In part one of this two-part series, we learned how Baillie Lumber, one of North America’s largest hardwood lumber manufacturers, approached building a business case and strategy for moving to SAP S/4HANA.
Responsible for the overall delivery and understanding of the greenfield implementation, Chief Technology Officer Gary Braunscheidel and Director of Marketing Communications Tony Cimorelli shared best practices they plan to use for the next phase of the project, which includes big-bang implementations for two additional business units under the corporate umbrella.
In part two of this article, we discuss the change-management requirements of the implementation, the benefits of moving to SAP S/4HANA, and lessons learned. We even touch on the current pandemic and how SAP S/4HANA has—to some degree—made it easier to operate.
Sharon: How has moving to SAP S/4HANA affected your business processes?
Gary: Generally speaking, inventory visibility throughout the business has improved. We’ve also seen improvements in invoice and cost processing, as well as better decision support for the entire company.
Tony: One of the biggest impacts we’re experiencing today is from the fact that SAP is so fully integrated from department to department. Our business units are still uncovering how important it is for them to be accurate and timely in their transactions because it affects coworkers down the line. That is a new realization for us. The other thing I think about a lot is we were prepared to use the system and do the keystrokes, but we underestimated the impact of process change. Even today, I'll hear someone say, “Oh, I always do it this way.” Working through that and making those changes has been interesting.
Sharon: How has SAP S/4HANA helped your business operations continue during the current pandemic?
Gary: Having all business functions connected and having a workflow between them has helped. But there are also a lot of external factors that are not SAP-related that I think probably contributed a lot to our ability to become remote in a very quick manner.
Tony: I really think the fact that it was a cloud-based type of solution really made it easier on our end users to keep continuity while we all moved to remote work. Our legacy systems would have been much harder for us to get access to remotely.
Sharon: To what extent does your new system deliver the benefits outlined in your original business case? Where does it fall short and how do you plan to address that?
Tony: We had four primary project goals, which included the ability to see inventory across the entire platform simply and easily, automation across functions for improved customer experience, consistency of workflows, and improved analytics.
The benefits are still evolving as we work to get the other two business units on SAP S/4HANA, which we currently have planned to complete in Q1 2021. We are starting to see some improvements, but until we have all three business units on SAP S/4HANA, we only have one-third of the benefits.
Sharon: How long did it take you to get to a steady state of operations post-implementation?
Tony: It was longer than I expected. It's hard to gauge in a sense of time but perhaps more fitting to do it in the sense of pain. It was measured by how many new things I uncovered each day that I didn't know the day before.
When I look back to November 2019, it was a lot. We really relied on our power users for much of the on-the-job training and to help with the adoption. By the time we came into 2020, people were comfortable, and things were in an upswing.
Our hypercare program lasted a little bit longer than we anticipated, but we found great value in getting end users—not just project team members—in the system. If we could do it again, we would have been more adamant about getting more power users or end users into the sandbox earlier.
Sharon: Walk me through your change-management process. What has worked and what would you do differently if you had the opportunity?
Tony: We followed a very standard approach. If you look at it in thirds, the first part was really about project awareness, the second was about building up the strategy, and the last part was execution.
We did a lot of awareness and communication work throughout. In the second part of the change management initiative, we focused a lot on training material development and end-user introductions. Our training delivery approach was at the tail end of the project. The approach we took was that our SAP subject matter experts, who were the product owners, would be our trainers and they would rely on in-class support from the power users in their department or group. Looking back, I think it would have been very interesting for us to spend more time enabling the power users to be the in-class trainers and have more of them.
Sharon: Are you looking to adopt any intelligent technologies now that you've gone live with SAP S/4HANA?
Gary: In terms of the road map with SAP, there are many opportunities where we could drive innovation, such as plant maintenance and electronic commerce. We’re looking at blockchain to streamline our export business and IoT technologies for manufacturing efficiencies, in addition to analytics for forecasting purposes.
There is a real opportunity to get into more business-model planning and forecasting, financial consolidation with other business units, and predictive analytics to help expose possible business outcomes. I think that by leveraging the capability that we have now, we can put more science behind those areas rather than relying on institutional knowledge.
Sharon: What were some of the lessons learned that you would consider if you had this project to do again?
Gary: We were the first hardwood lumber manufacturer to go live with SAP S/4HANA. As such, we learned that best-practice capability doesn't always exist. Initially, it was one of our missions to stay as close to best practice as we could, but we learned quickly that we needed to build it. As a result, we had a high degree of customization. We’re currently working with SAP to try to get it into their baseline. The lesson learned here was to be prepared for that unknown and to plan for it.
Another lesson learned is that SAP S/4HANA is still very new within the partner network. Knowing that, we should have put a policy in place that aligned with SAP strategy more closely. For example, we should have had an SAP Fiori-first mentality. When it came time to discuss user interfaces, the system integrator did not have a preference and allowed us to choose. We went with SAP GUI for some and SAP Fiori for others, but knowing what we know now, SAP Fiori should have been the only choice. It’s the only way to get full ROI of the investment.
The last lesson learned is that we should have embraced advanced analytics a lot sooner than we did. We wanted to, but we didn’t have enough experience or exposure to know how to. Looking back, I would have addressed the lack of SAP knowledge within the business and sought more subject matter experts who knew SAP. It would have made solving issues a lot easier.
Join us June 22–25 for ASUGFORWARD to learn, exchange ideas, and gain information you can put into practice immediately. Register for the sales and e-commerce track or the supply chain and manufacturing track, taking place on June 22–23, to hear how your peers are conquering today’s challenges and ask questions about their experiences.