Making a move to a new ERP system like SAP S/4HANA offers benefits including speed, cost savings, and innovation. But it also comes with challenges, some of which can be prevented if you know how to plan ahead and how to address issues before they become barriers.

AES Corp., a Fortune 500 company that generates and distributes electrical power in 15 countries, is currently consolidating several of its ERP systems to run on a single SAP S/4HANA environment.

The company began this project in 2017 to reduce its total cost of ownership as well as increase the speed of its processes. At the time, all of its businesses were running in a global SAP ECC 6.0 environment and on an Oracle database. AES has maintained an SAP global ERP template for more than 10 years, which has helped the company manage its business processes across all locations.

A Two-Step Itinerary to SAP S/4HANA

AES designed a digital transformation road map where the global ERP was the foundation for the infrastructure. “For us, SAP S/4HANA was that foundation,” said Guillermo Elizeche, IT global delivery portfolio manager, AES Servicios America.

The company adopted a two-step approach where it would first migrate its database to SAP Suite on HANA, and then to SAP S/4HANA. The first step involved moving its infrastructure from a relational database to the SAP HANA database in the cloud. “This kept us running in the same ERP system, but in a different environment,” Elizeche said.

The second step—migrating to SAP S/4HANA—has been rolled out in phases, first in Argentina and now in the U.S. “We are now consolidating two very important businesses in the U.S.—Indianapolis Power and Lighting and Dayton Power and Lighting. All our U.S. locations will go live this year, and next year we will focus on consolidating businesses in El Salvador and Brazil,” Elizeche said.

People Make the System

Organizations going through a transition like this one often focus on the technical part of an ERP project, with user adoption coming in as an afterthought. In “Planning for a Successful ERP Project,” Josh Greenbaum, principal at Enterprise Applications Consulting, shared, “The first thing a business needs to do is to pay attention to the change management and the people component. It is critical to not treat the project as a technical endeavor, but rather one that involves people and business change.”

“From a high-level point of view, customers can drive adoption and effective use of their SAP software, which ultimately is a key factor in achieving ROI from their IT investment,” said Bogdan Nica, vice president of products and services, Knoa.

A View of Users and Performance

During the SAP S/4HANA implementation, AES worked with Knoa to measure how many business users were interacting with the system and what the performance looked like. The metrics that came out helped AES determine where it could abandon certain customizations before the SAP S/4HANA migration. It also provided a view of how the users were engaging with the system to help AES develop its training for the rollout.

“AES had a fairly complex landscape with custom functionality that had been developed over time,” Nica said. Elizeche and his team were looking to get visibility and an understanding of who uses what and how within AES’ SAP environment. Although simple, it is a basic and fundamental metric that any company migrating to SAP S/4HANA needs to have access to.

“For instance,” Elizeche said, “We were able to detect the errors in specific business processes and identify whether it was user error. If it was something that repeated, we knew that rather than changing the entire process, perhaps training the employees would solve the issue.”

The Value of Knowing Your SAP Users

By tracking inefficiencies and providing user-centric success criteria, AES was able to add everything it learned to the global template it already had in place, which helped it save time and money on the SAP S/4HANA implementation across the entire organization.

Establishing how users are interacting with an SAP solution gave AES a good footing for embarking both on the consolidation, as well as the migration project because it helped the company define the scope and prioritize which parts of the system it needed to recreate.

Eliminating the Blind Spots

Using this visibility into its SAP landscape and user interaction, AES has created a website with training materials based on real user behavior. This is helping with change management and user adoption as the company rolls out the rest of the organization-wide implementation of SAP S/4HANA. “When proceeding with an SAP S/4HANA migration, you need to evaluate everything very carefully,” Elizeche said.

The Knoa solution helped by eliminating the blind spot. “We were able to show AES the contribution all of its users have on the overall success of the project, before and after the migration. We were able to quantify the ROI by measuring the impact of IT initiatives on the user experience and productivity. By doing so, we allowed AES to focus on the end users, which is really the key to success,” Nica said.

Join us at the SAP for Utilities conference in San Diego, October 21–23.

Want to continue reading this article?

Become a member and get access to all ASUG benefits including news, resources, webcasts, chapter events, and much more!

Log in

Not an ASUG member? Learn more