SAP Customer Success Story

Life Sciences Pharmaceuticals

MERZ GROUP
CARVING OUT AND UPGRADING
SOFTWARE BRINGS MAJOR BENEFITS
Given the success of the migration
effort, Im certain well be teaming
up with the System Landscape
Optimization group again in the
future.
Tanja Ludwig-Neubauer, Project Manager for HR,
Merz Group Services GmbH
SAP Solutions and Services
HCM migration service from the System
Landscape Optimization group
Implementation Highlights
Completed smooth transition ahead of
schedule
Migrated configuration settings and HCM
data to an upgraded system supporting
Unicode
Utilized excellent teamwork, with rapid
responses by the experts from SAP
Consulting
Why SAP
Extensive expertise, real-world experi-
ence, and proven migration technology
Specific proposals with a detailed project
timeline
Benets
Significantly enhanced flexibility by
implementing a separate HCM system
Simplified maintenance of HCM software
Accelerated provision of new HCM
functionality
Existing Environment
SAP R/3 software (functionality now found
in the SAP ERP application)
Third-Party Integration
Database: Oracle
Hardware: Hewlett-Packard
Operating system: Microsoft Windows
Company
Name: Merz GmbH & Co. KGaA
(Merz Group)
Location: Frankfurt am Main, Germany
Industry: Life sciences pharmaceuticals
Products and services: Pharmaceuticals,
skin care and dental products, and
disinfectants
Revenue: 610,5 million
Employees: 2,289
Web site: www.merz.com
Implementation partners: System
Landscape Optimization group from SAP
Consulting, Merz Group Services GmbH
Challenges and Opportunities
Reduce the impact of downtime involved
in maintaining human capital management
(HCM) software
Implement data-protection and access-
control mechanisms in a more practical,
efficient way
Facilitate rollout of HCM functionality to
international subsidiaries
Objectives
Carve out HCM functionality from the
core enterprise resource planning (ERP)
application and run it in a new, separate
system
Migrate all current and historical data to
help ensure continuity
Upgrade to the latest release of the SAP
ERP Human Capital Management solution
Convert to Unicode to streamline support
for new languages
QUICK FACTS
Headquartered in Frankfurt am Main,
Germany, the Merz group specializes
in pharmaceuticals, over-the-counter
drugs, and dentures, as well as disin-
fectants and cleaning agents. Products
range from innovative treatments for
dementia and dermatological disorders
to popular consumer brands. A global
player, Merz has subsidiaries in several
European countries, Mexico, and the
United States. With a total workforce
of over 2,200, the group posted
revenues of 607 million in fiscal year
20072008.
Challenges Created by the
Application Landscape
SAP software for ERP has played a
central role at Merz for over a decade.
In 2004 the group implemented the
SAP ERP Human Capital Management
(SAP ERP HCM) solution. SAP soft-
ware is currently used by 15 Merz sub-
sidiaries outside Germany. However,
having HCM and ERP software within
a single application landscape brought
a number of problems. First, there was
the issue of upgrading: Merzs HR
managers wanted to exploit new func-
tionality offered by the latest release
of SAP ERP HCM such as country-
specific payroll accounting. This en-
tailed moving up to the latest release
of the SAP ERP application. But Merz
had no immediate plans to upgrade
its core ERP software.
Whats more, whenever legislation
affecting payroll accounting was
changed, the entire system had to be
shut down to import the necessary
support packages. As this downtime
impacted Merz staff in multiple times
zones, finding suitable maintenance
windows was far from easy. Having just
one application landscape also created
significant challenges in the area of
user authorization. For example, to
safeguard sensitive HCM data, such
as executives salaries, Merz had to
severely curtail access rights for all
users, hampering routine maintenance.
To overcome all these issues, Merz
decided to decouple its HCM and ERP
software. HR specialists at Merz Group
Services GmbH the company respon-
sible for the groups SAP software
investigated options for implementing
the latest release of SAP ERP HCM as
a separate system, hooked up to the
core ERP application via standard inter-
faces. And with expansion into eastern
Europe on the cards, it also made sense
to convert to Unicode, streamlining
the addition of new language support.
In the past, every time Merz GmbH & Co. KGaA (Merz Group) up-
dated its HCM software to meet new legal requirements, it had to
schedule a full system outage and find a maintenance window that
avoided impacting staff at sites worldwide. But not anymore the
System Landscape Optimization group from SAP Consulting helped
Merz to carve out its human capital management (HCM) software
from the core enterprise resource planning (ERP) application and run
it in an upgraded stand-alone system. The result: easier maintenance
and administration plus faster provision of new functionality.
The migration specialists from SAP had a firm grasp on the issues involved.
We were particularly impressed by their experience, proven methodologies,
and the detailed project timeline they presented to us.
Hilke Roeder, Project Manager for HR, Merz Group Services
Extensive Experience, Proven
Methodologies
Three consulting companies were invited
to submit proposals. After careful con-
sideration, Merz opted to partner with
the System Landscape Optimization
group from SAP Consulting. The migra-
tion specialists from SAP had a firm
grasp on the issues involved, recalls
Hilke Roeder, project manager for HR
with Merz Group Services. We were
particularly impressed by their experi-
ence, proven methodologies, and the
detailed project timeline they presented
to us. Moreover, the service from
SAP supports direct transfer of data to
a system running Unicode and a newer
release of the HCM software enabling
Merz to combine the migration and
upgrade, saving time and money.
Based on tried-and-trusted standard-
ized migration and conversion technolo-
gy, the System Landscape Optimization
groups HCM migration service pro-
vides a clearly defined process that
helps ensure a smooth transition and
data consistency. Project tasks are
mainly handled via remote services,
with SAP specialists working at the
customer site where required.
Fast, Cost-Effective Support from
the Migration Experts
At the kickoff workshop, the stakehold-
ers finalized the project plan and de-
fined all tasks. Merz Group Services
organized and supervised the initiative
and handled the upgrade and Unicode
conversion. The SAP consultants ana-
lyzed the software and migrated config-
uration settings and master and trans-
action data. The System Landscape
Optimization specialists from SAP
were certainly quick off the mark. They
completed the first test migration just
a week after starting the analysis,
recalls Tanja Ludwig-Neubauer, project
manager for HR at Merz Group Services.
Merz Group Services conducted
acceptance testing with key users from
HR and integration tests with other
departments. All activities were sched-
uled to avoid disrupting monthly payroll
runs. To up the ante, we made our
To up the ante, we made our real-life test cases more complex and
created additional ones. . . . When we compared the payroll accounting
figures with those from the source system, we found they were
identical right down to the last cent.
real-life test cases more complex and
created additional ones including
sickness, retroactive adjustments, and
partial retirement, says Roeder. And
the results were impressive. For ex-
ample, when we compared the payroll
accounting figures with those from the
source system, we found they were
identical right down to the last cent,
reports Roeder.
A Smooth Transition Completed
Ahead of Schedule
The consulting team from SAP was
relatively small, helping ensure fast,
effective communications. Whats more,
the combination of on-site and off-site
resources delivered tangible benefits.
The remote service was a big plus,
cutting down on travel expenses. And
the experts from SAP always responded
promptly to our queries, reports
Ludwig-Neubauer. We couldnt fault
the support we received, she continues.
When we ran into issues, the special-
ists from the System Landscape
Optimization group had a solution the
next day if not sooner. Speaking from
experience with other projects with
various partners, Id grade this one A+.
The original project schedule included
two test cycles and a full dress rehearsal.
However, as the test results of the first
two cycles had been spot-on, this last
step was omitted enabling the new
system to go live a whole month earlier
than planned. The transition couldnt
Hilke Roeder, Project Manager for HR, Merz Group Services
When we ran into issues, the specialists from the System Landscape Optimi-
zation group had a solution the next day if not sooner. Speaking from
experience with other projects with various partners, Id grade this one A+.
Tanja Ludwig-Neubauer, Project Manager for HR, Merz Group Services
50 xxx xxx (YY/MM)
20YY by SAP AG.
All rights reserved. SAP, R/3, xApps, xApp, SAP NetWeaver, Duet,
PartnerEdge, ByDesign, SAP Business ByDesign, and other SAP
products and services mentioned herein as well as their respective
logos are trademarks or registered trademarks of SAP AG in
Germany and in several other countries all over the world.
Business Objects and the Business Objects logo, BusinessObjects,
Crystal Reports, Crystal Decisions, Web Intelligence, Xcelsius, and
other Business Objects products and services mentioned herein as
well as their respective logos are trademarks or registered trademarks
of Business Objects S.A. in the United States and in several other
countries all over the world. Business Objects is an SAP company.
All other product and service names mentioned are the trademarks
of their respective companies. Data contained in this document
serves informational purposes only. National product specications
may vary.
These materials are subject to change without notice. These materials
are provided by SAP AG and its a liated companies (SAP Group)
for informational purposes only, without representation or warranty of
any kind, and SAP Group shall not be liable for errors or omissions with
respect to the materials. The only warranties for SAP Group products
and services are those that are set forth in the express warranty
statements accompanying such products and services, if any. Nothing
herein should be construed as constituting an additional warranty.
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have been smoother and has certainly
delivered in terms of continuity and
efficiency. The data was identical, and
the new release has the same look
and feel as the HCM software the us-
ers formerly deployed. In fact, the
changeover was so transparent that
some employees accidentally logged
on to the previous system after lunch
on day one and called to ask where the
data theyd entered that morning had
gone, says Ludwig-Neubauer. Other
departments and senior executives
were pleasantly surprised by how quick-
ly the project was completed. And
they were impressed by how little the
changeover impacted them.
Greater Responsiveness, Greater
Freedom
One year after completing the project,
the Merz Group is more than satisfied
with the results. Having a separate
HCM system makes us far more respon-
sive to changes and new challenges,
says Ludwig-Neubauer. And the
carve-out has brought other benefits.
We can now install support packages
whenever we want, without impacting
non-HCM processes or staff at inter-
national subsidiaries. Thats a huge
advantage, explains Ludwig-Neubauer.
Access control is now much more
straightforward and efficient, since
user authorizations can be assigned in
accordance with real-world needs.
Moreover, the international rollout of
the new HCM software is well under
way. Payroll accounting functionality is
already up and running in Switzerland,
for example. Going forward, we plan
to implement even more new HCM
functionality, such as support for train-
ing and event management, employee
development, and e-recruiting, says
Ludwig-Neubauer. Given the success
of the migration effort, Im certain well
be teaming up with the System Land-
scape Optimization group again in the
future.
50 092 446 (08/11)
2008 by SAP AG.
All rights reserved. SAP, R/3, xApps, xApp, SAP NetWeaver, Duet,
PartnerEdge, ByDesign, SAP Business ByDesign, and other SAP
products and services mentioned herein as well as their respective
logos are trademarks or registered trademarks of SAP AG in
Germany and in several other countries all over the world.
Business Objects and the Business Objects logo, BusinessObjects,
Crystal Reports, Crystal Decisions, Web Intelligence, Xcelsius, and
other Business Objects products and services mentioned herein as
well as their respective logos are trademarks or registered trademarks
of Business Objects S.A. in the United States and in several other
countries all over the world. Business Objects is an SAP company.
All other product and service names mentioned are the trademarks
of their respective companies. Data contained in this document
serves informational purposes only. National product specications
may vary.
These materials are subject to change without notice. These materials
are provided by SAP AG and its a liated companies (SAP Group)
for informational purposes only, without representation or warranty of
any kind, and SAP Group shall not be liable for errors or omissions with
respect to the materials. The only warranties for SAP Group products
and services are those that are set forth in the express warranty
statements accompanying such products and services, if any. Nothing
herein should be construed as constituting an additional warranty.