By Matt Gillespie, Contributing Writer, SAPinsider
Perrigo is a global, leading provider of over-the-counter (OTC) self-care products across various OTC categories. Headquartered in Ireland, Perrigo’s international presence has grown dramatically over the years, accelerated particularly in the last decade or so by acquisitions that enhanced its product portfolio and geographic reach. Layering in additional tools and technologies from each new acquisition has created a multifaceted finance landscape at Perrigo, with the company maintaining 21 separate enterprise resource planning (ERP) systems, both SAP and non-SAP, and multiple financial planning and consolidation tools.
Across industries, customer interest in SAP S/4HANA for central finance is commonly catalyzed by one or more of the following scenarios:
- Multiple ERP platforms or instances
- Merger & acquisition activity and evolving business models
- Desire to migrate to SAP S/4HANA gradually, with finance as an early goal
- Enterprise financial data being applied to solve complex business problems
Perrigo checked the box for each scenario and officially started its SAP S/4HANA for central finance journey in Q3, 2019.
PwC was brought in as a consultant for the implementation.
Assessing the Potential for SAP S/4HANA for Central Finance
Perrigo saw SAP S/4HANA for central finance as a potential enabler for a non-disruptive, finance-first approach. As the company continued to work through the long-term source ERP strategy, Perrigo was able to immediately benefit from SAP S/4HANA capabilities, reduce complexity, and build a global platform for the finance organization.
SAP S/4HANA for central finance has become the conduit for all financial data at Perrigo, significantly reducing the data movement between multiple consolidation and financial planning tools. All source ERP financial data is now harmonized and posted directly to SAP S/4HANA for central finance either through real-time replication or month-end trial balance loads, creating a single source of truth for the Perrigo finance organization.
Organizing the SAP S/4HANA for Central Finance Project Into Two Releases
Perrigo organized its SAP S/4HANA for central finance project into two distinct releases, with the first one focused on building the foundation for the solution, and the second expanding the platform’s reach and bringing in additional functionality.
Perrigo’s first release went live in early 2021 and included the implementation of SAP S/4HANA for central finance, SAP S/4HANA for group reporting, and a combination of SAP Business Planning and Consolidation and SAP Analytics Cloud for financial planning.
As part of the SAP S/4HANA for central finance implementation, the team significantly invested in the global enterprise structure design, including tasks such as mapping key attributes from source systems into SAP S/4HANA, data reconciliation, and defining ledgers. Key decisions were made around source system replication. The team decided to real-time replicate three SAP and two non-SAP source systems. All other locations load month-end trial balance files.
The team identified several use cases for adopting SAP Analytics Cloud as part of the new financial planning solution at Perrigo. Ultimately, the project included performing headcount planning and operating expenditure (OpEx) planning in SAP Analytics Cloud while deploying SAP Business Planning and Consolidation for all other financial planning activities. This approach allows Perrigo to make initial use of SAP Analytics Cloud, with an eye toward a gradual migration. Early on, the team evaluated various consolidation tools, and ultimately decided on SAP S/4HANA for group reporting.
By the end of Release 1, the Perrigo team had successfully redirected and harmonized all financial data to SAP S/4HANA for central finance.
They also initiated Release 2 with the goal of expanding the capabilities of the new global platform and moving transactional processing to SAP S/4HANA for central finance.
The Release 2 scope includes SAP Global Treasury, Central Payment (both Accounts Payable and Accounts Receivable), Central Vendor Invoice Management with OpenText, and fixed assets. In addition, the team plans to create a global costing view to help enable eliminations, transfer pricing, and royalty calculations in SAP S/4HANA for central finance. Perrigo currently operates in 30+ countries and will be using a combination of SAP S/4HANA for advanced compliance reporting and SAP S/4HANA for central finance to fulfill any localization reporting requirements. With these activities, Perrigo continues to move the finance organization as a whole into the new global platform. The targeted go live date is early 2022.
Lessons Learned and Key Take-Aways
While it required a significant amount of work, Perrigo decided to do an initial load of one full year of historical data. This approach helped the team learn a tremendous amount about how data transformations were functioning and how rules needed to be adjusted. The added work paid off, resulting in a very low error rate.
Over the course of the project, the necessity of involvement across the business has been emphasized over and over. It starts with buy-in from the leadership team, to ensure that they understand the scope of the effort and to get their commitment for resources throughout the project. Coordination across IT and finance is also critical, and a strong working relationship between the two — along with super users from across relevant business units — is vital to success. Finally, finding an implementation partner that meshes well and shares a vision with Perrigo proved an invaluable addition.