ERP-IranFava Proposal ISACO 900529 v8

Iranfava Gostaresh
Iranfava Proposal for SAP implementation in ISACO

Version: 8.0

Iranfava Gostaresh
No.18,Nastaran St, Ibn Sina St, Asadabadi Sq.
Tehran, Iran
www.Iranfava.com
Tel:+9821 88616303-7

August 2011

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Iranfava Proposal for SAP Implementation in
ISACO
Iranfava Gostaresh
Abbas Azimzadeh
www.Iranfava.com
+ 98 21 88616303-7(118)
Iranfava Gostaresh
ISACO
8.0
17 August 2011
Strictly Confidential
IFG-ISACO90-8.0

Iranfava Gostaresh No 18,Ibn sina St, Asadabadi Sq, Tehran, Iran
Tel: (9821) 88616303 Fax: (9821) 88616308  Website: http://www.iranfava.com

Page 2 of 29

Table of Contents
1 EXECUTIVE SUMMARY............................................................................4
1-1 ISACO GENERAL REQUIREMENTS..............................................................................6
1-2 IMPLEMENTATION METHODOLOGY...............................................................................6
1-3 CRITICAL SUCCESS FACTORS AND ASSUMPTIONS..........................................................6
2 IRANFAVA PROFILE...............................................................................7
3 PROJECT SCOPE.....................................................................................8
3-1
3-2
3-3
3-4

COMPANY ORGANIZATION AND GEOGRAPHICAL SCOPE...................................................8
FUNCTIONAL SCOPE................................................................................................ 8
ASSUMPTIONS..................................................................................................... 10
CUSTOMER RESPONSIBILITIES.................................................................................10

4 GENERAL SCOPE DEFINITION................................................................12
4-1 SCOPE OF INSTALLATION AND IMPLEMENTATION SERVICES.............................................12
4-2 LEGACY DATA MIGRATION......................................................................................12
4-3 DEVELOPMENT OBJECTS........................................................................................12
4-4 OUTPUT AND REPORTING.......................................................................................12
4-5 TRAINING............................................................................................................ 13
4-6 CHANGE MANAGEMENT......................................................................................... 13
4-7 LANGUAGE SCOPE................................................................................................ 13
4-8 AUTHORIZATION................................................................................................... 13
4-9 FACILITIES.......................................................................................................... 13
4-10 PROJECT RISK AND MITIGATION.............................................................................14
4-11 CHANGE CONTROL............................................................................................. 15
4-12 PROJECT DECISION PROCESS................................................................................16
5 IMPLEMENTATION METHODOLOGY........................................................17
5-1 ACCELERATED LEARNING (TRAINING)........................................................................17
5-2 ACCELERATED SAP...............................................................................................18
5-3 ACCELERATED BUSINESS IMPROVEMENTS (OCM)........................................................20
6 PROJECT PLAN.....................................................................................21
7 PROJECT ORGANIZATION......................................................................22
7-1
7-2
7-3
7-4

PROJECT ORGANIZATION STRUCTURE – TEAM CONCEPT...............................................22
ROLES AND RESPONSIBILITIES.................................................................................22
IRANFAVA CONSULTING TEAM..................................................................................25
ISACO TEAM LEADERS.........................................................................................26

8 PROJECT COSTS...................................................................................27
8-1 TERMS & CONDITIONS.......................................................................................... 27
8-2 FEES AND PAYMENT SCHEDULE...............................................................................28

1

Iranfava Gostaresh No 18,Ibn sina St, Asadabadi Sq, Tehran, Iran
Tel: (9821) 88616303 Fax: (9821) 88616308  Website: http://www.iranfava.com

Page 3 of 29

1 Executive Summary
This document is the proposal that is submitted as the Iranfava response to the ISACO
request for proposal for implementation of SAP R/3 in ISACO.
For satisfying the requirements of ISACO, Iranfava is the main contractor that is
participating in this project.
In providing consulting services to ISACO, we commit to adding value through our role as
a business partner. We share with you our implementation and business experience for
our proposed SAP solution as well our promise to realize a system, which meets the goals
and objectives of ISACO to support to enhance its services through more than 2000
dealers and resellers.



ERP Benefits for ISACO
ERP implementation success is to a large degree reliant on how an organization
manages change (be it change related to resources, technology, or processes).
Implementing “best of class” enterprise software does not itself guarantee the
desired results if the human resources affected remain unaware of the degree and
extent to which they will be affected by changes to business processes, roles, and
responsibilities. Indeed, the implementation will almost certainly fail if the
organization’s people are unwilling, unable, or unprepared to acquire new skills and
tools.
A preponderance of ERP implementation studies demonstrates that humans (as
opposed to technology) are the leading failure point. A global survey of just under
2,000 implementations revealed that two of the most significant issues were
inadequate skills training and “organizational resistance.” TEC’s experience is that
the success of any SAP implementation depends on how the project team addresses
the three critical elements of project management: people, process, and
technology. These elements do not function independently of one another—indeed,
they are intimately related, to the extent that success in any aspect of one of them
depends on how the other two are handled.
The chart below shows the top issues organizations face during an ERP
implementation, as determined by a Benchmarking Partners study performed on 62
companies that have gone live with an ERP system.

Iranfava Gostaresh No 18,Ibn sina St, Asadabadi Sq, Tehran, Iran
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Another study by Deloitte Consulting and Benchmarking Partners, based on a
survey of 62 companies that have gone live with an ERP system, identifies the
following as tangible benefits of ERP implementation for their organization. Of
particular note is the fact that the main anticipated benefit/outcome of these projects
was “Cost Reduction.”



From ISACO’s perspective, the benefits of a successful ERP implementation cover a
broad range of areas, including the following:



data management (e.g., one-time data entry, inter-business unit access to
data),



security (e.g., passwords, access records, and access rules can be tightly
controlled and traced; authorizations must be controlled by approved authorizers,
and recorded permanently)

Iranfava Gostaresh No 18,Ibn sina St, Asadabadi Sq, Tehran, Iran
Tel: (9821) 88616303 Fax: (9821) 88616308  Website: http://www.iranfava.com

Page 5 of 29



workflow automation (e.g., as work is completed, the next department/person
is notified and alerted; immediate detection of work delays; standardization of
business practices and data across business units and functions)



unified and real-time view of finance and logistics (i.e., reduced decision
time; what-if business scenario testing; reduced inventory; more accurate
production costing



centralized system management (i.e., single system eliminates domino
modifications common in multiple legacy environments; pure IT personnel
(hardware and applications) can be reduced; business/application expertise stays
with business unit)

The perspective that ISACO can benefit from the ERP solutions in general is not
difficult to understand. However, because ERP implementation is a high-risk
undertaking, based on similarly high levels of expected benefits, a vital ingredient of
success is the need for ISACO to manage the elements of organizational change and
to establish proper expectations from the very beginning of the project.
It is absolutely essential that this project’s parameters be firmly established and
communicated in advance, including expectations with respect to the capabilities of
the SAP solution. Any deviation with respect to, e.g., planned customizations, will be
fatal to project success.
The most important element of a successful project is a carefully chosen and
stable project team that remains on track throughout the process. For this reason, the
guidance of an independent third-party advisor is critical to ensuring consensus and
efficiency throughout the project, leading ultimately to implementation success.

1.1 ISACO General Requirements
ISACO plans to implement proposed SAP implementation:
 Efficient and effective After Sales Services, Financial, Inventory Management,
Procurement, through an integrated ERP system.
 Provide the management with timely and accurate information for better
management control and decision-making.

Iranfava Implementation Scope and Approach
For this project, Iranfava will provide SAP consulting services and will be responsible for
implementation of SAP solution within the organization.
The implementation will be carried out in one phase as per the ISACO need.
Project
Scope

SAP Enterprise ERP Components

 Financials ( FI )
 Management Accounting ( CO )
 Materials Management ( MM )
 Sales and Distribution ( SD )
 Quality Management (QM)
 Customer Service (CS)
 Dealer Business Management (DBM)
For more details on the scope of work see Section 3.

Iranfava Gostaresh No 18,Ibn sina St, Asadabadi Sq, Tehran, Iran
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Page 6 of 29

1.2 Implementation Methodology
Iranfava proposes the use of ASAP methodology, a methodology developed to ensure
smooth implementation enables the project team to:
 Minimize the length of implementation time
 Maximize the utilization of SAP and customer resources
 Leverage SAP business tools and accelerators
 Incorporate a process-oriented approach.
For more details on the implementation methodology see Section 5

1.3 Critical Success Factors and Assumptions










Senior Managements Support
Adherence to scope and objectives of the project.
Adherence to the no-modifications objective.
Ability to adopt SAP Business Processes, which are based on industry best practices.
Skill level and commitment of both the ISACO and Iranfava project team.
Efficient use of both internal and external resources.
Timely decision making.
Clarity of business objectives for the project.
Empowered project team.

The CSFs will communicate with ISACO by Iranfava project manager and appropriate
policies and mitigations will undertake.

Iranfava Gostaresh No 18,Ibn sina St, Asadabadi Sq, Tehran, Iran
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Page 7 of 29

2 Iranfava Profile
Iranfava Gostaresh was founded in 1384, with the aim of improving the performance and
profitability of large organizations, by integrating and planning their internal and external
resources and by utilizing information technology for optimizing their business processes.
The company was jointly founded by Iran Khodro industrial group (IKCO) and Industrial
Development and Renovation Organization of Iran (IDRO).
Iranfava mission is to avail Implementation and consulting services to large enterprises
and industries such as automotive and telecom industries in the field of enterprise
resource planning, supply chain management, and customer relationship management.
Iranfava Gostaresh provides complete spectrum IT-services, Consulting, Implementation
& Execution, and Training services in the field of “Enterprise Resource Planning (ERP)”,
“Supply Chain Management (SCM)”, “Customer Relationship Management (CRM)”, and
“Knowledge Management (KM)” in various industries and organization. Iranfava
Gostaresh will help organizations and companies in getting more potential and
compatibility in competing in the local and global markets.
Iranfava has prepared for Go Live and supported the SAP in Irankhodro Financial
Department from 2 years ago. As well, Iranfava has implemented the SAP in an
automotive Iranian production plant, IranKhdoro Tondar, for the first time in 1390, and
this system was supported by Iranfava SAP consultants from Go Live date.
Besides Irankhodro group companies, Iranfava has lots of customers in manufacturing,
telecommunication, Power, Energy and EPC industries e.g. Iran Telecom Infrastructure
Company, Power Ministry, Behtotal, Apadana Ceram and National Iran Oil Company.

Iranfava Gostaresh No 18,Ibn sina St, Asadabadi Sq, Tehran, Iran
Tel: (9821) 88616303 Fax: (9821) 88616308  Website: http://www.iranfava.com

Page 8 of 29

3 Project Scope
3.1 Company Organization and Geographical Scope
The following legal entity will be within the Scope of Work:

Legal
Entity

Location

Business

ISACO

Iran

Automotive After Sales Services (Irankhodro After
Sales Company)

3.2 Functional Scope
The following SAP Sub-Modules are within the scope of Work:
Modul
e
FI

Description
Financials

CO

Management Accounting/
Controlling

MM

Materials Management

SD

Sales and Distribution

QM

Quality Management

Sub-Module
Accounts Receivable
Accounts Payable
General Ledger
Bank Accounting
Asset Management
Funds Management
Profit Center Accounting
Cost Center Accounting
Overhead Cost Controlling
Internal Order Accounting
Profitability Analysis
Parts Demand Planning
Parts Inventory Planning
Parts Supply Planning (MRP)
Parts Monitoring
Purchasing –PR, RFQ, PO
Goods Receipt
Invoice Verification
Inventory Management
Warehouse Management
Batch/Expiry Management
Physical Inventory
Returnable Transport Packaging
Handling Unit Management
Marketing Planning and Budgeting
Sales Planning and Forecasting
Inquiry
Quotation
Sales
Contracts
Delivery
Parts Distribution Planning (Transportation)
Billing
Sales Analysis
Pricing
Quality Planning

Iranfava Gostaresh No 18,Ibn sina St, Asadabadi Sq, Tehran, Iran
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Page 9 of 29

CS

Customer Service

DBM

Dealer Business
Management

Quality Inspection
Quality Certificates
Quality Notification
Quality Control
Test Equipment Management
Importer Service Operation
Strategic Service Planning
Self-Service Support
Customer Service and Support
Service Contract Management
Service Request Management
Installed Base Management
Service Plan Management
Service Order Quotation
Service Employee Resource Planning
Service Order Management and Field
Service
Depot Repair
Service Confirmation Processing
Billing
Service Performance Analysis
Warranty Management
Service Contract and Quotation
Analysis
Warranty Claim Processing
Billing
Warranty Analysis
Service Contract Processing
Product Service Letter Processing
Credit/Debit Memo Processing
Product and Warranty Registration
Warranty Claim Entry
Labor Value, Catalog
Labor Operations and Packaging
Service Order Processing
Parts Order Processing
Debit Memo Request
Service Order Split and Billing
Warrantee Claims
Return Processing
Cash Desk

Not included in the Scope of Work are the following modules:
- Business Area Accounting (1)
- Legal Consolidation / Enterprise Consolidation Functionality (LC)/(ECCS) (2)
- Transfer Pricing (3)
- Material Ledger Functionality(4)
- Modules outside SAP R/3
(1)

There is no division of the company into separate business areas. Only one
Balance Sheet / Profit & Loss report is required for the legal entity.
(2)
Legal or Enterprise Consolidation is out of scope.
(3)
Material will be transferred within profit centers at cost
(4)
Materials will be valuated in local currency

Iranfava Gostaresh No 18,Ibn sina St, Asadabadi Sq, Tehran, Iran
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Page 10 of 29

3.3 Assumptions


The project will focus on implementing those business processes listed in section
above. Processes not listed will be considered out of scope for the project defined
in this proposal.



The project communications is in English language.



ISCAO will use SAP software, components and licenses provided by Irankhodro
Company. The providing the required SAP licenses are out of this project scope.



Consulting cost estimates include only the cost for implementing the SAP ERP
systems, and does not include implementation tasks for 3rd party products



Estimates do not include Business Processes Reengineering activities.



Standard SAP reports and forms will be used.



Customer data to be loaded is accurate, up to date and available. Any data
conversion if needed will be ISACO’s responsibility.



Additional processes/modules that are out of scope need to be requested through
the change order process and will be included once approved and billed on a time
and material basis



Any consulting resources required subsequent to completion of this project, will
be available and billed on a time and materials basis.



Changes to project timescales may result in additional costs. Iranfava will make
every effort to minimize any additional costs due to changes in timescales.



The project has sponsorship from senior management. ISACO will identify an
executive to act as Executive Project Sponsor throughout the project. The
Executive Project Sponsor will monitor the project progress, and will be available
to act as decision maker, ensuring 48 hour turnaround on policy decisions.



ISACO is responsible for testing and validating the delivered business processes



ISACO will provide a working environment and facilities adequate for SAP to
perform their assigned duties at or away from the customer site. This includes
adequate conference rooms, cubicle space, and desktop personal computer with
access to the network at the ISACO site, project team shared drives, e-mail,
telephone, and analog phone line or internet to access SAP systems.



Iranfava reserves the right to deploy consultants as and when required to the
project site in accordance with the project plan. Iranfava specifically reserves the
right to roll off consultants from the project at any point in time. ISACO has the
right to interview with consultants and accept or deny them.



This proposal is based on the assumption that SAP’s best business practices are
being used. ISACO has indicated its willingness to adhere to those business
practices wherever possible.



The project time lines have been arrived at based on agreed scope of work. ISACO
will provide the resources and information as requested. If there is any delay from
ISACO in terms of allocation of resources, providing information and for any other
matter such as delay in opening of the store etc and as a result if project is
stretched beyond agreed time lines, ISACO agrees to pay extra to Iranfava on
time and material basis.

3.4 Customer Responsibilities


Ownership, providing a project manager, driving resources, providing direction to
that team regarding decision making, planning and scope management.
Iranfava Gostaresh No 18,Ibn sina St, Asadabadi Sq, Tehran, Iran
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

Effective and timely decision making processes are critical to the success of any
ERP implementation. To ensure a successful implementation, all issues will need
to be resolved within 48 hours days. The customer will identify at the start of the
project a steering committee comprising of senior management who will ensure
that decisions are made within this timeframe. Any deliverable given to ISACO for
acceptance / approval should be signed off within 3 working days. If acceptance /
approval is not received within this time limit, deliverable would be considered as
accepted.



Ensure Executive Sponsorship from senior management. The Executive Project
Sponsor will monitor the project progress, and will be available to act as decision
maker, ensuring 48 hour turnaround on policy decisions



Data extraction, preparation & cleansing



Change management



Ensure knowledge transfer from key users to end users, e.g. perform end user
training and roll out of end-user documentation and modifications to the delivered
material



Assign knowledgeable key- and end-users and ensure their full time availability.



The ISACO project team will be assigned to the project in accordance with the
included schedule. The assigned team members will be relieved of their regular,
duties in order that they may dedicate themselves to the project as per the
implementation approach/schedule throughout the entire project lifecycle. The
team members will be knowledgeable about their business areas of responsibility
and empowered to validate test results.



Provide a working environment and adequate facilities



Change in a particular business process can only be requested only twice,
however if a third change is requested, same will be taken up at steering
committee meeting for resolution.



Providing Severs, clients and network infrastructure is ISACO responsibility.

Iranfava Gostaresh No 18,Ibn sina St, Asadabadi Sq, Tehran, Iran
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4 General Scope Definition
4.1 Scope of Installation and Implementation
Services
The detailed scope of work including required modules, functions, processes and
scenarios are described within the project scope section. This section further elaborates
and defines the scope of work for this proposal.
The following are within the scope of the installation and implementation services:
- Project Management
- Delta Requirements Workshops
- Key User training on the job
- End-User Documentation
- Setup of SAP landscape
- Pre-defined sheets for data migration
- Pre-defined Test catalogs
- Pre-defined Forms & Printouts
- Standard Reports
- Go-Live Support
- Support for months after go-live
The following are not within the scope of the installation and implementation
services and are optional services that can be procured separately. Upon request
Iranfava will provide a separate quotation for any of the below services required:
- End-User Training
- Custom Forms, Reports, and Interfaces
- Custom Authorization
- Post Implementation Support
- Data Archiving
- Workflow

4.2 Legacy Data Migration
ISACO is responsible for the quality of all data to be converted to the SAP system.
Before the project begins the customer will cleanse legacy data and map their data into
SAP formatted data sheets.
ISACO is responsible for providing and mapping that data into the conversion
spreadsheets provided by Iranfava. Iranfava Consultants will use LSMW Legacy System
Migration Workbench / CATT tool / Custom Developed Migration programs for data
migration purpose. No historical data will be converted.

4.3 Development Objects
Interface / Development work elaborated in business blueprint phase will be
prioritized and by project team and top needed developments estimated up to 60 mandays will be carried out in line with the needs of the project. Requirements beyond 60
man-days should be requested as "Change Request" and will be treated on time-material
basis.

Iranfava Gostaresh No 18,Ibn sina St, Asadabadi Sq, Tehran, Iran
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4.4 Output and Reporting
Extensive reporting is delivered with the SAP standard system and ISACO will use the
standard outputs for Purchase Orders, Checks and so on customized with their company
logo. Two programming resource has been included in the estimate of Iranfava to assist
with ISCAO ABAP development team to create the ISACO special reports, forms and
layouts.

4.5 Training
Key User training on the job is included in the scope of this proposal. End user
training has to be executed by the customer himself, following the principle “train the
trainer”. Training material and documentation in Farsi language is provided by Iranfava.

4.6 Change Management
Iranfava consultants will use their standard methodology to assist project team
member to manage change management within the organization during the project
phase.
Iranfava Project Manager will assist ISACO organization change manager to manage
the changes within the organization.

4.7 Language scope
The project is based on English Language.
 Communication Language: English/Farsi
 Documents (including blueprints, training materials, workshops…) : Farsi
 Key user training: Farsi
 SAP GUI: Farsi
 Output forms & reports: Farsi

4.8 Authorization
Standard Authorization roles will be provided. Iranfava will train the identified key
users on the use of the authorization profile. ISACO has sole responsibility for
implementing, testing and maintaining user authorizations. Should customer specific
authorization set up be required, this can be provided on a time and material basis and is
outside the scope of this proposal.

4.9 Facilities
Project rooms must be equipped with furniture, network connections and power
outlets for the consultants and the customer project team. It is critical that
communication and training equipment as well as the necessary office supplies are
available for the project team throughout the duration of the project.
Communication Equipment:
- High band-width Internet access for all team members
- Phones (one line for each Iranfava team member)
- Fax machines
- Copy Machines
- Additional Power outlets for Laptops
Communication Logistics:
Iranfava Gostaresh No 18,Ibn sina St, Asadabadi Sq, Tehran, Iran
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- Access to systems domain and Private network space for sharing data
- Dedicated SharePoint site for project document management
Presentation / Training Equipment
- Training/Workshop Rooms (at least two/2 dedicated workshop rooms equipped
with proper network accessibility/ computers/ Projector with SAP logon feature)
- White boards, multiple color pens, eraser
- Additional Projector when required
Facilities
- Launch/Tea/Refreshment for Iranfava team should be provided by ISACO
Transportation
- Internal transportation for all Iranfava team member / consultants

4.10 Project Risk and Mitigation
The following generic risks have been identified.





No clear understanding of requirements and hence schedule slippage
Non availability of full time Core Team members from ISACO
Change in scope after business blue print
Delay is signing off of deliverables
The risks and their mitigation plan are as under.

No
1
2

Risk
Insufficient Business/
Application Knowledge
specific to ISACO
Schedules not adhered

3

Manpower Attrition/Rotation

4

Communication Gaps

5

Assurance of meeting
Support objectives
Non-availability of ISACO’s
core team members’ full
time.
Delay in Sign-off of
deliverables

6
7

Mitigation
ISACO will ensure constant availability of
knowledge on ISACO’s systems and business
processes
Identify Parallel Tasks
Identify Automation Areas
Timely resolution of issues raised by IRANFAVA
regarding configuration
Enforce strict documentation guidelines &
Configuration management process
Identify the reporting/escalation structure and
procedure
Identify the format and content of status reports
Identify circulation lists for reports
Frequent Senior Management Review
Strong Contract Management
Senior management at ISACO to ensure that the
core team members are available full time.
All project deliverables to be signed off within 3
working days from the date of submission. If
acceptance / approval is not received within this
time limit, deliverable would be deemed as
accepted.

Iranfava Gostaresh No 18,Ibn sina St, Asadabadi Sq, Tehran, Iran
Tel: (9821) 88616303 Fax: (9821) 88616308  Website: http://www.iranfava.com

Page 15 of 29

4.11 Change Control
The Scope of Project will be detailed and finalized through business blue print phase.
The changes in scope after business blueprint will be subjected to a change
management process as under.
Request for Change
Scope check
Iranfava and
ISACO
Impact on Schedule and Cost

No

Impact

Change in scope of
work

Included in Existing
Scope

Execute without any
impact

Approval from
Steering Committee

Execution with
Revised Cost and
schedule estimate
The change control guidelines are as under.
In the event that either party (“the Initiator”) wishes to request a change to the
Services or any part of them (“the Change”), the Initiator shall submit to the other a
written request for such Change (“Change Request”), together with the reasons for such
change and full particulars thereof and such further information as the other party may
reasonably require. Neither party shall be obliged to consider or implement a request for
a change to the Services except in accordance with the procedure set out in this Clause
4.11
Subject to Clause 4.11.1.2, until such time (if at all) as a Change Request is accepted
IRANFAVA shall, unless otherwise agreed, continue to provide the Services
notwithstanding the Change Request.
4.11.1 The following terms shall apply where the Initiator is the ISACO:
4.11.1.1 As soon as reasonably practicable following receipt of the Change Request,
IRANFAVA shall submit to COMPANY a full written quotation for such Change (“a
Change Quotation”) specifying what adjustments will be required to the Charges
and/or the Services;
4.11.1.2 ISACO acknowledges that to consider a Change Request and prepare a
Change Quotation will involve a diversion of resources, and accordingly accepts that if
such activities result in a delay in the provision of the Services then SAP shall not be
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Page 16 of 29

responsible for that delay and shall be entitled to an extension of time for performing its
obligations;
4.11.1.3 ISACO shall, within ten (10) working days of receipt of the Change Quotation
or such other time as the parties may agree in writing, advise IRANFAVA in writing of
its decision either:
(a) to accept such quotation in which case an addendum to the Business Blueprint
and/or the Project Plan shall be added to reflect the Change; or
(b) to withdraw the Change Request and its reasons for that decision, in which case
the Business Blueprint and/or the Project Plan shall continue in force unchanged
(subject to Clause 4.11.1.2 above).
4.11.2 The following terms shall apply where the Initiator is IRANFAVA:
4.11.2.1 IRANFAVA shall submit to COMPANY a full written quotation for such Change
(“a Change Quotation”) specifying what adjustments will be required to the price,
any agreed program of work or plan (including the Project Plan), any specifications
(including the Business Blueprint), the personnel to be provided and any other
aspect of the Services;
4.11.2.2 COMPANY shall, within ten (10) working days of receipt of the Change
Quotation or such other time as the parties may agree in writing, advise IRANFAVA in
writing of its decision either:
(a) to accept such quotation in which case an addendum to the Project
plan/Statement of Work (including where necessary to the Business Blueprint) will be
added to reflect the Change; or
(b) to decline the Change Request and give its reasons for that decision, in which
case the statement of Work and Project Plan shall continue in force unchanged.

4.12 Project Decision Process
Effective and timely decision making processes are critical to the success of
any ERP implementation. The customer will identify at the start of the project a
steering committee comprising of senior management who will ensure that
decisions are made within this timeframe. The following matrix reflects the timeline
guidance.

Topic

Resolution Time

Issue resolution

2 working days

Deliverable Sign-off

3 working days

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Page 17 of 29

5 Implementation Methodology
Triple A – ‘AAA’ Methodology is built on core ASAP methodology recommended by
SAP.
AAA Stands for
A Accelerated Learning
A Accelerated SAP
A- Accelerated Business Improvements

5.1 Accelerated Learning (Training)
We conduct standard classes and customized training in Iran and partner academy for
SAP in Malaysia, Singapore, Thailand and Indonesia. As such we have extensive
experience in training of SAP to users, the IT team and internal or external consultants.
These training courses are now part of our methodology and interwoven with the ASAP
approach. We have identified the following stages for an accelerated learning and
knowledge transfer.
Awareness
The project is in its initial stage. Users will need orientation of the project goals and
the capabilities of the software. Management needs to see the big picture before the
final embarkation on the road to success. In this stage we will conduct an overview
training session of SAP Enterprise ERP. Depending on the specific project situation, the
size of the project team and the timeframe of the implementation, the training sessions
will last from one to many days, covering the full integration of SAP Enterprise ERP. This
will provide an excellent opportunity to see the big picture for both the user community
as well as management. Those training sessions can also be used to identify business
improvements and project goals.
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Readiness
SAP has been selected as the tool for business improvement. The project team is
assembled, the scope has been identified and a project plan has been created. Now is
the right time to conduct more detailed courses for the individual project teams. Usually
one week will be spent to explore the functionality of the respective modules that are
part of the implementation, based on the scope of the project. Users will now learn the
functionality of SAP Enterprise ERP and they will have an understanding of the
capabilities of the software. Those courses provide the basis and the foundation for the
upcoming business blueprint.
Transition
After the business blueprint has been signed off, the project team will have to learn
in more detail certain functionalities of the software. This will enable the users to actively
participate in the implementation, thus improving on their knowledge as the software is
being implemented. Training sessions conducted during this phase will be very specific to
the individual configuration part. It is important to have the training sessions as close to
the configuration of the software as possible to maximize the knowledge transfer (“hear
it – see it – do it”). Additionally the project team from the client will be working very
closely with the consultants, allowing for additional knowledge transfer throughout the
configuration.
Expansion
The software is configured and accepted by the project team. Key users have signed
off and configuration is frozen. At this stage the users that were part of the project team
are enabled to use SAP for their daily business activities. It is now important to prepare
the rest of the user community within the company for the new procedures and the IT
system supporting those processes. User training will have to be held and all future endusers of the software undergo extensive training. The knowledge is “expanded” from the
project team to the end-users. We advocate that the key users that were part of the
project team conduct this training. Our role will be to support the key users in the
training, answering unforeseen questions, review the knowledge of the key users and
ensure that all users are being trained properly. Now the system is ready to go live.
Control
After SAP Enterprise ERP is used in a productive environment, questions will arise
which may not have been anticipated before. Additional problems may arise if new
employees join the company, or if employees change departments. Sometimes it may be
necessary to re-train employees to ensure that the procedures which are now in place
are being followed. During this stage training courses will deepen the knowledge of the
users, teach tips and tricks, and generally control the use of SAP Enterprise ERP as it has
been planned for during the implementation.

5.2 Accelerated SAP
ASAP is the recommended implementation methodology by SAP. Iranfava has
successfully used this methodology at various projects. The following phases will be used
in the Iranfava`s approach:




Project Preparation
Blueprint
Realization
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Page 19 of 29




Final Preparation
Go-Live and Support

 Project Preparation
During this phase, the project team is finalized and a high-level project plan is
completed. The hardware requirement is also listed. The Project is kicked off.
Deliverables
Project Charter
Project Plan
Kick-off Presentation
Project Handbook
 Business Blueprint
The purpose of the Business Blueprint is to understand the business goals of ISACO and
to determine the business processes.
This workshop will be conducted with the key users of each functional area to discuss the
relevant business process. A “blueprint” of ISACO requirement will be prepared and
presented for approval. This blueprint will finalize the detailed scope of the project, and
must be signed off before any work can commence.
Deliverables
Business Process Master List
Business Process Procedures
Change Register
Project Log
Reports List
Interface List
Conversion List
Enhancement List
Forms List
Minutes of Meeting
 Realization
In this phase, the consultants and the ISACO team members will configure the SAP
functionality identified in the above blueprint. The configured ISACO business processes
will be shown to the project team and key users of each business process to allow for
feedback as well as further confirmation of the blueprint. The developments will also be
carried out in this phase. During this phase, Train-the Trainer will be conducted for each
relevant module.
Deliverables
Configured System
Unit Testing
Integration Testing
Test Cases
Training Manual
Project Log
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 Final Preparation
The primary purpose of the Final Preparation phase is to complete End user training, final
system testing and go-live to production environment. A Go-Live strategy will also be
defined in this phase.
There will be an assessment of the trainers, before the end-user training is conducted.
Once the training has been executed, User Acceptance Test will be conducted. This test
will involve actual data, and will test real life scenarios for the business process. Once
the test has been completed, a UAT sign-off will be required. The final step in this phase
is to approve the system and the readiness of the company to go live.
Deliverables
User Acceptance Sign-off
Go-Live Readiness Assessment
 Go-Live and Support
Immediately after going live, the system must be reviewed and refined to ensure that
the business environment is fully supported. This process involves reviewing the
feedback from the user community (if any) to verify their needs are being met.
Deliverables
Post Project Review
Lessons Learnt
Configuration Manual

5.3 Accelerated Business Improvements (OCM)
We believe that in today’s competitive environment it is not enough to constantly
adapt to new business situations and improve the business conditions, but this change
has to happen under stringent time constraints. We help business to cope with this
change and improve their business conditions by assigning consultants to the project
that have worked in a similar environment before. This allows recognizing business
improvement opportunities in a very early stage of the implementation. As we ensure an
ideal mix of consultants with appropriate business expertise and in-depth SAP product
knowledge, we do not need to access a database of project implementations. We rather
assign the best available consultant to your project, thus ensuring that you have the
requested expertise at your fingertips.
Consultants assigned to the project have worked in a SAP project of a similar industry
before, and come equipped with solutions to improve business conditions with SAP
Enterprise solution. This again will help to recognize and implement business
improvements earlier, giving you a leading edge rather than a vanilla solution.
Our project manager will provide the ISACO Change Manager with necessary tools
and methodology to bring about changes during the various stages of the project.

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6 Project Plan
Estimated Total of 600 working days (30 Months) with 20 working days in a month for
Iranfava Consultants.

Stage

Duration (Working Days)

Preparation

30

Business Blueprint

90

Realization

300

Final Preparation/Cut Over

100

Go live & Support

80

Total

600 working day (30
Months)

Iranfava Gostaresh No 18,Ibn sina St, Asadabadi Sq, Tehran, Iran
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Page 22 of 29

7 Project Organization
7.1 Project Organization Structure – Team Concept
The proposed project organization chart for the ISACO project will be finalized upon
confirmation of project. Iranfava will undertake to staff the project with the necessary
qualified resources to work together with the ISACO implementation team.
The overall organization chart is as follows:

MM

SD

CS

A detailed mapping of roles to individuals will be done upon project start. It is understood
that individuals may and will occupy multiple roles. The Iranfava Project Manager will
assume overall project responsibility and be the main point of contact with ISACO.

7.2 Roles and Responsibilities
A key strength of the triple A Roadmap is the building of a strong core project team that
consists of both ISACO resources as well as Iranfava Consultants working hand-in-hand.
A project Manager will be assigned by Iranfava to work with and assist the ISACO Project
Manager. Functional consultants in each of the application areas will also be assigned to
the business process teams. Specific roles and responsibilities include the following:
Steering Committee
Steering committee consists of management team from ISACO. The objective
of steering Committee is to set the objectives of the project, put up a mechanism
to ensure that the objectives are achieved. The project sponsors are the Steering
committee members who monitor the progress, accept the project deliverables,

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Page 23 of 29

sign-off the milestones achieved, resolve, prioritize key issues and provide
direction to the project.
Project Manager
ISACO will provide a Project Manager. Ideally, it should be a full time role in
the project. Iranfava will also deploy a Project Manager. The project managers will
be empowered to have primary ownership of the project deliverables and will
provide day-to-day direction to the project team. The Project Managers will also
be responsible for maintaining the project plan, streamlining resolution of issues
and communicating the project status to the steering committee. In general,
both the Project Managers will provide overall project management for the
implementation, and play an active role in the integration between the consulting
team and business application teams.

Project Administrator
It is the responsibility of the project administrator to co-ordinate and provides
the necessary infrastructure support and facility to the project team to ensure
that necessary help/support is available to the team members. This will ensure
that project teams can spend most of their time in contributing towards success
of the project.
Iranfava Consultants
Iranfava consultants consist of SAP international certified consultants and Iranfava
local junior consultants. The local team will assist SAP consultants regarding
coordination, communication, translation and configuration.


Project Preparation Phase
This phase is primarily the responsibility of the Iranfava and ISACO Project
Management team.



Blueprint Phase
The consultants will hold several business process review sessions to
gather detail requirements. The consultants will then develop the
“Business Blueprint” which summarizes each business process to be
implemented by the project.



Realization Phase
The project team will configure the functionality identified in the business
blueprint. After the configuration, the consultants will playback the
business process flow to the project team and key users.



Final Preparation Phase
During Final Preparation, the consultants will assist the ISACO project
team to plan and execute the testing and prepare for cutover.



Go-Live and Support Phase
Consultants will provide application support for the first month. For any
additional consulting support required after the implementation,
consultants can provide the service at the standard consulting rate.

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ISACO Business Process Owner – Team Leaders
Business Process Owners should possess good knowledge of the relevant
business areas. Business Process Owners are responsible for the overall design
for their respective application areas to standardize ISACO business processes
and to ensure the right decisions from the perspectives of both ISACO
requirements and SAP R/3 functionality aspects. They also lead key users in the
designated module.

ISACO Project Team – Key Users
All members of the ISACO project team should ideally be full time. The project
team will be the process owner who owns all business processes within the scope
of this implementation.


Project Preparation Phase
This phase is primarily the responsibility of the Iranfava and ISACO Project
Managers as described above.



Business Blueprint Phase
ISACO senior management and the project team will be responsible to
attend the business process workshop. They will be responsible to provide
information concerning business policies and making decisions concerning
future business processes design. ISACO will also be required to approve
the Business Blueprint.



Realization Phase
The ISACO project team will define exception conditions for each business
process and running the integration testing scenarios. Testing will be
carried out by the ISACO project team simultaneously on all modules
during the unit testing phase. Once the individual modules are tested,
integration testing will be carried out which covers cross module testing.
The test plans are provided by Iranfava consultants. The ISACO project
team and the appropriate management team will review and approve the
configured business processes. At this stage, the ISACO project team will
acquire R/3 skill through on-the-job training provided by the consultants.
The ISACO project team will be able to document user procedures and
development of end-user training. The user procedures (transaction based)
are based on SAP’s Business Process Procedures and consultants will guide
ISACO in the creation of this documentation. End user training is generally
compiled from the user procedure.



Final Preparation Phase
The ISACO project team will execute the integration test, the volume tests
and prepare for cut-over based on Iranfava suggested test plan. ISACO will
provide the Training Environment for End User Training. End user training
involves the adaptation of SAP procedures to user jobs and roles. It is
therefore recommended that the ISACO project team do this training.
Go-Live and Support Phase



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After going-live, ISACO needs to verify the accuracy of the productive
system and provide application support. The project team will form a Help
Desk to support other business users in the organization. Once the system
has been in production, ISACO will be able to evaluate the business
benefits.
ISACO IT Team


Functional Consultants
The functional team will contribute to the project environment by assisting
the Iranfava team and in turn learn the system set-up. After the Go-live it
would be the responsibility of this team to support ISACO SAP environment.
The commitment of this team is full-time and is critical to the success of the
SAP initiative.



Daily System Administrative Tasks
The technical lead will provide the day-to-day system administration and
maintenance activities. The commitment of this person is full-time and is
critical to the success of the project.



Network and Network Security
The technical lead will provide the Network Infrastructure Design for
ISACO. He will also be responsible for Internet infrastructure security for the
implementation.



Infrastructure Support
The technical lead will ensure that proper infrastructure is available for
every end-user to perform their tasks in the new R/3 system. This includes PC
upgrades, network connections, and installation of appropriately sized R/3
servers, installation of SAP GUI, as well as the availability of user procedures,
forms and user support.

Other ISACO Responsibilities
It is required to prepare a room for the Implementation team. The rooms
should be big enough to accommodate the entire Project Team.
The project members should be equipped with the following:
- Telephones to be available for local calls
- Analog lines available for consultants to dial out
- Network Printer to test reports
- Electronic mail access and network Ids.
ISACO will manage any organizational changes that occur as a result of the
concepts or processes developed during the project, with help of a Change
Manager. This process looks into how changes can be managed in the
organization when there are changes in roles and responsibilities. ISACO can
facilitate this process via training, workshop and other activities conducted
internally. ISACO change manager will be assisted by IRANFAVA Project Manager.

7.3 Iranfava Consulting Team
Iranfava consulting team will be experienced consultants with good experience in
implementation SAP in manufacturing industry. The team will be deployed as under.
Area / Module

Project Manager

no. of consultants

1

Iranfava Gostaresh No 18,Ibn sina St, Asadabadi Sq, Tehran, Iran
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SAP solution consultant: Financials (FI/CO)
SAP solution consultant: Material Management
(MM)
SAP solution consultant: Sales and
Distribution, Customer Service and Dealer
Business Management (SD/CS)
SAP solution consultant: Quality Management
(QM)

2
2
2
1

SAP Technical consultant: ABAP Developer

2

SAP solution consultant: Technical (Basis )

1

7.4 ISACO Team Leaders
In order for the project to be successful, following resources needs to be deployed
from ISACO.
Area

Profile of Member

Minimum No of
Persons

Project
Management

Senior Member of IT department with good business
knowledge and IT knowledge.

One resource

Project Office

Project Office Secretary, Good knowledge of Project control,
office management and English language understanding

One Resource

FI/CO

Comprehensive knowledge of Finalization of Balance Sheet,
Bank Accounts, Inventory accounting, Sales Accounting and
Assets , Product Costing, Budgeting, Cost center accounting
and profitability analysis.

Four resources

QM

Comprehensive knowledge of Quality Management in
Procurement, After Sales

Two resources

MM

Comprehensive knowledge of Trading, Procurement,
Inventory, Stores etc.

Two resources

Engineering

Comprehensive knowledge of Engineering master data for
IKCO Aftersales

Two resources

SD/CS/DBM

Comprehensive knowledge of After Sales Services

Four resources

Basis &
Technical

Handling Database Management, Operating System,
Hardware set-up, tuning and trouble shooting

Nine resources, 3
for Basis, 6 ABAP.

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Page 27 of 29

8 Project Costs
In the partnership concept described above, we are offering professional services
adapted to your needs to meet the critical success factors required for this type of
project. To achieve this mandate, we then propose the following business formula:


Provide solution consultants to perform an independent and objective review of
business processes and application configuration



Provide technical consultants to help you make project-specific decisions on the
number of servers, operating system and database preferences, and the timing of
installations.



Provide solution consultants to support the ISACO project team implement the
SAP R3 software, which requires expertise in the following areas: FI, CO, MM, SD,
QM, CS and DBM.



Provide technical consultants to develop interface and conversion programs as
needed and to perform system support activities.

SAP Implementation costs
Description
Consulting Services including

Price
(Rials)
11,850,000,000

implementation, training,Project
management & Post Golive Support

Flight & Visa Expenses
Facilities Expenses such as Lunch &

1,070,000,000
To be paid by

internal Transfer
Accomodation for foreign consultant

ISACO
To be provided
by Iranfava

Total

12,920,000,00
0

8.1 Terms & Conditions



Any taxes, if applicable are payable extra.
Scopes of Work & Deliverables
The scopes of work & deliverables in the proposal are the results from the
study of the information & documents provided by ISACO as well as the
informal discussions held in ISACO office. Should any major change or any
unforeseen circumstance arise, both ISACO and Iranfava agree to address
the resulting impacts on the Project Plan mutually.



Iranfava is not liable for project delays caused by circumstances that
are not within our responsibility & control.



Deployment time is maximum 30 days from date of signing of
contract and receipt of advanced payment.
Iranfava Gostaresh No 18,Ibn sina St, Asadabadi Sq, Tehran, Iran
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Page 28 of 29

8.2 Fees and Payment Schedule
Prepayment
Item

Payment %

Signing of Contract as the
prepayment

20

Milestone Billing


The payments will be done MONTHLY based on project progress
claimed by Iranfava and approved by ISACO Project Manager

Iranfava Gostaresh No 18,Ibn sina St, Asadabadi Sq, Tehran, Iran
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Page 29 of 29