Successfully working with oracle as a customer and partner

1. T H E P A S S I O N R U NS D E E P
Stuart Patsos, CIO / Vice President of IT
Successfully working with Oracle as a
customer and partner

2. Agenda
The Company – Introduction and Background
Project Objectives
Project Scope
Project Approach
Implementation Approach
Change Management
Oracle On Demand
Partnering with Oracle
How Should Oracle Partners Work with Customers
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3. Company Background
The Macsteel Services Centers Group (MSG) is one of the largest international
steel conglomerates active in the trading and processing of steels and metals all
over the world. The companies are active in the Steel Service Center, Steel
Trading, Shipping, and Manufacturing industries
Macsteel Holdings
Mittal SA Kumba
Resources
Steel Service Centers
100%
Macsteel Macsteel ISKOOR Macsteel Trans Orient Ore
Service Service Group International Supplies
Centers Centers Israel (Trading) 50%
SA USA 50%
MUR
Shipping
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4. Company Background (Cont.)
Macsteel Service Centers USA is one of the leading metals
processors and distributors in North America.
● 30+ locations throughout North America and Puerto Rico
● processes and distributes
► carbon ► aluminum
► stainless ► specialty metals
● Products include a full range of
► flat rolled ► pipe
► plate ► bar
► tubing ► structurals
● The company also supplies a full range of
► Coated ► steel building products
► prepainted metals
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5. Macsteel Operations
Distribution and Trading
Buy in Sell - No Processing - Pipe, Beams, Rod, Bar
Coil Processing
Purchase Coil from Integrated Mills - Process to Sheet, Plate, Tube,
Roll Form Shapes
Tube Manufacturing, Roll Forming
Building Products
Roofing Panels and Hardware
Plate Burning
Atlanta – Dedicated to Plate Burning
York, Charlotte – smaller scale
Outside Processing
Contract with other companies to warehouse or process our material
Large scale at some facilities
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6. Project Objectives

7. Global Project Objectives
Key objectives for this project
Replace legacy ERP and Mgt Reporting systems
Standardize key business processes across all plants
Transition to and Implement Oracle EBS R12
Adopt industry best practice processes to speed
implementation and reduce risk
Facilitate statutory compliance
Provide easy access of data
Provide one true complete picture of information across
the entire organization
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8. Project Timeline

9. Project Timeline
Macsteel Oracle Implementation Timeline
Western Division Golive
Implemenation Partner Selected Eastern Division Golive
Atlanta Division Golive
Hawai Golive
Project Restart - USA Only 3.0
Oracle EBS Selected Midwestern Division Golive
Project Restart - USA Only 2.0 Southwestern Division Golive
Requirements / Gap Analysis
Global Implementation Start
Completed
CS&T Division Golive
Southeast Division Golive
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10. Project Scope

11. Project Scope
The project scope includes implementation of Oracle R12 business flows in
following three areas:
Commercial Manufacturing Financial
• Procure to Pay Forecast to Plan • Accounting to Financial
Inventory Management Reports
• Order to Cash
Manufacturing Hybrid
• Process Manufacturing
• Discrete Manufacturing
Shipping / Transportation
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12. Applications Footprint
Version of EBS currently Implemented: 12.1.2
Oracle products implemented:
Financials (GL, AP, AR, Advanced Collections)
Order Management (including Configurator)
OPM (Process Manufacturing, Inventory)
Discrete Inventory
Procurement (including LCM – Landed Cost
Management)
OTM (version 6.04)
eBus Tax (with Vertex O series)
On Demand since Sept 20, 2010
Future implementation
OBIEE – Piloting now with AR and Procurement
Warehouse Management
EAM
ASCP
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13. Application Usage
Scope of implementation
Multiple legal entities, 8 Divisions, 30+ branches / Offices
US & Mexico Ledgers
Hybrid of Process Manufacturing and Discrete Inv. Orgs.
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14. Key Challenges / Drivers
Multiple units of measure
Average Costing Raw Materials & Finished Good Stock
Lot Costing cut to order steel
Management of Freight (OTM)
Management of Acquisition Costs (LCM)
Management of Sales Taxes (Vertex)
Management Reporting (OBIEE)
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15. Gap Analysis
Performed Business Requirements Mapping
Gathered, reviewed and summarized 1071 Business Requirements
Mapped each Requirement to Oracle Standard Functionality
Result: Standard Functionality exists or there is a GAP
Performed Gap Analysis
Functionality Workaround to meet Business Requirement?
Change in Business Requirement to meet Standard Functionality?
Otherwise, Extension Required
Categorized Each Requirement
Standard, Workaround, Process Change, Extension
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16. Gap Analysis (Cont.)
Mapping Results Total
Total Business Requirements 1071 100%
Standard Functionality Meets 656 61%
Gap in Functionality 415 39%
Gap Analysis Results Total
Total Gaps 415 100%
Oracle Workaround 96 23%
Business Process Change 25 6%
Extension Required 294 71%
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17. Project Approach
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18. Hybrid Approach
Discrete
Buy and sell only
Perpetual Average Costing
Landed Cost Management (LCM)
Desire to do lot costing in discrete
Processing performed in OPM
Desire to do Perpetual Average Costing in OPM and not periodic
Desire to do LCM in OPM
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19. Hybrid Approach
Discrete
Buy and sell only
Perpetual Average Costing
Landed Cost Management (LCM)
Desire to do lot costing in discrete
Processing performed in OPM
Desire to do Perpetual Average Costing in OPM and not periodic
Desire to do LCM in OPM
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20. Hybrid Approach Challenges
Material transfers between OPM and discrete
Costing
Visibility to detailed component costs required
Transfer price is used to carry the cost but is not updated by perpetual
average costing (extremely dynamic) (Advanced Pricing?)
Cost allocation methods
Double the inventory organizations
How to manage the sale, purchase, and production of random
dimension items?
Create an item for each new combination of dimensions /
attributes using Oracle Configurator (enabled in Sales Entry, PO
Entry, Process Manufacturing,
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21. Implementation Approach

22. Implementation Approach
Strong Oracle Project Manager (must know Oracle)
Engage an experienced Oracle team (must be business process
savvy)
Have properly documented requirements and map them to
Standard Oracle Process Flows
Gap analysis will determine the number and complexity of the
extensions that were required
Do not under any circumstances change Oracle or do any direct
table writes.
Only customizations are where Oracle does not have
functionality – can develop separate tables
Develop fully integrated footprint of the entire solution
Rollout by Geography - multiple branches at a time after the
initial proofing
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23. Implementation Approach (cont.)
Goal was to get the base system implemented first
Phase II and III to do further process reengineering later
Identified areas to reduce the number of steps due to the lean
workforce e.g.
Sales Entry
Blanket Agreement and Quotes releases
Manufacturing Batch
Shipping Execution - Transact Move Order (reservations, prints
documents, moves material to stages, allocates full lot)
Reports development – look to use OBIEE which provides multi
use of reports than single use custom development
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24. Current Status
We first went live with Western Division Dec 14, 2009
Other Divisions have gone live
Atlanta Division – May 1
Midwest Division – July 1
CS&T Division – August 1
Hawaii – September 1
Southeast Division – October 1
Planned Rollouts
Eastern Division – February 1
Southwest Division – December 1
Ongoing Issues
Managing enhancement requests
Managing report requests – 250+ reports on the list
Closing help desk tickets and supporting live users
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25. Change Management
Executive Support
Build a comprehensive budget
Get business involvement – this is not an IT Project
Select a core team early of “doers” that perform the business
processes
Be realistic on what should be in the system and what can be
accommodated through business process change
Training will be extensive
General Computer training
More keystrokes and processes
Develop training on Oracle UPK
Build Job Aids
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26. Oracle On Demand (OOD)
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27. Oracle On-Demand
Key Drivers to choosing Hosting
Hardware – Servers and Storage were undersized when purchased 4 ½ years ago
Insufficient internal resources to manage the system – we needed 24 x 7 support
and only have 1 DBA
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28. Why Oracle On-Demand
Reduced Risk
Access to unmatched oracle expertise
Proven best practices and automation
Security, auditing, governance, standards
Accelerated implementation timeline
Up and running faster (90 days)
Run most current software – including Vertex
Lower, Predictable costs
We pay for what we use
Global sourcing model to optimize costs
Reduce data center complexity
Avoided capital expense of new servers and storage
Lower, Predictable costs
Scalable, proven cloud infrastructure
Integration platform
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29. Partnering with Oracle
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30. How do we work with Oracle
Close partnering with Oracle Sales teams
Alignment with Oracle Industry Verticals
Oracle CAB involvement
Critical Accounts support
Involved SIG groups
Involvement with Oracle marketing
Customer reference calls
Presentations
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31. How Should Oracle Partners
Work with Customers

32. Considerations
Strong Project Management
Project Team should be process driven not just configuration experts
Plan Plan Plan
Make sure to get business involvement
Get clear requirements (not wish lists)
Map / Gap against standard Oracle
Determine how to meet gaps
Business Process change
Extensions
Customization
Steel companies have an unsophisticated user base
Change Management
Training – including PC skills training
Effect of unionized labor on the project and team availability
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33. Questions