Evaluation of the successful 6 month SAP implementation at GTECH. The methodologies used at GTECH were incorporated into the SAP ASAP methodology.

1. 5/98 article
R/3 Installation At A Glance:
Selected: June 1994
Installs Completed: February 1995–October 1996
Current release: R/3 Release 3.1G
Modules in use: FI, CO, AM, EIS, SD, MM, PS, PP, PM, PD
Number of users: Approximately 800
Database: Oracle 7.2.3
Operating System: DEC Unix 3.2G
Hardware: Digital Equipment Corporation Alpha
Key Complementary Applications: ADP Payroll, TAXWARE Sales/Use Tax System, Hyperion Pillar,
Systems Union Sun Accounting, Resumix Resumix System
Primary Integrator: In-house personnel

2. Case Study: Building A Modern Infrastructure At
GTECH With R/3
By Steven J. Tirone
Headquartered in West Greenwich, RI, GTECH is a global manufacturer, facilities management, and
service provider for lottery, gaming, and entertainment organizations. GTECH, with operations on 5
continents, had fiscal year 1997 (ended February) revenue of $904.3M. The company has more than 5,000
employees around the world. It has five core business groups: the GTECH Worldwide Lottery Group,
Dreamport, GameScape, Transactive, and GTECH Worldserv.
In 1994, GTECH decided to move to a modern, unified ERP system. At that time, the company, which
then consisted of the GTECH Worldwide Lottery Group and Transactive, did not have a real business
system. It instead relied on a patchwork of in-house developed systems, accounting packages, and
spreadsheets to maintain its financials, and used the CA-MAXCIM MRP system in its manufacturing
operations. GTECH essentially went with SAP from the initial decision to upgrade. The only other
vendor under consideration, Baan, was new to the U.S. market and was unable to demo its products for
GTECH. In early 1994, SAP was selected to provide GTECH’s business infrastructure.
Implementation
With the decision to completely revamp its IT base, GTECH bought a full suite of R/3 modules, including
Financial Accounting/Asset Accounting (FI), Sales & Distribution (SD), Materials Management (MM),
Project System (PS), Production Planning (PP), and Plant Maintenance (PM) modules, as well as the
Personnel Planning & Development (PD) element of the Human Resources (HR) module. The
implementation, which covered more than 40 U.S. and 20 international sites, was completed in two-and-
a-half years at a cost of $12M.
The implementation cycle began in July 1994 and was carried out in three distinct phases, based on
business processes. During the initial phase, GTECH implemented the FI and SD modules, completing
implementation in February 1995. In the second phase, the company began implementation of the MM
and PS modules in April 1995, finishing in December 1995. The last phase to be implemented targeted
the company’s manufacturing operation, with implementation of the PP, PM, and PD modules beginning
in February 1996 and completing in November 1996.
GTECH chose not to hire a system integrator to carry out the work, instead relying on in-house personnel
supplemented by SAP employees at key points. The effort was led by a steering committee composed of
business champions drawn from vice presidents from the operating units and a program manager from
GTECH’s IT unit in turn supported by sub-program managers. The implementation team, which
numbered up to 100 GTECH personnel, included approximately 20 employees who spent the bulk of their
time on the implementation as well as a handful who were completely dedicated to the effort. Most
employees, however, did not give up their day-to-day responsibilities. The team made every effort to
balance the demands placed on employees, for example, avoid weekend work except during the “go live”
phase.
The effort encountered a certain level of internal resistance to the changeover of systems from personnel
who were comfortable with their existing processes. The steering committee had to mediate, enforcing

3. internal discipline and driving education among the end-users. Much of the credit for the success of the
implementation is due to the insistence on dependence on internal personnel to carry out the
implementation. Their business knowledge and understanding of in-house issues proved critical in
addressing internal concerns and requirements. All in all, however, GTECH personnel were required to
adapt existing processes to match R/3, as a key element of the implementation was the mandate to avoid
modifying code to keep the project on track.
GTECH’s installation runs primarily on Digital Equipment Alpha servers running on DEC Unix 3.2G and
supporting an Oracle 7.2.3 database. The current R/3 release in use is 3.1G. GTECH plans to upgrade to
R/3 Release 4.0 in 1998, in part because of its support for the Euro unified European currency, which will
substantially impact GTECH’s operations abroad. Again, GTECH plans to stick with release functionality
and avoid code modification to prevent introducing added complexity.
Complementary and Custom Software
The implementation team also attempted to minimize interfaces with other applications, to avoid
synchronization issues and keep the implementation as straightforward as possible. However, as GTECH
has not yet adopted the full R/3 suite, many human resources and certain financial requirements are met
by complementary software applications. GTECH uses ADP Payroll, TAXWARE Sales/Use Tax System,
Hyperion Pillar for enterprise budget planning, and Resumix Resumix System for resume capture. Going
forward, the company expects to adopt the R/3 Treasury (TR) module and the complete Human Resources
(HR) module. In Europe, GTECH uses Systems Union’s Sun Accounting package in conjunction with
SAP software, which will be displaced at all large European sites by R/3 but will be retained at small sales
and support sites. In partnership with SAP, GTECH has also developed an integration interface between
the R/3 Project System module and Microsoft Project.
Results and Lessons Learned
GTECH has realized significant benefits from its complete overhaul of its business infrastructure. The
order entry approval cycle has been cut from 15 days to 1 day, while the month-end close has similarly
been reduced from 17 down to 2 business days. By creating milestone billing procedures, receivables
collection has been improved, leading to the collection of some $250K in previously uncollected revenue.
With the implementation of inventory management, U.S. field inventories have reduced by 25% or $1M,
while revised export shipping processes have reduced customs penalties by $250K per year. The
reengineering of project management, which included the custom-developed integration between
Microsoft Project and Project System, provided central control for all customer projects, preventing cost
overruns and in the process saving more than $5M since 1996.
Among the key lessons GTECH drew from the implementation effort was that management of human
factors is perhaps the critical aspect of a successful implementation. The decision to modify business
processes to fit R/3 rather than attempt to shape the code around existing practices side-stepped one of the
major traditional pitfalls of R/3 implementations, one that has sunk a number of projects. On the other
hand, this decision forced the abandonment of long-established practices and required the enforcement of
whole new disciplines. Again, the company credits its do-it-yourself approach to implementation as vital
to the success of the project, as this tack forced employees to buy-in to R/3. Ultimately, though opinions

4. were mixed for months after change-over, end-user reaction was enthusiastic a year on as the new ways of
work became familiar.