Since start­ing in 1988, after sev­en farm­ers con­vened at Wisconsin’s Viro­qua Coun­ty Cour­t­house to dis­cuss the virtues of a coop­er­a­tive, Organ­ic Val­ley has grown to become one of the nation’s largest organ­ic con­sumer brands. Today, Organ­ic Val­ley has near­ly 1,000 employ­ees and works with more than 1,600 fam­i­ly farm­ers to pro­duce its dairy, egg, and meat products.

As part of a long-term strate­gic plan to mod­ern­ize, con­sol­i­date, and sim­pli­fy its over­all tech­nol­o­gy land­scape, Organ­ic Val­ley has made the deci­sion to stan­dard­ize on SAP solu­tions. Today, OV is in the test­ing phase of a full-scale deploy­ment of SAP S/4HANA, SAP Inte­grat­ed Busi­ness Plan­ning, SAP Ana­lyt­ics Cloud, and SAP Busi­ness Tech­nol­o­gy Plat­form under RISE with SAP.

Almost two years into his role as Organ­ic Valley’s CIO, Ron Gilson — a past ASUG Board Direc­tor — talked with ASUG about the organization’s past and future infor­ma­tion tech­nol­o­gy (IT) land­scape, the SAP project’s chang­ing scope and chal­lenges, and employ­ees’ con­tri­bu­tions to — and eager antic­i­pa­tion of — new process­es, effi­cien­cies, and results.

This is an edit­ed ver­sion of the full conversation.

Q. Let’s start with a lit­tle back­ground on the orga­ni­za­tion’s his­to­ry and use of SAP tech­nol­o­gy pri­or to your cur­rent SAP S/4HANA project. 

A. Today, the Organ­ic Val­ley tech­nol­o­gy land­scape is a best-of-breed envi­ron­ment with a num­ber of crit­i­cal appli­ca­tions that are at or near end of life — includ­ing the lega­cy ERP solu­tion. Addi­tion­al­ly, in a num­ber of instances we have dupli­cate solu­tions that were imple­ment­ed over the past 15 years includ­ing five or six plan­ning engines. 

The SAP project start­ed pri­or to my arrival at Organ­ic Val­ley. The ini­tial focus was to replace the lega­cy ERP solu­tion and then build inter­faces to the remain­ing lega­cy solu­tions. It start­ed as an IT-led project with lit­tle busi­ness engagement.

At that time, when Organ­ic Val­ley decid­ed to go to SAP, the only SAP solu­tion they had was SAP Busi­nes­sOb­jects for reporting. 

In ear­ly 2022, we stepped back and we reimag­ined what the busi­ness trans­for­ma­tion should look like for Organ­ic Val­ley. We increased the scope of the project. Rather than just try­ing to imple­ment SAP S/4HANA as a replace­ment for our pre­vi­ous ERP solu­tion, we added in SAP Inte­grat­ed Busi­ness Plan­ning (IBP) for demand and sup­ply plan­ning. We added SAP Ana­lyt­ics Cloud (SAC) for ana­lyt­ics, as well as SAP Finan­cial Plan­ning & Ana­lyt­ics (FP&A) and SAP Sales & Oper­a­tions Plan­ning (S&OP). With the revised scope, we will be retir­ing more than 20 lega­cy solu­tions with­in our tech­nol­o­gy landscape. 

Q. What types of changes were nec­es­sary from a busi­ness trans­for­ma­tion perspective?

A. There were two pri­ma­ry changes that were nec­es­sary as we re-scoped our SAP project: IT trans­for­ma­tion and busi­ness transformation. 

Let’s start with the IT trans­for­ma­tion first. There are a few guid­ing prin­ci­ples from our IT strat­e­gy that I believe are rel­e­vant and are sig­nif­i­cant depar­tures from the pri­or tech­nol­o­gy strat­e­gy at Organ­ic Valley:

1. We will devel­op and lever­age strate­gic part­ners and plat­forms to the fullest extent pos­si­ble to max­i­mize our return on invest­ment in those part­ners and platforms.
2. As we replace and mod­ern­ize our lega­cy solu­tions, we will move all appro­pri­ate work­load to the cloud and focus on a cloud first strategy.
3. Tech­nol­o­gy life­cy­cle man­age­ment will be a core com­pe­ten­cy and crit­i­cal com­po­nent of our tech­nol­o­gy strat­e­gy mov­ing forward.

There is noth­ing new or inno­v­a­tive here — but it is a dra­mat­ic shift of the orga­ni­za­tions approach to procur­ing, deploy­ing, sup­port­ing, and main­tain­ing our tech­nol­o­gy land­scape. This is a shift that will require new skills and dis­ci­plines to be successful.

From a busi­ness trans­for­ma­tion per­spec­tive, we need­ed to change the way the busi­ness viewed this project. Organ­ic Val­ley is a 35-year-old coop­er­a­tive. For many years, the co-op grew very rapid­ly. To sup­port that growth, it took an ad hoc approach, imple­ment­ing solu­tions to meet spe­cif­ic prob­lems ver­sus hav­ing a long-term strat­e­gy or roadmap for capa­bil­i­ty. Along with that came a lot of busi­ness process­es that were not built around best prac­tices but built around home­grown processes. 

Busi­ness trans­for­ma­tion is about matur­ing our end-to-end busi­ness process­es and using best prac­tices to focus on stream­lin­ing and opti­miz­ing these end-to-end process­es ver­sus being sub-opti­mized at the func­tion or depart­ment lev­el. We have a lot of very siloed process­es and solu­tions. It’s about step­ping back and mak­ing sure that we stream­line, stan­dard­ize, and opti­mize our end-to-end process­es based on best practices.

As we reimag­ined the project, we focused on the crit­i­cal areas of oppor­tu­ni­ty for the coop­er­a­tive. Those fell into three basic areas:

1. Cre­ate a foun­da­tion for the future to enable long-term growth with capa­bil­i­ties required of a mod­ern con­sumer goods company.
2. Dri­ve employ­ee effi­cien­cies and dra­mat­i­cal­ly improve the qual­i­ty and avail­abil­i­ty of data through con­sol­i­da­tion of solu­tions and stan­dard­iza­tion of busi­ness processes.
3. Enhance the speed and qual­i­ty of deci­sions by deliv­er­ing an inte­grat­ed plan­ning and finan­cial environment.

Q. Re-engi­neer­ing process­es is, of course, a lot of work. Are there par­tic­u­lar depart­ments or func­tions that have been lead­ing the way in this area?

A. I think the most change that is going to come to the orga­ni­za­tion is in our end-to-end plan­ning process­es — both finan­cial and sup­ply chain plan­ning. The entire process from demand fore­cast­ing through sup­ply plan­ning, all the way back to the farm. 

Q. Organ­ic Val­ley chose RISE with SAP for your imple­men­ta­tion. Can you share your thoughts on your deci­sion to go with RISE?

A. We pur­sued RISE (S/4 Pri­vate Edi­tion on Azure) for a num­ber of reasons. 

First, we had a sig­nif­i­cant change in our soft­ware bill of mate­ri­als based on increased scope for our project. OV had pre­vi­ous­ly licensed S/4 under a tra­di­tion­al on-premise per­pet­u­al license mod­el. Although SAP still offers per­pet­u­al licens­es, the abil­i­ty to nego­ti­ate mean­ing­ful dis­counts under the per­pet­u­al mod­el were extreme­ly lim­it­ed –we sim­ply could not nego­ti­ate pric­ing that was accept­able under the per­pet­u­al model. 

Sec­ond, the infra­struc­ture pur­chased for the ini­tial project was not sized appro­pri­ate­ly and need­ed an upgrade/​replacement. Addi­tion­al­ly, we have a core strate­gic goal to con­tin­ue mov­ing work­load to the cloud where it makes sense – both tech­ni­cal­ly and financially.

The third com­po­nent was the man­aged ser­vices com­po­nent. We had an IT team that had lim­it­ed SAP expe­ri­ence. There­fore, we did not have the inter­nal skills or com­pe­ten­cies required to imple­ment and sup­port the SAP tech­nol­o­gy stack. 

Ulti­mate­ly, we signed the RISE deal, and then we engaged SAP as the prime for the S/4 imple­men­ta­tion. We then engaged MSCG (My Sup­ply Chain Group), which is part of NTT DATA Busi­ness Solu­tions, for our IBP imple­men­ta­tion, and Analy­sis Prime for SAC. 

Q. Are you imple­ment­ing SAP Busi­ness Tech­nol­o­gy Plat­form (BTP) as part of the RISE project?

A. Under the BTP umbrel­la, we will be imple­ment­ing SAC — SAC Plan­ning and SAC Ana­lyt­ics — as well as BTP Inte­gra­tion Suite. SAC will be our stan­dard plat­form for report­ing and ana­lyt­ics, as well as the plan­ning engine for FP&A and S&OP. We will use SAC for the stan­dard bud­get­ing process. All the FP&A work, and all the S&OP report­ing and process­es, will flow through SAC. On the inte­gra­tion front, we have well over 100 inte­gra­tion points as a part of the project where we will use SAP Cloud Plat­form Inte­gra­tion (CPI).

Q. What have been the key chal­lenges, and how did you meet them?

A. From a high lev­el, one of the chal­lenges that we have had is try­ing to align three imple­men­ta­tion part­ners and a train­ing part­ner along with our inter­nal teams. There is a ton of cross func­tion­al and cross team align­ment and com­mu­ni­ca­tion that is required to keep every­one on the same page.

The num­ber one issue, and biggest chal­lenge for us, has been the inte­gra­tion of lega­cy solu­tions. Some of these solu­tions are 12 to 15-years-old and no longer sup­port­ed – they are at end of life. These solu­tions do not offer the APIs or the inte­gra­tion points that we would like to use, so we must find workarounds to devel­op the integrations. 

Orga­ni­za­tion­al change man­age­ment is anoth­er key chal­lenge we have faced. To move from the lega­cy best-of-breed tech­nol­o­gy stack we have today to a SAP-cen­tric solu­tion based on best prac­tices, we are chang­ing a sig­nif­i­cant num­ber of busi­ness process­es, as well as chang­ing roles and respon­si­bil­i­ties in the orga­ni­za­tion. The change man­age­ment is a heavy lift.

Q. As part of this change man­age­ment process, has there been a com­mu­ni­ca­tions plan, with inter­nal com­mu­ni­ca­tions and resources focused on that kind of work?

A. We have an inter­nal Orga­ni­za­tion­al Change Man­age­ment (OCM) team, a full-time inter­nal com­mu­ni­ca­tions lead who comes out of our com­mu­ni­ca­tions depart­ment, sev­er­al resources focused on train­ing and edu­ca­tion, and a com­pre­hen­sive super user pro­gram to sup­port with regard to change, com­mu­ni­ca­tions, and train­ing. We are using anoth­er third par­ty to help devel­op train­ing con­tent, and we are lever­ag­ing SAP Enable Now as a part of the train­ing solu­tion, build­ing out train­ing con­tent there as well as an exter­nal OCM resource to sup­port the OCM work. 

Q. Any delight­ful sur­pris­es so far? 

A. We’re in the test cycle here, so we have a lot of folks that are real­ly excit­ed about some of the effi­cien­cies and elim­i­na­tion of work that is going to go on once we get there. For exam­ple, we talk about the finance team spend­ing a cou­ple of days a month just rec­on­cil­ing data between lega­cy solu­tions, because they are not ful­ly inte­grat­ed. We talk about peo­ple hav­ing things avail­able imme­di­ate­ly ver­sus hav­ing to wait for 24-hour batch jobs to gen­er­ate. It’s thrilling to see so many peo­ple in the orga­ni­za­tion get excit­ed about the new capa­bil­i­ties they will have. 

Q. A year from now, what does that look like for you, for the organization?

A. We’ve been prepar­ing the orga­ni­za­tion to under­stand that go-live is not the end of the project, but the begin­ning of the next phase. We are prep­ping the orga­ni­za­tion for six months or more of sta­bi­liza­tion in the envi­ron­ment. There is going to be a steep learn­ing curve and user adop­tion that we must get through, as there is sig­nif­i­cant process change and a lot of new tech­nol­o­gy. We are cur­rent­ly build­ing out our 3 – 5 year roadmap in sup­port of our long-term strat­e­gy. As a part of this roadmap, we are look­ing at activ­i­ties like ware­house man­age­ment and trade pro­mo­tion man­age­ment, and advanc­ing our data and ana­lyt­ics capabilities.

For more S/4 cus­tomer sto­ries, reg­is­ter for the Con­sumer Indus­tries and Cus­tomer Expe­ri­ence Com­mu­ni­ty Alliance Presents: S/4 in Con­sumer Prod­ucts — Real World Cus­tomer Lessons Learned Task Force, on August 4, here.