Many companies love to brag about being a global player, but the reality is that lofty status can bring a different set of problems. Munich Re is one of the largest reinsurers in the world, but its technology needs were not being served by the variety of legacy systems it employed. We needed the infrastructure to support the needs of a global player, says Udo Schucar, project manager for Munich Re.
With operations in more than 150 countries, Munich Re was looking for a solution that would speed its processes for calculating exposure to loss and create a transparency, according to Schucar, for the worldwide business. It is our goal to have for our information a single point of entry only, he says. The diversity of systems around the Munich Re Group caused parallel development and maintenance and would hinder Munich Re to achieve its objectives within an acceptable time.
The reinsurer conducted an intensive feasibility study as it began to search for a solution. During this six-month phase, we involved all important business units, explains Schucar. We evaluated other products, and we considered internal development, too.
The decision was made to go with SAP, a global solutions provider also based in Germany. The main reason for this decision, besides the business functionality it provided, was the technology platform of mySAP.com, says Schucar. Munich Re already has implemented a number of SAP products, and we had a good experience with them.
The implementation phase is ongoing for Munich Re. Throughout 2002, SAP and the carrier concentrated on the blueprinting phase where business requirements were developed. That was followed by the realization phase, according to Schucar. He says this involved customization, add-on and interface development, and data conversion. In addition, a training strategy was developed during these phases that concentrated on role-specific training for users.
The project is going well so far, says Schucar. But as usual, in a project of this size, we are identifying a number of internal issues that require fundamental business decisions. He claims most of the implementation problems have occurred on the business requirement side. Having so many interest groups involved, it is difficult to serve all of our clients, he says. With possible gaps in functionality of the system, the carrier decided functions would have to be determined to be absolutely necessary for Munich Re to develop such functions as specific add-ons or go back to SAP and encourage the vendor to turn a specific functionality into an SAP standard. The decision whether we can live with a work-around is always based on cost/benefit, says Schucar.
The Munich Re change management team will be able to minimize the shock that comes with rolling out a new system, Schucar asserts, especially one that leads to changes in both processes and organization. It is our clear order to follow the systems standard functionality and processes wherever possible, he says. All of our users seem to understand this generally.
The production platform is Version 4.71 of mySAP.com, according to Schucar. We use the components FS-RI, FS-CD, Business Partner, PD-Org, and SAP-BW, he says. We also use the superdome server from HP as hardware. These powerful machines are necessary to support the global organization. To integrate the software with other non-SAP systems, Munich Re uses Microsofts Biztalk server as the enterprise application integration (EAI) tool.
Schucar believes the importance of this implementation lies in the effort to reach a worldwide business language with the same data semantics and the same business processes. Saving manpower is not the primary goal. It is more about using our manpower effectively to avoid unnecessary administration and coordination work [by] people who should be concentrating on improving our business and client relationship, he says. The return will be the unification of data and processes. This will lead to a high consistency of data and avoid unnecessary coordination work and multiple entry of data.
CaseFile
The Problem: Implementing a single system to handle core processes.
THE COMPANY: Munich Re
PREMIUM volume: $24.4 billion
WEB SITE: www.munichre.com
The SOLUTION: mySAP Insurance by SAP
WEB SITE: www.sap.com
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