Terumo Americas Holding (TAH), which is a subsidiary of a global $6 billion medical device company headquartered in Tokyo, recently completed a phase of its digital transformation by implementing SAP S/4HANA.
In part one of this two-part series, Kalyan Balsubramanian, CIO for all the Americas, Sung Yang, VP and digital transformation project executive, and Rick Larrieu, VP of global IT and infrastructure, discussed the scope of the project, building the business case, navigating the implementation process, and going live. In part two, we go into more detail about the benefits of moving to SAP S/4HANA, executing on a well-thought-out change management strategy, and doing so during a pandemic.
ASUG: What technologies are you leveraging on your new SAP landscape and how has doing so improved operations?
Larrieu: If you think of it, SAP S/4HANA is at the core of our implementation, but it is surrounded by at least 35 to 40 complementary applications that we use. Many of them are a part of the SAP ecosystem, but we also have some third-party applications.
ASUG: To what extent does your new system deliver the benefits outlined in your original business case?
Larrieu: We should classify the benefits into different categories. In terms of meeting our compliance needs, as well as our commercial needs, it has delivered on the ROI from day one. In terms of the implementation of our manufacturing execution system, which was done to generate electronic device history records and our compliance point of use for manufacturing—the ROI has materialized over the past three months. We’re still on target to reap the benefits of SAP Ariba. So, I think that we have actually been able to achieve a lot of the lion's share of our improvement objectives.
With automation, Terumo Americas can now speed up orders with end-to-end visibility and our customers can receive what they need when they need it.
ASUG: Are you using SAP Fiori, and if so, to what extent?
Balsubramanian: Yes. We are fully using SAP Fiori except for the handheld scanners, which is where we feel it cannot be used. But SAP Fiori is our user interface strategy, and our business users love it.
ASUG: How are you addressing change management, particularly during a pandemic?
Yang: I managed the change management portion of this program and the number one factor that made it a success was getting executive buy-in. We established a change network that includes site leaders, as well as change champions within the organization. A lot of them are subject matter experts from the different business units that were included in this leg of the program. We had a monthly change check-in with the change champions and provided them with tools that would help them share this information with their employees, as well as to be able to communicate the realized benefits. We also had monthly lunch-and-learns with the executive leaders—directors and above—to update everyone about the program.
We tried to run this program with transparency to ensure that everybody understood what's coming down the road.
Larrieu: We selected a subject matter expert for each of the business areas and they were removed from their day-to-day duties and dedicated to the project. That was our point of contact between the technical side—which is the CoE group and the consulting group. We also communicated via monthly newsletters, open-house showcases and demonstrations, and played videos on loops throughout the organization. We had several groups working together to make sure information was not only properly and adequately created, but also disseminated to the entire organization.
For the deployment part of the program, we assigned site leaders, which included controllers and director-level personnel, to help us with the coordination at the local activity. So, we took a geographic location point of view through the site leaders all the way through the subject matter experts for the specific process areas.
Balsubramanian: Another thing to keep in mind is that this was a greenfield implementation. We designed everything from scratch, and we had a completely new set of processes. It was a huge undertaking from our side to ensure the organization was brought along as well. A lot of emphasis was given daily to drive that message home.
ASUG: Did COVID-19 affect the way you addressed change management and training?
Larrieu: When the pandemic resulted in lockdowns, we had to temporarily pull the plug on the project sometime in the middle of March. We’d already invested a lot in training materials, as well as a tremendous amount of money and resources to develop an entire training program. It was mostly focused around an in-classroom type of training. And then, suddenly, we found ourselves in left field. We used the first three months to repurpose our entire training program to be in a hybrid model, using Microsoft Teams and other remote tools. I think that time that was afforded to us to revamp our training program was critical to the success of the program.
ASUG: What were the lessons learned during your SAP S/4HANA implementation that you would share with other health care and life sciences organizations?
Balsubramanian: First and foremost, we know that there is basic blocking and tackling that everybody must do, but the fundamental thing is ownership. You need a very strong project management office that is equally vested in making sure they are driving toward the success of this program. The second thing is that you need to have the right team—whether it’s business stakeholders, technical experts, or even the systems integrator—they need to be the right players. All of them must also be equally vested toward the success of the project. The last piece of advice I’ll offer is that you need to focus on making sure the data is managed properly. That includes the data itself, the data conversion, and then the whole aspect of making use of those gained insights to create the new processes.
Read part one of this series to learn more about building the case, finding the right platform, and executing on the implementation. ASUG members can watch six episodes of ASUG Express: Achieving Success with SAP S/4HANA Virtual Boot Camp on demand.