WhatIn-house sets developments us vs allstandard apart. systems Stockholm 2015-09-17
Johan Christenson MD, voestalpine group-IT AB
voestalpine group-IT AB www.voestalpine.com/group-it Agenda In-house vs standard systems
Introduction - Short about voestalpine and Uddeholm - IT within a large International company
In-house developments vs standard systems - Pros and cons - Strategic direction within voestalpine
Experiences from real projects - Actual system landscape at Uddeholms AB - Evaluation of various options - Findings - lessons learned
Questions??
voestalpine group-IT AB 2 | 17/09/2015 | We shape the world.
We are the world’s market leader or hold leading positions with all of our four divisions.
We’re the partner of choice worldwide Steel Special Steel for demanding product solutions high quality sheet and Market leader in tool steel, involving steel heavy plate for the most high-speed steel and special demanding applications. forgings. 500 Group companies - in more than 50 countries on all 5 continents
The voestalpine AG share is listed on the Official Market of the Vienna Stock Exchange Metal Engineering Metal Forming market leader for rails and metal proc. solutions, precision processed wire, welding cons. steel coil and special components and seamless tubes. for the automobile industry. voestalpine group-IT AB 3 | 17/09/2015 | We’ve got great figures.
Key figures for 2014/2015
Employees 47,500
Revenue EUR 11,190 million
EBIT EUR 886 million
EBIT margin 7.9%
voestalpine group-IT AB 4 | 17/09/2015 | Uddeholm – History and location
Founded 1668: Johan Karlström started to build Stjernsfors Works, the origin of today’s Uddeholms AB, in the community of Uddeholm. Since July 1, 2007, Uddeholms AB belongs to the Austrian company voestalpine AG, division Special Steel. voestalpine group-IT AB 5 | 17/09/2015 | Uddeholm - what we do
Our product Tool Finished product
in high performance voestalpine#1 group-IT AB tool steel | | Uddeholm - Production site
~ 830 employees
Steel mill
2 forging presses
Rolling mill
10 ESR units
> 300 patents
> 90 % on export
in high performance voestalpine#1 group-IT AB tool steel | | Uddeholm - Global presence
>100,000 customers all over the world
Sales network of over 2,000 people
1 million deliveries/year. The average weight to the end customer ~ 50 kilo
More than 120 stock locations = fast and reliable deliveries
Global support from international or local specialists
in high performance voestalpine#1 group-IT AB tool steel 8 | | Sales by industry segments
voestalpine group-IT AB 9 | 2015-09-17 | voestalpine group-IT
Full scope of IT-services to all group companies Infrastructure services (datacenter, server operation, storage, etc)
Desktop services, incl. service desk (PCs, Notebooks, tablet PCs, etc)
Communication services (LAN, WAN, etc)
Business application services (standard & non-standard systems)
We are the number-one partner of all IT-services within voestalpine More than 550 consultants worldwide Sourcing via in-house resources or via external partners
voestalpine group-IT AB 10 | 17/09/2015 | We follow our customers worldwide…
We are close to all companies with our locations and services group-IT customers @ 52 countries August 2015
voestalpine group-IT AB 11 | 17/09/2015 | Agenda In-house vs standard systems
Introduction - Short about voestalpine and Uddeholm - IT within a large International company
In-house developments vs standard systems - Pros and cons - Strategic direction within voestalpine
Experiences from real projects - Actual system landscape at Uddeholms AB - Evaluation of various options - Findings - lessons learned
voestalpine group-IT AB 12 | 17/09/2015 | Pros and cons – in general Standard systems vs in-house development
Standard systems - pros + Standard functionality based on best practice - you must not reinvent the wheel + Lower costs + safer investment calculation (fixed price from vendor) + Faster implementation and lower support/maintenance costs + New versions and releases – dev. costs are shared by many companies
Standard systems - cons - Might not fulfill all business requirements – a lot of modifications needed - Must adapt the business to the system - Dependent on a vendor – little influence of new versions, licenses, prices, etc
voestalpine group-IT AB 13 | 17/09/2015 | Pros and cons – in general Standard systems vs in-house development
In-house development - pros + Tailor made solution – follow the business process + Free to decide on any new developments + Use of the latest technology + No license costs for the application
In-house development - cons - Longer implementation time - high involvement from the business - Higher risks (resources, future development, technology shift, brain drain, etc) - Higher Total Cost of Ownership (development, maintenance, support, etc)
voestalpine group-IT AB 14 | 17/09/2015 | Strategic direction within voestalpine - Applications Management
Standard systems are preferred over individual solutions, integrated systems over island solutions and modular systems over monolithic systems.
The purchase of applications is preferred over in-house developments.
Unification and standardization of applications for comparable business processes is required to the extent possible.
Defined group/division standards are to be used.
Utilization of software as a service (SaaS) is preferred over in-house implementation in the event that the service can be integrated into the corporate IT infrastructure.
….. und so weiter …
voestalpine group-IT AB 15 | 17/09/2015 | Agenda In-house vs standard systems
Introduction - Short about voestalpine and Uddeholm - IT within a large International company
In-house developments vs standard systems - Pros and cons - Strategic direction within voestalpine
Experiences from real projects - Actual system landscape at Uddeholms AB - Evaluation of various options - Findings - lessons learned
voestalpine group-IT AB 16 | 17/09/2015 | Actual system landscape at Uddeholms AB
- There is a large mix of different standard systems and In-house developed systems!
voestalpine group-IT AB 17 | 17/09/2015 | Real project - replace old MES-system (HISS)
Background 20 years old In-house developed MES-system Old technology – HW/SW Old user interface - text based
Very difficult to implement changes and new demands in the system Key persons in the system (business & IT) were about to retire
Very hard to find external resources within the old technology Very high risk and high costs to keep and maintain the old system
voestalpine group-IT AB 18 | 17/09/2015 | Evaluation - find a new Standard MES
Mission – find the best standard MES-solution on the market that covers the business needs and implement it at Uddeholm Steel Mill
Target Efficient and flexible standard system for existing and new processes Modern technology User friendly – minimize errors via relevant self instructions (QM, etc) Increase productivity One common system for the production Good basis for planning and simulation Increase automation level Professional partner Improvement of existing business processes Platform for growth and proper IT support
voestalpine group-IT AB 19 | 17/09/2015 | Evaluation process - new Standard MES
Detailed requirements specification from Uddeholm (> 200 pages) Evaluated existing MES-solution within Special Steel Division (Villares Metals, Kapfenberg and Buderus) Market survey of all well known suppliers of standard MES-solutions (~40 international suppliers) RFI sent to 16 suppliers. Evaluation based on the following criteria's: References within steel, Swedish references? Functionality, flexibility, interfaces? Software platform, product, life cycle, upgrades, etc? Hardware platform? Stability and delivery capability? Local representation - Swedish consultants? Detailed evaluation of 4 different standard MES-solutions Presentations, workshops, offers, etc voestalpine group-IT AB 20 | 17/09/2015 | Standard MES – results from the evaluation
We could not find a standard MES-solution that covered the unique production processes at Uddeholm
Findings from the standard MES-evaluation A lot of modifications needed in order to meet all the requirements High license costs Long implementation time High risk - stepwise implementation very hard Hard to find local resources
Not a good business case – very high TCO
voestalpine group-IT AB 21 | 17/09/2015 | New evaluation approach
Modernize the old but well functioning In-house developed MES-system (HISS)
Updated requirements sent out to 4 Swedish suppliers: Criteria for the selected suppliers Good knowledge in MES-system and industrial IT Familiar with Uddeholm production processes References within steel industry Local presence and skilled consultants
Contract signed with a new partner in Q1 2014 2 of 6 modules implemented YTD (Sept 2015) 3rd module is under implementation Project is on time and budget
voestalpine group-IT AB 22 | 17/09/2015 | Findings of the new In-house approach
What was the benefit of modernizing the old MES-system? We can reuse already developed functions in the old system Modern technology (.NET) to fulfill current and future requirements Modern user interface (web, mobility, etc) Easier to integrate with other applications New standard platform for automatization/digitalization (RFID, GPS, etc) We own the source code Lower risk Stepwise implementation possible More flexible and agile development Easier to find local resources Much better business case Lower implementation costs No license costs - for the application
voestalpine group-IT AB 23 | 17/09/2015 | Findings – lessons learned
Standard systems are good for standard business processes Do not underestimate the need of modifications of standard systems For unique processes => In-house developed systems can be a better option High involvement from the business is needed very often it is more of a business project than an IT-project Strategic directions are not always easy to follow Develop a comprehensive business case Analyze all business requirements/benefits (in-house or standard?) Realistic implementation plan Ensure access to skilled resources Calculate Total Cost of Ownership (TCO)
voestalpine group-IT AB 24 | 17/09/2015 | Agenda In-house vs standard systems
Introduction - Short about voestalpine and Uddeholm - IT within a large International company
In-house developments vs standard systems - Pros and cons - Strategic direction within voestalpine
Experiences from real projects - Actual system landscape at Uddeholms AB - Evaluation of various options - Findings - lessons learned Frågor? Questions?? Questions?
voestalpine group-IT AB 25 | 17/09/2015 | For further questions please contact:
Johan Christenson [email protected]
Phone: +46 (0)702 59 25 00 www.voestalpine.com/group-it
voestalpine group-IT AB 26 | 17/09/2015 |