Group Mannheimer Versicherungen reduces operational costs by 30 percent with SAP and IBM

Published on 15-Nov-2010

Validated on 03 Dec 2013

"We always assess which platform best meets our needs, and SAP applications with DB2 on Power Systems provide a cost-effective, future-proof solution for Mannheimer." - Rainer Böhm, Head of SAP Systems, IMD GmbH

Customer:
Mannheimer

Industry:
Insurance

Deployment country:
Germany

Solution:
Enterprise Resource Planning, Infrastructure Simplification, Optimizing IT, Optimizing IT, Virtualization, Virtualization - Server

IBM Business Partner:
SAP, LIS.TEC

Overview

Founded in 1879 in Mannheim, Germany, insurance group Mannheimer offers life, sickness and general insurance. The group companies employ 842 people in total, and generate an annual insurance premium income of around €376 million (2009).

Business need:
Insurance group Mannheimer relied on SAP applications to run its core business operations. Older HP servers were unable to support new SAP applications, and migration to the Unicode standard would require investment in additional physical servers. Poor dialog response performance and slow report generation caused user complaints, while maintenance and license costs continued to rise.

Solution:
Migrated from HP servers running SAP applications and Oracle databases in the Microsoft Windows Server environment to IBM infrastructure. SAP ERP applications, DB2 and other in-house and business intelligence applications run in multiple virtual servers on IBM Power 570 servers running AIX and the Unicode standard. Deployed IBM System Storage DS4800 systems to rationalize and consolidate the data storage landscape.

Benefits:
Migration to IBM Power Systems and DB2 has reduced operational costs by around 30 percent a year. Business reports that took 20 minutes to generate are now produced in three minutes. SAP application dialog step response times and batch run times have decreased by a factor of five. IBM DB2 Deep Compression for data and indexes has reduced total data storage requirements by an average of from 40 to over 60 percent.

Case Study

To read a German version of this case study, click here.

Founded in 1879 in Mannheim, Germany, insurance group Mannheimer offers life, sickness and general insurance. The group companies employ 842 people in total, and generate an annual insurance premium income of around ?376 million (2009).

Mannheimer enjoys consistent business growth, fueled by specialist insurance solutions focusing on market sectors such as jewelers, artists and musicians. The company has relied on SAP applications to run its core processes for many years, including the specialist SAP Financial Services Collections and Disbursements and SAP Financial Services Re-Insurance components, as well as its own in-house and other non-SAP applications.

Group IT services are provided by an in-house company, IMD - Gesellschaft für Informatik und Datenverarbeitung mbH. Norbert Koch, Managing Director of IMD, explains, “We provide SAP systems and support for all the Mannheimer companies, and IMD itself is a wholly-owned subsidiary.

“The existing HP and Oracle infrastructure could not scale reliably and cost-effectively to meet demand. In addition, we wanted to move to the current versions of the SAP applications as this would reduce license and support fees. We therefore chose to review the entire software and hardware landscape.

“IMD had to complete many changes with minimal disruption to the Mannheimer companies, which placed significant constraints on our project plans. The new solution also needed to allow us to complete system administration and maintenance without impacting daily business.”

Choosing IBM
The IMD team selected IBM to advise on the best way to progress with the transformation, including the introduction of Unicode, which was required for the upgrade to the most current versions of the SAP applications.

“IBM offers an excellent cross-brand value proposition, including hardware, software and services,” says Norbert Koch. “IBM presented three possible architecture solutions, any of which could be operated in-house or outsourced to IBM. This flexibility of approach suited Mannheimer, as it enabled us to choose the right course based on the business requirements rather than the technical specifications.”

Mannheimer chose to migrate all its SAP applications to virtualized environments on IBM Power Systems servers running IBM AIX, and to replace Oracle with IBM DB2.

The project was initiated in May 2008, with the first hardware implemented in November. Database migration operations commenced in January 2009 and finished in February, followed immediately by SAP application upgrades that concluded in November. The SAP ERP applications were divided into test, development, quality management and production, all hosted on the IBM Power Systems servers.

The purpose behind the upgrade to the latest SAP ERP version and Unicode enablement was to move the company to a standard, current SAP environment with reduced license costs on flexible, scalable technology.

The first project phase covered the migration from Windows and Oracle to IBM AIX and DB2 9.5. This migration, including DB2 row compression, resulted in compression rates of between 40 percent and over 60 percent for the SAP Financial Services Collections and Disbursements, SAP Financial Services Re-Insurance, and SAP ERP Human Capital Management landscapes. The second project phase comprised SAP application upgrades for SAP FSRI from SAP 4.6 C via SAP 4.71 and SAP 4.72 to ECC 6.0, and was completed during a single weekend. The concluding phase was the conversion to Unicode for the SAP Financial Services Collections and Disbursements, SAP Financial Services Re-Insurance, and SAP ERP Human Capital Management landscapes. This process included the upgrade from DB2 9.5 to DB2 9.7 and the implementation of new features such as “Reclaimable Storage” and Index Compression, and despite the conversion to the Unicode character set, data volumes decreased slightly.

Selecting a DB2 strategy
Mannheimer implemented two IBM Power 570 servers with POWER6 processors, two IBM System Storage devices from the DS4800 family, and an IBM TS3310 tape library. To manage the data, Mannheimer enabled the DB2 Storage Optimization Feature and implemented IBM Tivoli Storage Manager to provide backup, archive and recovery services.

IBM Global Technology Services provided service and support to migrate Oracle databases from 32-bit Microsoft Windows Server 2000 on HP servers to the 64-bit AIX environment on the IBM Power Systems platform.

“The strategic database system within the whole Mannheimer group is DB2, and we wanted to pursue our standardization strategy to help us reduce costs, consolidate our skill sets and increase system performance. DB2 provides a scalable, highly robust foundation for SAP applications, and ensures that we are well-placed to manage the predicted business growth,” says Norbert Koch. “Enhanced application performance available from POWER-processor based systems also boosts user productivity, a valuable gain across the entire company.”

Additional POWER-processor features include Live Partition Mobility, a unique IBM technology for POWER processor-based systems that allows LPARs to be moved from one system to another even during continuous production. Combined with the established reliability, security and availability advantages, the IBM Power Systems platform offers a very high degree of business flexibility to Mannheimer.

Taking advantage of IBM Power Systems
With database migration in place, Mannheimer migrated its SAP applications to the new platform, with an intermediate upgrade and conversion to Unicode, followed by final deployment of SAP ERP applications in the production environment. The Power 570 systems were divided into virtual servers called logical partitions (LPARs), used as staging servers for the upgrade and then sized according to the predicted workload of the SAP application.

Norbert Koch continues, “We evaluated other vendors’ 64-bit solutions for the SAP application landscape. Because the HP hardware had reached the end of life, it became important that the new solution would be able to handle this workload and scale to meet future demands. We chose the Power Systems and AIX platform because it offers better scalability, IBM provides a long-term strategy, the pricing was very competitive and it included superior virtualization technology.”

Rainer Böhm, Head of SAP Systems, adds, “Virtualization capabilities were the deciding factor. IBM logical partitioning (LPAR) on Power Systems servers permits dynamic allocation of processor capacity between LPARs, allowing Mannheimer to ensure that each application meets its expected performance levels.

“The ability to allocate CPUs is an outstanding business advantage, particularly the ability to use more resources for busy application areas when they are not needed by other LPARs. This is important both for our nightly batch runs and during production for the dialog-based applications.”

Norbert Koch says, “With IBM Power Systems we can do what formerly was only possible in the mainframe environment. AIX provides everything we need on one machine, and practical experience shows that the virtualization solutions are very good. For example, for overnight batch runs we can utilize the whole machine to meet processing demands, and then re-allocate resources automatically to the production applications the next morning.

“Additionally, scalability is a huge advantage, as we could not predict at the time of purchase how the workload would grow. By combining the processor and resource allocation offered by virtualization with the ability to add processors as required, Mannheimer is able to increase throughput without buying additional servers.”

Working with IBM
Mannheimer worked closely with IBM Global Technology Services on the migration processes themselves. This included the complex multiple steps for updating both the SAP applications and the introduction of the Unicode standard.

New versions of SAP applications require support for Unicode, and older operating systems, database data and applications must be upgraded in the correct sequence to ensure that the conversion is successful and that the revised data sets are suitably compact.

“IBM Global Technology Services provided us with the advice and experience necessary to plan and execute the SAP application upgrades and Unicode conversions rapidly and cost-effectively. By working with IBM Global Technology Services, we were able to draw on their global resources for the crucial periods, and complete the work on time, successfully,” says Norbert Koch.

Reducing costs with DB2
As a central services supplier to the Mannheimer group, IMD is particularly cost-conscious. On the database side, any ways to reduce infrastructure cost are welcome. For example, finding, training and retaining IT personnel is a costly business, and database administrators are no exception.

Norbert Koch comments, “To maintain the Oracle databases we needed to hire external contractors, whereas the DB2 tools remove this expense, and all database administration tasks can be managed internally.

“The volume of data generated by SAP transactions started strain our total storage capacity. Even though conversion to the Unicode standard often results in increased capacity, using IBM Deep Compression we reduced the volume of data by from 40 to over 60 percent.”

For example, SAP Financial Services Collections and Disbursements originally ran to 500GB, which on conversion to Unicode and migration to the latest SAP application release grew to 1TB. After applying DB2 Deep Compression (both indexes and data), the 1TB volume was reduced to 350GB, achieving a compression rate of 65 percent.

“We have been able to release several terabytes of disk space, and at current growth rates do not need to worry about running out of space for the next five to ten years,” says Norbert Koch. “This represents a considerable cost saving for the company.”

Improving storage performance
As part of the project, Mannheimer re-structured its data storage. By mixing drive types within the DS4800 family storage units, the company implemented an information hierarchy that ensures data is placed on the drives as cost-effectively as possible while at the same time improving technical performance.

Rainer Böhm explains, “We wanted to improve the response times from our business intelligence application, and one route would have been to license further processors.

“Instead, working with IBM, we reorganized the layout of the disks, and we now have smaller disk drives that offer faster data access, which has produced a remarkable improvement in response times without the expense of additional processor licenses.”

Two separate data centers each house an IBM Power 570 server and storage system. IBM Tivoli Storage Manager automatically replicates data from the production to the secondary server, including system state copies, ensuring that production can continue even if disaster strikes the primary site.

Rainer Böhm comments, “With the previous system, we needed three days to recover data and restart operations. Based on previous experience we used to dread this.

“The new solution has cut the period to just half a day, and with the IBM Power Systems and DB2 combination, recovery and it is no longer an issue. We use Tivoli Storage Manager to mirror data continuously between the two data centers, and the non-production Power 570 server acts as a hot stand-by system, offering very high availability of better than 99.98 percent.”

Achieving business benefits
This root-and-branch review and restructuring of the Mannheimer IT landscape has more than met the business objectives, and has also delivered lower operational costs with improved technical performance.

Norbert Koch comments, “The HP and Oracle solution was incurring high maintenance costs and significant annual license fees. The migration to IBM Power Systems and DB2 has saved around 30 percent a year, and the solution is priced as a complete hardware, maintenance and license package for five years, offering budget predictability for Mannheimer.

“Previously, users complained about performance, especially concerning the 20 minutes or so it took to generate complex accounting and statistical reports. With the Power Systems server and DB2, the same queries now take around three minutes to complete, and many other standard reports are delivered in just seconds. Similarly, SAP application dialog step response times and batch run times have decreased by a factor of five, eliminating user complaints and greatly improving total productivity.”

At the operational level, Mannheimer has replaced seven HP servers with two energy-efficient IBM Power Systems servers. With lower energy consumption and reduced heat output, the company saves on air-conditioning costs and has been able to reduce server room floor space.

Norbert Koch concludes, “We are extraordinarily satisfied with the business, technical and operational benefits of the IBM Power Systems and DB2 combination. Some consulting companies painted what we might call ‘anxiety scenarios’ concerning the migration, and they have been proved wrong. The project ran smoothly, on time and slightly below budget.”

IBM provided a SAP certified Migration Consultant to support the transformation, working as a joint team with Mannheimer and LIS.TEC.

Rainer Böhm adds, “Migration to DB2 fully meets our expectations, and we are 100 percent confident in the solution. IBM recommended the combined landscape and migration process, and it was excellent.

“For Mannheimer, the twin IBM Power Systems and DS4800 solution provides easily sufficient capacity, and the flexibility offered by virtualization enables us to look at adding functionality, such as portal solutions, with no immediate need to invest in additional hardware.

“We always assess which platform best meets our needs, and SAP applications with DB2 on Power Systems provide a cost-effective, future-proof solution for Mannheimer.”

Products and services used

IBM products and services that were used in this case study.

Hardware:
Power 570, Power Systems, Storage: DS4800

Software:
AIX, Tivoli Storage Manager, DB2 for Linux, UNIX and Windows

Operating system:
AIX

Service:
GTS ITS Server: Server Product Services for Power Systems, IBM-SAP Alliance, GTS Data Center Services

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