2 page Case Study - Posted 10/11/2011
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AmerisourceBergen Division Cuts Costs with Switch from AS/400, Expects 18-Month ROI
AmerisourceBergen Specialty Group, which distributes specialty medical products, relies on a Baan enterprise resource planning (ERP) solution that it hosted on an IBM AS/400 system. When the time came time to relicense Baan ERP, the company decided to migrate the solution to the Microsoft Application Platform, including Microsoft SQL Server 2008 R2 Enterprise. It is now enjoying an 18-month ROI and lower total cost of ownership, along with the scalability it sought to support growth.
AmerisourceBergen Specialty Group (ABSG) is a market leader in the distribution of biotechnology, plasma derivative, and oncology products. The company is part of AmerisourceBergen Corporation, which ranks number 27 on the 2011 Fortune 500 list of America’s largest companies, has 10,000 employees, and generated revenue of more than U.S.$70 billion in 2010.
||We took the loads of our peak days and doubled them, and SQL Server handled this without any problem …. We have plenty of scalability with SQL Server 2008 R2.
Chief Information Officer
AmerisourceBergen Specialty Group
Pharmaceutical manufacturers rely on ABSG for services including outsourced logistics and market access programs that support commercialization strategies. The company provides the resources that physicians need to maximize practice efficiency and the specialty pharmacy services that patients need to improve their health. Specialty pharmaceuticals refer to treatments that are administered to patients by medical professionals in a clinical setting and alternate facilities such as skilled nursing and assisted living centers.
ABSG distributes specialty products that cover a spectrum of human health needs, including oncology, nephrology, urology, immunology, ophthalmology, pediatrics, neurology, and orthopedics. The reliability of the company’s distribution system is powered by its mission-critical, enterprise resource planning (ERP) system. ABSG uses a data warehouse to provide business intelligence to its pharmaceutical customers. The company built its first data warehouse using Microsoft SQL Server 2000 data management software in 2002.
ABSG used the Microsoft platform for nearly all of its operations, with the exception of its Baan ERP application, which was hosted on an IBM AS/400 system. When the time came in 2010 to renew its license for the Baan solution, the company learned that its current version would no longer be supported for the AS/400. ABSG had an important decision to make: either license an alternate version of Baan for the AS/400 or move to a Baan ERP product designed to run on the Windows Server operating system and SQL Server.
The IT group at AmerisourceBergen Specialty Group had a long history of working successfully with the Microsoft Application Platform but, because of the importance of the ERP deployment, it performed load testing and also contacted other companies that were running a Baan ERP on SQL Server.
Load testing showed that SQL Server running on Windows Server 2008 R2 Enterprise could easily handle the loads, and inquiries to other companies also came up positive. “Because of our extensive experience with SQL Server, and our great satisfaction with the entire Microsoft platform, it was an easy decision to make,” says Mike Biesanz, Vice President of IT Solutions Delivery and Architecture at AmerisourceBergen Specialty Group. “We migrated our Baan ERP to SQL Server 2008 R2 Enterprise. We are in the process of upgrading our data warehouse to SQL Server 2008 R2 Enterprise as well.”
The company deployed its Infor ERP Enterprise LN (formerly Baan ERP) solution on the same type of server computer as it uses for hosting its data warehouse solution: an HP ProLiant DL580 G5 server with four Intel processors, each with 6 cores, for a total of 24 processing cores. The servers were configured with 64 gigabytes of memory.
With its move from the AS/400 to the Microsoft Application Platform, AmerisourceBergen Specialty Group has the scalability it needs for growth, expects an 18-month ROI, and benefits from easier systems management.
Robust Scalability to Meet Peak Loads
ABSG averages between 25,000 and 35,000 order lines a day (with an average order representing 3 to 4 lines). During peak periods, typically Monday afternoons, processing rates average 6,000 lines per hour. The company needed to ensure that SQL Server could handle its heaviest loads.
“We took the loads of our peak days and doubled them, and the Microsoft platform handled this without any problem, so we could see we have plenty of room to grow,” says Dale Danilewitz, Chief Information Officer at AmerisourceBergen Specialty Group. “We have plenty of scalability with SQL Server 2008 R2.”
18-Month Return on Investment
The cost savings of moving from the AS/400 platform helped provide ABSG with what it estimates will be an 18-month return on the cost of moving to the Microsoft Application Platform hosted on a 24-core, Intel-based server. “There were a couple of options for staying on the AS/400,” Biesanz says. “We considered the costs to the business of staying on the AS/400 with a newer version of our ERP, but every way we looked at it there were significant advantages to moving to SQL Server on an Intel platform.”
The advantages were confirmed by the CIO. “There were licensing costs, labor costs, and administration costs involved in staying on the AS/400,” notes Danilewitz. “Eliminating the AS/400 and the related software from our stack has removed an entire layer from our overall cost. I estimated our ROI at about 18 months.”
ABSG sees even more savings in creating internal applications. “Our skilled development staff can use Microsoft products in more innovative ways than with our previous solution,” Danilewitz says. “This helps us and our customers.”
Easier Systems Management
Consolidating on the Microsoft Application Platform has resulted in easier systems management for ABSG. “If you have different technology stacks, you're constantly having to figure out the boundaries between the two and how they intersect and how they're going to communicate,” says Biesanz. “Those issues have gone away now that we are on the Microsoft technology stack.”
Biesanz notes that the cost of systems management can take a toll when working with disparate systems. “Sometimes an attractive sticker price to get in the door is not the last bill you pay, so we wanted to make sure that we were looking at the total cost of ownership. That’s why we chose Microsoft.”
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