ERCO
REDUCING TIME TO MARKET AND
QUICK FACTS
Industry
High tech – electronics
Revenue
€163 million
Employees
More than 1,000
Headquarters
Lüdenscheid, Germany
Web Site
www.erco.com
SAP® Solutions and Services
SAP® Product Lifecycle Management
application, SAP NetWeaver® Folders
Management application
Implementation Partner
ILC PROSTEP
When ERCO GmbH, which produc-
es engineering hardware and soft-
ware for architectural lighting, had
to streamline product development
and project management, centralize
data, and support collaboration, it
turned to SAP. Using the SAP®
Product Lifecycle Management
and SAP NetWeaver® Folders
Management applications – com-
bined with the 4PEP platform from
ILC PROSTEP – ERCO has reduced
time to market, lowered costs, and
simplified collaboration.
SAP Business Transformation Study
High Tech
LOWERING COSTS WITH SAP® SOFTWARE
Key Challenges Why SAP Was Selected
• Existing product and project management • Strong SAP® Product Lifecycle Manage-
application at end of life ment application functionality supporting
• Overly complex IT landscape that limited product development and project manage-
process efficiency and cost containment ment processes
• No centralized, easily accessible source • Native integration of engineering-authoring
of project, budget, and CAD data CAX systems with SAP software
• Unintegrated project management and • Ability of SAP NetWeaver® Folders
information management processes Management application to automatically
link data objects across different SAP
software products
• Support for formal workflows
• Strong customer support
Implementation Best Practices Low Total Cost of Ownership
• Engaged departments to reengineer • Consolidated systems by leveraging multi-
processes faceted functionality of SAP software and
• Established governance structure repre- ILC PROSTEP software
senting different departments and first • Reduced integration costs due to native
sold members the vision integration of SAP software
• Secured strong executive support man- • Simplified IT maintenance and upgrades
dating adoption of the software by standardizing on SAP software
• Used pilot to test and size system
• Invested in effective employee training
Financial and Strategic Benefits Operational Benefits
• Faster processes via structured work- Key Performance Indicator Impact
flows, centralized data, and easier
collaboration
Length of product Reduced by
• Complete transparency into product devel- development lifecycle 30%
opment and customer projects Products produced within Increased by
• Better decision making during concept budget defined during project 85%
phase to prevent development of unprofit-
able products New products launched Increased by
• Enforced processes that are flexible on time 80%
enough for creative teams to develop
Number of R & D projects Increased by
what’s best for customers
• Reduced total cost per product launch managed 15% to 18%
• Faster time to market for new products Number of products Increased by
developed 45%
Length of project lifecycle Reduced by 23%
“Now information is at everyone’s fingertips as they work and collaborate – and www.sap.com /contactsap
we have the transparency needed to react quickly and early, so we can solve
problems before they impact the business.”
Uwe Koeller, Vice Head of Information Technology, ERCO GmbH

Getting by with Outdated Systems ware could support structured, best transparency into product development
and Processes practice–based processes that would and customer projects. The new pro-
speed up product development and help cesses are flexible enough to help
ERCO GmbH specializes in producing ensure more profitable client projects.” ensure creative teams are empowered
engineering hardware and software for to develop what’s best for customers.
architectural lighting. In addition to con- A Successful Implementation
stantly designing and manufacturing Plus, ERCO’s costs are down. States
new products, it creates custom lighting ERCO implemented the SAP Product Koeller: “We’ve reduced total cost per
solutions for clients. But the processes Lifecycle Management application and the product launch and cut our IT mainte-
and technologies driving the two sides SAP NetWeaver® Folders Management nance and integration costs at the same
of the business were outdated and dis- application in conjunction with several time.”
connected, hindering information shar- use cases of the 4PEP platform from
ing, collaboration, and efficiency. “Our ILC PROSTEP. In the pilot phase, ILC Future Plans
product development software, which PROSTEP worked closely with a cross-
was no longer supported, also siloed departmental governance structure. “ILC ERCO is thrilled with the way the solu-
data needed by the rest of the organiza- helped us analyze current processes and tion enables them to automatically link
tion,” explains Uwe Koeller, vice head of reengineer them based on proven best information across systems. “We’re
information technology at ERCO. This practices,” explains Morales. At the same planning on using it for contract man-
made it difficult to collaborate and make time, management sold members on their agement in HR, quality management –
informed decisions. “For example, dur- vision for change. “Many people resisted anywhere where we want to link SAP
ing the concept phase for a new prod- moving to more structured processes, but software together,” adds Morales.
uct, we couldn’t determine early on if we overcame this with strong executive
we could manufacture the product in a support and by involving employees,” he
profitable way – so we’d have to commit adds.
based on experience rather than fact,”
Koeller adds. The second phase involved moving data
over from existing systems and using SAP
At the same time, ERCO’s project man- NetWeaver Folders Management and ILC
agement software was isolated from its PROSTEP software to link data objects
customer, product, and budgeting infor- logically. The migration was huge, with
mation, maintained in SAP® software. 27,000 project folders containing 200,000
This limited visibility into and control documents and 280,000 CAD documents.
over customer projects.
Realizing the Benefits Implementation Partner
Reinventing How Work Gets Done ILC PROSTEP’s 4PEP platform optimizes
ERCO now has optimized, integrated, nearly all product development activities
ERCO turned to SAP to integrate its workflow-driven processes for product through integration with SAP software
product development, project manage- development and project management. and enabling links to third-party sys-
ment, budgeting, and information man- “We’ve shortened our new-product devel- tems. In addition, the company helps
agement systems. “By standardizing on opment and introduction process by 30% clients reengineer processes based on
SAP software, we could establish a sin- and have the centralized data needed to proven best practices.
gle source of data that everyone could identify issues early,” explains Koeller.
access,” explains Carlos Morales, proj- Employees share data and collaborate
ect manager at ERCO. “Also, SAP soft- easily, and management has complete

50 101 783 (10/09)

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