How Four SAP Customers Are Successfully Driving Transformation in Their Businesses

Tropicana is a household name to many consumers, known chiefly for its juice and other beverage products. But while the brand is more than 75 years old, Tropicana Brands Group is just a bit over two years old, having been recently spun-off as a stand-alone group.

Jeff Lischett, CIO of the US$3 billion organization, joined Russell to talk about how his company relied on RISE with SAP to make its “Project Harvest” IT separation and transformation project successful.

Lischett noted that speed and agility was the key value proposition for the project. “We needed a platform that was able to accelerate, move with us, pivot with us, as we were going through this in a very accelerated timeline,” he said. “When you bring the technology and couple it with the unified business architecture powered by SAP, the choice for us was clearly RISE with SAP. Tropicana really needed a fit for purpose. Where we came from was going to be entirely different than where we were going, and this modern ERP, in terms of leaner, simpler, more streamlined ways of working, was really at the core of what we needed across the value chain.”

Tropicana Brands Group took its European business operations live on SAP just 11 months after it started the design work, followed by North America three months later. “That was pressure testing!” Lischett said. “In just over a year, we had a fully implemented, end-to-end digital core and technology foundation for Tropicana Brands. We have a technology and a platform now that is really going to – no pun intended – rise to meet the challenge of our growth ambition.”

“Ruthless prioritization” and change management were key to the project’s success, Lischett said. “I’m the biggest evangelist and advocate of change management,” he said. “You need it. You need it at the front, you need it during, you need it at the end. One thing that I would’ve probably done slightly differently is [to have] stayed with it longer at the end.”

Tropicana is already seeing the impact of the project and specifically its focus on a clean core. “The most impactful value we’ve seen [goes] back to that clean core,” Lischett said. “Just in the months that followed, the ability to … bring the development forward, to build on top of the core that we have with enhancements and optimizing at a speed ratio that you just haven’t seen.”

When asked about what role AI will play in his company, Lischett focused mainly on the human side of the technology. “Ironically, from the standpoint of being a technologist … AI in my mind, in terms of how I lead it, [needs to be] human-centered first and foremost, ensuring that we’ve got the right culture, responsible use, and effective use,” he said. “The gift of time is really the value creator that I see in AI and being able to work more efficiently and being able to take that time and translate it into what matters to you.”

Responsibly Enabling Critical Systems

Russell handed over the stage to Saueressig, who recently launched the new Customer Services & Delivery Board area. Saueressig noted that 25% of the world’s commerce already runs through more than 6,000 RISE with SAP customers worldwide, and that SAP supports the most critical business processes on the planet.

With that comes “the responsibility and the accountability to provide you with the most reliable and secure infrastructure,” Saueressig said. “That’s the reason why we co-engineered together with our partners from AWS, Microsoft Azure, Google Cloud Platform, and many others, to ensure that you have the highest level of quality and availability.”

Echoing the theme of speed and adaptability, he noted that fast adoption of technology is critical. “Today, it’s not about the big fish that eats the small fish, it’s about the fast fish that eats the slow,” he cited. “At the end of the day, [our] ambition is to transform your system landscape to create a more flexible architecture, which enables fast adoption of innovations and ultimately, value realization. … And we take our responsibility seriously to really help you thrive in this ever-changing environment.”

Fresenius SE: From Complexity to Standardization

Ingo Elfering, CIO of global healthcare conglomerate Fresenius, knows something about speed: his team migrated 29 system landscapes containing more than 134 systems in less than 15 months. He joined Saueressig on stage to provide some insights into his company’s transformation project.

As a company that has grown through many acquisitions, Fresenius had a highly heterogenous IT landscape. “We never quite integrated them,” Elfering said. “So, a really complex landscape …, [with] all sorts of interfaces and other applications attached to it. That was our starting point.” 

Fresenius’ management realized the company needed to change and become more efficient and effective to set itself up for ongoing success. It went all-in, doing four major transformations at the same time. As Elfering noted, “We not only did the RISE with SAP migration, we also did a complete cloud migration of our data centers worldwide; an outsourcing with a partner to become a more global team; and a global change of our network, including a whole bunch of security additions into our space.”

Since it works in the healthcare and pharmaceutical space, Fresenius has a lot of regulatory requirements that it must adhere to, making the project more challenging than it might be in other industries. “You do a lot more technical documentation, testing, and so forth. So, from that perspective, regulations like GxP, good manufacturing or critical infrastructure, they were new to SAP in that instance in RISE with SAP. And we did it together. And I find that quite remarkable.”

The new system has now been live for just over a year and the company has seen many benefits. “We have a better speed on the underlying systems,” Elfering said. “We have a new infrastructure stack that works well. The main benefit for us will come as we [reinvent] the company. … We have some systems that doubled and tripled in size. So, it’s possible to leverage SAP quite quickly in these types of environments. From that perspective, I’m very happy with where we are. … We now have all the foundations in place to be able to execute our next phase of changes, our consolidation, our simplification, and in the cloud.”

Finally, Elfering believes that healthcare is an area where AI can make a significant difference. “Healthcare always has been data-rich and insights-poor. … And the only way to get there, in our opinion at least, is to be on a cloud-based infrastructure in the first place. Because otherwise you don’t have the same performance or capabilities.”

Clean Core Drives Agility

The idea of a “clean core” and a unified, simplified system underlies all these customer transformation stories. And it’s even more important in the context of agility and adaptability when it comes to taking advantage of the latest innovations in AI.

“It’s super important for us to be clear that the clean core is not just for the sake of the clean core,” Saueressig said. “It’s a means to get to an innovation- and upgrade-ready system to be able to embrace these innovations. Because at the end of the day, legacy systems often have this technical depth that limits agility.”

Saueressig admitted that even SAP has struggled with this, noting that the company had millions of lines of custom code in its systems. An internal analysis of all SAP customers showed that more than 65% of their custom code was unused in the past 12 months. “Code is also a liability, not just an asset,” he said. “And this is something we need to actively work against.”

Hitachi High-Tech Corporation: Clean and Simple Benefits

Saueressig invited Takuya Sakai, general manager of the Digital Transformation Business Group at Hitachi High-Tech, on the stage to talk more about the benefits of system simplification and clean core. In 2019, Hitachi High-Tech initiated a project to simplify its business processes and digitize its management information. With its existing business processes fragmented across overseas sales offices, headquarters, and manufacturing sites, the organization needed to change to accelerate its business and set itself up for future growth. It chose SAP S/4HANA to help it build its new foundation for ongoing growth.

Hitachi was running SAP R/3 but had significantly customized it with 9,000 add-ons across four instances, resulting in a lot of custom code. This resulted in many errors every day and large operational costs every year, Sakai said. And with the cost of validating so many add-ons, the company only did a major version update once in 12 years.

To move to a more standardized and flexible system, Hitachi High-Tech adopted a two-tier architecture model. Taking advantage of development flexibility, the company deployed SAP S/4HANA Cloud Private Edition for its headquarters and group companies in Japan and SAP S/4HANA Cloud Public Edition for its overseas sales offices. The adoption of SAP S/4HANA Cloud allows Hitachi High-Tech to take advantage of the functionality offered by SAP Business Technology Platform (SAP BTP) for application development, data management, automation, integration, analytics, and AI.

With the new system, Hitachi High-Tech reduced its 9,000 add-ons to just 750, allowing it to easily upgrade its ERP core. “Upgrading our old ERP took about a year and a half from the planning stage,” Sakai said. “However, with clean core, we can now do an upgrade every year in about 40 days. An upgrade every year keeps the clean core fresh and means new features can be delivered to our business quickly, like AI or process automation.”

But achieving – and keeping – a clean core “requires patience,” Sakai said. Executives must understand the purpose of the transformation project and employees must overcome the pain that comes with a transformation project. “This is the most difficult thing,” he said. “The IT department must properly understand the new technology and suggest how to use it correctly. Then together we embark on the journey to the transformation.”

Supporting Business Transformation and Accelerating Time to Value

Accelerating and improving time-to-value for customers is very important to SAP, according to Saueressig.

“We are now bringing together all of our assets … in a seamless, end-to-end tool chain,” he said. “We want to holistically support your business transformation according to the dimensions of applications, data, processes, and people, which means we bring together and fully integrate SAP LeanIX for the IT landscapes and architecture, SAP Signavio for process management, SAP Cloud Application Lifecycle Management for application management and operational aspects, SAP BTP for integrations, and SAP Build for extensions, but also our telemetry tools, which we can leverage in the cloud.”

Saueressig’s passion and ambition is to help customers drive innovation adoption. He noted that RISE with SAP is more than just a technical migration: it’s an offering for holistic business transformation as a service to accelerate value realization.

“Ultimately, we want to help you to bring the best out of our entire holistic portfolio,” he said. “We want to help you to transform, realize agility at scale, achieve more across the entire value chain, and fundamentally transform operations with sustainability at the core. And this is something where I feel that we have a huge opportunity together to make that a reality.”