The Challenge

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.

The 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 family systems to

rationalize and consolidate the data

storage landscape.

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

we know

they know

Overview

The 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 between 40 to over 60 percent.

SAP Financial Services Collections

and Disbursements data was

reduced from 1TB to 350GB,

avoiding investment in additional

storage capacity. Consolidating

from seven to two physical servers

simplified the IT environment,

reduced power consumption and

released valuable data room space

for new projects.

Key Solution Components

Industry: Insurance

Applications: SAP® ERP

applications including financials,

controlling, SAP Financial Services

Collections and Disbursements,

SAP Financial Services

Re-Insurance and SAP ERP

Human Capital Management

Hardware: IBM® Power™ 570, IBM

System Storage DS4800 series

Software: IBM AIX®, IBM Tivoli®

Storage Manager, IBM DB2®

version 9.7 for Linux, Unix and

Windows

Services: LIS.TEC, IBM Global

Technology Services

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 migration to IBM Power Systems and DB2 has saved around 30 percent each year, and the solution is priced as a complete hardware, maintenance and license package for five years, offering budget predictability for Mannheimer.”

Norbert Koch, Managing Director,

IMD GmbH

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

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

“We are extraordinarily satisfied with the business, technical and operational benefits of the IBM Power Systems and DB2 combination... The project ran smoothly, on time and slightly below budget.”

Norbert Koch, Managing Director,

IMD GmbH

TECHNICAL LANDSCAPE

Servers: Two IBM Power 570 servers

with POWER6 processors replacing

HP servers, two IBM System Storage

devices from the DS4800 family, and

an IBM TS3310 tape library

Software: IBM AIX and IBM Tivoli

Storage Manager. IBM DB2 version

9.7 for Linux, Unix and Windows

replacing an Oracle database. SAP

ERP applications including financials,

controlling,SAP Financial Services

Collections and Disbursements, SAP

Financial Services Re-Insurance and

SAP ERP Human Capital Management

Users: 400

“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.”

Rainer Böhm, Head of SAP Systems,

IMD GmbH

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.

“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

© Copyright 2010 SAP AG SAP AG Dietmar-Hopp-Allee 16 D-69190 Walldorf

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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.”

SPC03284-DEEN-01 (November 2010)

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.”