At the end of 2007 Continental acquired Siemens VDO Automotives. Five years on and the company’s new supplier relationship management system is one of the largest in Germany, with over 21,000 users across 250 locations worldwide.
A huge project, which involved migrating VDO’s SAP purchasing solution with 10,000 users to an SAP SRM platform. It didn’t just entail a large number of different SAP systems but also numerous third-party applications, such as a catalog solution for materials purchasing in revenue-enabling departments at Continental.
Weaknesses in old SRM system
“Consolidating our systems revealed the weaknesses of our old SAP SRM 4.0,” says Armin Schmitt, head of supplier relationship management IT at Continental. “We had added numerous enhancements and modifications in the ten years since we implemented the system. Support took a lot of effort, and we could not add any more new developments.” As SAP SRM 4.0 had reached the end of its maintenance period, it was time to innovate.
A completely new approach was urgently needed to deal with the vast array of old user interfaces. For instance, each part of the organization had a different process for approving invoices, resulting in a whole range of screens and maintenance-intensive interfaces to the SAP systems. There were so many different input screens that having a standard process for ordering office supplies across locations was a real challenge. Continental’s purchasing and IT managers realized that they had to standardize.
A joint strategy workshop with SAP back in March 2010 convinced them they were right, and enabled them to discover how the latest SRM developments could help them innovate. Continental then set up its ePOS program (Enhanced Strategic and Operational Procurement Applications On a Central SRM and Portal System) to simplify and improve its purchasing applications by using standardized SAP technology. The starting point was the upgrade to SAP SRM 7.0 and the implementation of SAP NetWeaver Portal 7.0 and a new catalog system.
Single sign-on saves time and money
“In the strategy workshop with SAP we soon realized that it was just not possible to integrate the vast number of applications our employees were using for purchasing,” says Armin Schmitt. “So that they won’t constantly have to switch between systems in the future, we’ve opted for SAP NetWeaver Portal.” One major improvement was single sign-on: Users log on to the portal once and can access all the systems and data they need, and call up a consolidated worklist. This makes using the SAP purchasing platform easier and saves a lot of time and money.
Continental expects the new catalog solution and its supplier self-services capability to bring additional cost reductions and time savings. As suppliers will be helping to keep the catalog up to date, Continental no longer has to do all this work itself. With around 650 suppliers for non-production materials in its catalog, a number that is set to rise, shifting the task of updating the information will free up no end of time.
Continental has so far rolled out the new central SAP purchasing platform plus portal and catalog solution to 250 locations in 13 countries. Although the implementation project was highly complex and the timetable extremely tight, it was completed on time. The ePOS1 project kicked off in August 2010, the blueprint finished in December that year, and the implementation and rollout were completed by the end of 2011.
SAP SRM consulting firm apsolut assisted with the upgrade and the implementation of the portal and catalog solution at application level, took care of the preliminary study, blueprint, implementation, and pilot project, and provided after-go-live support during the rollouts. After an intense preparation period, all locations went live within six months.
Tips for a smooth upgrade
Companies planning to modernize their SAP SRM software should think about performance and stability early on, says Schmitt. They should consider using services such as SAP Safeguarding to identify, assess, and minimize the project’s technical risks. In a greenfield approach to the SAP SRM upgrade, the effort involved in cleaning up master data should not be underestimated, especially if this is to be done manually, as was the case at Continental. If companies are implementing new technologies such as portals or self-service capabilities at the same time, they need proper change management to get employees on board right from the start. Where the architecture is complex, organizations need a test catalog covering all processes, and variants to test all conceivable constellations in a systematic way.
Follow-up project with apsolut
With SAP SRM 7.0, SAP NetWeaver Portal, and the new catalog solution, Continental now has the technology it needs to realize its SRM strategy throughout the group. Continental also wants its materials purchasing team to benefit from the new portal and SRM technology. They currently have to log on to multiple SAP systems, convert the purchase requisitions stored in those systems to purchase orders, and then send them to the suppliers. This process is set to become simpler: In the future, the purchasing team will be able to display the purchase requisitions on the portal, where they can click on them and send them automatically to the relevant SAP system.
Continental is using apsolut’s process and SAP expertise in a follow-up project, and is already working on a blueprint for production material contract management. It wants to take advantage of the SAP SRM purchasing platform and single sign-on to manage contracts with its raw material suppliers. In another phase of the ePOS project, Continental wants to install a sourcing cockpit and SAP functions for e-bidding.
Key success factors for upgrading SAP IT infrastructures with large, global applications:
→ Work on performance and system stability during the project
Example: SAP Safeguarding
→ Factor in the effort required to clean up master data
→ Carry out change management to gain acceptance of new technology among employees
→ Create a detailed test catalog to ensure the quality of the applications in a complex system infrastructure