Jazz Pharmaceuticals goes SAP S/4HANA on private AWS

Profile picture for user gonzodaddy By Den Howlett December 5, 2019
Summary:
Early team building and owning the projecct paid off handsomely in this S/4HANA greenfield project - but there's more and a few surprises

jazz pharma

Spoiler alert - there is much to like about this story. 

Founded in 2003 and headquartered in Dublin, Ireland, Jazz Pharmaceuticals is a fast-growing supplier of therapies for certain chronic sleep disorders for which there are few alternatives and in the field of hematology/oncology. Jazz recently won a silver award at SAP's UKI Quality Awards in the Business Transformation Category for its greenfield S/4HANA implementation. 

At this year's UK&Ireland SAP Connect event, I sat down with John Mahon, Executive Director, IT Technical Operations & Finance, Jazz Pharmaceuticals, to discuss the firm's greenfield SAP S/4HANA project that was delivered in a breakneck 11 months across five sites. 

Jazz successfully ran its business on Microsoft AX, but the version it was using goes end of life in 2021. Jazz could have taken an upgrade path, but the company has ambitious expansion plans, which meant there were question marks over Dynamics' ability to carry Jazz forward. Taken together, Mahon says the business case was predicated mainly on managing risk while considering growth going forward. Enter SAP, Edson Consulting, which assisted in the SAP Discovery Phase and iTelligence, which conducted the implementation. Says Mahon:

SAP is a much better fit than alternatives based on multi-currency, multi-language, local regulatory requirements, and a platform for GxP requirements in pharmaceuticals. 

Standouts

There are a couple of stand out yet unusual features about this project that are worth highlighting. First, Jazz insisted that its SAP AE be part of the steering group. We view this as essential in a world where software is no longer tossed over the proverbial wall but is part of an ongoing service engagement. It is a central part of the implementation model Workday insists upon and which has served them and their customers well over the years. Equally unusual, Jazz implemented an on-premises hosted on a private AWS cloud. Who said AWS could care less about hybrid style deployments? In response to my raised eyebrow, Mahon noted that:

Jazz operates in a highly regulated environment where audits are ongoing throughout the year, apart from a short window in the July to September period. That had two effects. First, we had to go live inside that window, or we would lose the project for a year. Second, the nature of regulation, FDA, SarBox, and so on, mean that we have to operate inside a controlled data center environment. 

The relatively short cutover to go live period also meant that Jazz determined it best to replace AX processes with standard SAP order to cash, inventory management, order to order, procure to pay, and some project management processes for pharmaceuticals. In this context, Jazz doesn't think about SAP's modules - think SD, FICO, etc. but in terms of the end to end business processes. But then making switches between vendors can throw up challenges. 

We undertook a detailed and successful discovery phase where iTelligence took our existing processes and showed how they would work in an S/4 system. That gave us a level of comfort that we would not end up doing anything particularly wild. In pharma, while we operate globally, we're not running anything that is unusually complex.

I asked whether Jazz took a fixed price, fixed scope project, or T&M. In this case, Jazz went T&M but with defined scope and estimates to match.

We stuck well with the budget because it was well managed and well monitored. We worked through a deal that benefited and protected both of us.  

I also asked about the licensing model, which, as outlined above, is on-premises based. 

We looked at S/4 cloud and determined it wasn't quite mature enough for what we needed. 

Next up?

Next up for Jazz is a remediation exercise for the chart of accounts using BPC as part of an activity to remove the current AX to S/4 mapping table. Then it is on to extracting the information analytics benefits of S/4. Also, Jazz is working through the security implication of having users access the S/4 system through their own devices using Fiori apps.

While S/4HANA was the focus of our conversation, I was interested to understand the broader IT estate. Here, Mahon said that Jazz uses Workday, DocuSign, and Veeva - a specialist CRM for pharma - alongside S/4. For BI, the firm uses Tableau. That begs the question about indirect access.

We take a feed from Workday, but we don't use Workday to access SAP data. The same goes for Concur. On the indirect access front, we've bought licenses that will allow us to integrate across the solutions. 

I was also interested to understand immediate benefits given that we hear plenty of discussion around making the business case for S/4. Mahon said that Jazz is taking the lessons from this project and applying it to other projects, some of which are not IT projects.

Team well being

Team well being in these kinds of project are very important because they are often tough to get done. We have a policy of 'no casualties' by which I mean that in other projects, I've seen the 10% make a career out of their implementation experience while the additional 90% never want to do such a project again and may well leave. We didn't want that to happen because we hold to a culture where Jazz is a great place to work. We actively worked to make this project an experience that people are happy and proud of and would look back on and want to repeat. 

Jazz engaged a high-performance coach who works typically in sports environments to develop a program that addresses physical, mental, and emotional well-being. 

We had a very high level of sponsorship. So while there was a degree of cynicism at the beginning, it quickly went away as the early exercises focused on team building, which included everyone on the project, partners included. It accelerated team forming, and it helped us with management in problem-solving as the project progressed. We ended up treating issues that we had to work on together as a real partnership and not as commercial issues which we put to one side. So we all shared problems and successes. 

My take

Jazz Pharmaceuticals is a relatively small business with some 1.500 employees and contractors, approximately 950 of which touch the SAP system in one way or another but with 150 'day in/day out' users. Even so, there is always the prospect of projects going off the rails. The adopted approach, which emphasized early team building and the fact that Jazz remained in control of its plan rather than merely deferring to an SI, was also a key ingredient for bringing the project home. Similarly, a 'fit to process' approach that ensures keeping with tried and tested business processes rather than re-inventing the proverbial wheel paid off.