Global Harmonization and Consolidation Project at Siemens

December 22, 2008 by Lars Lundmark, Siemens IT Solutions and Services

Siemens mobile phone (Photo: Siemens)

The initial situation

As a global powerhouse in electronics and electrical engineering, Siemens’ size – combined with a lack of mandatory specifications – had led over the years to an unsystematically structured IT landscape based on SAP ERP. Furthermore, processes for harmonizing business requirements and IT were not defined, and IT management was very patchy.

The goal of the project was vertical optimization and horizontal integration in all operational units, countries, and systems.

Sights set on cutting costs

Like most companies, Siemens was keen to reduce IT costs for implementing, maintaining, and operating SAP systems. Standardized and harmonized business processes for application management and shared services (internal outsourcing) were to pave the way for this. In addition, central administration was intended to ensure consistently high data quality.

Strategy becomes reality

Lars Lundmark (source: Siemens IT Solutions and Services)


The project kicked off in 2000, supported by the internal IT service provider Siemens IT Solutions and Services. First of all, an international core team was assembled, which implemented the global contracts and provided a complete range of products and services.

“Originally, harmonized financial processes in the SAP ERP Financials environment formed the core of the project. The global harmonization and consolidation project then emerged from this, and finally the logistics processes for the business of products as well as for system, project, and services business were incorporated,” says Lars Lundmark, who was responsible for the implementation and post-project support in Denmark, Sweden, and Norway.

The project steps at a glance

  1. Development of globally harmonized business processes
  2. Configuration of SAP software, plus design and setup of a global template
  3. Implementation of the standard template, plus design and setup of regional enhancements
  4. Provision of application management centers (AMC) for support and operations after the “go-live”

First processes, then programs

During the implementation, the corporate units and regional organizations worked closely with the experts from Siemens IT Solutions and Services. In the first step, the project team developed globally harmonized business processes to then configure the SAP ERP application accordingly.

“First of all, we developed a globally valid template to which we later added the regional requirements,” Lundmark explains. “For the rollout, we made use of workshops known as system setup workshops, in order to implement local requirements fast and flexibly. In the final step, we worked together with key users to pass our knowledge on to all the remaining end users.”

Siemens’ one-stop approach was adopted for the project – because this was the only way to manage global IT consolidation and harmonization. (Source: Siemens IT Solutions and Services)

“Change management, data migration, and post-go-live support are the three decisive criteria. But the most important prerequisite is that the project has the management’s full support,” says Lundmark, commenting on the starting and implementation phase of such major projects.

Small ideas with big consequences

Benefits

  • Consistent master data
  • Minimal need for maintenance
  • Easier to implement structural changes
  • Transferring or outsourcing processes becomes more straightforward
  • Faster completion of financial statements
  • Basis for certifications

The project team took less than a year per country to complete the implementation. Today, around 40,000 users work using standardized IT systems – distributed across six application management centers (AMC) in the Netherlands, Spain, Austria, the United States, Thailand, and Brazil.

And what are the advantages? First, it’s easier to compare all the data. Second, the standardized processes and uniform information structure enable precise data management. This benefits not only the financial, logistics, production planning, and HR departments, but also all Siemens’ internal activities.

The project is also attracting interest beyond the Siemens Group. “We achieved the international goal by the end of 2008. And now external prospects are already lining up to profit from our expertise and people, to get similar projects underway at their companies,” Lundmark says.

Siemens and SAP

Siemens, headquartered in Munich, Germany, has been engaged in a close partnership with SAP for more than 30 years – as an SAP global partner, vendor, and customer. More than 160,000 Siemens employees worldwide use the group’s SAP applications.

The internal IT service provider Siemens IT Solutions and Services employs around 4,000 SAP consultants and has so far contributed its skills to more than 2,600 SAP projects in 87 countries. Siemens IT Solutions and Services has its own training center in India, which certifies and finances SAP projects.

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