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Swiss technology company SFS Group implements digital future platform 2025+

06.03.2024

The globally operating Swiss industrial company SFS Group AG (13,500 employees, around CHF 2.74 billion in sales, 140 companies in 35 countries) based in Heerbrugg (canton of St. Gallen) has set itself the goal of implementing a completely new digital global solution platform in 2025 based on SAP S/4HANA.

This involves the design of digital end-2-end processes, the harmonisation of company data and the consolidation of existing systems. The project partner is cbs Corporate Business Solutions. The challenge is to reduce the complexity of corporate processes that has arisen over the last 20 years, partly due to in-house developments, and to standardise processes worldwide. The global standardisation of processes should lead to significantly higher process quality and ensure greater efficiency. With a selective transformation approach, SFS is utilising the opportunity to switch technology from ECC 6.0 to S/4 at top speed without sacrificing profitable innovations. The two existing SAP ERP system lines will be merged, enabling SFS to implement the next generation of a business solution and become a pioneer in terms of digitalisation. The overarching goal is to design a business process platform that supports the business globally and allows innovations to be utilised for new business models.

About SF

The SFS Group is a global leader in precision components and assemblies, mechanical fastening systems, quality tools and logistics systems.
SFS comprises the three segments Engineered Components, Fastening Systems and Distribution & Logistics. Its customers come from the automotive, construction, industrial manufacturing, aerospace, electronics and medical technology sectors. SFS is present in 35 countries worldwide with 140 sales and production sites and generated sales of 2.74 billion Swiss francs in the 2022 financial year with around 13,500 employees.

Global standardisation of Group processes

In recent years, the SFS Group has become significantly larger, more international and therefore more heterogeneous in its processes - both internally and across the organisation. Those responsible have therefore set themselves strategic goals to adapt the organisation and processes to the new circumstances and increase competitiveness. These include Simplifying and standardising business processes, increasing automation and ensuring process quality, combined with a significant increase in efficiency. It was clear to SFS that the R/3 system line would only be supported by SAP for a few more years and that the transformation to S/4HANA should be used to set the course. The decision was quickly made to merge the two existing SAP ERP system lines into a new, global system.

The aim was to reduce the complexity of the processes that had developed over the last 20 years and standardise them worldwide.

»We wanted to switch to the new SAP technology as quickly as possible and utilise the latest system line in order to take advantage of opportunities for future innovations at an early stage. We also realised that the suitable consulting firms on the market would not have had sufficient resources available at a later date,« explains Reto Buchli, Head of Corporate IT at SFS.

SFS decided in favour of the Selective Process and Data Transition. The decision in favour of a selective approach was based on the results of the SAP baseline analysis, a type of transformation study.

»We compared our existing processes with those of S/4HANA and carried out a fit-gap analysis. Some processes are already precisely tailored to our strategic needs. This meant that we were already very lean and competitive and very advanced in terms of digitalisation. Naturally, we wanted to transfer these processes to S/4. Conversely, there are also pain points that can be eliminated with S/4. We therefore wanted to build a new and future-orientated solution from the best processes of the old and new SAP world. The aim was to implement consistently lean and competitive processes - for the benefit of the company and its employees,« says Buchli.

Template design phase in short sprints

SFS therefore opted for a hybrid approach. »We enter the process world at a very early stage and determine the future,« says Buchli, outlining the procedure.

The project team went into prototype design at an early stage in order to have something tangible as quickly as possible. This involved building a solution in the system at an early stage, verifying it and developing a template from it. The approach combines aspects of classic waterfall project work with those of the agile working world. The preparation, proto-design, template design and template pilot rollout phases form the basic framework.

The template design phase was certainly the most agile in the project. The project team focussed on three-week sprints and developed the future Group template. One goal was to design group-wide processes. This challenging task helped to improve efficiency, quality, innovation and alignment within the organisation. Critical success factors here were agile methodology elements as well as small and heterogeneous working teams in order to remain capable of making decisions and to bring different perspectives and creativity into the process. Early prototypes made it possible to visualise, test and communicate ideas quickly and cost-effectively. Mapping the data for data migration was also important in this phase. Data mapping is a critical aspect that ensures data quality. If done incorrectly, data can become unusable when transferred to the target system. Careful data mapping is therefore crucial for the optimal utilisation of data during migrations, integrations and transformations.

In this phase, the data rail met the SFS application world. It was therefore an exciting phase, especially in preparation for the tests. Project manager Roland Tüscher: »This step was very agile simply because we were not travelling in this classic design-build-test mode, but for the first time finally end-to-end. This meant testing and verifying global business processes end-to-end and, above all, based on migrated data from the previous SAP systems. And things continued at this pace until the first go-live.«

SFS has already successfully completed these first stages. The go-live of the system for the Central Finance division as well as for the finance divisions of a further 28 companies in a total of 27 countries and the Distribution & Logistics Switzerland division went smoothly. All core processes continued to run and customers could continue to be supplied without any restrictions.

»S/4 HANA is a key project - and a successful go-live was essential for the Distribution & Logistics Switzerland division so that we can ensure delivery capability for our customers. The relevance and therefore the pressure were therefore very high. Thanks to the outstanding commitment of everyone involved in the project, the go-live went practically without a hitch. With this major step, we have laid the foundations for future successful business development,« says Iso Raunjak, member of the Group Executive Board.

In the next phase, the logistics processes of all previous SAP locations (19 countries, 37 locations) will be migrated to S/4HANA. For the project team, this also means migrating and validating 1.4 billion data records within a very short space of time.

»With this transformation, we are laying the technological foundation for the next 20 years. We will fully automate all of our processes and thereby increase our competitiveness. The aim is to establish lean, agile and future-proof business processes,« emphasises Head of IT Buchli.

»Another important point to mention is that S/4HANA opens up new opportunities for our employees to work with high and rapid data availability and modern user interfaces. This is an important added value that will make SFS more efficient and help it make significant progress,« explains Buchli.

SFS will also be able to move closer to the SAP standard. In-house programming in IT has been reduced by 30 per cent, which will lead to significantly lower time and maintenance costs in the future.

As part of the »one country, one company (OCOC)« initiative, SFS consolidated several business units in various countries, including Switzerland and Germany, to optimise the corporate structure. For the SAP organisational structures, this meant Merging company codes, reassigning or splitting plants and realigning and merging sales areas.

The selective migration approach made the organisational change much easier without losing the complete reporting history.

Change management as the basis for success
The transfer of customer and supplier master data is a special step in the S/4HANA migration. Special attention was therefore paid to the topic of business partners, as SFS has a total of 185,000 customers and suppliers that needed to be migrated.

The topic of data migration was also very challenging with regard to transaction data. SFS had planned to migrate not only the current financial year, but also data from the past. The company has also changed in the meantime. »In combination, this results in a high level of complexity and we realised that intensive discussions were necessary in order to work through this topic area. The intensive dialogue during this phase was important and was directly reflected in the quality of the migrated data,« says Tüscher, project manager at SFS. The tried-and-tested standard software cbs ET Enterprise Transformer for SAP S/4HANA was used for the migration.

What lessons were learnt by the SFS managers?
»It's always about having the right people in the project, especially to the extent that you need them for success. It's often the case that the business doesn't like to give up precisely these experts. They are needed in day-to-day business. So it is important to hold talks in good time to be able to remove these people from their environment for a certain period of time,« explains Roland Tüscher.

In the past, SFS had focussed communication on the project primarily on the managers and IT contacts. This time, those responsible realised very early on that the business transformation would require close communication support due to the size of the project. After discussions with cbs, it was therefore decided to form a dedicated group to explicitly take care of communication.

»This time, we wanted to integrate change management into the project comprehensively and at an early stage. That was the basis for the success of the project. It was therefore particularly important to get all employees »on board« at an early stage. A special change management group took care of this. From my perspective, I can only say that I was very happy not to have to worry about the communication aspect as well,« emphasises Tüscher.

SFS and cbs act as equals at all times. »We have an extremely cooperative, appreciative and pragmatic working relationship. This is an aspect that we already felt during the selection phase, because direct communication is very important to us. We can only achieve our goals together and must constantly be able to react to new, tricky situations. And it's important to have a common understanding,« explains Tüscher

»cbs supports us with expertise, but also with its resources. There are always new issues that we can't solve ourselves, and we've had very good experiences because the size and network of cbs have always been able to fulfil the additional requirements very well,«he adds.