At a recent SAP panel discussion, “Lay the Foundation for Your Enterprise with Intelligent ERP,” attendees heard two SAP customers, Doehler GmbH and The Goodyear Tire and Rubber Company, talk about their transformational journeys to become an intelligent enterprise.
Following is the Q&A from that discussion, moderated by Andrea Stokvis of SAP and featuring Harald Muley, of Corporate Functions IT at Doehler, and Horst Ebert, vice president of Global IT from Goodyear.
Q: Let’s begin by telling us a bit about each of your organizations and your role.
Ebert: Goodyear is one of the world’s largest tire companies. We employ about 64,000 people and manufacture products in 47 facilities in 21 countries around the world. I’m responsible for all SAP activities at Goodyear globally, with focus on centralizing our SAP support structure, harmonizing our application architecture across geographies, and defining together with SAP strategic roadmaps to move toward the Intelligent Enterprise.
Muley: Doehler is a global producer, marketer, and provider of technology-driven natural ingredients, ingredient systems, and integrated solutions for the food and beverage industry. We have over 7,000 employees worldwide and serve customers in more than 130 countries with 45 production sites. As head of Corporate Functions IT, I am responsible for all IT aspects regarding finance, controlling, and HR.
Both companies have been long-standing SAP ERP customers and have decided to move to SAP S/4HANA on premise, supporting very complex system landscapes. What was the key driver for embracing SAP S/4HANA as your digital core?
Muley: Doehler had run its operations on the SAP ERP application since 1993, which resulted in a highly customized and specialized system with more than 33,000 custom objects and roughly 3.7 million lines of code. To accelerate growth, the company needed to update our ERP. We made a strategic decision to use SAP S/4HANA. We knew it was the future of SAP and that development and investment were being made.
Ebert: Goodyear is running separate ERPs to support our business units in North America, EMEA, Asia Pacific, and Latin America. We identified a couple of key drivers to start our SAP S/4HANA journey. First, we want to leverage the latest SAP technologies, including machine learning and artificial intelligence (AI). Second, we wanted to harmonize our applications architecture and drive standardization and simplification to support new business requirements quicker. Finally, SAP S/4HANA will be the core of the SAP architecture surrounded by cloud solutions, and we need to stay within maintenance windows.
Many are interested in how you moved to SAP S/4HANA. Can you describe your journey and where you are in the process now?
Muley: We were previously using SAP ERP Central Component with SAP MaxDB. Our journey began by first moving to SAP HANA with a technical upgrade. Then we did a system conversion to SAP S/4HANA 1610 with 90 percnet automation of custom code conversion. Currently, 17 companies are running on our central SAP S/4HANA 1809 system. We’ve been doing yearly upgrades to keep on the latest and greatest version of SAP S/4HANA.
Ebert: Our journey started with SAP’s announcement to cancel maintenance for SAP ERP Central Component by 2025. We went live with finance initially, deploying a technical foundation last year and now we continue to add more business processes and innovations. We don’t consider our SAP S/4HANA journey in isolation; it’s part of the digital enterprise transformation where we have a strategy of leveraging as many cloud solutions as possible.
How did you decide the path to deploy SAP S/4HANA?
Muley: We decided a system conversion was the way to go because a greenfield project would have taken too long for our fast-changing industry. We decided to perform process redesign on the new SAP S/4HANA data model. Also, it allowed us to reuse valuable custom developments.
Ebert: We are taking a hybrid approach since we are running multiple ERP systems. Our first deployment was a new implementation for functionality we wanted to globalize and standardize, like finance. However, since we are not moving all our business processes into a single instance, we will do system conversions of existing ERPs, where processes are market-driven and might differ by geography. We are making that decision in close collaboration with our business functions.
What did you consider when deciding whether to deploy on premise or in the cloud?
Muley: We decided to keep our data on premise, because our own data center is very efficient. It allows us to keep our financial data as well as valuable intellectual property like development recipes on our on-premise instance of SAP S/4HANA.
Ebert: We are not ready yet for SAP S/4HANA in the public cloud, but we are deploying SAP S/4HANA on SAP HANA Enterprise Cloud. This allows us to focus on our own capacities to improve core processes and drive new innovations while leaving the management of SAP S/4HANA hosting to SAP as part of our hosting strategy. In APJ, SAP HANA Enterprise Cloud only had a center in Japan and we decided that we needed a location closer to our markets in Australia and New Zealand, so we have deployed on Amazon Web Services in Singapore.
What was your biggest challenge?
Muley: Being an early adopter at that time presented us with great challenges. We could not leverage SAP tools like SAP Readiness Check, documentation was missing, and there was a shortage of consultants with SAP S/4HANA knowledge. Also, SAP S/4HANA support from third-party add-ons and consulting solutions was a challenge, as some were not ready yet for the journey. Nevertheless, we made it on time within six months, including necessary retrofits due to parallel projects, two FPS SAP S/4HANA upgrades, and around 230 implemented OSS notes.
Ebert: SAP continues to invest in SAP S/4HANA with the consequence of significant annual release upgrades. While we are increasing the utilization of the system, we need to plan for those annual upgrades.
What were some of your magic moments that worked well during your deployment?
Muley: I have to say the collaboration with SAP during our project was one big magic moment. The commitment of the team involved was outstanding — from our customer care coordinator to the support consultant during our production system conversion weekend, working on an unexpected serious issue during migration. Everybody was very committed to make this a success story. It was a big success for team Doehler and SAP.
Ebert: The robustness of the application is really impressive. We replicated 5 billion universal journal items records into SAP S/4HANA and had zero rounding difference.
A specific question for Doehler: What is your strategy with the yearly SAP S/4HANA upgrades?
Muley: There are always so many new capabilities, like embedded SAP Extended Warehouse Management; embedded SAP Transportation Management, our key driver for 1709; embedded master data quality, our key driver for 1809; or group reporting for 1909. Also, we see many innovations like machine learning with SAP Leonardo — SAP Cash Application extended functionality under 1809, GR/IR monitor — so we decided that we need to do the SAP S/4HANA upgrades each year. Furthermore, our upgrades are comparable to enhancement package upgrades in SAP ERP Central Component times. We will now try the next upgrade with 1909 within five weeks. From our perspective, the sooner you start, the better it gets!
What capabilities of SAP S/4HANA are you currently using, and what other solutions do you have connected to it?
Ebert: Currently we are using finance and plan for central procurement in 2020. We have SAP Analytics Cloud to leverage real-time analytics and eventually, planning. Furthermore, we integrate with SAP SuccessFactors, SAP Concur, and SAP Fieldglass solutions. Digital supply is under evaluation.
Muley: We are using all the classical SAP SAP S/4HANA modules like finance, supply chain, inventory, etc., but we also implemented SAP Financial Closing cockpit, and the embedded SAP Extended Warehouse Management and SAP Transportation Management. We integrate SAP S/4HANA with the SAP Data Maintenance by Vistex, pricing option for SAP S/4HANA, SAP Sales Cloud, SAP Ariba software, and just recently acquired SAP Integrated Business Planning for Supply Chain to also strengthen our supply chain footprint in connection with SAP S/4HANA. We are also implementing live reporting with SAP Analytics Cloud.
Now a Goodyear-specific question: You mentioned finance as a key driver for why Goodyear moved to SAP S/4HANA. Can you share what your users are telling you and what benefits they’ve received?
Ebert: The availability of information has been amazing. It’s the first time in history we can provide comparable data globally with full transparency to the lowest level of detail. Our finance professionals don’t have to make decisions based on yesterday’s or last week’s reporting. They’re getting real-time numbers – what’s actually happening in the business. All of this means they can make better, more informed decisions.
What are some of the benefits you’re realizing with SAP S/4HANA?
Muley: We didn’t focus on before-and-after metrics or focus on the percentage increase of productivity, etc. However, we had a definite increase of performance implementing SAP HANA already by more than 30 percent. We are also seeing with SAP Cash Application that 30 percet or more of the postings are automated, so that gives folks in finance more time to focus on more strategic activities versus just posting items. Overall, SAP S/4HANA gives us a foundation to run new business processes and create innovative business models that deliver even more value to partners and customers.
Ebert: We quickly identified opportunities and benefits for finance. We didn’t have a global chart of accounts or global cost center structure, so this was really an opportunity to implement global standards and gain real-time visibility into financial data.
What advice would you give other customers that are considering deploying SAP S/4HANA?
Ebert: Take your time to implement SAP S/4HANA and make sure you understand the full potential in combination with other applications like SAP Analytics Cloud. Make sure your internal support team is building the required capabilities and learn how to leverage all the new functionalities.
Muley: A conversion project can be done fast, and the sooner you start, the smaller the gap between SAP ERP Central Component and SAP S/4HANA. As with every release, there are new simplifications implemented, which make the conversion more complex if you start with SAP ERP Central Component as basis. And expect and be prepared for the unexpected.
We hear a lot from our customers about the importance of change management. How did you approach it? Whether from a business user or IT professional perspective?
Muley: Since our approach was to perform only mandatory adjustments for the system conversion, such as the implementation of SAP Business Partner for SAP S/4HANA or rebate settlement management and keeping SAP GUI as user front end, there was not much change management necessary initially.
Ebert: Most important is the support of the executive leadership. Second is to demonstrate to users what is possible; don’t implement just the as-is. Lastly, train your internal IT professionals and make them hungry for new technologies.
Thanks to Harald Muley from Doehler and Horst Ebert from Goodyear for sharing valuable insights about their respective SAP S/4HANA deployment and journey to become an Intelligent Enterprise.
Start your intelligent enterprise journey by learning more about SAP S/4HANA here.