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Upgrades are never a walk in the park. They usually come with costs, uncertainties and enough business disruption for most organizations to avoid the pain if they can.
An upgrade to SAP S/4HANA appears to be a painful exercise for many SAP shops, as they fear the complexity of the job and are skeptical of the return on investment. This may be a reason why only small minorities of customers have taken the plunge.
This is not the case with every company, however, as evidenced by the experience of Hillarys Blinds, which completed an upgrade to S/4HANA in record time. A longtime SAP shop with several upgrades under its belt, Hillarys used the Panaya CloudQuality Suite, a cloud-based testing and validation tool, to test, scope and execute the on-premises SAP S/4HANA upgrade in just six months, rather than the three years that was projected.
Hillarys is one of the U.K.'s leading vendors of made-to-measure window treatments, including blinds, curtains and shutters. Founded in 1971 by Tony Hillary in his garage, Hillarys now generates a turnover of about £170 million. This is all done without storefronts or showrooms, as Hillarys makes all of its products to order for each individual customer. A nationwide network of sales advisers travel to customers' homes to sell and fit products, which are manufactured and shipped to the sales adviser, who then installs the product in the customer's home.
Managing a complex business model
This has been a successful model, but it has inherent business management challenges, according to Julian Bond, Hillarys' head of information, communications and technology. Hillarys makes up to 30,000 products each week, no two of which are the same, and the products don't have SKUs.
"The challenge of managing all that is part of what brought us to SAP in the first place," Bond said. "We implemented SAP in 1999, and even then it was one of the few standard, off-the-shelf products that could cope with the complexity that every product [we] make each week is unique. It could help us cope with fairly short turnarounds on blinds that are made to order for every customer order we receive."
Hillarys implemented SAP R/3 in 1999 and steadily upgraded or added new applications over time. They implemented SAP CRM in 2004, upgraded to ERP Central Component (ECC) 5 in 2006, implemented SAP Business Warehouse and reimplemented CRM with CRM 7.0 in 2010, and added SAP's mobile platform in 2014, Bond said. So they were no stranger to upgrades and adding new technology, but they were not chomping at the bit to move to SAP S/4HANA (Business Suite for HANA).
"Like most SAP businesses, we don't relish and jump at doing an upgrade any quicker than [we] have to, but for us, the noose was closing around our neck in terms of ECC 5," Bond said. "We'd come to the end of enterprise support and were starting to get locked out of some of the newer SAP tool sets that were coming through, like Fiori or all of the new technologies you just can't do with ECC 5."
Hillarys knew the upgrade was inevitable, but the company was wary of the overall project cost and the amount of business disruption that it would entail. Added to this was the fact that, as a retailer, Hillarys had a very limited window of opportunity to complete an upgrade during its slowest time period, between Christmas and New Year's.
Prioritizing functions shortens upgrade time
This is where the Panaya CloudQuality Suite came in to help Hillarys get the job done in a vastly shortened time frame that would not have been possible without it.
"The business doesn't relish an upgrade, and it's hardly excited by that prospect because it's going to cost a lot of money, it's going to take a lot of time, a lot of business resources and opportunity costs in terms of what else we could be doing," Bond said. "It's not really a very compelling business case, and that's where the Panaya tool was really a part of what helped transform us this time around."
One of the functions performed by the Panaya CloudQuality Suite is an analysis of an SAP ERP system's program code, giving you a full picture of what's most useful and what's not. This helps speed an upgrade by focusing on upgrading the most important functions and setting aside those that are used the least. For Hillarys, this was vital because they had developed a large amount of complex custom code over the years.
"It gives you a very objective view of ... what state you're in with your bespoke code [custom code]," Bond explained. "Our bespoke code had grown up from 1999 all the way through to 2016, and it's very difficult to benchmark that -- to say this is where you are compared to other people, these are the areas where you are complex, these are the areas in which you are very simple -- so that was very good."
This allowed Hillarys to identify and rank functions in terms of priority for testing, which it did by taking the transactions done on the system in a given period and determining which ones were used the most and what impact they had on the business processes. Something that was done once a day had a high impact and needed to be tested accordingly, while something that was done once a year might not need testing. Fewer tests meant a faster upgrade, but Bond maintained one of the real values was that it saved a great deal of resources and caused less business disruption.
"If you extrapolate and say that this is how much testing was needed, you could say it would have taken years because, if everybody had done six times as many tests, it would have taken years to do," he said. "But the truth is we would just have had to put far more resources [into the upgrade] to have done it in that window that we did because it would have [caused] us much more interruption, it would have cost us much more hard cash, so I'm not sure if this is a case where it saved us elapsed time. It certainly saved us cost, risk and disruption."
As it was, the upgrade project began in September 2015, and SAP S/4HANA went live in February 2016, which was actually two months longer than anticipated due to a few technical glitches in the SAP code.
SAP S/4HANA speed astonishes
The upgrade to S/4HANA also paid off in terms of speed, with significant impact on business process improvements, particularly with CRM, Bond said.
"The SAP CRM system is not known for being a swift beast, and there's only so much you can do no matter how much hardware you throw at it, but, clearly, putting it onto the HANA database platform has made a phenomenal difference," he said. "In the old days, you could almost have finished the call with a customer by the time you'd managed to bring their details up on the screen. It was that bad at times. There aren't too many times when you've done an upgrade and your internal customers are wowed by that, but this would have been one of those occasions. They were just astonished with the speed difference of the upgrade."
This upgrade has enabled Hillarys to re-embed CRM into the business processes, a critical benefit for a business that relies so heavily on close customer contact. It has also allowed it to run the business more efficiently, getting jobs completed faster and doing it without having to add more staff, even in the peak periods, Bond said.
Finance functions in ECC have also benefited from the boost in speed. "A monthly tax report went from taking 20 to 30 minutes to literally within a minute," Bond said. "Some of the longer running jobs that we used to run overnight, we can now do multiple jobs in a day, whereas before we had last night's snapshot and had to live with that until we got another snapshot tonight. Now we've got a chance to make business decisions throughout the day because we can afford to run them far more frequently."
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