IFMP Competency Center Overview

1. IFMP Competency Center Overview Where No ERP Has Gone Before: NASA’s SAP Implementation August 23, 2004 Donna L. Smith SAP Version Update Project Manager Manager, Business Process and Application Support Integrated Enterprise Management Program (IEMP) Competency Center

2. Agenda • NASA Background & Future Direction • The Need for Business Transformation • IEMP: The Prime Enabler for OneNASA • Initial SAP Implementation: Core Financial • SAP Upgrade • Competency Center

3. Some Facts about NASA • Established in 1958 • Primary mission areas are Space Operations, Science, Aeronautics Research, and Exploration Systems • MSFC a key player in all areas except Aeronautics • Current major emphasis areas are: • Completion of the International Space Station • Completing and executing the plan to return to the moon and eventually to send humans to Mars • Workforce: 19,000 Civil Servants and ~40,000 contractors

4. NASA Center Locations

5. Back to the Future

6. The Business Problem (prevalent in the 1990s) • Decreasing budgets (in real $) • Lack of financial credibility with external stakeholders • Past failures to successfully implement new Agencywide business software (particularly financial) • Impending implementation of Full Cost accounting Contributing Factors: • NASA culture • Extremely decentralized IT structure • CIO function traditionally not viewed as being business value contributor

7. Integrated Enterprise Management Program (IEMP) established in April 2000 • Initiating and Sustaining Effective Business Process Improvements, not Implementing Software Packages, was the Overriding Objective • The Ultimate Beneficiaries are the Agency Program and Project Managers • Better decision data • Consistent information across centers • Improved functional efficiency and effectiveness • Enable One NASA with 10 Interdependent Centers • Restore credibility with external stakeholders ...IEMP will re-engineer NASA’s business processes in the context of industry “best practices” and implement enabling technology to provide necessary management information to support the Agency’s Mission.

8. Typical IEMP Project Structure (2000 – 2005) (SAP/Core Financial module project) IEMP Program Executive Officer NASA HQ Core Financial Project Steering Committee IEMP Program Director NASA HQ Core Financial Project Manager MSFC Integration Project Manager MSFC Agency Process Team Integration Contractor Implementation Contractor

9. ERP Implementation Team Composition

10. Core Financial Project Scope Accounts Receivable SAP MODULES Sales & Distribution (SD) Financial Accounting (FI) Accounts Receivable SAP MODULES Sales & Distribution (SD) Financial Accounting (FI) Purchasing SAP MODULE Materials Management (MM) Accounts Payable SAP MODULESMaterials Management (MM) Financial Accounting (FI) Accounts Payable SAP MODULESMaterials Management (MM) Financial Accounting (FI) Cost Management SAP MODULE Controlling (CO) Standard General Ledger SAP MODULE Financial Accounting (FI) Cost Management SAP MODULE Controlling (CO) Budget Execution SAP MODULES Funds Management (FM) Project Systems (PS) Budget Execution SAP MODULES Funds Management (FM) Project Systems (PS) Reporting SAP Business Warehouse (BW) Reporting SAP Business Warehouse (BW)

11. 2000 2001 2002 2003 FY '00 FY '01 FY '02 FY '03 FY '04 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Core Financial Implementation: Pilot Center and Agency Rollout Period of Understanding Peak Workload Window Begin Project Execution Contracts in place Agency Design Phase Agency Commitment For Pilot Agency Process Design Defined Agency Rollout Planning Pilot Center (MSFC) Implementation End Stabilization Pilot Center Design Complete Pilot Center Cutover 10/2002 TRR* Wave 1: GRC Implementation UP** Readiness Review End Stabilization Wave 1 Cutover 10/2002 Wave 2: HQ, ARC, JSC, KSC Implementation UP** Readiness Review End Stabilization Wave 2 Cutover 2/2003 Wave 3: DFRC, GSFC, LaRC, SSC Implementation UP** Wave 3 Cutover 6/2003 Readiness Review End Stabilization *TRR = Test Readiness Review **UP = Understanding Phase Agency Commitment For Rollout 3/2004

12. IEMP Challenges • External pressure/scrutiny • NASA already a target of Congress, GAO, OMB, IG, etc. • Corporate financial scandal quickly raised the audit standard (see Sarbanes-Oxley) • eGov Mandate • Immaturity of ERP in the US Federal Sector • Learning to navigate the SAP Organization for Support • NASA ERP Inexperience • Contractor • NASA IT and business staff • Agency undergoing significant change • Unrealistic Expectations • Installing effective governance structure

13. What We Did Well • Established clear governance structure with strong executive sponsorship • Established single instance strategy • Integrated right mix of NASA subject matter expertise (business and IT) with consultants • Focused on rigorous project management • Minimized customization • Established central integration team and enterprise application integration strategy • Planned and implemented information delivery strategy along with transactional system deployment • Planned for long term sustaining support early in the project • Benchmarked early and often • Leveraged independent IT research firm (Gartner) to validate critical technology decisions

14. What We Didn’t Do Well • Allowed other business system initiatives to “fly under the radar” • Implemented single instance, but maintained 10 business operations • Training: inadequate, inconsistently delivered & didn’t certify users • Governance structure lacked representation from 2 key groups • Program/Project managers • Procurement • Overestimated demand for analytical reporting capabilities • Didn’t catch data integrity issues (from legacy apps) during conversion • Failed to establish strong executive level relationship with primary software vendor (SAP) A recent Gartner Research note on “Why Projects Fail” found the following: • A problem with organizational change management was cited in 45% of cases • In 31% of cases, respondents stated that the IT system was delivered and used, but that the benefits were not obtained

15. OPERATIONAL Resume Management Position Description Mgmt Travel Manager Core Financial / Data Warehouse* ERASMUS e-Payroll i-View (IEMP Portal)* Recruitment OneStop Agency Labor Distribution System* Project Management Information Improvement (PMII)* SAP Version Update Contract Management Module Projects (Modules) • UNDERWAY • e-Travel • Asset Management • Human Capital Information Environment (Reporting) • Aircraft Management * * SAP-enabled capability * SAP enabled capability

16. SAP Upgrade4.6C  mySAP ERP ECC 6.0(upgraded to BW 3.5 March ’06)

17. Summary Version Comparison = does not support functionality = 1st generation code = 2nd generation w/corrections

18. Decision Selection of mySAP ERP 2005 as the target version • Most mature & robust functionality • Foundation of future SAP Development • Enhanced support for the update with SAP’s Ramp-Up Program

19. Updated Scope Document Initial Scope Document Release 7.1 Go-Live Preliminary Design Review Test Readiness Review Center Readiness Reviews Operational Readiness Review SAP Version Update Project Timeline High Level Milestones FY05 Oct '06 Oct '07 Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Formulation Blueprint Realization Final Prep Functional & Technical Evaluations Stabilization Evaluation/Design Working Sessions Prototype/ CRP Review / Finalize Design Application Development Information Delivery Development Critical Design Review Test (SIT / Performance / Release 7.1 Regression) Data Update Planning & Preparation Mock Data Update Tests Communications & Change Management End User Procedures Development/Test Training Development Training Delivery

20. 6/13 – SIT 1 Delta TRR CMM Extract & Load Internal Valid- ation Center Valid- ation 6/19 6/26 6/30 6/12 6/26 6/30 7/14 6/19 CMM Extract CMM Load Internal Valid- ation Year End Close Year End Entries & Financial Statement Tech Update Integration Test Data Migr. 7/17 7/24 6/26 9/1 7/10 8/14 8/21 9/1 8/9 Extract & Load Internal Valid- ation Center Valid- ation Go Live (11/20)(using new funding) Release 7.1 SIT Testing Timeline Month Ending Nov 30 Apr 30 May 31 Sep 30 Jul 31 Oct 31 Jun 30 Tech Update Integration Test Year End Close Data Migr. BW Extract Integration Test Pass 1 6/15 6/21 6/26 5/15 5/29 6/5 7/14 CMM Extract & Load Internal Valid- ation 5/10 – Pass 1 TRR CMM Mock 2 5/17 - CMM Service Pack 7/19 – SIT 2 Delta TRR Will finalize SIT 2 BW extract once SIT 1 BW extract has completed Integration Test Pass 2 6/13 – Pass 2 TRR 6/14 7/10-mySAP ERP Patch 57/10-Netweaver 2004s Patch 7 6/6 - CMM S.P. 6/30 - CMM S.P. Go-Live SAP Patch Levels 9/7-9/8 –SIT 3 Delta TRR Test FY07 year end close using new system / procedures 8/2 – Pass 3 TRR Integration Test Pass 3 Integration Test New Close Y.E. Close Year End Entries & Financial Statement Tech Update Data Migr. 8/28 9/4 9/11 8/14 9/29 8/7 Technical Update and Data Migration Auditor Review & Audit-Requested Adjustments 10/20 Final Financial Statements to Auditors 11/15 1st Draft of Financial Statements to Auditors Production Close /SAP Version Update Go Live(11/13)(using existing funds & documents) 10/2 – 10/6 CORRs Y.E. Close Year End Entries & Financial Statement Generation Tech Update Data Migr. 10/4 10/19 10/7 10/28 11/10 NOTE: Dates of CMM Service Packs and SAP Patches is approximate. These dates can only be confirmed as the date approaches. Extract & Load Internal Valid- ation 10/16 10/27 10/19 10/11 ORR

21. Current SAP Systems Environment • Financials • R/3 4.6c Going to MyERP 2005 (Patch 7) in October 2006 with Netweaver 2004s (Patch 4) • Solution Manager 3.2 • 12,000 named users R/3; 4,000 measured actual in R/3; 400 concurrent • R/3 is 1TB actual size • Business Warehouse • BW 3.5 • 12,800 named users in BW; 2,000 measured actual in BW; 170 concurrent • BW is 1.4TB actual size • Desktop Summary • Windows XP • GUI = v6.40 patch 18 • HTML = IE 6+ (IE 7 testing is currently underway) or FF 1.0 Java 1.4.2+ • Macintosh OSX 10.3+ • GUI = Java 6.4 rev 4 or 6 with Java Run Time 1.4.2 • HTML = FF 1.0 or FF 1.5 (conditional with potential performance issues)

22. Post 7.1 Release Landscape (CMM, R/3, BW) TEST SANDBOX DEVELOPMENT STAGING PRODUCTION TRAINING YEAR END/6.1 US2 QA2 DEV TST QA1 TRN P01 4 way 25K 4 way 25K 4 way 25K 4 way 25K 4 way 25K 4 way 20K 16 way 15K Center Sandbox 600 Prod Prism CFG./SBX BW2 BT1 BWP BWD Prism TRN1 Prism Y/E Supp QA2 Prism QA1 Prism PROD Prism TST Prism DEV2 4 way 25K 4 way 25K 16 way 15K 4 way 25K BQ2 BW3 as03 as04 msfc27 as05 4 way 25K P01 APP P01 APP P01 APP P01 APP 4 way 15K X01 8 way 10K NEW Production Landscape TEC SBX 600 Prism Prod Supp Prism TRN2 app02 app01 BWP APP BWP APP AS1 8 way 10K OCFO supp 600 BW SVU Training (BW3) will retire Nov 30, 2006 Solution Mgr LB1/LB2 8 way 25K SMP Perf. Lab 600 4 way 15K SM2 IA1 4 way 15K IAM SBX D01 AR1 100 Config 120 ABAP 150 SBX 151 CMM 4 way 15K Archive SBX BI1 BW1 4.6C Reference Systems 8 way 10K 4 way 25K 4.6c/BW Reference systems to retire June 1, 2007

23. Realized IT AdvancementsIEMP Competency Center Achieve efficiencies and operate effectively

24. What is a Competency Center? • Competency Centers are a “best practice” organizational model for providing sustaining support for Enterprise Resource Planning (ERP) systems like SAP • A Competency Center allows resources to be pooled and shared across all business functions. This is critical for ERP systems which are highly integrated • A fundamental component of the Competency Center is the tight integration of IT professionals and business professionals into a a single service-oriented unit • The Competency Center is built with a combination of expertise in an organization’s business processes and expertise in the software that implements those processes • These skills are developed through the implementation projects and then applied to the long term sustaining support and continuous evolution of the new processes and system

25. Interface Support Agency Center IEMP Competency Model “An SAP Competency Center is a permanent center of expertise that supports the efficient implementation, enhancement, and maintenance of common business processes built around SAP” - Gartner Application Operations Support Application Development Support Infrastructure Support BusinessProcess Support OLA User OLA Application Functional Support Competency Center IFMP Competency Center Infrastructure Service Providers HQ & NASA Centers

26. IEMP Competency Center Organization IEMP Competency Center (Office of the MSFC CIO) Module Projects Business Process & Application Support Technical Architecture and Operations Application Development & Software Assurance Financial Human Capital and Workforce Application Technical Support Procurement Internal Controls And Audit Module Projects In-Flight Human Capital Information Environment E-Travel Project Asset Management Project Aircraft Management

27. Backup

28. IEMP Server Virtualization Activities • IEMP applications are currently supported by 80+ Sun/Solaris instances and 100+ Windows server instances • IEMP has implemented server “virtualization” techniques on both platforms • Reduces cost • Increases flexibility • Maximizes utilization of computing resources • Windows • IEMP has adopted “VMware” as a platform of choice for non-production Windows server installations • VMware Server is virtual infrastructure software for partitioning, consolidating and managing Windows environments • IEMP has 6 (IBM 366) Quad processors that hosting 60 Windows instances • VMWare • FY 07 strategic plan identifies 48 new VM instances • Windows • Linux • Sun • IEMP continues to extensively leverage the hardware “domain” capabilities of the SUN Enterprise class server platform • IEMP has implemented a pilot set of Solaris 10 instances with containers and will develop a more comprehensive rollout plan

29. Realized IT AdvancementsInformation Delivery Provide timely, consistent, and reliable information for management decisions

30. Guiding Principles for IFMP Information Delivery • Maximize value of information created within IFMP applications • Implement Information Delivery incrementally in sequence with IFM module delivery • Promote information quality and efficiency by utilizing a single, centralized BW instance • Deliver information via web technology • Drive information quality through the standardization of key data attributes and reporting formats for Agency decision making

31. Classification of Financial Reporting users at NASA • NASA financial information requirements are driven by five general categories of users: • Extendedstakeholders such as Congress, OMB, the public, and business partners • Senior Executiveswho require financial information in order to manage Agency and Center portfolios of Programs and institutional services • Program/Project Managerswho require financial information to monitor and act on indicators of program/project financial performance • Analystswho work with detailed financial information to supply managers with detailed insight for better decision • Transactional Workerswhose primary role is execution of financial business processes on a daily basis Extended Senior Executives Program/Project Managers Analysts Transactional Workers

32. Why BW for NASA and Why in Parallel with R/3? • Wanted to define and implement a sound information delivery capability from the outset of our ERP deployment • Without BW, would have created a large volume of ABAP reports • Would be difficult to break the cycle and move to BW after the fact • BW was SAP’s strategic direction for reporting • NASA didn’t have an existing Enterprise Data Warehouse • BW is tightly integrated with SAP R/3 transactional system • Predefined / extendible business content based on R/3 • Data extractors, including delta change data extractors • Drill down support from BW query to R/3 transactional data. • All users that needed access to report information did not need access to R/3 (non- transactional users) • The implementation of R/3 and future SAP modules created the possibility of developing a NASA-wide data warehouse that could satisfy the majority of Business Intelligence requirements

33. Application Development: Reports Reporting Decision Tree Identify application area(s) Search in R/3 for the report Does it exist? Yes Use R/3 standard reporting No Requires current day’s data? Yes No Transactional/ Externally Mandated Type of report? Operational/ Management Review Business Warehouse Delivered business content Develop the report in R/3 Does it exist? Yes Use Business Warehouse content No Advanced transformation logic needed Infoset query or database view accessible Type of data? Create custom ABAP extractor Execute the generic extractor Define custom Business Warehouse objects A number of factors determine the best approach to resolve a Center reporting requirement

34. Current Status • Overall the BW Implementation has been very successful • Currently averaging 400-500 unique BW users per day, 1000 per week and 1500 per month • We have enhanced our BW solution since go-live: • Integrated Non-SAP data sources • Added new and enhanced queries • Users are still adjusting to the new processes and learning to trust the data • Recently selected 3rd party tool (Actuate) to augment our BW implementation for stronger formatted reporting capability Requested Reporting Enhancements

35. Integration Project (IT arm of IEMP)Roles and Responsibilities • Define and maintain the IEMP business and applications architecture • Work with Agency Process Teams to define business processes and points of integration • Facilitate resolution of issues across business processes • Provide meta-repository for NASA processes and data • Describe the “as-is” and “go-to” applications that automate the business processes defined within the business architecture • Define and maintain the technical infrastructure on which the applications architecture executes • Work with each module project to define technical requirements • Acquire hardware and infrastructure software for each project • Deploy and operate system environments during testing and implementation • Work with Agency CIO to ensure the IFM technical architecture is compliant with Agency IT standards • Define and implement an integration backbone at all layers of the architecture • Define and implement an information delivery strategy • Plan and implement transition of each module to operations (Competency Center)