Refratechnik Successfully Moves to SAP S/4HANA Amid Lockdown

Refratechnik Group of Germany had planned to roll out SAP S/4HANA at its newest acquisition, the Australian mining company Queensland Magnesia (QMAG) – on site, in Australia. But then the coronavirus pandemic hit the world stage and everything changed. Undeterred by the nine-hour time difference between Australia and Germany, remote implementation was a huge success.

Having all gone to plan in the beginning, the migration project between Refratechnik and QMAG suddenly became a great adventure. Munich-based Refratechnik Group, with more than 1,700 employees at 27 locations worldwide, specializes in refractory materials for industrial furnaces used in the cement, lime, steel, non-ferrous, and ceramics industries as well as waste incineration. In February 2020, it acquired Australian magnesia producer QMAG, which mines and processes cryptocrystalline magnesite in the state of Queensland, Australia.

“As part of the contract negotiations, we had agreed to phase QMAG completely out of the seller’s existing ERP system by the end of 2020. So, technically speaking, we would have had enough time to implement the SAP solution on site in Australia,” reports Silke Denecke, CFO of Refratechnik Holding GmbH. “We couldn’t transfer the existing ERP system,” she explains further, “because it was integrated in the seller’s group IT landscape.”

What’s more, that enterprise resource planning (ERP) system, called Pronto, is specifically tailored to the mining industry in Australia. Hardly anyone in Germany was familiar with it. Back in January 2020, Refratechnik was gearing up for migration and had therefore begun to develop a prototype for the Group’s switch to SAP S/4HANA. As a first step, Refratechnik had already implemented SAP Analytics Cloud in Germany, which it deployed for analysis and planning purposes. The second step, as per the original plan, was to implement SAP S/4HANA internally.

Greenfield Transformation to SAP S/4HANA

But Refratechnik then decided to follow a greenfield approach and implement the new SAP S/4HANA system full-scale in Australia instead. “I didn’t want to spend all that money on just a transitional ERP solution,” Denecke points out. Besides, with annual revenues of 140 million Australian dollars and around 200 employees, QMAG is not what Refratechnik considers a small company. Refratechnik also wanted quick insight into the monthly data of its newest acquisition. Hence, QMAG was chosen as the first company within the Refratechnik Group to transition to SAP S/4HANA.

Of course, no one knew at the time that pretty much the entire installation would have to occur remotely from Germany. Olga Koenig and Renata Munzel, who were in charge of the ERP implementation at Refratechnik, traveled down under for three weeks at the end of January 2020 to analyze the existing processes. But then came the COVID-19 lockdowns. To this day, the two project leads are the only members of Refratechnik’s team from Germany to have ever been on site.

Denecke still sounds enthusiastic and proud about the project when she talks about it today. From March 2020 onward, the entire project team, consisting of internal SAP experts and experienced key users from the companies’ various specialist departments in Munich, Goettingen, and Duesseldorf, were obliged to work in home offices due to the pandemic. Process analyses and the go-live had to continue online via the Microsoft Teams platform – in daily meet-ups between the key users in Australia and the partner company.

Proud of the Team’s Accomplishments

Bear in mind that there’s an eight- to nine-hour time difference between Germany and Australia. “That meant we had to get up really early every morning,” recalls Koenig. Meetings were usually held between six and eight o’clock in the morning – or very late at night. The go-live even saw the German colleagues put in two weeks of night shifts to help the employees in Australia get acquainted with the new system.

“We didn’t know anything about SAP S/4HANA or the processes on site. Even this type of mine was new to us,” says Denecke, describing some of the underlying challenges. As such, many people back then told the team “that’s never going to work” – even some of its internal SAP experts were skeptical at first. “We only had seven months to pull it off – everything from familiarizing ourselves with SAP S/4HANA, capturing all the processes, conception, customizing, training of colleagues, migration, and go-live – not to mention across different time zones.” Looking back today, one year later, Denecke notes with satisfaction that “the implementation worked out great, even remotely.”

As is so often the case with transformations, though, it wasn’t always easy getting all employees onboard. “In a virtual implementation, it’s much harder to explain the process changes in a way that everyone can understand. Especially if they are switching from a system with relatively few integrated functions to a highly integrated one,” explains Denecke. “It was a huge challenge for our Australian colleagues, but they did a fantastic job.”

Winning People Over

Today, everyone agrees that the project would have been quite lovely were it not for the pandemic. “The coronavirus definitely complicated things, yet it also brought everyone – our internal SAP experts, the key users, and our new colleagues in Australia – closer together,” emphasizes Denecke.

And with outstanding results: “We were able to deliver products without interruption post-go-live, and performed our year-end closing after just one month with the new system,” she reports. The new look and feel has also made the lives of the employees easier. “We can now calculate automatically to nine levels. A lot of manual tasks have been eliminated.”

According to Munzel, the new system, with its new services and interfaces, has simplified a great many things. For example, staff no longer has to upload and download sensitive bank data manually. They can just enter their signatures into the system and it takes care of the rest: Data is transferred directly to the bank in exchange for completed account statements that are written back to the system. “We want to have all the companies’ data in our system centrally and, ideally, without a lot of manual work on our part, since we have a very small administration team,” explains Denecke.

The Future Lies in Machine Learning and AI

Going forward, Refratechnik plans to invest more heavily in machine learning and artificial intelligence (AI) to hone its predictive planning and sales forecast capabilities. It also wants to revamp its logistics processes and foray into the e-commerce world. To this end, it aims to roll out SAP S/4HANA across the rest of its 20-strong group of companies over the next three years to gradually replace its legacy ERP systems. The cloud is another area of interest on Refratechnik’s near-term agenda. This year, the group will implement the ERP system at its companies in Germany, followed by either Canada or Asia.

“This success has boosted our self-confidence and really brought the team closer together,” observes Munzel. Denecke jokingly adds, “I’d even implement the SAP solution on Mars with this team.” As soon as the current pandemic situation allows it, the team members plan to travel to Australia and celebrate the go-live together with the colleagues they’ve so far only known on-screen. “We’re already looking forward to the next migration to SAP S/4HANA,” says Denecke.


This story originally appeared on the SAP Germany News Center.
Top image via Refratechnik | QMAG Kuwarara Mining