Amer­i­can Water is the largest reg­u­lat­ed water and waste­water util­i­ty com­pa­ny in the Unit­ed States. With a his­to­ry dat­ing back to 1886, the util­i­ty com­pa­ny pro­vides safe, clean, reli­able and afford­able drink­ing water and waste­water ser­vices to more than 14 mil­lion peo­ple with reg­u­lat­ed oper­a­tions in 14 states and on 18 mil­i­tary installations. 

In 2021, Amer­i­can Water sold its Home­own­er Ser­vices Group. The trans­ac­tion includ­ed the cur­rent ERP sys­tem cru­cial to the Mil­i­tary Ser­vices Group’s operations. 

“This drove an urgent need to imple­ment a new ERP solu­tion that will not only ensure busi­ness con­ti­nu­ity, but also pro­vide a plat­form that will fuel the busi­ness growth by sup­port­ing a wide range of gov­ern­ment con­tracts and effi­cien­cies to ensure Fed­er­al Acqui­si­tion Reg­u­la­tion (FAR) and Defense Fed­er­al Acqui­si­tion Reg­u­la­tion Sup­ple­ment (DFARS) com­pli­ance,” Kel­ly Bhoombla, Asso­ciate Direc­tor of Enter­prise Sys­tems and Solu­tions at Amer­i­can Water, recent­ly told ASUG. 

To meet this need, and to man­age its Mil­i­tary Ser­vices Group, the util­i­ty com­pa­ny lever­aged RISE with SAP. Span­ning about a year, the project involved the imple­men­ta­tion of SAP S/4HANA Cloud, pri­vate edition. 

Ahead of the 2024 SAP for Util­i­ties, Pre­sent­ed by ASUG con­fer­ence, where Bhoombla dis­cussed best prac­tices for max­i­miz­ing the ben­e­fits of RISE with SAP, she reflect­ed on crit­i­cal steps to the S&P 500 company’s suc­cess in lever­ag­ing RISE for its SAP S/4HANA implementation. 

Ini­tial Steps for ERP Dig­i­tal Trans­for­ma­tion Success

Prepar­ing for dig­i­tal trans­for­ma­tion is cru­cial, giv­en that such projects require sig­nif­i­cant change at any orga­ni­za­tion. Based on past expe­ri­ences that made clear the impor­tance of prepa­ra­tion, the Amer­i­can Water lead­er­ship team took con­crete steps to pre­pare for its RISE with SAP jour­ney and set the project up for success. 

“Dig­i­tal trans­for­ma­tion involves inte­grat­ing dig­i­tal tech­nol­o­gy into all areas of a busi­ness, fun­da­men­tal­ly chang­ing how you oper­ate and deliv­er val­ue to cus­tomers,” Bhoombla said. ​“It’s also a cul­tur­al change that requires orga­ni­za­tions to con­tin­u­al­ly chal­lenge the sta­tus quo, exper­i­ment, and get com­fort­able with chal­lenges dur­ing this dig­i­tal trans­for­ma­tion journey.”

To start, the team cre­at­ed a plan and set spe­cif­ic goals for the trans­for­ma­tion project to accom­plish. Bhoombla described this process as an ​“assess­ment of var­i­ous ERP plat­forms and add-ons to ensure the right tech­nol­o­gy is cho­sen to match the busi­ness goals.” 

Busi­ness and IT teams also col­lab­o­rat­ed to assess Amer­i­can Water’s cur­rent IT capa­bil­i­ties, deter­mine the short­com­ings of its cur­rent ERP sys­tem, and iden­ti­fy the tech­nol­o­gy and skill gaps nec­es­sary to address in ensur­ing Amer­i­can Water could suc­cess­ful­ly imple­ment SAP S/4HANA.

Equal­ly impor­tant, accord­ing to Bhoombla, is build­ing a dig­i­tal cul­ture, includ­ing through train­ing, lead­er­ship endorse­ment, and rear­rang­ing teams to max­i­mize efficiency. 

“One of the first steps in this dig­i­tal trans­for­ma­tion jour­ney was to get the orga­ni­za­tion ready for change by fos­ter­ing a cul­ture that sup­ports dig­i­tal inno­va­tion,” she said, not­ing that Amer­i­can Water’s lead­er­ship team con­sis­tent­ly empha­sized the impor­tance of cross-team align­ment and main­tain­ing a clean core. 

Final­ly, Amer­i­can Water pri­or­i­tized both data gov­er­nance and cyber­se­cu­ri­ty. Giv­en the util­i­ty company’s own busi­ness require­ments and com­pli­cat­ed state and fed­er­al reg­u­la­tions the orga­ni­za­tion must com­ply with, this was a vital step. Bhoombla said Amer­i­can Water con­duct­ed a thor­ough analy­sis to ensure the appro­pri­ate ERP infra­struc­ture and solu­tion were cho­sen giv­en the enterprise’s spe­cif­ic requirements. 

Facil­i­tat­ing Cross-Orga­ni­za­tion­al Collaboration 

Ensur­ing effec­tive com­mu­ni­ca­tion between teams was anoth­er crit­i­cal com­po­nent of this project’s success. 

“Facil­i­tat­ing col­lab­o­ra­tion between dif­fer­ent busi­ness units dur­ing a dig­i­tal trans­for­ma­tion was cru­cial for ensur­ing that the trans­for­ma­tion is cohe­sive and effec­tive across the entire orga­ni­za­tion,” Bhoombla said. 

Specif­i­cal­ly, estab­lish­ing clear­ly defined roles and respon­si­bil­i­ties ear­ly in the project helped to ensure align­ment on ​“who was in charge of what with­in the change process,” she said. As such, the team could avoid dupli­cat­ing their efforts. Addi­tion­al­ly, the Amer­i­can Water team devel­oped a shared vision of the project’s goals that helped facil­i­tate effec­tive collaboration. 

“Amer­i­can Water used dif­fer­ent busi­ness and IT forums to help every­one see how this trans­for­ma­tion helps the whole orga­ni­za­tion and their own unit,” Bhoombla said; this helped the orga­ni­za­tion get input from dif­fer­ent stake­hold­ers and adapt the trans­for­ma­tion strat­e­gy to address var­i­ous needs across the organization. 

Bhoombla also point­ed to the impor­tance of a com­mu­ni­ca­tion strat­e­gy Amer­i­can Water put in place dur­ing this project, which involved devel­op­ing newslet­ters and sched­ul­ing meet­ings aimed at report­ing project achieve­ments and hurdles. 

“Being open about the progress and chal­lenges helped every­one stay informed and engaged,” she said. 

The team estab­lished feed­back sys­tems that pro­vid­ed employ­ees insights into where they could log issues, pro­posed improve­ments, and updates on outcomes. 

“By imple­ment­ing these strate­gies, Amer­i­can Water was able to facil­i­tate effec­tive col­lab­o­ra­tion across dif­fer­ent busi­ness units and work­streams, which is led to a suc­cess­ful dig­i­tal trans­for­ma­tion,” Bhoombla told ASUG. ​“This not only result­ed in the enhanc­ing the trans­for­ma­tion process but also built a more resilient and agile organization.”

Man­ag­ing Integrations

Anoth­er com­po­nent of trans­for­ma­tion was strate­gi­cal­ly man­ag­ing the process of inte­grat­ing SAP S/4HANA with the non-SAP solu­tions present in Amer­i­can Water’s tech­nol­o­gy landscape. 

Amer­i­can Water first assessed exist­ing third-par­ty sys­tems to iden­ti­fy inte­gra­tion points, data flows, and depen­den­cies. ​“This informed the devel­op­ment of a detailed inte­gra­tion plan spec­i­fy­ing objec­tives, scope, and time­lines,” Bhoombla said. 

With this assess­ment in hand, Amer­i­can Water turned its atten­tion to build­ing inte­gra­tions. Pri­mar­i­ly, the orga­ni­za­tion used stan­dard APIs from SAP S/4HANA. How­ev­er, where cus­tom code was nec­es­sary, Amer­i­can Water lever­aged the SAP Busi­ness Tech­nol­o­gy Plat­form (BTP) to build those integrations. 

With inte­gra­tions in place, the util­i­ty com­pa­ny con­duct­ed rig­or­ous data map­ping and gov­er­nance to main­tain both data integri­ty and secu­ri­ty. Amer­i­can Water also con­duct­ed exten­sive test­ing, includ­ing sev­er­al rounds of data inte­gra­tion test­ing with con­vert­ed data and user accep­tance test­ing, to ensure ensured that inte­grat­ed sys­tems still func­tioned cor­rect­ly with­out dis­rupt­ing exist­ing processes. 

Over­com­ing Hurdles 

While its imple­men­ta­tion of SAP S/4HANA Cloud was a suc­cess, Amer­i­can Water — like all orga­ni­za­tions — encoun­tered chal­lenges that required ​“metic­u­lous plan­ning and well-orga­nized col­lab­o­ra­tion among var­i­ous work­streams, and lead­er­ship sup­port to be addressed in a time­ly manner.”

Bhoombla laid out three chal­lenges — and the solu­tions that led Amer­i­can Water to over­come them:

• Change Man­age­ment – Amer­i­can Water found that some of its approx­i­mate­ly 550 end users were some­what resis­tant to changes in exist­ing process­es. To com­bat this, the team imple­ment­ed robust change man­age­ment strate­gies, includ­ing com­pre­hen­sive train­ing pro­grams and com­mu­ni­ca­tions that made clear the ben­e­fits of the new sys­tem. Engag­ing end users and stake­hold­ers ear­ly helped Amer­i­can Water obtain end user buy-in and adop­tion of the over­all solution.
• Data Migra­tion – ​“Data qual­i­ty was one of the sig­nif­i­cant chal­lenges because of the lim­it­ed con­trols in the lega­cy sys­tem,” Bhoombla said. In addi­tion, large chunks of data had been main­tained out­side the core ERP sys­tem. Con­duct­ing thor­ough data audits and cleans­ing before the migra­tion, Amer­i­can Water also lever­aged automa­tion with­in its migra­tion to ensure data integri­ty and security. 
• Man­ag­ing Cus­tomiza­tion and Stan­dard­iza­tion – Cus­tom code is a key part of every enterprise’s ERP envi­ron­ment. How­ev­er, bal­anc­ing cus­tomiza­tion with stan­dard­iza­tion is crit­i­cal for func­tion­al­i­ty. Amer­i­can Water pri­or­i­tized stan­dard­iza­tion when­ev­er pos­si­ble to reduce costs and save time while lim­it­ing cus­tomiza­tion to areas that ​“offer sig­nif­i­cant busi­ness val­ue or com­pet­i­tive advantage.”
• User Train­ing and Sup­port – Bhoombla not­ed that the speed of the imple­men­ta­tion neces­si­tat­ed extra time to train end users, famil­iar­iz­ing them not only with the new sys­tem but also with SAP stan­dard process­es crit­i­cal for dai­ly oper­a­tions. Giv­en this issue, Amer­i­can Water engaged end users ear­ly and often through­out the project lifecycle. 

Advice for Oth­er Organizations

Bhoombla offered advice to oth­er enter­pris­es about to embark on their own RISE with SAP jour­neys. Specif­i­cal­ly, she encour­aged orga­ni­za­tions to begin build­ing com­pre­hen­sive plans with detailed, clear time­lines and bud­gets. ​“This ensured that every phase of the imple­men­ta­tion was well-orga­nized and exe­cut­ed,” she said. 

Also essen­tial: effec­tive stake­hold­er engage­ment and change man­age­ment strate­gies to ensure end users are engaged, bought into the project, and clear on how the new solu­tion impacts their work. 

Bhoombla final­ly under­lined the impor­tance of qual­i­ty assur­ance and ensur­ing that SAP S/4HANA Cloud, pri­vate edi­tion, met all of Amer­i­can Water’s func­tion­al require­ments with­out cre­at­ing addi­tion­al issues. 

“These ele­ments com­bined to ensure not only a suc­cess­ful ini­tial roll­out but also sus­tained oper­a­tional suc­cess and user sat­is­fac­tion with the new SAP sys­tem,” she said. 

To hear more insights from SAP for Util­i­ties, Pre­sent­ed by ASUG read our recap of the conference’s top­ics.