Milliken & Company, a 160-year-old diversified industrial company with operations in over 70 locations across 15 countries, successfully implemented SAP S/4HANA in January 2021. Tyler Blouse, Vice President of IT for the Spartanburg, SC-based company, said the keys to success were strong senior leadership buy-in, early and thorough planning, and a focus on continuous support for digital transformation.
The team carefully evaluated greenfield vs. brownfield strategies and implemented a phased approach supported by a robust communication plan, employee training, and targeted impact assessments. Challenges included navigating the complexity of legacy systems, maintaining business continuity, and resolving compatibility issues with third-party vendors. Through resilience and collaboration, Milliken achieved a smooth migration with minimal downtime, setting a strong foundation for future innovation.
In a conversation with ASUG Executive Exchange, Blouse reflected on Milliken’s migration to SAP S/4HANA, and lessons learned along the way. He explained why the organization is considering RISE with SAP, how to mitigate the challenges associated with managing perpetual contracts, and how SAP BTP and AI play into the organization’s long-term strategy.
This interview has been edited and condensed.
Q. What key factors enabled Milliken's successful SAP S/4HANA migration, and how can other organizations replicate that success?
A. Our success was driven by several key factors: senior leadership buy-in and communication, early planning and testing, and effective data management. The success of the project was ensured through securing senior leadership support, maintaining consistent communication, and planning extensively for thorough testing with our system integrator, IT department, and end users. We started early on system readiness with ECC custom code remediation, critical simplification items, and data management. We archived as much data as possible, including storage of attachments prior to the move, as this would significantly impact our downtime and database sizing. To ensure technical readiness and alignment with SAP support processes, we achieved the necessary HANA migration certifications. Organizations should focus on securing strong leadership support early in the planning phases to replicate our success. The migration is both a technical and strategic business initiative. Securing support from leaders by emphasizing business benefits and future innovation is crucial. This alignment ensures the migration is seen as essential for long-term growth and technological progress.
Q. You are currently considering a move to RISE with SAP, but the timing isn't right yet; you are targeting sometime over the upcoming years. Why are you interested in the move, and what are your timing considerations?
A. Our interest in RISE is driven by several strategic considerations. First, SAP has indicated that RISE is their strategic direction, with many of their latest innovations being prioritized for RISE rather than the on-premises versions. This ensures that we stay at the forefront of technological advancements, benefiting from the latest features and improvements in areas such as GenAI, machine learning, and user experience enhancements.
Additionally, moving to RISE aligns with our broader cloud strategy, which aims to accelerate digital transformation, enhance business flexibility and scalability, and achieve cost efficiency. By adopting RISE, we can streamline our IT operations, reduce the complexity of our on-premises infrastructure, and take advantage of the scalability and flexibility offered by cloud solutions.
Our timing considerations include aligning the move with our strategic goals and ensuring that we have the necessary resources and landscape considerations in place to support a smooth transition. We are currently assessing and evaluating our SAP on-premises environment's readiness and developing a roadmap and budgetary framework model to be better prepared for the RISE migration. Additionally, we are observing how other companies make the transition to RISE to learn from their experiences and best practices.
By targeting a few years out, we aim to balance risk, cost, and reward for our strategic SAP solution architecture while minimizing potential risks. This approach allows us to strategically plan and execute the migration, ensuring a seamless transition and maximizing the benefits of RISE.
Q. A few of your challenges include managing perpetual contracts and addressing hardware/software deadlines. Could you share more details on these, and any other challenges you’re currently facing?
A. Managing perpetual contracts and addressing hardware/software deadlines are indeed challenges we face. Perpetual contracts often come with rigid terms that can be difficult to renegotiate or adapt to evolving business needs. This can lead to increased costs and limited flexibility in our operations. Often, it takes an event, such as a cloud purchase, to revisit these perpetual licenses. To mitigate these challenges, we continuously evaluate our contract terms and seek opportunities to renegotiate or optimize whenever possible. Hardware deadlines will impact our RISE timing because we want to avoid upgrading hardware only to replace it before its end-of-life (EOL) as part of the RISE migration. This requires careful planning to ensure that our infrastructure investments are aligned with our long-term strategic goals. Additionally, software deadlines need to be taken into consideration to ensure we remain on supported versions of SAP solutions to continue receiving security updates and support. In order to avoid other additional challenges, we are leaning on our successes from migrating to S/4HANA. We are already building the senior leadership support, going through extensive planning and preparation, and putting in place a revamped archiving strategy.
Q. After your recent successful SAP S/4HANA upgrade, what plans or goals do you have for your team in 2025?
A. Our plans and goals for the team in 2025 are centered around further enhancing our digital capabilities, driving continuous innovation, and preparing for RISE. We are focused on leveraging the advanced features of S/4HANA to optimize our operations and support our strategic business objectives. Additionally, we will embark on several preparation projects for RISE, such as embedding solutions in S/4HANA and co-deploying where it makes sense.
Q. How is Milliken's digital transformation journey shaping its overall business strategy and competitive positioning in the market?
A. Our digital transformation journey is central to our business strategy, enabling us to enhance operational efficiency, improve customer experience, and drive innovation. By embracing digital technologies, we are better positioned to respond to market demands, capitalize on new opportunities, and maintain a competitive edge. This transformation is also fostering a culture of agility and resilience, which is crucial for long-term success.
Q. What are your plans for SAP BTP (Business Technology Platform)? What capabilities will this provide the organization, and why are you considering it?
A. Our plans for BTP are integral to our strategy. We currently utilize several BTP services, such as SAP IAS, for user provisioning and single-sign-on capabilities across multiple systems. Additionally, our custom Fiori development leverages BTP tools to enhance user experience and functionality. And then SAP Cloud Platform Integration is another vital service heavily utilized in our landscape. Given our extensive use of BTP, we consider it a key component in our strategy to keep the core clean in preparation for a move to RISE.
Q. How does AI play a role in your strategy today? What is the future of AI for the company?
A. At Milliken, we've always been at the forefront of innovation, and our early adoption of AI is a testament to that. AI is a key pillar of our business strategy, driving innovation, enhancing operational efficiency, and adding value across various areas. To ensure our AI initiatives are both responsible and deliver value, we've established a governance framework through our AI Council and AI Center of Excellence. These bodies ensure our AI efforts align with sustainable and ethical practices, maximizing business value while maintaining responsible usage.
Looking ahead, AI will continue to be a central part of our strategic vision, fueling growth and transformation. We're committed to advancing our AI capabilities to boost productivity and streamline operations across different domains. As part of this effort, we are exploring SAP AI solutions like Joule to further enhance our technological framework. By leveraging AI, we aim to drive innovation, improve decision-making processes, and enhance customer experiences, ensuring we stay ahead in the rapidly evolving digital landscape.
Q. How is Milliken approaching the consolidation and rationalization of their application landscape to reduce technical debt?
A. We are taking a strategic approach to consolidate and rationalize our application landscape, focusing on eliminating redundancies and optimizing our systems. This involves conducting thorough assessments, prioritizing high-impact areas, and implementing best practices for application management. Solutions based on older technology, especially custom applications, are being evaluated for current business value and the feasibility to support new business needs. Where appropriate, SaaS alternatives or PaaS migrations are being considered. By reducing technical debt, we aim to improve efficiency, reduce costs, and enhance the overall performance of our IT infrastructure.
Q. What advice would Milliken's IT leadership team give to other organizations embarking on similar technology and business transformation initiatives?
A. When embarking on a digital transformation, it's crucial to have strong leadership support and ensure everyone is on board. Start by setting up a senior leader steering team to guide the process and keep things on track. This team will help create a clear vision and roadmap, making sure everyone in the company understands the direction and goals.
Next, build a solid operating model that clearly outlines processes, roles, and responsibilities. This clarity is essential for smooth execution and accountability. Investing in training and development is also key, as it equips your team with the necessary skills to be successful in the transformation. Adoption is key to achieving business value, and our IT team has taken the lead in providing ongoing training to the organization.
Testing new technology on a small scale is another important step. This approach allows you to identify and address failures quickly, increasing the likelihood of success when scaling to the enterprise level. By following these steps, you can navigate the complexities of transformation more smoothly and ensure a successful outcome that delivers value to your customers and achieves long-term success.