following the path to the digital enterprise
TRANSCRIPT
SAP S/4 – A CORNERSTONE OF SIKA’S DIGITALIZATION STRATEGY
18.11.2021 / IG SAP CHHEIKE SILLER-MORAWSKI / ANDREAS KISSLING
Following the path to the digital enterprise
Sika is a specialty chemicals company with a leading position
in the development and production of systems and products
for bonding, sealing, damping, reinforcing and protecting in
the building sector and motor vehicle industry.
WHAT WE DO – BUILDING TRUST
18.11.2021 IG SAP Talk | Sika's S/4 Journey3
SIKA AT A GLANCE25,000 EMPLOYEES
100 COUNTRIES
300+ PLANTS WORLDWIDE
6 NEW & EXPANDED PLANTS IN 2020
83 NEW PATENTS IN 2020
1 ACQUISITION IN 2020
7.88 BN NET SALES IN 2020 (IN CHF)
WE ARE THEREOur products might not always be visible but the results they achieve bring clear added value to customers and society.
FOCUS ON ATTRACTIVE MARKETS:
CROSS-SELLING, LIFE-CYCLE MANAGEMENT, ONE STRONG BRAND
18.11.2021 IG SAP Talk | Sika's S/4 Journey4
Waterproofing Roofing Building Finishing
Flooring & Coating Sealing & Bonding Refurbishment Industry
Concrete
FOOTPRINT EXPANSION SINCE 2015
CREATING THE FOUNDATION FOR FUTURE GROWTH
18.11.2021 IG SAP Talk | Sika's S/4 Journey5
+11 Subsidiaries
+46Plants
+27Acquisitions
>7,000New employees
Market Penetration
Innovation
Operational Efficiency
Acquisitions
Values
6-8%annual growth
25%of sales with newproducts
0.5%pts non-material cost improvementas % of net sales
15-18%EBIT marginUntil 2020: <15%
>10%Operating free cashflow per year as % of net sales
>25%ROCE by 2023
SUSTAINABILITY
12% CO2 emission reduction per ton sold
REVENUE GROWTH
SAVE COST – INCREASE PRODUCTIVITY
ACCELERATION OF IMPLEMENTATION
1
3
2
4
RELEVANCE IN THE DIGITAL WORLD
18.11.2021 IG SAP Talk | Sika's S/4 Journey7
SIKA’S STRATEGIC TARGETS 2023
DIGITAL IMPACT ON OUR GROWTH STRATEGY
Ag
ile
IT
/ B
ig D
ata
An
aly
sis
SIKA’S DIGITAL VISION
CREATE IMPACT WITH 5 BUILDING BLOCKS
18.11.2021 IG SAP Talk | Sika's S/4 Journey8
Grow revenue
Build new revenue streams
with digital services and new
business models
Enable acceleration
Drive growth and adoption by
leveraging Sika’s decentralized
organization
Sika’s
digital visionIncrease relevance
Differentiate on the market,
stay relevant and grow by
transferring offline strength
to digital
Save costs and increase
productivity
Use digital technologies to
drive down costs and increase
productivity in manufacturing
Customer
centricity
Operational
excellence
(Industry 4.0)
Effective
knowledge
worker
New business
models &
Innovation
Digital Building Blocks
1
3
2
4
1. Established core platforms as a fundament for digitalization
Customer Centricity
Operational Excellence
(Efficiency)
Effective Knowledge Worker
2. Provide powerful integration platforms (SAP BTP, SAP PO, Mulesoft)
3. Develop Apps on flexible cloud platforms
DIGITAL IT ARCHITECTURE
SOLID CORE & FLEXIBLE BOUNDARY CONCEPT
9
Data
Process
Eco-System
Integration
18.11.2021 IG SAP Talk | Sika's S/4 Journey
Coming from a heterogenous ERP landscape …:
53% of Sales to Third on SAP platform (and most of IC sales)
47% of Sales to Third on other ERP platforms (roughly half are from acquired companies)
Some 100 companies are running local ERP installations like Axapta, JD Edwards, SAGE, local brands
… which is hindering:
process and data standardization (Sika BdP)
integration of acquisitions
drive global digitalization initiatives
2019: Alliance program based on 4 pillars
Global implementation of SAP
(2 Tiers: Sika Alliance / SAP ByD)
Enhance Functionality (e.g., TM, DMC)
Migrate to SAP S/4
Review standardized core processes
NEW SIKA ALLIANCE PROGRAM
LEVERAGE 2 TIER SAP PLATFORM
18.11.2021 IG SAP Talk | Sika's S/4 Journey11
Time to consolidate our ERPs globally
Dual ERP Strategy with common a data base / format / process template
Sika’s company landscape is very heterogeneous in terms of: Company size
Process complexity
Maturity of the organization as well as markets
SIKA’S DUAL ERP STRATEGY
BASED ON THE SAP STACK
18.11.2021 IG SAP Talk | Sika's S/4 Journey12
A “one fits all” ERP
strategy will fail!
SAP S/4HANA Midsized to large companies
Complexity in business processes
Leverage the full platform eco-system
Significant process automation needs
SAP ByD Small companies
Cloud ERP processes sufficient
User base with limited process
knowledge
Tier 1 Tier 2
SIKA’S ERP STRATEGY
WHAT DO WE AIM TO DELIVER
18.11.2021 IG SAP Talk | Sika's S/4 Journey13
Fast integration of acquired companies Sika Processes / Data Scalability Proven Experience Project Methodology
Provide transparency for business decisions Real Time Data Transparent Reports Harmonized Data Scenario Simulation / Analytics
Strong governance Access Control SoD Audited Operation Process Owners
Strategy support: efficiency increase BdP Processes Planning Tools Automation Integration Capabilities
Enable Sika’s digital roadmap Artificial Intelligence Machine Learning Analytics Development Platform
Provide global modern ERP platform Alliance Template Newest Technology Hybrid Cloud / Mobile Regional Competence
SIKA’S JOURNEY TO SAP S/4HANA
COMMITTED TO GROWTH AND INNOVATION
15
SAP
Alliance
Template
Greenfield
ECC 6.0
Alliance
pilots US
+ AT
Industrialized Alliance
Rollouts EMEA +
Automotive
Implement new
S/4HANA
features
2005 2010 2015 2020 2025
R/3
2000
GoLive
S/4HANA
Industrialized Alliance Rollouts
Americas, EMEA, Automotive, APAC
Digital Core
Enterprise Suite
S/4 Upgrades
EHP8
18.11.2021 IG SAP Talk | Sika's S/4 Journey
SAP S/4SAP ECC 6.0SAP R/3
EHP7
HANA
DB
IBP
TM
MDG-S
SuccessFactors
MII US
MDG-M
GTS
MII CH
DMC
EWM
LES
Concur
APO
SAP S/4 Enterprise Suite will provide the modern platform for process digitalization
In parallel the intensified global Rollout Program to drive standardization
ROADMAP TO DELIVER NEW DIGITAL ENTERPRISE SUITE
ROLLOUTS & BUSINESS PROJECTS IN PARALLEL
2018 2019 2020 2021 2022 2023 2024 … 2027
Alliance
Rollouts
and
Integration
Acquisitions
Deliver
Intelligent
Enterprise
Suite
A uto mot ive + 8 S / 4 p r o j e c t s *
A mer icas + 1 6 S / 4 1 3 p r o j e c t s *
BW/4HANASAP S/4HANA
Digital Core
SAP
SuccessFactors
EWM S/4HANA
EMEA + 1 4 S / 4 p r o j e c t s *
A PAC + 1 3 S / 4 p r o j e c t s *
GTS e/4HANA
IG SAP Talk | Sika's S/4 Journey18.11.202116
Template based,
centrally hosted and
globally managed,
single client ERP
Replace Product Compatibility
End-of-
Life
Compatib
ility
Mode
End-of-
Life
*S4 projects 2021
and beyond
SAP S/4 JOURNEY – PREPARE THE FUTURE
STRATEGIC CHOICE – BASIC QUESTIONS
18.11.2021 IG SAP Talk | Sika's S/4 Journey17
Why When How
SAP landscape identified as core
digital platform of Sika – very
important to be ready to innovate
Reduce impact on global ERP Rollout
plan – limit the risk and Business
impact (6000 User vs 9000 User)
Make the project digestible – fast time
to value
Limit change impact and training
No further innovations to current
systems – need to follow a
modernization strategy
Adequate time to convert from
compatibility mode to equivalent
S/4HANA solution – back to standard
Leverage existing Sika Template
Solutions, access historical data
Start the transformation to the digital
core, automate business processes –
benefit from SAP digital journey
Have the matter of choice in the
selection of project partners
Explore new functionality after
migration – limit the scope to a
technical conversion
Hybrid architecture, composable
systems – become faster, agile as
innovation is accelerating
War of talents – be attractive as
employer
Ability to manage rollouts, other
projects and change requests in
parallel – limited freeze
Digital Core Early Mover System Conversion
S/4 HANA CONVERSION
FIGURES AT GLANCE
18.11.2021 IG SAP Talk | Sika's S/4 Journey18
25’000+ ADAPTED OBJECTS DURING THE CUSTOM
CODE CONVERSION
2 POC CONVERSIONS
18INPLACE / DOWNTIME OPTIMIZED
CONVERSIONS
2000+ PO CHANNELS / INTERFACES
3100+ OSS NOTES S/4HANA IMPLEMENTED BY SIS
CONSULTANTS
1000+ ACTIVITIES IN THE CUTOVER LIST
46 HOURSBUSINESS DOWNTIME DURING THE GOLIVE
WEEKEND
280+ OPERATIONAL CHANGE REQUESTS
REALIZED IN PARALLEL
3100+ INCIDENTS AND SERVICE REQUESTS IN
PARALLEL
8 SAP ROLLOUTS IN PARALLEL
SAPLEAD IMPLEMENTATION PARTNER
10EXTERNAL CONSULTING PARTNERS
6000 DAYS JOINT EFFORT INCL. SIS TEAM
25’000+ TEST CASES EXECUTED
1000+ BUSINESS TESTERS AROUND THE GLOBE
INVOLVED
2.7 TB NETDATA BASE SIZE PRODUCTIVE ERP SYSTEM
2183BATCHJOBS MIGRATED DURING THE S/4
CONVERSION PROJECT
60+ PROCESS CHANGES (SIMPLIFICATION
ITEMS) IMPLEMENTED
50+ OWN DEVELOPED SOLUTIONS BUILT FROM
SCRATCH
SAP Business Systems
SAP LANDSCAPE @SIKA – HIGHLY INTEGRATED
ILLUSTRATIVE
18.11.2021 IG SAP Talk | Sika's S/4 Journey
Supporting Systems
Fiori Launchpad
Learning Hub
S/4HANA Core
FI/CO STP
PM QTC
MM WM
MDGPP-PI
PPDS EHS
19
SAP ByD
FI STP
QM QTC
PP
4-TierS/4HANA ERP
Landscape
58 Company
Codes
40 Countries
250 Plants
+6’500 Users
SuccessFactorsEmployee
Central
Learning
Management
Succession
ManagementCompensation
Variable PayPerformance
Management
Onboarding
Solution
ManagerSolution
Documentation
Ticket Management
Change Management
Transport
Management
SAP BTP
Integration Suite
Identity Authentication
Services
Transport
Management
KYMA
Adobe document
Services
SAP PO
SLD
Cloud
Connector
System
Implementation
Running System
NON-SAP
Prod./WHS
Applications
Galileo
TIG
XAPI
Prologistics
Financial
Applications
DNB
Cortera
Covline
Salesforce
Vertex
3rd party WHS
Extension Suite
Cloud
Satellites
IBP Leonardo IT
ConcurAnalytics
Cloud
Ariba DMC
On-Premise
Satellites
HR TM
GTS
MII LES
BI
EWM
Hybris
eShop
GRC
VIM QM
nMain phases S/4
conversion project
Oct
2019
Nov
2019
Dec
2019
Jan
2020
Feb
2020
Mar
2020
Apr
2020
May
2020
Jun
2020
Jul
2020
Aug
2020
Sep
2020
Oct
2020
Nov
2020
Dec
2020
Jan
2021
Feb
2021
Mar
2021
Apr
2021
May
2021
Cu
rre
nt
Liv
e E
CC
17-Apr
Refresh
AEI/AEQ
S/4
PO
C
AEP S/4HANA POCConversion
Prepare
AEQ ECC 6.0 EHP8
New landscapeAEQ S/4HANA
IPC AED S/4HANA AED AEQ AEP AEI AES all on S/4HANA
Defined satellites connected
All business-critical satellites connected All satellites connected
Ne
w S
/4 l
an
dsc
ap
e
Realization
Conversion consists of 2 phases1
POC conversion
Delta training
Production conversion
to S/4POC and sandbox conversions
Project
Preparation
Alliance landscape
AED AES AEI AEQ AEP Satellites Current ECC Landscape on HANA DB
Guiding principle: Constantly changing landscape – Business process improvement projects / rollouts / application maintenance – limited freeze during S/4HANA GoLive
DoC
IPC
Downtime optimized conversion
In place conversion
Business:
Proc. tests 1
2 3
SIS:
Proc. tests
Business:
Retests
SIS:
New CC
Delta test
Business:
New CC
Delta test
Te
sts
DoC
DoC
Go Live
April 18
Project
development
stop
Test landscape business Final conversion
AEP ECC copy for Data Correction
Su
pp
ort
Sy
ste
ms
Technical Conversions:
DoC & IPC
Technical
Conversions
IG SAP Talk | Sika's S/4 Journey18.11.2021
S/4HANA PROJECT PLANNING
DIFFERENT LAYERS
20
TEST MANAGEMENT
JOINT-EFFORT BUSINESS ORGANIZATION AND IT
21
SUCCESS
Test LandscapeSept – Nov 2020
914 SIS Tickets
14’768 Business Tests
1’717 SIS Process Tests
Testers - Globally Distributed Team
58 company codes in 40+ countries
1000+ Business & Consultants & SIS
201 SAP OSS Tickets
Final Conversion Delta TestsMid Feb – End Mar 2021
383 SIS Tickets
6’914 Business Tests
1’738 SIS Process Tests
93 SAP OSS Tickets
18.11.2021 IG SAP Talk | Sika's S/4 Journey
FINAL PRODUCTIVE CONVERSION APRIL 2021
18.11.2021 IG SAP Talk | Sika's S/4 Journey DoCDowntime optimized
conversionIncreased system sizing
Cu
rre
nt
liv
e l
an
dsc
ap
e
AE
PE
CC
Conversion transports
from AED dark green
AE
PE
CC
AE
PE
CCSatellites reassigned
AEQ AEP S/4 dark greenGo Live
sapaep.sika.com
DoC
Activation triggers
Fr, Apr-09, 09:00
AE
PS
/4
No changes of critical master data in finance
Workbench lock and no import of transports at all
to AEPImport of noncritical customizing to AEP grey possible, no technical restrictions for business
No import of critical customizing to AEP grey, special check of transport, special approval
No postings to previous periods
Import of “non-critical objects”
and workbench objects
GoLive
procedure
Business
downtime
FI-AA postings restricted
Import of “non-critical objects”
and workbench objects
Sa
tell
ite
s
Satellites assigned to
AEQ AEP ECC grey
Last import
of “non-critical objects”
and workbench objects
22
HARD SYSTEM FREEZEPHASE OF LIMITED CHANGES
Extract from cutover plan – 1000 activity tasks
CUTOVER PROCEDURE DURING UPTIME AND BLACKOUT PERIOD
TEAMS INVOLVED FROM EMEA AMERICAS APAC – BUSINESS + IT
18.11.2021 IG SAP Talk | Sika's S/4 Journey23
System upgrade plus
post conversion
So, Apr 18 05:00Fr, Apr 16
18:00Sa, Apr 17 3:15
System
closing
System
tests
So, Apr 18 19:00
GoLive
Thu, Apr 01 18:00 check
readiness to start final
conversion
… until Thu, Apr 08 17:00
upgrade pre-processing tasks
Fri, Apr 09 09:00
activation trigger
…. until Thu, Apr 16 24:00 SUM upgrade during uptime
phase
Start conversion
during uptime
So, Apr 18 21:45
Sun 05:00 system activation tasks,
reassign interfaces
Sun 06:00 reversible tests
Consulting teams
Sun 10:30 reversible tests
Business users
Sun 14:30 AEP live release
Sun 15:00 release all
interfacesSun 17:00 NON-reversible
Business tests
Fri 18:00 closure EMEA/APAC
satellites
Fri 24:00 shutdown AEP and
closure activities – all teamsSat 01:15 closure FIN team
Sat 01:30 pre-conversion audit
reporting LVTF, closure activities
FIN team
Sat 03:00 Closure activities SAP
Basis
Sat 03:15 start SUM
downtime Sat 04:00 FIN delta conversion &
migration
Sat 05:30 main import 26.000 OSS
notes / XPRA
Sat 13:30 SUM Post phase
Sat 20:00 Upgrade phase
finished – start of activationSun 00:30 activation FIN
Sun 02:00 after-conversion audit
reporting LVTF
Sun 19:00 GoLive approval and agree on high priority issues
for immediate fixing
Sun 21:45 release all users on all
systems and activate all batch
jobs
Business uptimeBusiness downtime Fri 24:00 – Sun 21:45Business uptime
Point of NO-
return
Milestone: closure of all
systems finished Sat 03:15
Milestone: functional teams
start activation Sun 04:15
Milestone: release for GoLive
AEP Sun 19:00
Milestone: release all Users on
all systems Sun 21:45
BEING LIVE ON S/4 – SO WHAT´S NEXT
GET THE MOST OUT OF THE PLATFORM
18.11.2021 IG SAP Talk | Sika's S/4 Journey24
Keep the system in shape
Stable but flexible and clean Core
Simplification with principle of ONE
Upgrade frequently to increase usage of standard by offering innovation
Drive the usage of the system
Investigate if user workaround inefficiencies and remedy
Increase efficiency based on End2End process design
Foster the pace of innovation
Increased user productivity with embedded analytics, new user experience (Fiori, Mobile, Speech,….)
Automation with Machine Learning, prediction, intelligent Robotic Process Automation
Cloud first – but not only – inclusive ecosystem of Apps, Services and Solutions
Organizational transformation – global operations
Hybrid Architecture
Security
Near-zero downtime
Covid pandemic started already in an early project phase – virtual teams and globally distributed teams,
difficult home office circumstances, required increased effort in information and team collaboration
No landscape freeze – ongoing system extensions, Rollouts and Projects – strict Governance of parallel
system changes – all had to be included in the final delta test phase
Functional gaps in S/4HANA – high number of SAP OSS tickets
Functional impact was higher than expected – even a technical S/4 conversion goes beyond a classical
upgrade project
Missing localizations for LATAM (ACR) –additional licenses were required
Downtime optimized conversion – technical highly complex
Global test management – very high effort for the Business organization within a given short time
System landscape planning – incorporating learnings
Add-Ons – upgrade beforehand required and complex adaption to the new S/4HANA software
LSMW replacement – due to Business Partner concept, new concepts for data loads / updates to be
evaluated
Understanding of the new data model – S/4 is a new software!
SOME OF OUR KEY CHALLENGES
25 18.11.2021 IG SAP Talk | Sika's S/4 Journey
INGREDIENTS FOR S/4HANA CONVERSION PROJECT SUCCESS
Create landscape diagrams for each conversion cycle – including the connectivity to the
satellite systems and transports – assure architectural due diligence
Start as early as possible with cutover plan preparation for the test system conversion cycles
– must become perfect by the time of production conversion
IG SAP Talk | Sika's S/4 Journey18.11.202126
Select the implementation partners that suit best – elaborate the right team composition
Build up your team’s skill – Business Team and Functional Consultants
Make sure that the Development Team fully understands the new software development
concepts and technologies
Transparency
in both
functional and
technical
architecture is
key
Make sure that there is enough focus on pertinent hardware planning and performance
testing
Evaluate und use the adequate tools for testing, custom code correction
Reassess and clean up the custom code – manage your RICEFWS
Conversion test cycles are the backbone of the project
Verify the simplification items – close attention to the ones requiring a business decision or a
preparation project
Check the compatibility of the add-ons in advance and decide how to deal with each before
the conversion – whether it can be kept or uninstalled