Manufacturing - ERP/MRP

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Ammann Group Modernizes Its ERP with Move to SAP S/4HANA

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Ammann Group Modernizes Its ERP with Move to SAP S/4HANA
When Swiss construction equipment manufacturer Ammann Group moved its enterprise resource planning (ERP) system to SAP S/4HANA, it took a gradual approach, converting the system before looking to consolidate processes and introduce a new user interface.

“Anything else would have overwhelmed the users,” said Bruno Schwager, former CIO of the company.

The different approaches that customers take to moving to SAP S/4HANA were evident at the recent 2019 SAP Campus Basel event.

“Every customer’s situation is unique,” said Dr. Volkmar Jaeckle, strategic consultant at SAP, as he stood onstage alongside Schwager, Tobias Rölz, vice president of IT and Digital Business at Komax, and Peter Baldauf, head of IT processes for Retail, Finance, and HR at Coop.

While Ammann Group opted for an on-premise installation in the cloud, Komax chose SAP S/4HANA Cloud, and Coop decided to start by standardizing its financial systems across Europe.

“Harmonization and simplification are the driving factors,” said Jaeckle, naming two of the few qualities shared by all migration projects.

Brownfield Approach to ERP Migration

Ammann Group’s project is an example of how a brownfield project – generally described as complex and tedious – can be completed within 10 months. Unlike greenfield projects, which do not have to take a company’s current systems into account, brownfield projects build on existing processes.

“Any other approach would have been too risky,” said Schwager. Thinking about the approximately 1,000 system users in 20 countries, he added: “Converting the system, changing the user interface, and introducing new processes would have overwhelmed them.”

Standardized Infrastructure, Reorganized Business, Consolidated Systems

The company had already undergone other changes in recent years. Schwager recalls shortcomings in the technical infrastructure, explaining that only a few years ago, employees in a neighboring country had been unable to simply plug in a laptop and work from there.

What’s more, the company also reorganized its business: Between 2011 and 2016 the two divisions at the company – batch manufacturing, the machines, and project manufacturing, the plants – each handled their own global development, production, sales, after sales, and support activities. Today, these two divisions still exist but the marketing, sales, service, and support teams have been consolidated to form one Global Sales and Marketing department that serves both divisions.

So Ammann Group first standardized its technical infrastructure, then changed its organizational structure, before in early 2017 consolidating the four SAP systems that it used into one.

Adopting SAP S/4HANA Early: Resources Become Harder to Get as Time Passes

With digital transformation in the cards, Schwager knew that Ammann Group needed to take things one step further and implement SAP S/4HANA.

The numbers in the 2019 Investment Report by the German-Speaking SAP User Group show that today three percent of companies have gone live with SAP S/4HANA, while 75 percent are currently planning to change or have already started a project. Just six percent of the customers asked wish to continue using SAP ERP 6.0.

When Schwager made the decision to move Ammann Group to SAP’s modern ERP system in mid-2017, he was among the first to do so. “Getting involved early on has its advantages and disadvantages,” he said. “Astime passes, fewer resources are available for the implementation, and the move to SAP S/4HANA becomes more expensive. So the advantage is that by acting early, you avoid this.”

Ammann Group Moves to SAP S/4HANA in 10 Months

The project started in early 2018, half a year after the contract was signed. Ten months later, it was complete. Ammann Group can now immediately generate month-end closings and MRP runs, and the logic behind the bills of materials speeds up transactions.

Staying Close to the Standard Setup

With that, Ammann Group had mastered the technical migration and kicked off the next phase, which Schwager leaves to his successor, Oliver Enzmann, who will introduce the new user interface and standardize some of the company’s global processes.

Ammann Group’s project is certainly proof that the brownfield approach doesn’t have to be complicated. “Private cloud does not mean that the entire ERP system is tailored to the customer and is packed with special features,” shared Schwager. “Even when we used SAP ECC, we always stayed close to the standard setup.”

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