According to Winfried Winterstein, Team leader SAP Technology, Döhler has 25 years' experience working with SAP technologies and in the last two years has embarked on a modernization program that will allow the company to develop a more service centered business model:
We know what is going into our containers from the farm all the way to the consumer so we have full traceability. For example, when producing products that are halal or kosher we have to prove that. So when something is halal, we can show the machine used to make the product is clean and complies with halal requirements.
In addition, we are now developing capabilities so that we can for instance manage our customers' inventory for them. This gives us opportunities to develop new services where we offer better service or perhaps make a charge, depending on the need.
This will come as a surprise to the wider world but according to Winterstein:
SAP is a lot further on this road for things like blockchain and so on than you imagine. They are beyond that solid backbone technology for which we all know SAP. You still need that single point of truth, quality of data, integrated processes and so forth you get with an SAP backbone.
I find the German technology market fascinating and especially that pertaining to SAP for a variety of reasons. It seems to me that German companies of all types and sizes tend to be very thoughtful in their approach to technology but that when they decide to make a change, it tends to happen very quickly. Döhler confirms that point of view saying that two years ago, there was no cloud solution in the company (and very little as such from SAP directly.) Winterstein explained that:
The mindset of the owner has changed and while they're not necessarily looking for cloud as such, some solutions are not available for on-premise like SuccessFactors for recruiting but also SAP Cloud Platform for innovation. For example, we have a Cash app project for matching payments in S/4 and asset management.
According to Döhler, these changes are not only being driven by the need for innovation in their industry but also by the desire of customers to improve processes. That, in turn, represents significant challenges in the development of appropriate endpoints between Döhler and its customers. The technology needed to ensure end-to-end governance and harmonization of security models, for instance, has a way to go.
And since it is relatively early in the SAP transformation journey for Döhler, there is a good amount of 'wait and see,'
We want to see how far we can go in using our existing knowledge in the SAP Cloud Platform but yes, we fully intend to do our extensions there rather than in the backend. Now that we have ABAP in the cloud the options are better for us.
Even so, Döhler finds that it is having to learn new topics such as container strategies with Kubbernetes because it is 'mandatory' with the SAP Data Hub. That also means heavy investment in infrastructure.
I was curious to understand how Doehler manages so many changes in an environment that has been stable:
We see that if you don't expand your skills then in five years you will be lost. For example, the programming model for ABAP in the cloud is different so you have to learn - it's not copy paste. Sometimes you have to push the people because this is not in their comfort zone.
I then asked about moving to the cloud generally. Döhler says that it has 3.9 million lines of code and while some code is deprecated - an estimate puts this at perhaps a million lines of code - developers are loathe to delete code. Despite this apparently incongruent situation, the company wants to invest in innovation rather than housekeeping. It is able to accomplish this because it has found ways to manage upgrades such that new functionality can be brought to their SAP landscape in as little as three months with a goal of eight weeks in 2019. That's lightning speed in SAP terms. Asked about advice to others, Winterstein said:
Move to S/4 as soon as possible. The gap between the old and new is growing. There are functions like the new discount management that can be done before the upgrade. Also, the project size is decreasing. It is still big enough to warrant a proper upgrade approach but it is getting much easier and faster in on-prem. But don't put too much effort into your ECC because you still have to make changes when you go to S/4.
Döhler has managed to get the technical upgrade time down to 34 hours which in practical terms means it can be accomplished at a weekend. That is a big change from past implementations which encourages the company to spend more on IT for innovation.
It strikes me that companies like Döhler when faced with multiple technical challenges but a long history of a particular supplier, are much more resilient and capable of change than we might imagine. In this case, Doehler is taking a wholly pragmatic approach that refuses to throw out technology with which it is comfortable and which meets its business needs while still investing in its future for which the last word goes to Winterstein:
Our CEO wants us to be the digital leader but recognizes this can't happen overnight.