Customer Solution Case Study
/ Global Electronics Firm Cuts Costs by 35 Percent, Boosts Scalability and Capacity
Overview
Country or Region:Denmark
Industry:Manufacturing—Audio and video equipment manufacturing
Customer Profile
Bang & Olufsen manufactures upscale consumer electronic products for customers throughout the world. The company has 2,000 employees working in 25 locations worldwide.
Business Situation
The firm’s infrastructure would not support new SAP business applications, and Bang & Olufsen wanted to reduce operating costs associated with outsourcing IT operations.
Solution
Working with NNIT and Microsoft Services, the firm migrated to Microsoft SQL Server 2005 Enterprise Edition and Windows Server 2003 Enterprise Edition to support its SAP installations.
Benefits
- Lowers costs by 35 percent
- Boosts scalability and capacity
- Delivers 40 percent faster response
- Offers fast, simple migration
- Delivers high availability, resiliency
Michael Søby, Outsourcing Manager, Bang & Olufsen
Headquartered in Struer, Denmark, Bang & Olufsen is a leading global manufacturer of high-end consumer audio and visual products. The firm’s employees use a comprehensive collection of SAP business applications to keep track of supplier and customer sales activities. However, the company’s IBM-based infrastructure did not provide the flexibility required for adding critical new applications and updates. For that reason, and because the company wanted to lower costs, the firm migrated to a new infrastructure based on Microsoft SQL Server 2005 Enterprise Edition and Windows Server 2003 Enterprise Edition. As a result, Bang & Olufsen has lowered costs by 35 percent, boosted scalability, and delivered response times that are 40 percent faster. The company also benefited from an easy migration process and has gained higher system availability.
Situation
Bang & Olufsen is a Danish company known for its luxury audio-visual consumer electronic products. Founded in 1925, the firm produces state-of-the-art stereos, televisions, loudspeakers, telephones, and a range of digital media products for customers around the world. The company also manufactures audio equipment for some of the world’s leading luxury automobiles. Bang & Olufsen currently employs 2,000 people in 25 locations.
As a global manufacturer, Bang & Olufsen receives thousands of product purchase orders every day from more than 200 suppliers worldwide. Since 2000, the company has tracked and managed these orders, along with retail sales activities, using a range of SAP business applications running on an IBM OS/390–based mainframe server and AIX application server computers. Bang & Olufsen had outsourced the management and operation of these servers to IBM Global Services.
However, business has changed rapidly over the past 11 years, and Bang & Olufsen has substantially expanded its SAP environment to include applications such as SAP Enterprise Resource Planning (ERP), SAP NetWeaver Business Warehouse, SAP Supplier Relationship Management, and SAP Supply Chain Management.
This proliferation of software presented challenges, because the company’s existing IBM infrastructure was not flexible enough to support the growing number of applications. For example, the IBM mainframe did not offer support for SAP ERP 6.0. Bang & Olufsen needed to upgrade to this software version because of the need to use Unicode—the computer industry standard for the consistent encoding and representation of text in most of the world’s writing systems.
Outsourcing systems to IBM was also proving to be costly for Bang & Olufsen, particularly as new business applications were added. In addition, the overall architectural limitations of the company’s systems presented obstacles to achieving scalability and flexibility. System performance was another challenge: as the company’s business had grown, the database and usage had expanded about 10 percent each year, to the current 1.6-terabyte size. This expansion led to slower overall response times. In addition, employees were spending too much time tracking purchase orders, and IT personnel were spending more and more of their time maintaining operations and dealing with system performance issues.
Amid these business challenges, Bang & Olufsen executives decided that it was time to consider working with a new outsourcing company—the agreement signed with IBM in 2000 was set to expire on December 31, 2010. “We were ready to try something new and different,” says Dan Uhre, Senior Manager, IT ERP & BI, Bang & Olufsen. “We were ready to look for a more flexible and scalable solution.”
In late 2007, Bang & Olufsen began evaluating new outsourcing partners and IT infrastructures. The company specifically sought a solution that provided flexibility, scalability, and stability without incurring risks.
Solution
Bang & Olufsen initially looked at solutions from IBM, HP, Microsoft, and several local vendors. Ultimately, the company was impressed most with NNIT, a Danish IT consultancy that is owned by global pharmaceutical company Novo Nordisk. NNIT, a Microsoft Gold Certified Partner, specializes in IT development, implementation, and operations. "NNIT had a very attractive price/performance ratio in terms of infrastructure and services compared with IBM," says Michael Søby, Outsourcing Manager, Bang & Olufsen.
Bang & Olufsen chose NNIT to plan and lead the migration from the IBM mainframe to Microsoft SQL Server 2005Enterprise Edition data management software and the Windows Server 2003 EnterpriseEdition operating system for supporting the company's multiple SAP installations. NNIT chose Microsoft Services to assist in the migration.
SQL Server 2005 is designed to support very large SAP application installations and databases. Together with Windows Server 2003, it provides enhancements such as failover clustering, which helps increase the availability of applications and services. Additionally, SQL Server 2005 simplifies overall database management. The Microsoft software also contains administrative and database compression functionality, which leads to improved operational efficiency and better system performance.
In early 2008, NNIT and architects from Microsoft Services began designing and implementing the new Microsoft environment at Bang & Olufsen headquarters. Microsoft Services consultants developed the initial design of the new architecture with NNIT, provided architects on-site to share implementation best practices, and validated the implementation of the solution architecture.
Over a period of three months, NNIT and Microsoft Services migrated 1.1 terabytesof data from 23 SAP applications to SQL Server 2005.The solution was implemented at two data centers in Copenhagen, on 10 HP ProLiant blade server computers running Windows Server 2003.To ensure high availability, NNIT implemented both servers and storage technology at each data center, taking advantage of the clustering capabilities provided by Windows Server 2003. A two-node cluster now supports the Bang & Olufsen production system, and IT staff members use the company’s other system for testing and development. In addition, NNIT implemented Microsoft System Center Operations Manager 2007 for managing the Microsoft Application Platform in the SAP landscape.
The solution was made available to all 1,250 SAP users at Bang & Olufsen in mid-2008.
Benefits
Since migrating to a new application platform builton Windows Server 2003 Enterprise Edition and SQL Server 2005 Enterprise Edition—and outsourcing its operations to NNIT—Bang & Olufsen has been able to reduce its operating costs by 35 percent. The new solution increased system scalability and capacity, and it delivered response times that are 40 percent faster than before. The company also experienced a fast, smooth system migration resulting from the partnership between NNIT and Microsoft Services. Also, Bang & Olufsen has improved availability and resiliency.
Lowers Costs by 35 Percent
By outsourcing the operation and management of its SAP and SQL Server 2005 infrastructure to NNIT, Bang & Olufsen has been able to significantly reduce its overall operating costs while reducing risk. “By migrating to SQL Server 2005 Enterprise Edition and outsourcing operations to NNIT, we have been able to reduce our software support and other operating costs by 35 percent,” says Søby. “One of our biggest reasons for choosing NNIT and the Microsoft Application Platform was cost reduction, and we have achieved that. Running and managing this new infrastructure is significantly cheaper for us than what we had with IBM. We are definitely getting a much more dynamic infrastructure for less.”
Additionally, Microsoft Services best practices and models, along with help from NNIT and the technology itself, helped the migration stay on schedule and budget.
Boosts Scalability, Increases Capacity by 30 Percent
With its new infrastructure, Bang & Olufsen has much greater CPU capacity and has increased storage capacity by about30 percent. As a result, the company can easily and quickly scale or modify its systems to meet new business requirements. “The previous Bang & Olufsen environment was not set up to handle or manage upgrades to critical new SAP applications like ERP 6.0,” says Kurt Karlsen, Solution Manager, NNIT. “With this dynamic new SAP and SQL Server 2005–based environment, the company is set up for the future for all new SAP business applications.”
For instance, Bang & Olufsen was able to easily scale its systems to support ERP 6.0. This means that the company can take full advantage of Unicode support in ERP 6.0, which it uses to quickly and accurately track and report all purchase orders it receives from suppliers and customers around the globe.
Delivers Response Times That Are 40 Percent Faster
Bang & Olufsen is also capitalizing on the administrative and database compression functions in SQL Server 2005, which are helping speed up overall system response times. “The average response times are 40 percent faster than before for our SAP business applications,” says Uhre. “Because of this tremendous increase, we can get purchasing data much faster from our suppliers and can make better, more informed business decisions about that data.”
Offers Fast, Simple Migration
NNIT and Microsoft Services brought together their shared technical experience and best practices to ensure a quick, simple system migration for Bang & Olufsen. From initial architecture design to system validation and testing, the implementation team was able to easily deliver the project on time and budget for Bang & Olufsen. “It can definitely be challenging to migrate from one environment to a totally new one, but Bang & Olufsen was really surprised at how easy all of this was,” says Karlsen. “We planned for the migration for months in advance, doing many test runs and communicating regularly to all of the company’s internal teams. Because of our planning, there were only minor issues to be handled.”
The SAP environment itself also helped make the migration smooth. “Microsoft Services provided a lot of expertise with the technical SAP migration tools,” Karlsen says. “SAP and SQL Server 2005 together offer a lot of flexibility in terms of migrating infrastructures and operating systems.”
Delivers High Availability, Resiliency
Bang & Olufsen also now has a more available system because of built-in Microsoft features such as database clustering. This means that the company’s critical applications and databases are more likely to stay running. “With the failover clustering features in Windows Server 2003 and SQL Server 2005, we have seen a very solid improvement in availability,” says Søby. Also, Bang & Olufsen has more confidence in its cluster setup at its data centers. Now, when an application or database server is unavailable, it fails over to another system automatically. Søby says, “Because we have improved our availability and resiliency, we can much more easily meet our service level agreements.”
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