be decommissioned 3 months
  after decision
• Solution Activate SAP IM and custom made
  workflow in 2 months time.
• Multiple controlling areas, require multiple
  investment programs
• Solution Merge controlling areas into one
  controlling area
• Performed by SAP Services Waldorf
• Multiple currencies per region
• Solution SAP version 4.7 allows budgeting and
  planning in object currency
• Controlling area currency for reporting in EUR
• Quick approval process by management
• Solution Activate SAP Portal for approval
  process

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Capex Integration Project Scope Phase 2

• Integrate SAP IM with commitments and actuals in
  SAP plan budget- actual
• Integrate FI-AA-PM-MM into Capex processes
• Replacement of internal orders and plant
  maintenance orders with projects and WBS elements
• Build solid basis for further improvements
• - Capital Budgeting
• - Capex Forecasting Processes
• - Asset Disposals

SAP R/3
PS
PP
DMS
WF
WM
HR
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Phase 2 Process Flow
Mail to project responsible
WF
Release WBS
WF
PS
WF
Create WBS element
Transfer plan data Assign Budget
Assign WBS Master data
PS
PS
WF
WF
IM
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Phase 2 Implementation (April 06 July 08)

• SAP Project Systems
• Set up PS and link to IM appropriation request
• Cut over from existing SAP PM/CO environment to
  SAP PS/IM for Capex
• Improve workflow to automate transactional steps
  project creation budget distribution
• Roll out of Phase 2 solution
• Limited to full SAP run legal entities
• After pilot in Obbola, Sweden
• implementation in 5 other plants in Europe in
  Sweden, Netherlands, Great-Britain, Italy (2
  months total)
• Implementation in 20 plants in Germany (big bang
  roll out)
• Handover to central SCA IT department München for
  further support and roll out (July 2008)

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Phase 2 Challenges

• Change over from PM / CO order budget process to
  IM-PS process, whilst integrating IM
• Solution Pilot roll out in Obbola, Sweden
• Roll out in Europe
• Solution Phased roll out region by region.
  Knowledge transfer to central IT services
• Change management for end users in all plants
• Solution Detailed procedures and training
  required for decentralized controllers and
  engineers

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Procedural guidelines examples
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Procedural guidelines examples
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Procedural guidelines examples
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Capital Wheel Further Improvements

• Capital Budgeting process
• Usage of request and WBS plan values and plan
  version 5x for capital budgets
• Update plan values in investment program for SAP
  based reporting
• Extract to data warehouse (BI 7.0) for aggregated
  reporting and for input to SCA consolidation
  system (ABS)
• Replacement of Excel based reporting
• Replace manual and duplicate entries by automated
  data flows, based on single entry
• Capital Forecasting process
• Extend capital budget process for quarterly
  capital forecasting processes
• Project Systems Cash Flow Management

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Further improvements Capital Budgeting /
Forecasting
IM
Non SAP
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Cost savings Efficiencies reached

• Cost Savings
• Decommissioning of eCapex
• Avoid duplication of data in multiple systems /
  Excel sheets (less errors, and more reliable,
  timely information)
• Centralized support possible due to process
  harmonization
• Time consuming reconciliations between various
  systems can be avoided
• Efficiencies
• Harmonize Capex approval process via system
  driven process
• Allow operational audit on Capex processes
  tracking plan-actual-budget
• Accurate consolidation and analysis
• Improve traceability

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Lessons learned

• Change Management
• Difficult to get users away from Excel sheets
• Multiple currency environment build new reports
  in IM/PS for object currency reporting
• Phased approach get people used to massive
  changes in processes
• Get customer buy-in for further improvements let
  the customer benefit from an integrated system
• Usage of SAP Portal in approval process generated
  easier end user acceptance
• Workflow development
• Embedded controls in workflow proved to be more
  difficult than foreseen
• Pilot roll out concept
• Use same project team for implementation and
  initial support.
• Improve system before further roll out
• Project Management
• Project Life Cycle Approach
• Manage deliverables
• Manage various stakeholders Business, IT,
  functional and technical consultants

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Thank you!