Can ERP drive a transformation agenda, even in pandemic times? Inside FMC Corporation's global SAP S/4HANA move

Profile picture for user jreed By Jon Reed March 29, 2021 Audio version
Summary:
Pull off a global ERP go-live amidst the remote work imperative? No small achievement. Now tie that to an ambitious transformation agenda. That was the predicament - and opportunity - faced by Thaisa Hugenneyer and her team at FMC.

Thaisa Hugenneyer of FMC
(Thaisa Hugenneyer, FMC, talking shop)

When the pandemic hit, IT projects hit the brakes. Yes, some surged ahead - usually involving cloud, or remote collaboration. One kind of IT project, however, definitely slowed for a while: large-scale ERP projects.

But some determined teams pressed ahead. One such team can be found at FMC Corporation - an agricultural sciences company. FMC was in the midst of an ambitious global S/4HANA rollout when the pandemic hit.

How did they pull it off? That's one of the questions I had for Thaisa Hugenneyer, Vice President, Procurement and Global Facilities at FMC Corporation. FMC's corporate history goes back way before ERP was a thing - as in 1883. Headquartered in Philadelphia, PA. FMC Corporation now has over 6,500 employees globally. About half of them use the SAP S/4HANA system. That's enough pressure for Hugenneyer's team - now add the pandemic's remote work imperative.

But this story goes back further, to FMC's corporate transformation. As Hugenneyer told me:

I've been with FMC for ten years - most of those years in procurement. About three years ago, we started the S/4HANA implementation. It was a greenfield project, truly a transformational project for FMC.

Hugenneyer's role? She serves as the business lead - the director responsible for the project. That also means interfacing with the IT team, to ensure project goals are achieved. Hugenneyer continues:

This all started after we completed the initial vision for FMC -  becoming a true agricultural science company. If you look at our history, we had a much more diverse portfolio of products. Over the years, we divested some businesses; we acquired others. Three years ago, we became the ag sciences company, achieving that initial vision.

Force-fitting doesn't work - "We found ourselves with multiple ERP systems"

Yes, the initial vision was reached, but there was a problem. The internal systems weren't primed to support it:

We found ourselves with multiple ERP systems, and a very complex technology landscape, to be honest. We were trying to run one business with this complex environment. It just felt like it was the right time to make the investments into this new platform. So that's how it all got started.

When you acquire and grow, siloed systems hamper productivity:

We were trying to incorporate new companies into our infrastructure. As you can imagine, that leads to a lot of force-fitting of how you run business processes into what we had, which wasn't necessarily modern and didn't always fit. That led to many activities being done offline, and then just input in the system after the fact.

It all started with S/4HANA Central Finance in October 2018, later adding BPC-RTC, and moving into waves of global S/4HANA rollouts - the last of which went live successfully in November of 2020 - adding 12 more countries, 1000 more users, four new languages, and 227 new locations.

However,

One milestone caught my eye: release three, known as "Big Bang Pilot," Brazil. What was the rationale there? Hugenneyer:

We chose our largest and most complex country as our pilot. We wanted the pilots to be meaningful, and bring true lessons learned. Rollout four was the DuPont products that we acquired, which was global. And five was the FMC legacy business, which was also global - that was the November 2020 go-live.

S/4HANA lessons - "This was truly a transformational program"

Looking back, what has Hugenneyer and team learned?

It was a journey - a very intense journey. We talk about SAP implementations as a system implementation, but actually that was the easier part of it, although there were some complexities with that. 

This was truly a transformational program for FMC. The technology functions as an enabler for new ways of working. We changed our processes; we standardized them. At the same time, we also changed our operating model for the functions. So for example, we moved towards more center-led strategies, with centralized pieces. So the core transactional processes are now centralized, with groups in Manila, for example.

So if you put it all together, the operating model change, the change on how you do the day-to-day work, the change on how the data comes out of the system, all of the institutional knowledge that we had built over time - how to interpret our data, our information; all that changed. All of a sudden, the data we're looking at is very different than before. We had to go through our learning period, and should be able to understand it and explain it. On top of that, all of the challenges on the technology, which is not necessarily mature in all of the areas, made it a very complex process, and truly a transformational program.

I'm pretty cynical about technical upgrades - a transformational project is more compelling. But what does "transformation" mean in this context? Hugenneyer says it starts with process standardization:

It was really the concept of driving this one global standard process. So if you look at, process by process, how we run the company, maybe in the past, each country performed it differently, with a different flavor. Some did it in the system, some outside of the system - it was all different.

Getting employees to embrace a standard global process is no small feat:

We had over 300 processes under scope. Thousands of employees had to basically forget how they did it before, and really learn how to do it now.

But the transformation doesn't stop there: it's about pulling insights from better data.

The second bigger biggest piece is around insights. In the past, we spent a lot of time consolidating aggregating data, and trying to explain the past. Now we can understand the past, but quickly shift to looking to the future, and moving more towards future-oriented conversations, which is a big piece.

Hugenneyer says there's one more key: using S/4HANA as a platform for "continuous improvement."

The third big one is: now that we have the foundation in place, it's easier for us to come in with continuous improvement programs, such as automation and robotics, and bring some more meaningful benefits. Now that it's all standardized, there's a whole bunch of new things we can do from a technology perspective that was not possible before.

The wrap - it's not about change management; it's about business readiness

One notable detail: this was a private cloud S/4HANA project, running on the Dell Virtustream cloud. Perhaps it's a credit to Virtustream that this topic didn't even come up in our discussion. I'm sure FMC's IT team would have more to add, but as for why FMC went with the private cloud, the reasons are what you'd expect. FMC has seen cloud adoption trending internally for several reasons, including agility, scalability, and Opex versus Capex. All that adds up to the private cloud S/4HANA choice - where you can preserve your on-premise S/4HANA configuration options, while achieving some of the cloud's benefits.

I asked Hugenneyer: what advice do you have for other customers taking on a monster remote ERP project? One vital ingredient remains: you need a stellar team  ("recruit the right people"). In FMC's case, their team already had strong relationships, prior to the remote shift: "It takes a special team to survive a program like this," she says. Hugenneyer adds two more keys:

1. Do your technical due diligence - make sure the technology will serve your business needs. ("There's no such thing as plug and play," she warns).

2. It's not about managing change or training - it's about the journey. That requires a "business readiness" approach, not a change management approach. Interesting. Hugenneyer:

That's my biggest learning: we should start with a business readiness mindset. The readiness allowed, at least in my experience, for the right conversations to be put on the table. So that we could gain the level of confidence  we needed: that we were not going to disrupt the business.

So does Hugenneyer think all the transformation goals have been realized? Not yet. As is common for projects of this scope, the biggest benefits must be extracted after some degree of normalization on the new platform has occurred. As she puts it:

We're on our way there... So far, we have been very much focused on making sure that the system works, the pipes are clean and the initial technical issues are solved... Maybe later in the year, we'll start shifting more to run and maintain, with a continuous improvement mindset. But there's very good early indications on the table right now