Laing O’Rourke upgrades to SAP S/4HANA and has sights set on cloud

Laing O'Rourke has been involved in the construction of some of the world's most famous sites - including Ascot Racecourse, Heathrow Terminal 5 and Atlantis, the Palm in Dubai. Based in the UK, the multinational engineering and construction company specialises in off-site manufacturing, building modular units that are then delivered to customers. 

In recent years Laing O'Rourke found that its ERP system - SAP ECC - was holding it back, due to a lack of adoption, low integration, and was stifling growth. In particular, the company was facing challenges with its IoT plans, where the system didn't integrate effectively with monitoring tools off-site, where tracking manufacturing assets is crucial.

As such, the company sought to ‘future proof' its IT roadmap and upgrade to a more modern ERP platform - opting for SAP S/4HANA (on premise) - in order to get systems i place that could support Laing O'Rourke's business processes. 

As Sue Parsons, IT Manufacturing Systems Manager at Laing O'Rourke, explained at the recent UK & Ireland SAP User Group conference: 

The S/4 system has an in-memory database, which means we can do everything in real-time and not have to rely on background processes. It gives us better user experiences, because we can use the Fiori mobile enabled apps. Also it's about staying in support, the older version wasn't going to carry on. But it's mostly about being fit for the future. 

However, Parsons was wary of the leap from ECC to S/4HANA, and was initially planning to upgrade to Business Suite on HANA, as she perceived this to be less risk and more of a "technical upgrade". She said: 

I've only got a small team and we have to keep the business going. When we were doing the project itself we had to run in parallel sometimes on the old system to get the functionality live for the users, but then we had to develop it again in S/4 to be able to make sure it was going to be there. I was set on keeping it low risk for the business. 

The reason Laing O'Rourke ultimately decided to go with S/4 in the end, using implementation partner Centiq, was down to SAP running a proof of concept for the company in its own data center, to highlight the benefits. Parsons explained: 

I had an account manager at the time who was convinced that S/4 was the right thing to do. SAP had low adoption at the start, so they were desperate to get customers on S/4, so they did a proof of concept for me. 

They took a copy of our database and put it on their servers in Ireland. They upgraded it and included a couple of people from my team in that process, so that we could touch and feel how that upgrade was going to be. 

The other good thing that came out of it was that SAP confirmed that a brownfield migration would work, because our data was clean enough. And at the end of it I got to play back to my business the S/4 version, with the Fiori apps, which have the new look and feel, so I got their acceptance. 

They then knew it wasn't going to impact the business and it wasn't going to be a risk. 

Benefits and future cloud project

Parsons said that the main benefit for Laing O'Rourke in upgrading to S/4 has been the updated mobile capabilities, which are now essential for the company's users, which work across multiple sites and in varying conditions. She said: 

It's giving people the experience that they need for the role that they're doing. We've got people working outside, in yards, on cranes, in the factory, and we've got people sitting at desks, so we need to be able to give them the different options of usability. 

One of the other main things is that the factory is built with concrete blocks and we rely on WiFi. WiFi doesn't like concrete blocks and it fails a lot. So now that we've given them 4G, we've got live data all the time now. That was one of the reasons they used to drop off using the app.

Parsons said that Laing O'Rourke went live in Easter last year, during the first lockdown in the UK. However, despite the unusual conditions, the upgrade itself only took three to four months. The main barrier was that the company was also moving data centers at the same time. 

As mentioned previously, Laing O'Rourke is using S/4HANA on premise. The reason for this is that the cloud costings didn't work out favourably when compared to a five year lifespan for hardware. Parsons added: 

The costings just suggested it wasn't the right thing to do, because it's not a big SAP system that we've got. We've got 400 SAP users, but we're expanding the functionality into other areas of the business, such as project management. 

However, this expansion into new areas of the business and the growth of the SAP system internally is now pushing the cloud conversation into a positive direction. Parsons said: 

Cloud is probably my next project. And that's because Laing O'Rourke has identified that SAP is a platform of choice. Now we can see the potential of what we've got. The construction business has an ERP called COINS, but it isn't fit for purpose and it's not going to take the business forward. We've got SAP implemented, so we're going to roll that out. For our project sites it's going to increase the size an awful lot, so we need to be able to scale up. 

Advice 

In terms of learnings from the project, Parsons had some key advice for those grappling with the change management process when upgrading to S/4HANA. She said that other organizations should consider carefully what capabilities to expose to users, until they're used to the new system and processes. In the case of SAP, Laing O'Rourke opted to stick to the traditional UI for some users, before updating to the Fiori apps, in order to drive adoption. Parsons explained: 

One of the main things is, because I've only got a small team, change management for the business was going to be a big problem for me. So the approach I took was that I went for the GUI look and feel, because you can do that, you don't have to switch on the Fiori tiles and apps. You can do that at a later stage. I took that approach because it had less impact.

I only had to retrain 30 users on a couple of transactions, so it really was low impact. It was great because it was an anticlimax when we went live. The users went home on the Friday, came in on the Monday, and it was just business as usual. Which means we've done our job. My advice to other companies is just keep it simple. Don't go for the big things just because you're doing the upgrade, do it in phases, and then grow with it. 

We're now rolling out Enterprise Portfolio Management to a new part of the business, but that's on Fioro. So they don't get to see the old SAP. That's how I'm going to move forward for the next six to nine months, to get other people on to Fiori.