SAP S/4 HANA upgrades are about process optimization - how CENIBRA used ARIS to map a successful global project

I've bemoaned the lost ERP art of process expertise. But I also encouraged readers to take another look: process management tools have evolved. Today,  process mining and analysis tools can make the difference process geeks (like me) always hoped they would.

Recently, I got another proof point, via a fascinating SAP S/4HANA upgrade at Brazilian-based CENIBRA, the world's largest producer of bleached short-fiber eucalyptus pulp (a key ingredient in paper and cardboard products).

CENIBRA's massive S/4HANA go-live would not have been possible without the instrumental role of process analysis - in this case, via ARIS from Software AG.

What about the S/4HANA business case?

Via video chat, I got the story from Ronaldo Neves Ribeiro, CIO, Celulose Nipo-Brasileira S.A. (CENIBRA). Start with the S/4HANA business case. In this economy, it's no simple thing to get the green light for a huge, multi-year endeavor like this one, involving 18 parallel projects.

I won't lie to you: I don't like to hear about S/4HANA projects driven by SAP's end-of-maintenance deadlines on older releases. I believe customers need a full business case to ensure a good S/4HANA result, not just end-of-maintenance. Good news - Ribeiro's team clearly had that. Motivating factors for the S/4HANA move included:

• Establish SAP standards across CENIBRA and CNBLog (CENIBRA's logistics arm), to save time and money
• Process clarity, to ensure supply chain management accuracy in a complex market
• The need to establish a single source of data truth
• The need for greater alignment between business and IT
• Demand for control and security - for CENIBRA's mission-critical forestry process cycle

A promising list - and it doesn't end there. In his presentation, Ribeiro told me that CENIBRA's SAP server infrastructure was obsolete - "Its update guarantees more performance for CENIBRA's ERP systems."  Strong S/4HANA business case? Check that box. But when your company has an annual production capacity of 1.2 million tons, and exports 98% of its pulp to Asia, Europe and North America, you better get your project right.

A global SAP project faces a pandemic twist

This was a multi-year push: 2017/2018 was about building the business case and getting board/shareholder approval. Ribeiro's team also used SAP Enterprise Support Services to determine the project's technical scope, including the customization volume. 2019 moved into the discovery phase, covering everything from user training to the initial ARIS process maps. In May of 2021, the entire project went live. As Ribeiro told me:

I'd like to show you the benefits we achieved during this project: we improved our processing time after the project; we implemented mobility for SAP - we didn't have this in the past. We contributed to our future sustainability, because we have seen automation and performance improvements.

Ribeiro's team faced a huge pandemic curveball. As he told me:

We did this project completely remotely - it was a huge challenge.  I believe it was the first global S/4HANA project in the world that was completely implemented using the home office.

No surprise - Microsoft Teams sessions got heavy use. Ribeiro's team did something I've never heard of before. They switched midstream from a waterfall to an agile methodology:

This amount of projects is very difficult to manage in the home office; it was our first experience managing a project completely using remotes. We had to change our way to manage this project. The methodology was waterfall; we needed to change to Agile during the project.  I was never [physically] present with the manager of IBM, the integrator that supported us...  We have a lot of lessons learned that we can share.

Process mapping with ARIS - into S/4HANA

But how did process analysis factor in? ARIS was integral from the beginning of the project. Ribeiro explains:

In 2018, we did our "discover" phase...  That's the point we need to discuss here, because this point is very important to us. It was necessary to redraw our process using the [ARIS tool]. Software AG supported us here, to do the new process drawing of our complete process -  every process that's on SAP now, along with the new version... We had the support of SAP and IBM too.

And why ARIS? Because it was the only tool for the job:

With other tools, it was impossible to connect our various SAP systems - it was like our data was walled off. Now, with ARIS, we have access to all our tools and systems and can use that clear view to standardize and improve our process landscape.

CENIBRA has now mapped and managed the entire forest process cycle within ARIS. 455 process flows have been designed across IT and corporate governance. 140 users are involved in process design and improvement. A team of analysts continues to focus on process improvement and infrastructure management.

On ROI - and the evolution of automation

You know me - I'm always looking for project ROI. I've already covered some results, but there is more. Processing times for a number of core areas have reduced significantly, including major reductions in accounting close and payroll processing.

What really struck me was how Ribeiro's team is modeling their future state from an SAP roadmap, "The evolution of intelligent automation in the S/4HANA cloud." The whole point of SAP's approach here? Help customers deal with converging pressure points, from sourcing the best possible suppliers to shorter product lead times.

SAP charts out the evolution of automation, from digital to intelligent to autonomous. "Autonomous automation" is an ambitious state. It's not something that can happen in a year or two - or even three. But it's good to look beyond internal benchmarks (Note: I don't have permission to share this slide at presstime, but if I can add it later as a reference, I will).

The wrap - on cloud, sustainability and lessons learned

It's worth noting: this was not an S/4HANA cloud project. Ribeiro told me they looked at cloud options, but at the time of project launch in 2019, the cloud connectivity in their region was not reliable enough. However, cloud-based operations is definitely part of CENIBRA's future state. Work with ARIS continues as well - the next step? Rolling out a business process platform across all other systems. Digitalizing the company's remaining manual processes is already underway.

Looking ahead, meeting sustainability commitments will be a core ARIS use case. For CENIBRA, responsible supply chain management is everything. Efficient logistics can eliminate waste, but it's process transparency that makes sustainability possible, via guidelines for ethical suppliers - and ESG compliance. That includes complete traceability of all the wood used in CENIBRA's pulp production. A central process repository makes KPI monitoring of these sustainability goals a reality. Looking back, Ribeiro says that training and user education was key:

We did some assessments with SAP that were very important to us, because the assessments showed us the direction. Then we could train the key users and analysts. SAP consulting supported us throughout the project.

Lessons learned? Plenty, some of them surprising:

• Remote meetings were surprisingly effective - no limits on physical resources, or the number of people in a meeting, increased meeting productivity.
• Time-consuming travel time was converted into working hours.
• SAP Solution Manager Focused Build proved valuable for governance.
• Agile methodology in the realization phase proved successful.
• Daily project view management for users was important - in this case, via Power BI.
• Daily performance monitoring and follow up was the right discipline.

But to make daily monitoring effective, the process maps needed to be in place:

It's very important - update the process design beforehand. That's where Software AG supported us - it was very important to have that support.

Weekly meetings with SAP, IBM, and CENIBRA also proved important. Ribeiro acknowledged: it's not easy to handle design and profiling activities remotely. Building trust is more challenging remotely as well, when you cannot be face to face. But CENIBRA pulled it off - and has the results to show for it. Where this ambitious project goes next may be the most interesting chapter of all.