MIS636 Final Presentation

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MIS-636 Final Presentation Part-I SAP
Implementation at Apple Computers Inc.,
USA Presented by Sathwik Nikhil
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Part-II Analysis of an IT Contract Presented
by Annah Urmila
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• SAP R/3 at Apple Computers, USA

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About Apple Computers

• incorporated on January 3, 1977
• designs, manufactures, and markets
  microprocessor-based personal computers
• Some of its popular products are
• - Power Mac, Power Book, iMac, iPod
• - MAC OS operating system
• reported sales of 7.98 billion for the fiscal
  year ending September 2000.

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Why SAP R/3 ??

• Niall OConnor ,VP of Information Systems
  Technology was a strong believer in SAP R/3 s
  capabilities of achieving high level of
  integration.
• SAP R/3 was the market leader in ERP solutions
• Existing system was fragmented over 16 disparate
  legacy systems

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SAP R/3 Implementation Timeline

• Kick off Date January 1998
• Go Live Date January 2nd 1999
• Implemented in a short span of 12 months

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Implementation Partner

• KPMG Consulting Inc., presently known as
  BearingPoint
• The team consisted of 90 individuals which
  included 35 KPMG Consultants.

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How much did they spend?

• Our best estimate is 45 million to 50 million
  based upon the size of the company, the
  implementation time frame and the size of the
  implementation team.
• - Estimate derived from industry sources and SAP
  consultants

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Modules Implemented

• Finance
• Sales Distribution
• Manufacturing

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Performance Impacts after SAP

• Improvements in manufacturing processes
• Complete Integrated Solution
• Better Relationships with Business Partners

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Stock Performance
Stock Price before implementation (January 1998)
was 9.16 Stock Price after Go-Live (January
1999) was 20.59
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Applying the Matrix of Change
Existing Business System of Apple Inc (before
Jan 1999)
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Applying the Matrix of Change
Target Business System of Apple Inc (within 12
months)
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MOC generated for Apples Case
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Analysis of IT Contract
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Industry Selected

• Value added electronic distribution
• A diverse product mix including
• Custom assembly electronic components
• Integrated, custom production resources for
  complex assembly, sub-systems and other out of
  the ordinary needs.
• Contract manufacturing aimed at supporting
  customer design and manufacturing needs.
• Electrical and mechanical assembly of
  interconnection products and switches

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Industry Selected cont

• Wire cutting and stripping services
• Custom or standard bar coding
• Military and customer specific intermediate and
  outer-level packaging that are water, vapor and
  weather proof. Including packaging for aerospace
  and defense contractors.

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Motivations for this IT project implementation

• To provide connectivity to their existing SAP
  ERP system via wireless medium such as PDAs, Cell
  phones and the Internet on any computer to
  facilitate easy electronic ordering, checking of
  order status and shipment tracking for their key
  customers and their mobile sales and workforce.

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Key contract terms

• An initial payment upon execution of the
  agreements
• Subsequent payments based on three milestones set
  in the contract.
• Telephone and email maintenance and support for
  the first year of the contract.
• The contract agreement is in force for ten years
  from the date of execution

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Key Contract Terms cont

• The software provided remains under the ownership
  of vendor
• There are no warranties on any client equipment,
  hardware or network.
• The supplied software is under limited warranty
  that does not guarantee compatibility with future
  versions.

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Project Deliverables

• A web-based/wireless SAP connectivity software
  for up to 50 users
• SAP adapter
• PDA and a PC/WEB front end device

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Enforcement of IT deliverables

• A initial down payment on execution of contract
  agreement.
• Subsequent payments based on three key milestones
  namely
• Re-vamping of the HTML front end
• Training and
• Configuration of basic warehouse management
  functionality for PDA use

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Conclusion

• Contract Classification
• One stage outsourcing with fixed incentives i.e.
  class 3 in Ding-Wu-Hitt classification.
• Advantages
• Better risk and expectation management
• Customer satisfaction
• Clear and specific milestones for measuring
  project success.