This shared services provider aimed to sell to new industries within its parent conglomerate. To seize the growth opportunity, the company needed to provide better support for inventory and logistics.
Joining forces with IBM Services, the shared services provider deployed SAP S/4HANA solutions and harmonized and streamlined key business processes to boost efficiency.
USD200k savedfrom leveraging apps and dashboards in SAP Fiori
USD30k cutin accounting costs
40% reductionin time required for tasks such as invoice processing
Business challenge story
This company provides shared services for a large conglomerate. Historically, the company focused on the services sector, but realized that there were tremendous opportunities for expansion in the conglomerate’s agriculture, fishing and manufacturing sectors, too.
A spokesperson explains: “We have made our name supporting service-based organizations in our parent company. We recognized that if we could encourage additional group subsidiaries to outsource their IT to us, the subsidiaries could avoid the time and cost of maintaining their own IT landscapes, and we could generate even greater economies of scale for the group.
“To seize this growth opportunity, we needed to adapt our business. The group subsidiaries that we didn’t serve operate in a broad range of sectors – including mining, fishing and agriculture, which are very product-oriented. To meet their needs, we needed to provide better support for areas such as logistics, inventory, plant maintenance and materials management.”
How could the shared services provider extend its existing IT systems and capabilities to support the new non-service-sector clients? The team reviewed potential development costs and invited vendors to propose solutions to enable the new initiatives and seize the moment.
The shared services provider abandoned piecemeal development and opted for an integrated strategy, choosing the SAP S/4HANA Enterprise Management solution, a core application covering all mission-critical processes of an enterprise. For help on the journey, the company enlisted IBM Services.
“We decided to deploy SAP S/4HANA because the solution enabled us to deploy best-practice processes for areas like logistics and inventory out-of-the-box,” recalls the spokesperson. “To ensure a successful implementation, we wanted a partner with experience in SAP S/4HANA deployments and specifically logistics, and IBM ticked both of those boxes.
“Furthermore, IBM offered local consultants and a real partnership approach, helping us train our in-house IT team so that they could support the SAP S/4HANA solution independently in future. Additionally, IBM showed us how SAP S/4HANA could pave the way for us to offer innovations such as Internet of Things [IoT] technology to our clients in future, demonstrating a real value-add.”
SAP S/4HANA Enterprise Management is natively built on the SAP HANA® database, and designed with the SAP Fiori® user experience. Specifically, the shared services provider deployed the SAP S/4HANA Supply Chain, SAP S/4HANA for Customer Management, and SAP S/4HANA Sourcing and Procurement parts of the SAP S/4HANA Enterprise Management solution.
The IBM team helped the company deploy SAP S/4HANA within an extremely tight timeframe and with minimal disruption to the business. Alongside the solution implementation, IBM helped the company simplify and standardize key business processes around sales, customers and more to boost efficiency.
“This was my first time working with IBM on a project of this kind, and it went very well,” remarks the spokesperson. “The IBM project manager worked hard to keep the deployment on track, reacted fast to issues as they came up, and escalated where necessary. It definitely wasn’t the kind of slow and bureaucratic process that you might expect from a vendor as large as IBM.
“As part of the implementation, IBM ran several IBM Design Thinking workshops, which proved to be particularly valuable. The Design Thinking approach helps us to focus on how the new solution and processes would affect our business and end-users, and come up with an approach that would work well for them. The workshops also prompted us to consider and address other internal issues that were not part of the project scope, but had a real impact on how well the solutions would work in practice. The findings were valuable and my team was particularly enthusiastic about the approach.”
The shared services company previously worked with a different vendor to deploy SAP S/4HANA Finance, and that deployment included only a handful of SAP Fiori applications, giving end-users restricted scope for completing tasks on mobile devices. The IBM team redesigned the SAP S/4HANA Finance application and introduced around 20 additional SAP Fiori apps, offering greater opportunities for mobile working, and the company now truly enjoys the benefits of this powerful solution.
The shared services provider’s SAP landscape is hosted by IBM Services in an IBM data center. The SAP environment is being migrated to IBM Power System S824L and IBM Power System S822L servers, which are respectively 48 percent and 16 percent faster per core than the current x86 servers. The servers are virtualized using IBM PowerVM® software and run the SUSE Linux Enterprise Server for SAP Applications operating system.
Data is stored on IBM Storwize® V7000 devices virtualized using IBM Spectrum Virtualize™ software. The IBM Storwize V7000 storage features the IBM Easy Tier® function, which automatically moves frequently accessed data to ultra-fast solid-state drives (SSDs) for optimal performance.
Unlocking huge efficiencies
By harnessing efficient, best-practice ways of working from IBM and SAP S/4HANA, the company is transforming productivity.
The spokesperson remarks: “By streamlining processes and reducing the need for manual data input into SAP, we have cut the time needed for numerous processes across diverse areas of our business by 40 percent on average. Because all data is held in SAP S/4HANA, managers can report on their respective areas more easily and gain deeper insight into operations. Reports that used to take 2 days to generate are now available instantly at the touch of a button, and managers can see live data rather than static reports.
“On top of that, end-users can complete a broader range of tasks – such as logging inventory, tracking turnover, reporting issues involving plant maintenance and generating customer account statements – from their mobile devices. Improvements like that make a real difference to the productivity of our own employees and our clients.”
The shared services provider has already achieved massive cost savings.
“Our accounting processes are so much more efficient that we have been able to reassign some staff to other departments, saving around USD 30,000 per year,” elaborates spokesperson. “Additionally, before deploying SAP S/4HANA we had been planning to engage suppliers to develop new dashboards and mobile applications for us, at a cost of around USD 200,000. With SAP S/4HANA and SAP Fiori, we gained around 25 mobile applications plus numerous dashboards with no additional investment.
“Also, compression in the SAP HANA database has reduced our data-storage requirements by 32 percent, which in turn decreased the fees we pay for hosting. Furthermore, we have made sure that we assign full SAP licenses only to people who need them. For example, managers who only use SAP Fiori to approve purchase orders can complete that task using a more appropriate license.”
The project has turned heads within the parent company, as news of easier reporting and enhanced mobility has travelled fast. Additional subsidiaries have already approached the shared services provider to ask about outsourcing their IT.
The new support for logistics, inventory and more from SAP S/4HANA will enable the shared services provider to bring in business from group subsidiaries in other industries, driving growth. The company can entice prospective clients with exciting innovations. For example, fishing and agriculture companies can install sensors in processing plants and transfer the sensor data to the SAP HANA database for real-time analytics, enabling predictive maintenance and production optimization.
The spokesperson concludes: “The SAP S/4HANA solution deployed by IBM is helping transform our business towards standardization, automation and efficiency. With IBM and SAP at my side, I am striving for continuous improvement, and excited to see what the future will bring.”
About Shared Services Provider
This company provides shared services to a major conglomerate.
- GBS AD&I - EA - SAP
- IBM Global Business Services
- IBM Power Systems S822L
- IBM Power Systems S824L
- IBM Spectrum Virtualize Software for V7000
- IBM-SAP Alliance
- Storage: Storwize V7000