1 C and SAP Solutions for Corporate Customers

1 C and SAP Solutions for Corporate Customers – Experience in Russia

How to organize an efficient cross border SAP implementation project in Russia September 29, 2010 Braas – DSK 1 ROOFS FOR LIVING

MONIER – FACTS AND FIGURES • • 133 production sites in 33 countries Business activities in 40 countries Global headcount 8894 MONIER OFFERS Net sales 2010 – 1 280 500 000 euros • • Roofing tiles Roofing components Roofing systems Insulation Solar thermal and photovoltaic systems Chimney systems Ventilation systems

BRAAS – DSK 1 FACTS AND FIGURES • Sales Volume • Net Sales • Number of plants • Number of branches • Production Capacity • Market Share in Concrete Tiles • Number of employees • Share of Monier • Share of DSK-1 1 000 sq. m 15 mio. EUR 2 3 2 - 2, 5 mio. sq. m. > 70% 150 67% 33%

ERP System Evolution at DSK-1 • 1996 – 1999 COS/Westernacher (AS 400) + BEST (MS DOS) – Implemented Functional Modules – Number of users: – Number of locations • 1999 – 2003 Concorde XAL – Implemented Functional Modules – Number of users – Number of locations • 2004 – 2010 : Logistics/Local Accounting/ Wages : 6 : 1 : General Ledger/Debitors Creditors/Fixed Assets/Wages : 10 : 1 Axapta 3. 0 – Implemented Functional Modules – Number of users – Number of locations : General Ledger/Debitors Creditors/Fixed Assets Personell & Wages : 26 : 4 • Systems hosted internall • Application support organized via an external partner

Why SAP ? SAP is the standard ERP solution for MONIER as a basis for further process harmonization and shared solutions • Not using SAP has to be released by Group IS/IT • Migration towards SAP when replacing existing solution always have to be considered • Local ERP solutions are only allowed when SAP is not applicable MONIER IS/IT STANDARDS

MONIER ERP Landscape WESTERN EASTERN ASIA EUROPE PACIFIC SAP Germany Local Solution SAP Thailand France UK Italy Benelux Scandinavia Poland Ukraine Russia Turkey Local Solution Japan China Indonesia Malasya India Baltic Philippines Central Europe SOUTH AFRICA Local Solution

MONIER Customer Center of Expertise The Monier SAP CCo. E is certified with 91 points out of 100. This is an excellent result compared to other certified SAP customers. It is settled in the upper third of the meanwhile more than 1000 worldwide certified Cco. Es” (SAP)

Situation before the Project Eastern Europe Poland: • 10 years of stable SAP operation • In-house hosting and system administration • Long term successful external partner relationship for system support and development Russia: • • 6 years of Axapta (MS Business Solution) deployment A system upgrade decision is pending Dissatisfaction with an overall system performance, capabilities and running costs Dissatisfaction with the partner responsible for system support and development Ukraine: • No ERP system in place

Drivers for the Project Braas DSK-1 internal drivers • Axapta has been running since more than 6 years without any upgrade • Growing dissatisfaction with an overall system performance • Axapta upgrade is very expensive due to many system modifications Group drivers • Group Initiative for ERP Platforms • Available Polish SAP Platform and v. good experiences from Poland Multi-client approach of ONE SAP in West Europe

SAP Architecture - ONE client -- Multi company approach Application Infra Structure Poland Local Application Support and Development via Local Partners Standardized local processes Russia Ukraine One SAP System Applications on (Cross-client Customizing and Solutions) One Common IT Language Data Structure One Server (Cross-client Repository) with Database In House Hosting (Poland) Operating System Hardware -- Server

SAP Architecture - Multi client Application Ukraine Russia via Local Partners Multi local Processes Poland Local Application Support and Development Infra Structure One SAP System Applications (Cross-client Customizing and Solutions) One Common IT Language Data Structure on One Server (Cross-client Repository) with Database In House Hosting (Poland) Operating System Hardware -- Server

SAP Architecture evaluation - Conclusions Multi client approach Multi company code approach Pros • • • Optimal platform for cross country shared Ensuring high flexibility, stability Operational cost optimized solution services Reduced to minimum coordination costs • Platform for one business process – Good practice sharing possible not requiring sharing of business process • Deep process standardization ensured via • System operational stability and reflecting the Monier’s business need confirmed by west European successful approach • Authorization concept enables complete business data segregation (supports Joint Venture situation) Cons • Cross client business data aggregation possible only through third tools immediate practice sharing system architecture Cons • High costs of coordination and governance • Lower flexibility to react on local needs • Difficult to achieve local commitment for initial data harmonization and future governance • Cultural and language issues in highly integrated system SAP Multi client approach is strongly recommend

Fast Track Implementation - Methodology - 1. SAP Release ERP 6. 0 as the basis for further roll out 2. Implementation of the ERP common IT language in the shared SAP environment 3. Copy of the Polish client Ø Business process coverage is a prerequisite for an efficient client copy Ø Good practices in all relevant fields of reporting and logistic will be taken over Ø Implementation of legal adjustment of Russian Ø Adaptation of business process at SAP level only if definitely needed Ø Data migration 4. Local Infrastructure implementation (WAN Upgrade, SAP Client rollout, etc)

Fast Track Implementation - General Approach - SAP Multi Client “Client Copy Poland" SAP Training of Russian Key users Start: X Both phases to run simultaneously with continuous iteration SAP Implementation and Customization for Russia Business Process Design Russia Migration Training End User Go-live End: X

Project Phases • Project preparation and prototype documentation • Knowledge transfer and Delta blueprint • Customizing • Key user training • Integration test 1 • Enhancement realization • Integration test 2 • Final preparation • Go live and initial support

Project General Information Project scope FI CO SD MM Duration 7 months Go Live May 1, 2011 Implementation Metodology ASAP + Fast Track

ERP Project Success Statistics Standish Group

Project Organization MONIER GROUP • • MONIER RUSSIA Steering Committee Escalation Process definitions SAP Multi-client know-how counterpart System change coordination MONIER POLAND BRAAS – DSK 1 MONIER SP. Z O. O. • Project lead: D. Kriukov • Key-User concept • Hosting partner • Solution and know-how counterpart based on agreed “project” operational processes Project coordination ALPE Standard support System Know-How (fixed prise project) PLAUT (Strategic partner for Monier Poland) Transfer Secured via implem. contract

Project Team Project Manager Module Managers FI CO MM/SD 10 Key Users

Project Budget • Implementation • Infrastructure • Licenses

Project Status Controll • Weekly Status Meetings • Fixing all Project delays and problems • Fast reaction • Steering Committee • CEO involvement

Master Data Migration • Key users responsible for preparation • Labour intensive work • Thorough data verification

Key User Training • Just before Integration test 1

Integration tests 1 and 2 • Real data • Personal responsibility

Data Migration • Several days if possible

Go Live and Initial Support • 1 – 2 month obligatory

Project results • MONIER Group ERP Standarts conformity • Reliable and comparable information for Group Management • Fast period closing (RAS and IFRS)

Using SAP in Russia Our experience Claus Buettner-Wobst, BIM BI Russia

Content I. Our Corporation II. Implementation of SAP III. Governance Model IV. Critical Topics V. Outlook Using SAP in Russia – our experience 03 October 2020 46

I. Our Corporation

Boehringer Ingelheim in brief • • Family-owned global corporation Founded 1885 in Ingelheim, Germany Focus on Human Pharmaceuticals and Animal Health Employees worldwide: 42, 224 • • • Boehringer Ingelheim Center Our headquarters in Ingelheim, Germany Research and Development 16. 8% Production Marketing and Sales 29. 9% 39. 2% Administration Apprentices (on average) 12. 4% 1. 7% worldwide 699 Germany 685 in 28 professions Using SAP in Russia – our experience • • R&D worldwide at 7 sites Expenses for R&D: EUR 2, 453 million 20 production facilities in 13 countries Total revenue: EUR 12, 586 million 03 October 2020 48

II. Implementation of SAP

System Environment - History • 2005 Kick-Off SAP project INSURE • 2007 Go live for Austria • 2008 Roll out for CEE- Countries • 2010 Adaption SAP for RCV 29 (new legal entity Russia) • 2011 Adaption SAP for sales organization • 2012 automatically interface to warehouse provider Using SAP in Russia – our experience 03 October 2020 50

System Environment - Functionality Commercial Processes Production Processes • Order to Cash (O 2 C) • • • Purchase to Pay (P 2 P) Procurement Sales Production Planning (PP) Inbound Logistics (IL) Outbound Logistics (OL) Plant Maintenance (PM) Quality Management (QM) [LIMS] Logistics Production Maintenance Financial Processes Human Resources Processes • Integrated Planning (IP) • HR Development (HRD) • Accounting to Reporting (A 2 R) • International HR Management (RCV) (HRI) • Treasury & Cash Management (TCM) Accounting Using SAP in Russia – our experience Controlling Human Resources 03 October 2020 51

III. Governance Model

System Environment - Governance Development Quality Productive ECC AED AEQ AEP SRM ASE ASQ ASP BI ABE ABQ ABP Using SAP in Russia – our experience 03 October 2020 53

System Landscape D Q P BI E Q SRM P E Q P Terminal Clients MS Internet Explorer Terminal Clients (only for tech. administration) Using SAP in Russia – our experience User Terminal Service with SAP GUI Admin. Moscw Ingelheim ECC 03 October 2020 54

IV. Critical Topics

Critical topics • Legal environment – Forms – Tax requirements – Prepayment environment • Communication – System provider – Internal and external consultants • Strong involvement of SAP Using SAP in Russia – our experience 03 October 2020 56

V. Outlook

Outlook • Warehouse Interface • Optimization of processes • Payroll • … Using SAP in Russia – our experience 03 October 2020 58

Questions ?

SAP Roll out in Russia Alexander Schachner IT Consulting & & Implementation IT IT Consulting & Implementation

Founded in 2006 Offices in Moscow and Saint Petersburg > 45 employees > 40 successful projects 20 certificates: FI, CO, MM, SD, PP, PS, Basis, ABAP SAP Channel & Service Partner Official partner of Basware – the world leader in “Purchase-to-Pay” solutions A partner of Union of Independent Networks of Russia A member of: Association of European Business (AEB) Russian-German Chamber of Foreign Trade (AHK) Austrian Economic Forum (AEF) your SAP partner ALPE consulting IT Consulting & Implementation

SAP in Russia Since 1992 in Russia, offices in many Russian regions. > 700 employees, with own Development Team responsible for localization issues Fully localized & adapted (meets requirements of Russian legislation) Market leader in Russia with >50% market share IT Consulting & Implementation

SAP in Russia SAP software fully meets Russian legislation requirements IT Consulting & Implementation

SAP Roll-Out Adaptation in accordance with Russian legal requirements Global template Local requirements Standardization of global business processes Optimization of business processes between companies Higher information transparency Documentation Country versions IMG structures and settings Global customer developments Master data documents Organizational structure Local developments Local processes Global and intergra ted processes IT Consulting & Implementation

Characteristics of SAP Roll Outs No separate installation for Russia one or more client system hosted by the headquarter own company code for Russia Licenses are purchased centrally (mostly in accordance with SAP Enterprise Agreement) Business processes mainly in logistics are usually identical or very similar Difference between sales and production operations in Russia (see next slide) “Copy – paste” approach is not sufficient enough. Accounting should be fully adapted Statutory Accounting (VAT, creditors, debtors, bank, cash, . . ) Corporate chart of accounts as the main chart of accounts (Russian chart of accounts as an alternative chart of accounts) Asset Accounting Tax accounting Controlling Relatively low effort for controlling in the case of one controlling area (except for production companies – determination of production costs according to RAS) HR is usually covered from external systems. High complexity in Russia IT Consulting & Implementation

Project Size (Sales- or Production company) Module Sales company * Production company* FI High consulting complexity FI SL High consulting complexity (depends on differences in tax accounting) High consulting complexity CO Low consulting complexity High consulting complexity (Production costs calculation, cost of semi-finished products, …) MM Low consulting complexity Medium consulting complexity SD Low consulting complexity Medium consulting complexity PP - Medium consulting complexity ABAP Lower programming effort Relatively high effort • Assuming that processes are mostly identical in logistics IT Consulting & Implementation

Project Phases Project preparation Fit-Gap Analyzes Kick Off Workshop GAP list formation concerning differences to corporate template incl. Russian legal requirements Clarifiying of responsibilities within project team Installation of Russian System (SAP Basis preparation works) Customer's Master Data evaluation Customization Info seminars Customization of businessprocesses Training of the project team (Key user) Testing of the system through all modules Adjustment of the organizational structure Preparation of data for the integration test (test scenarios are being prepared by key users) Correction of the mistakes Planning of training (can be organized in a flexible way, depending from project volume) Data preparation for the upload Go – Live preparation Data transfer Preparation of productive system (done by SAP Basis consultants – mainly in house) Evaluation of the “System Readiness” before Go-Live Organization of After Go-Live support Definition of Reports and Forms which need to be adopted Project Start Testing Go-Live and support Transfer to productive system (Go-Live) Open problems solution Closure of the first period Evaluation of work of the productive system System support Project closure The system is adjusted Go-Live IT Consulting & Implementation

Success Factors of a Roll-Out Project Clear commitment of the project sponsor to support the project Involvement of the whole project team (Management, Key-users, IT, …) Fast decision making process Availability of the customers key-users (business process owners) Active cooperation with the corporate SAP competence center!! Open Communication Experts in Russian accounting and tax requirements Use of standard solutions as much as possible and programming only when this is necessary Clear definition of responsibilities within project team Authorization to the project team to access the system Preparation of Master Data IT Consulting & Implementation

Some of our customers The best demonstration of ALPE consulting competency and experience is the list of our customers IT Consulting & Implementation

ALPE Consulting, LLC Central office: Krasnoproletarskaya Str. , 16, bld. 1, Moscow 127473 Tel. /Fax: +7 495 660 -20 -19 North-West office: “IT Park” Business Center Krasnogo Kursanta Str. , 25, “B”, office 7, Saint Petersburg 197110 Tel. /Fax: +7 812 680 -22 -34 http: //alpeconsulting. com info@alpeconsulting. com IT Consulting & Implementation

Possible evaluation criteria Evaluation of possible ERP solutions / Example I II IV Option 1 Option 2 Option 3 Option 4 SAP ALL SAP + 1 C 1 C Other Option Technical feasiblity/complexity of implementation Manage complexity of integration/interfaces Flexibility / adaptability to new legal requirements Implement/set-up standard Companies processes Transparency on business Labour market condiditions PM support/supervision (incl. organization, access) Transparency about changes (amend vs. cancelation) Technical Support Authority concept IT Infrastructure (server, backup, archive, . . . ) Bilingual version available (engl/russ) Sum IT Consulting & Implementation