IM&C company drives effectiveness and resilience on the back of SAP S/4HANA Cloud
It is a well-known fact that every year gym memberships skyrocket during January when people make their new year’s resolutions. However, its equally well-known that the memberships plummet very soon afterwards. Typically, only those continue who not only believe that exercising is good but also understand the actual reasons why exercising is good. Thus, once we understand the cause/reason for an effect it gets ingrained and we can appreciate it much better.
Equally, in business, the WHY of the #DigitalTransformation – Motivation has shifted from “doing things right” to “doing the right things”. Hungry innovators want to get into business and grow. They look at the top line (doing the right things) rather than the bottom line (doing things right). The mission is the next big gig to grow the company by double-digit percentages or enter new market spaces with new innovative business models and creative new digital services, threating the established market leaders.
In this blog, we want to substantiate the role of a modern cloud ERP by not only highlighting some key benefits which accrued to a customer after activating the solution (WHAT) but also HOW they achieved it.
Success story of an Industrial Machinery & Components Customer
This is the story of a very ambitious and successful growth-oriented upper mid-market #IM&C (Industrial Machinery & Components) customer who decided to embark on the journey to become an intelligent enterprise by leveraging SAP S/4HANA Cloud. They are an innovator in the design, engineering and manufacturing of glass reinforced composite (GRP) solutions and special fabrications, headquartered in APAC with subsidiaries in South East Asia & India.
The wish list of the business leaders before the project started included:
- High demand for effectiveness gains and to accelerate regular financial consolidation in a multi-country & multi-currency setup
- Better and faster control of cash flow
- Increased transparency and operational efficiencies across the widely spread discrete manufacturing processes & supply chain
- Next generation project forecast accuracy, reliability & real-time visibility (budget vs. forecast vs. actuals)
- Ability to quickly scale and activate the solution in subsidiaries
Gaining effectiveness starts when you can change processes substantially. In this case collapse, the runtime of required steps to an unprecedented pace, which allows you to completely reconsider and redesign business from scratch.
Consider you could reduce the runtime of a multi-country, multi-currency financial consolidation so effectively that you can run it as a soft close monthly instead of a painful quarterly collection exercise. This does not only allow for completely new insights on cash flow planning, but it also brings the finance department and all involved parties towards a next level of fitness, sticking with the original metaphor. These changes make the monthly closing more efficient over time.
The customer was able to achieve further considerable quantitative as well as qualitative benefits with the implementation of SAP S/4HANA Cloud:
SAP S/4HANA Cloud provides inbuilt group reporting functionality which allows the individual units and the group close to happen in a single system – for both transactional and analytical operations. The foundation of this tremendous simplification is the universal journal forming the basis of an integrated accounting system combining general ledger accounting, asset accounting, controlling and material ledger.
Multiple tasks like intercompany eliminations, currency translations etc. can be managed within the same instance without any system or information break in between. This evolves the businesses into the mindset of continuous accounting and financial consolidation. Additionally, S/4HANA Cloud allows us to get real-time visibility and transparency over manufacturing operations which helps to optimize manufacturing processes, materials and resources.
Quality management processes are ingrained in every step. For this customer, serial number management helped in providing real-time traceability of each pipe that was manufactured. This allows for a pixel perfect quality tracking.
Real-time production statistics made sure every employee is utilizing the latest data in taking decisions. Apps like defect management & analysis provided options for deep and reliable root cause analysis.
Group Reporting – Continuous Accounting
As a result, the enterprise was able to achieve a 20% improvement in their production efficiency. It is worth taking a moment to consider a 20% increase in production efficiency and what that could mean for your company.
As the customer is in the IM&C industry, they are often required to undertake large projects in the areas of engineering, repair and refurbishment. This means that they needed reliable and real-time project costing information across all their projects budget vs. forecast vs. actuals. Leveraging advanced capabilities in the enterprise portfolio & project management (EPPM) area, the customer was able to achieve all the required project and financial control measures necessary for operations and decision making.
Project Costs – Budget vs. Forecast vs. Actual
In the digital economy, it is all about customer centricity and to make all touchpoints great. The adoption of advanced EPPM has led to an 80% reduction in project costing timelines and 100% accuracy in project forecasts. Not only the company but all customers love that. The customer wanted the solution to be nimble and agile so they could quickly roll it out to their subsidiary across the APAC region. Since most of the core processes were the same as in their headquarters, the customer performed a delta fit-to-standard workshop to take care of e.g. just India-specific regulatory processes. The inbuilt agile SAP Activate Methodology in combination with pre-configured business content allowed for a rollout into any new acquisition or subsidiary within 30 days.
SAP Activate – Quick time to value
The customer looks at their journey to the “Intelligent Enterprise” as a major success factor for their business operating in the “new normal” of pandemic times. Closed operations, people are working from home, orders are cancelled or postponed while other orders must be accelerated.
Having cross-enterprise, real-time data in cloud-based systems available, reduced the concerns of executives significantly and allowed for confident, fact-based decisions. Project statuses, forecasts and updates could be retrieved in real time online through a live system anytime.
SAP S/4HANA Cloud also allowed an increased visibility into production operations when many companies were experiencing the opposite. Not to mention the people factor of reduction in stress, overtime, inaccuracy of quarterly financial consolidations based on convenient real data – real-time consolidation, combined with the full confidence of generating correct financial statements.
With a solid and resilient foundation, the customer now plans to outshine its competition and continue its journey as industry leader by activating more and more intelligent scenarios leveraging Robotic Process Automation (RPA), Situations Handling and Machine Learning scenarios.
We hope this story is inspiring for you to further evaluate the opportunities new technologies can bring. Training your companies´ muscles by thinking agile and adopting to drive efficiencies. The proof points of this customer’s journey regarding the business benefits help to understand the impact that can be achieved.
Inside SAP S/4HANA Podcast
As always, I would like to encourage you to subscribe to our new podcast “Inside SAP S/4HANA”. This podcast leverages the unique knowledge and expertise of SAP S/4HANA product experts, partners and customers to address your needs by sharing product insights and project best practice. There is no customer success without product success and project success; we help you get to the next level and make your SAP S/4HANA projects a success. Subscribe now and benefit from the shared knowledge.
openSAP microlearning’s for SAP S/4HANA
Just a couple of months ago, we launched openSAP microlearning’s for SAP S/4HANA as an exciting new learning opportunity. What began with a small batch of 20 videos, has now become a channel with more than 50 microlearning’s that have generated over 20,000 views since then. Today we cover multiple lines of business, like Finance and Manufacturing & Supply Chain, and key technology topics like Master Data Management, Extensibility, User Experience, and Upgrade Management. We are continuously adding new microlearning’s to the SAP S/4HANA channel, so make sure you check them out.
Your voice matters!
If you want to learn more and actively engage with SAP subject matter experts on SAP S/4HANA Cloud, join our SAP S/4HANA Cloud Community – now fully integrated with SAP Community. The community brings together SAP S/4HANA Cloud customers, partners and SAP experts and has a clear mission: deliver an interactive community to engage with one another about best practices and product solutions. We invite you to explore the new SAP S/4HANA Cloud Community ‘one-stop shop’ as the central place for all resources, tools, content questions, answers and connect with experts to guide you through your SAP S/4HANA Cloud journey.
For more information on SAP S/4HANA Cloud, check out the following links:
- The power of best-in-class and Next Practices business content for a modern ERP Blog Post by Sven Denecken
- SAP S/4HANA Cloud: The Intelligent ERP Link Collection Blog Post by Sven Denecken
- Latest SAP S/4HANA Cloud Release Blogs here
- SAP Intelligent Robotic Process Automation Content here
- SAP S/4HANA Cloud release info: http://www.sap.com/s4-cloudrelease
- SAP S/4HANA PSCC Digital Enablement Wheel here
- Inside SAP S/4HANA Podcast here
- SAP S/4HANA Cloud Community here
- SAP Activate Community here
- Best practices for SAP S/4HANA Cloud here
- Help Portal Product Page here
Follow us via @SAP and #S4HANA, or myself via @SDenecken