A clean slate sounds great! But it’s a brave call indeed to implement from scratch, especially if you’re a big multinational. Yet a decades-long SAP customer did just that, driven by its own customers’ demand for speed – and a clear mission.
“Our mission is to help the customer be fast-moving,” Takuya Sakai, general manager of Hitachi High-Tech Corporation’s Digital Transformation Business Group, said in an SAP Winning Insights video after appearing in an SAP TechEd keynote last year. “And our corporate vision is a simplified customer process.”
So, in the name of speed and simplicity, Hitachi High-Tech did more than just modify its solution architecture; the Tokyo-based subsidiary of Hitachi Ltd. opted for a greenfield SAP S/4HANA transformation. That meant designing and building a new environment customized for its specific needs.
And it did so via an ambitious digital experience program with the goal of helping to simplify its customers’ high-tech processes across nano-technology, analytical and medical, as well as other business categories.
Jumping into the Greenfield
Hitachi High-Tech had run SAP ERP as the backbone of its global business since the 1990s, enabling decades of smooth operation and implementation, as well as allowing regions to tailor development to their specific needs. But it also resulted in about 9,000 add-ons – coding added over the decades to enable bespoke functionality – from reports and input screens to complex manufacturing-related processes.
Add-ons can help users customize software for specific tasks. But, especially over time, they can become unwieldy, hindering the organization’s agility and adaptability.
“After our digital experience project, we made the decision to jump into a greenfield so that we don’t transfer all that from our legacy system to our new SAP S/4HANA platform,” Sakai said. “We changed processes, and we changed technologies.”
Indeed, the jump into a greenfield – implementing a new system on a virtual blank canvas, without migrating pre-existing data, customizations, and more – helped Hitachi High-Tech slash its 9,000 legacy add-ons to a mere 800 add-ons, according to Sakai. And Hitachi High-Tech developed most of those new add-ons side-by-side via SAP Business Technology Platform (SAP BTP); not altering code helped minimize modifications, which safeguarded stability, agility, and speed.
And, Hitachi High-Tech stopped add-on development completely on SAP S/4HANA, according to Sakai.
How Two Tiers Equal One Clean Core
In its greenfield, Hitachi High-Tech built a two-tier model: one tier featured SAP S/4HANA Cloud Public Edition for the company’s small and midsize sales offices overseas, allowing them to use relatively simple ERP tools, while the other tier runs SAP S/4HANA Cloud Private Edition for Hitachi High-Tech’s larger domestic manufacturing.
“Side-by-side development on SAP BTP…allows for faster upgrades,” Sakai said, “giving our people more immediate access to improved functionality.”
Moving operations from an increasingly customized – and, therefore, cumbersome – legacy system to SAP S/4HANA Cloud offered flexibility, speed, and security, according to Sakai. This can be useful when demand surges, for example, or for offering more frequent upgrades.
But the two tiers still need to exchange data. That’s where SAP BTP fits.
“We have to integrate two ERPs, so that’s why we set up SAP BTP between the two tiers,” Sakai said. “We’d like to keep our SAP S/4HANA core clean…so we use SAP BTP as a business hub and a development foundation.”
Building a Simple, Smart Digital Process
“Using SAP BTP, we can build a simple, smart digital process without touching our SAP S/4HANA core,” Sakai said, echoing what he shared during his SAP TechEd keynote appearance. “That’s very, very powerful because we can introduce new functions to the user…and we believe SAP BTP is very important for accelerating our business.”
Sakai appeared at SAP TechEd to tell the story of Hitachi High-Tech’s greenfield transformation, during which employees had to adapt to new process, screens, and reporting. They ended up with every office digitally connected, which proved to be a tremendous benefit.
And that type of business case is “the most important thing” in a transformation, according to Sakai.
“SAP is not just a software company, but also something like transformation company,” Sakai said. “Of course,” he added with a smile, “the system also is very important.”