Mov­ing to SAP S/4HANA is a jour­ney, and no one way is going to be bet­ter than anoth­er. In fact, most orga­ni­za­tions need to under­stand their unique rea­sons for mov­ing before they can build their busi­ness case for the move. They can, how­ev­er, learn best prac­tices from oth­er orga­ni­za­tions that have gone through the trench­es and come out successful. 

Shell is map­ping out its near­ly 10-year move to SAP S/4HANA with lessons learned that apply across the indus­try. ASUG spoke to Evert Rui­js, lead design author­i­ty at Shell, to dis­cuss how he and his team are design­ing a data mod­el that will serve up the future ERP plat­form companywide. 

“We’re work­ing on an agen­da across the enter­prise to dri­ve a sim­pler and more agile enter­prise,” he said. 

Sharon: Can you pro­vide a high-lev­el overview of Shell’s cur­rent ERP landscape? 

Evert: We cur­rent­ly have up to 30 dif­fer­ent ERP sys­tems, most in SAP ECC 6 and some already in SAP S/4HANA. Shell has both an upstream and a down­stream busi­ness, each with their own divi­sions. It’s quite a diverse land­scape. You can think of it as a num­ber of real­ly big ERPs for the core busi­ness­es and then a num­ber of small­er, periph­er­al ones that are usu­al­ly either focused on a sin­gle asset or a small sliv­er of the busi­ness that is unique.

Sharon: What is work­ing well in the cur­rent land­scape, and what needs to be transformed? 

Evert: We’ve got a real­ly mature and rel­a­tive­ly sta­ble and cost-effec­tive land­scape. So, from the per­spec­tive of whether we’re hap­py with what we have, I’d say yes. Par­tic­u­lar­ly if I talk with the down­stream busi­ness, they actu­al­ly don’t want to get rid of their cur­rent system.

But we know change is hap­pen­ing. We know the cloud is com­ing, and also busi­ness change is com­ing. For instance, because we have a diverse set of ERPs, it requires quite some effort to do things like com­mon pro­cure­ment or group report­ing. Or what about bench­mark­ing of assets? It shouldn’t need to be that dif­fi­cult to do those things. Even per­form­ing upgrades has become dif­fi­cult because we have so many customizations. 

So, our objec­tive with dig­i­tal trans­for­ma­tion is to dri­ve more val­ue by sim­pli­fi­ca­tion, and for enter­prise align­ment of these dif­fer­ent systems. 

Sharon: What is the scope and time­line of Shell’s SAP S/4HANA project? 

Evert: It’s a bit of a tricky ques­tion, because it is not going to be one project. We don’t expect to have one gigan­tic sys­tem. We’re instead look­ing at a mul­ti­tenant sce­nario where the dif­fer­ent ten­ants are cov­er­ing dif­fer­ent aspects of the busi­ness, but still dri­ven from an aligned data design. 

We are approach­ing each SAP S/4HANA deploy­ment with a green­field deploy­ment with the end goal of even­tu­al­ly being 100% on the cloud. We cur­rent­ly have sev­en SAP S/4HANA ten­ants live, although they’re all rel­a­tive­ly small. The first large asset to go live is expect­ed to be in 2023. Hope­ful­ly, we can scale up very quick­ly to have more assets, but I expect that the full project will take us up to 10 years.

Sharon: What were the key ele­ments in your busi­ness case that allowed for this project to move forward? 

Evert: I’ll start with what we didn’t want — to run this project as pure­ly an IT asset refresh. That shouldn’t be the main busi­ness case for going to SAP S/4HANA.

We went in empha­siz­ing that busi­ness sim­pli­fi­ca­tion and bet­ter enter­prise align­ment will have tremen­dous busi­ness val­ue. But also, we are aim­ing for a bet­ter user expe­ri­ence, bet­ter ana­lyt­ics, and the abil­i­ty to use some of the new advanced func­tion­al­i­ties that are still in devel­op­ment. We also includ­ed a focus on hav­ing a clean plat­form with­out cus­tomiza­tion as a means to low­er our total cost. 

Hav­ing said that, indi­vid­ual busi­ness func­tions will have their own more-detailed busi­ness cas­es when mak­ing the tran­si­tion. So, it’s not going to be just one sin­gle busi­ness case for the whole jour­ney, but a series of busi­ness cas­es for spe­cif­ic implementations.

Sharon: Is there a cen­ter of excel­lence (CoE) in place? 

Evert: Indeed, we have learned that estab­lish­ing a sin­gle CoE has a lot of val­ue. The exist­ing SAP S/4HANA ten­ants that are already live fall under the purview of the CoE. And for the future, the CoE also will be tasked with run­ning the imple­men­ta­tion projects togeth­er with our busi­ness partners. 

My team, which falls under the Shell Group CIO orga­ni­za­tion, pro­vides the strat­e­gy and the approach for the design, and the CoE dri­ves the execution. 

Sharon: Can you pro­vide a high-lev­el overview of the steps you are tak­ing to deliv­er a com­mon data mod­el across the ERP landscape? 

Evert: We cre­at­ed dif­fer­ent work­streams that we start­ed in a stag­gered way. We are cur­rent­ly run­ning three work­streams and we’re just about ready to move on to the fourth. We began the work by pri­or­i­tiz­ing busi­ness func­tions, first with finance. It was the most log­i­cal because it’s real­ly the core of an ERP design. From there, we added oth­er func­tions includ­ing pro­cure­ment and asset man­age­ment. We are now mov­ing on to the sup­ply chain. We went bit by bit, depend­ing on the matu­ri­ty of the prod­ucts avail­able from SAP.

Once we cre­at­ed the work­stream, we took some time to ful­ly under­stand the prod­uct with­in SAP S/4HANA. We looked up what is avail­able in the prod­uct and checked to see if the data mod­el was fit for pur­pose for Shell. We do that by both map­ping what we have to the new mod­el, but also, where we see dif­fer­ences, hav­ing dis­cus­sions with process own­ers and data own­ers on how to get to an alignment. 

It has been quite a jour­ney because we’ve had to con­sid­er a lot of dif­fer­ent mov­ing parts with­in the process.

Sharon: Who was involved in the process? 

Evert: The IT team is lead­ing the design efforts togeth­er with our busi­ness excel­lence orga­ni­za­tion and finance oper­a­tions. Every work­stream con­sists of a com­bi­na­tion of IT and busi­ness­peo­ple. This includes mobi­liz­ing busi­ness experts that we call data def­i­n­i­tion own­ers. They’re the peo­ple who real­ly under­stand the data and how to use it, but par­tic­u­lar­ly under­stand it from a per­spec­tive of how we’re going to use that data in the tar­get set­up. A lot of these peo­ple also are involved in the ongo­ing design efforts in the SAP Oil and Gas con­sor­tium, a joint exer­cise with sev­en oth­er oil and gas com­pa­nies like Chevron, Cono­co, and Equinor. They’re help­ing us under­stand what is com­ing so that we can prop­er­ly plan for the future. It’s a very col­lab­o­ra­tive effort.

Sharon: What have been some lessons learned so far that you can share? 

Evert: One of the lessons learned is that it is a good idea to start a project of this scope with data design. It’s a good prac­tice to adopt. Tra­di­tion­al­ly, ERP imple­men­ta­tions have start­ed off with process design, and data wasn’t thought about until it was time to ramp up the project and get it done, leav­ing lit­tle time to get the data part right. We’ve flipped the pro­gram and start­ed with data because that gives us more time to align enter­prise deci­sions on how we want to align the design in the future. 

The sec­ond les­son learned is that it is impor­tant to spend the time and learn the sys­tem which you are imple­ment­ing. Most of the time with an ERP imple­men­ta­tion, an orga­ni­za­tion relies on a sys­tems inte­gra­tor (SI) to walk them through it. But the real­i­ty is that there isn’t a lot of expe­ri­ence with SAP S/4HANA at this time in the mar­ket, so you need to build up the knowl­edge in-house. We’ve done that by doing these small­er imple­men­ta­tions first and learn­ing from those. 

Sharon: What are some obsta­cles you’ve run into and how have you addressed them? 

Evert: The biggest obsta­cle has to do with change man­age­ment, as there are many stake­hold­ers. These sys­tem imple­men­ta­tions require not only resources, but also the abil­i­ty to bring users along to adop­tion. Some­times that is dif­fi­cult when you can’t explain that instead of look­ing for imme­di­ate return, you need to look out 10 years to under­stand why we’re doing this. You need to get the right stake­hold­ers involved ear­ly on to help cham­pi­on that change. We have a very com­plex orga­ni­za­tion at Shell, and it wasn’t easy to do that. 

Anoth­er obsta­cle has to do with the fact that there are still parts of SAP S/4HANA that are not mature. So, this means that we are work­ing with mov­ing tar­gets in some areas. We try to pri­or­i­tize the work based on the matu­ri­ty of the prod­uct, but that can still be dif­fi­cult at times. It requires plan­ning and the abil­i­ty to be agile. 

Sharon: In your opin­ion, what are the biggest chal­lenges that the oil and gas indus­try is fac­ing right now? How, if at all, can an SAP S/4HANA upgrade help address those challenges?

Evert: The biggest chal­lenge right now is cash. When there is a halt in cash flow, it can mean the need to post­pone invest­ments and projects. But the truth is, there is tremen­dous val­ue in mov­ing for­ward with a project like this. Although the val­ue may not be imme­di­ate, the long-term goal is to make the orga­ni­za­tion more agile, to allow it to deal with the lev­el of busi­ness change we are in, like the ener­gy tran­si­tion. You do that with sim­pli­fi­ca­tion. You do that by align­ing process­es and mak­ing it eas­i­er to glean insights. You do that by enabling deci­sion-mak­ing based on data and advanced ana­lyt­ics. SAP S/4HANA will help make that more seamless. 

Have you upgrad­ed your EAM tech­nol­o­gy stack, nav­i­gat­ed an SAP S/4HANA migra­tion, or solved an oper­a­tional busi­ness chal­lenge through tech­nol­o­gy or process improve­ments? Your peers are eager to learn from your expe­ri­ence! Find your local ASUG Chap­ter to sign up for an oppor­tu­ni­ty to share your SAP jour­ney.