1. .
POLILAGO
© SAP America, Inc / 1
plastilago
ROBERTO ALVAREZ
Plastilago-Polilago
AN 18 MONTH BIG BANG
IN THE VENEZUELAN
PETROCHEMICALS INDUSTRY

2. .
POLILAGO
© SAP America, Inc / 2
plastilago
COMPANY CARACTERIZATION:
 PLASTILAGO AND POLILAGO ARE TWO VENEZUELAN
PETROCHEMICAL COMPANIES WHICH PRODUCE
170.000 METRIC TONS OF HIGH AND LOW DENSITY
POLYETHYLENE PER YEAR FOR LOCAL AND
INTERNATIONAL MARKETS.
 YEARLY INCOME: 200 MEGA $. 480 EMPLOYEES.
 PRODUCTION, SALES AND ADMINISTRATION OCCUR
AT THE PETROCHEMICAL COMPLEX OF EL TABLAZO,
CARACAS AND MARACAIBO, RESPECTIVELY.
 STOCKHOLDERS ARE STATE OWNED PEQUIVEN,
VENEZUELAN INVESTORS GRUPO ZULIANO, ELF
ATOCHEM AND MITSUI.

3. .
POLILAGO
© SAP America, Inc / 3
plastilago
CONTEXT BY OCTOBER 1995:
 INSUFFICIENT APPLICATIONS INTEGRATION:
COMPANY APPLICATIONS RESTED ON FOUR
SYSTEMS ARCHITECTURES: MVS, VM, X-BASE AND
VARIOUS PACKAGES - I.E.: MILLENNIUM.
 INSUFFICIENT APPLICATION FUNCTIONALITY: ±
50% OUTSTANDING REQUIREMENTS MET.
 PURVEYOR OF ECONOMIC MAINFRAME SERVICES
HAD ANNOUNCED DISCONTINUATION OF ITS
ARCHITECTURE BY THE END OF 1997.
 NECESSITY OF SCALABLE SOFTWARE IN ORDER TO
SUPPORT A CHANGING BUSINESS ENVIRONMENT.

4. .
POLILAGO
© SAP America, Inc / 4
plastilago
ARCHITECTURE HISTORY:
FOUR
CONCURRENT
ARCHITECTURES
FOUR SETS OF
SPECIALISTS WITH
DIFFERENT
BACKGROUNDS
1975 1980 1985 1990
MILLENNIUM
SQL/VM
IDMS/MVS
X-BASE
S/34
S/3
ARCHITECTURE

5. .
POLILAGO
© SAP America, Inc / 5
plastilago
FUNCTIONALITY EVOLUTION:
MARGINAL RETURNS:
10%
20%
30%
40%
50%
1975-1990 1991 1992 1993 1994
%REQUIREDFUNCTIONALITY
35%
8%
3% 2% 1,5%

6. .
POLILAGO
© SAP America, Inc / 6
plastilago
WHY CHOOSE R/3?:
 IN FUNCTIONALITY, R/3 COMPARED FAVOURABLY
WITH OTHER INTEGRATED SYSTEMS UNDER
SCRUTINY.
 SEVERAL STOCKHOLDING COMPANIES HAD
ALREADY ADOPTED R/3:
 STATE OWNED PEQUIVEN
 ELF ATOCHEM
 THE COMPANY HAD ACCESS TO RELATIVELY LOW
R/3 PRICES, AGREED BETWEEN SAP-AG AND PDVSA
- VENEZUELA’S STATE OWNED OIL CONGLOMERATE
AND PEQUIVEN’S HOLDING COMPANY.

7. .
POLILAGO
© SAP America, Inc / 7
plastilago
PROJECT PREPARATION:
 DEVELOPING AN UNDERSTANDING OF LOCAL AND
INTERNATIONAL CONSULTANCY LIMITATIONS FOR
R/3 PROJECTS - ASAP AS SUCH YET NON EXISTENT
 TAKING ADVANTAGE OF A FOUR MONTH FORCED
WAITING PERIOD AS AN OPPORTUNITY FOR:
 856 HOURS OF EARLY TRAINING FOR 22 PROJECT MEMBERS
 EARLY PROGRESS ON DIVERSE INFRASTRUCTURE
STRUCTURAL ELEMENTS:
 CONCEPTUAL DESIGN OF NETWORK TOPOLOGY
 INSTALLATION OF REQUIRED NETWORK NODES
 PROCUREMENT OF INTERURBAN TELECOM LINKS

8. .
POLILAGO
© SAP America, Inc / 8
plastilago
PRELIMINARY SCOPE AND PROJECT
INVESTMENT MODEL
 PRELIMINARY FUNCTIONALITY SCOPE WAS DEFINED
ACCORDING TO THE COMPANY PROCESS MODEL
 PRELIMINARY PROJECT INVESTMENT ASCERTAINED:
COMPANY IT TEAM
32%
CONSULTANTS
22%
HARDWARE
25%
SOFTWARE
12%
RDBMS
9%
TOTAL PROJECT
INVESTMENT:
$ 2,862,137

9. .
POLILAGO
© SAP America, Inc / 9
plastilago
PROCESS OPTIMIZATION AND
COMPUTERIZATION RFP STRATEGY:
 JOINING FORCES WITH A SYSTEMS INTEGRATOR:
 COMPANY DESCRIBES PRESENT AND EXPECTED FUTURE
 PARTNER DEFINES PATH FROM PRESENT TO FUTURE
 DISCOVERY OF A SUCCESSFUL MODAL SOLUTION
 PROCESS OPTIMIZATION APPROACH MUST FIT R/3
 COMPUTERIZATION APPROACH MUST BE COMPACT
 COST OPTIMIZATION
 COMPANY HARDWARE/SOFTWARE PREFERENTIAL PRICES
 USE OF COMPANY IT PERSONNEL
 PROJECT DIRECTION UNDER COMPANY CONTROL

10. .
POLILAGO
© SAP America, Inc / 10
plastilago
SOME PROPOSAL EXPECTED DELIVERABLES:
 PURVEYORS’ R/3 EXPERIENCES AND REFERENCES
 DESCRIPTION OF CONSTRUCTION TECHNIQUE AND
DETAILED PRODUCT STRUCTURE - PBS
 PROJECT PERT NETWORKS AND GANTT CHARTS
 ASSIGNED RESOURCE RESUMES AND HISTOGRAMS
 PROGRAMMED PHYSICAL PROGRESS, MAN-HOUR
INVESTMENT AND CASH FLOW ‘S’ CURVES
 ECONOMIC DATA: HOURLY RATES, PERDIEMS, ETC.
 SCOPE CHANGE, PROBLEMS & REPORT PROTOCOLS

11. .
POLILAGO
© SAP America, Inc / 11
plastilago
SELECTED PROPOSAL CHARACTERISTICS:
 PRIME CONTRACTOR, INTEGRATOR AND BASIS
EXPERTISE: DIGITAL EQUIPMENT VENEZUELA
 FUNCTIONAL SAP EXPERTISE: SEMA GROUP - A
EUROPEAN CONSULTING COMPANY
 FUNCTIONALITY: SD, MM, PP-PI, QM, PM, HR, FI, CO, AM
 PROJECT EXPECTED DURATION: 18 MONTHS
 APPROACH: SEMA GROUP HOMEGROWN PROTO-ASAP
 INVESTMENT MIX: 4,700 CONSULTANT MAN-HOURS
AND 80,000 CLIENT MAN-HOURS - 50 USERS AND 13 IT
SPECIALISTS

12. .
POLILAGO
© SAP America, Inc / 12
plastilago
PROJECT TIMETABLE:
SEMESTER 1 SEMESTER 2 SEMESTER 3
SALES,EXPEDITIONS,INVOICING,WAREHOUSE MGMT.
GENERAL ACCOUNTING,PAYABLES,RECEIVABLES
MAINTENANCE
PRODUCTION,MATERIALS MGMT.,PURCHASING,QUALITY MGMT.
COST ACCOUNTING
ASSET MGMT.,TREASURY MGMT.
PAYROLL AND HUMAN RESOURCES - BEING DEFINED
JUNE1996
NOVEMBER1997

13. .
POLILAGO
© SAP America, Inc / 13
plastilago
COMPACT METHODOLOGY:
 PROJECT SUCCESS
ASSOCIATED TO
STREET-WISE SAP
DISTILLATES
 COMMON SUCCESS
FACTORS WERE:
 USER
INVOLVEMENT
 STERN PROJECT
CONTROL
 INTEGRATED
CHANGE
MANAGEMENT
ORGANIZATION AND
CONCEPTUAL
DESIGN
DETAILED DESIGN
AND
PARAMETRIZATION
PREPARATION
FOR
PRODUCTION
OPERATIONS
OPTIMIZATION
CHANGE MANAGEMENT
WELL DEFINED
PRODUCT
STRUCTURE
AND
NATURE

14. .
POLILAGO
© SAP America, Inc / 14
plastilago
STERN PROJECT CONTROL:
A The Assyrian came down like
the wolf on the fold
B And his cohorts were gleaming
in purple and gold
A The Assyrian came down like
the wolf on the fold
B And his cohorts were gleaming
in purple and gold
C And the shhen of his
A The Assyrian came down like
the wolf on the fold
B And his cohorts were gleaming
A The Assyrian came down like
the wolf on the fold
PRODUCT
STRUCTURE &
NATURE
PROGRESS
REPORTS
PERT
DIAGRAMS
‘S’
CURVES

15. .
POLILAGO
© SAP America, Inc / 15
plastilago
PROJECT ORGANIZATION:
USER LIAISON
USER ANALYST
SYSTEMS ANALYST
FUNCTIONAL CONSULTING
PER R/3 MODULE
INFRASTRUCTURE SPECIALISTS
PROJECT MANAGEMENT
MANAGERS:
•SALES
•FINANCE
•HUMAN RESOURCES
•PRODUCTION
•LOGISTICS
•IT
OTHER DECISION
MAKERS
CHIEF EXECUTIVE50 USERS
18 IT SPECIALISTS
5.000 HRS CONSULTING
ABAP/4 SPECIALISTS
POOLS

16. .
POLILAGO
© SAP America, Inc / 16
plastilago
BLOCK I - JUNE 96/JANUARY 97:
 SALES
 MASTER DATA
 PRICES
 DISCOUNTS
 BUSINESS PARTNERS
 ORDERS
 CONTRACTS
 DELIVERY PLANS
 SALES STATISTICS
 BILLING
 INVOICES
 PLANNING
 FORECAST
 SOP
 MPS
 SHIPPING
 DELIVERIES
 RETURN DELIVERIES
 REPLENISHMENT
 FINISHED PRODUCTS
 GOODS RECEIPT
 TRANSFER REQUIREMENT
 TRANSFER ORDER
 PHYSICAL INVENTORY
 VALUATION
 TRANSPORT ORDER

17. .
POLILAGO
© SAP America, Inc / 17
plastilago
BLOCK II - JUNE 96/JANUARY 97:
 GENERAL ACCOUNTING
 GENERAL LEDGER
 FINANCIAL REPORTING
 STATISTICS
 ACCOUNTS PAYABLE
 MASTER DATA
 VENDOR
 BANK
 CREDIT MEMO
 DOWN PAYMENT
 POSTING
 PAYMENTS
 ADVANCES
 TAXES
 CHECKS
 ACCOUNTS RECEIVABLE
 CREDIT/DEBIT MEMO
 REBATES
 LETTERS OF CREDIT
 COLLECTIONS
 DOWN PAYMENTS
 INTERNAL TRANSFER POSTING
 AUTOMATIC CREDIT CONTROL
OF SALES ORDERS
 CREDIT MANAGEMENT
 INTEREST CALCULATION
 CLEAR ANALYSIS

18. .
POLILAGO
© SAP America, Inc / 18
plastilago
BLOCKS III & IV - FROM JAN 97 TO AUG/OCT 97:
 PURCHASING
 GOODS
 SERVICES
 INVENTORY MGMT (SPARE PARTS,
OPERATING SUPPLIES, EMPTIES,
SEMIFINISHED PRODUCT, RAW
MATERIALS)
 RESERVATIONS
 GOODS RECEIPT
 TRANSFER ORDER
 TRANSFER REQUIREMENT
 PHYSICAL INVENTORY
 VALUATION
 STATISTICS
 COST CONTROL
 COST CENTERS
 PROJECTS SYSTEM
 PRODUCTION COSTS
 PROFITABILITY ANALYSIS
 ABC
 PRODUCTION - PROCESS
 MASTER RECIPES
 RESOURCES
 PROCESS ORDERS
 CONTROL RECIPES
 PI - SHEET
 CAPACITY LEVELLING
 MRP
 STATISTICS
 QUALITY MANAGEMENT
 INSPECTION PLANNING
 QUALITY CERTIFICATES
 PROCUREMENT
 QUALITY INSPECTIONS
 STATISTICS

19. .
POLILAGO
© SAP America, Inc / 19
plastilago
MARACAIBO CENTRAL COMPLEX:
UPS
REDUNDANT
POWER
SUPPLIES
REDUNDANT
SERVERS
DISK MIRRORING
FOR R/3
TAPE
BACKUP
CENTRAL COMPLEX:
• 2 COMPAQ PROLIANT
5000 SERVERS WITH
STANDBY RECOVERY
OPTION
•• 2 PENTIUM PRO
200 Mhz
•• 640 Mb RAM
• 35 Gb DISC
• 2 DLT TAPE UNITS
• 250 Mbps ETHERNET
CARD

20. .
POLILAGO
© SAP America, Inc / 20
plastilago
THE NETWORK:
EL TABLAZO COMPLEX
MBO CCS
EXTERNAL
STORAGE
x.25 internet
HIGH DENSITY PE PLANT LOW DENSITY PE PLANT
EXTERNAL
STORAGE

21. .
POLILAGO
© SAP America, Inc / 21
plastilago
SOFTWARE GENERAL ARCHITECTURE:
ABAP/4ABAP/4
INFORMIX ODS 7.20T21INFORMIX ODS 7.20T21
WINDOWS NT 3.51 SP 4WINDOWS NT 3.51 SP 4
MS OFFICEMS OFFICE
4.214.21
& OTHERS& OTHERS
SAP R/3 3.0E+SAP R/3 3.0E+

22. .
POLILAGO
© SAP America, Inc / 22
plastilago
DON’T:
 SELECT THE WRONG DEVELOPMENT APPROACH
 SELECT THE WRONG USERS
 SELECT THE WRONG FUNCTIONAL CONSULTANTS
 SELECT WRONG PURVEYORS
 SELECT WRONG BASIS PERSONNEL
 UNDERESTIMATE IMPORTANCE OF BASIS TRAINING
 UNDERESTIMATE TIME - AND COST - OF REWORKING
 UNDERESTIMATE PROCUREMENT/DELIVERY TIMES

23. .
POLILAGO
© SAP America, Inc / 23
plastilago
DO:
 EXCEL AT CHANGE MANAGEMENT
 RECRUIT THE COMPANY PRINCIPAL - SINE QUA NON
 RECRUIT - OR LEVY - TOP MANAGEMENT
 OBTAIN RIGHT AMOUNT OF THE ABLEST USERS
 CONFINE CONSULTANT TO PREDEFINED ROLE
 STERNEST PROJECT MANAGEMENT: TIME, COST, QUALITY
 R/3 CHOICE-OF-FIT REENGINEERING
 MINIMIZE NON R/3 FUNCTIONALITY
 ZERO CHANGES TO R/3 BASE CODE
 EARLY INSTALLATION R/3 DEVELOPMENT ENVIRONMENT
 EARLIEST POSSIBLE TRAINING OF USERS & SPECIALISTS