"It's a People Business": How One Global CIO Describes Massive Greenfield SAP S/4HANA Implementation

Inside GEA Group’s Co-Innovation with SAP to Deliver a Cloud-First Transformation Strategy

by Lauren Bonneau, Senior Editor, SAPinsider

During the third day of SAPinsider 2020, I was thrilled to have an opportunity to attend an interactive session with Christian Niederhagemann, CIO of GEA Group and SAP Executive Board Member Thomas Saueressig who discussed how GEA Group — one of the largest technology suppliers to the food and beverage industry, with more than 20,000 people at over 250 sites in 70 countries serving thousands of customers — took on a massive greenfield SAP S/4HANA implementation.

Over the past 18 months, GEA Group has undergone a complete fundamental transformation, bringing on a new board, CEO, CFO, and CIO, according to Niederhagemann. This total overhaul has involved a strategy of changing the entire company’s business model, operations, and processes — and improving visibility into business data and KPIs. “Right now, we run more than 60 different ERP systems — not different clients or instances, but different systems; each and every ERP system you’ve ever heard of in your lifetime, we run it,” he said. “And a directive from the board was to bring all these systems onto one single platform in a totally harmonized environment.”

Being an SAP customer that has been “more or less addicted to SAP” since the 1980s was certainly a factor in the decision to move to SAP S/4HANA, according to Niederhagemann. And having a heavy acquisition strategy over the last 40 years that created a scattered IT landscape and disparate business processes certainly helped convince the board that a new slate with a brand-new SAP system was needed. Because transferring thousands and thousands of lines of code from legacy systems was not an option, there was no basis for a migration, and the decision for GEA Group to choose a greenfield implementation was an easy one.

With more than 200 legal entities to convert, a big-bang implementation not a viable option so the business chose an implementation strategy involving go-lives of the new platform to the entities over a period of 10 years. Currently the company is half-way through the rollout, with five years to go.

According to Saueressig, GEA Group is in good company with the more than 14,500 customers that have decided to implement SAP S/4HANA. “We currently are seeing a massive movement toward SAP S/4HANA,” he said. “We now have more than 7,500 live in production, and already this year, we have more than 1,000 go-lives.” He described the multitude of project variations within greenfield and brownfield approaches for customers to choose from — such as converting data to the new system and then tackling business processes after the migration, starting from scratch with a new implementation and taking the opportunity to rethink business processes upfront, and moving to a full cloud infrastructure or adopting a hybrid model with some data remaining on premise.

GEA Group has adopted a cloud-first strategy and has selected Microsoft Azure as its cloud provider. “We migrated each and every on-premise server (4,000 in total) to the Azure cloud including the existing SAP systems within 15 months,” Niederhagemann said.  “More than 90% of our servers are currently running in the cloud, with only 120 servers remaining on premise, and we run the largest Azure environment in Germany right now.”

Niederhagemann pointed out that GEA Group had made a prior attempted to move to one ERP system, but that project failed because it was a purely IT-driven project and did not elicit perspectives from business users and operational employees. This time around, the project team collaborated across the business divisions and levels. “We surveyed and interviewed more than 50 stakeholders as well as nominees from the shop floor to collect requirements and identify their daily needs,” he said. “This sent the right signal to everyone, and at the end, there was total buy-in from management — not only the board but all levels.”

Another key success factor, according to Niederhagemann, was the decision to follow established best practices. “There are thousands of customers on SAP S/4HANA. Why should we reinvent the wheel? We opted for the standard approach of going with what’s available with SAP S/4HANA and onboarding stakeholders to think with the same mindset,” he said. “Most important to me is to change the mindset of the entire company that this is not an IT project but rather a business project with a tiny IT share at the end.”

GEA Global established a new department with the global responsibility of managing processes for each region. “We designed the entire process landscape together with the team and set up a virtual process community with 150 people from each division at all levels of experience within four months,” Niederhagemann said. “It was amazing to see how fast we were able to implement it.”

Saueressig agreed that a transformation should not be a pure technical topic but should involve the business and commended what GEA Group has accomplished so far. “If you think about the number of legacy systems, this is just a phenomenal large-scale project, and I have to give kudos to the entire implementation team,” he said. “During the kickoff call for the project, I was impressed with how many diverse people joined in and how the project was set up with the business and IT working hand and hand. Innovation happens by connecting people and bringing them together to think about the mindset. This is the key for success, and it should not be underestimated. Even if it’s a five-year project, this is something that starts today.”

Niederhagemann credited having clear communication plans to explain current and future changes to employees as the main factor for having 99% team member retention during the implementation so far. “A major takeaway is to deal with the right people and the right partners internally and externally,” he said. “This is not something you can run on your own. This is a people business.”

The interactive discussion involved questions from attendees and covered topics such as integration challenges, adopting agile process workstreams, best practices followed, training considerations, change and process management, and the importance of reskilling and upskilling employees. A recording of the full discussion will be available on demand soon. For more insight, check out some of the other sessions on SAP S/4HANA at the virtual event.