With S/4HANA Cloud, the future of clean air is in the cloud for American Air Filter (AAF)

Dr. Angelika Schwartz, Head of IT at AAF Europe/Dinair, and Frank Kreß, Vice President Finance/Controlling/IT at AAF Europe, in conversation with Jan Kretschmer, SAP, Center of Expertise for Cloud ERP.

AAF's mission since its founding in 1921 has been to provide fresh air to customers. Today, this mission is more important than ever. People need clean air to live - with rapidly evolving consumer behaviors e.g. increasing air conditioning of living and working spaces, or environmental conditions such as corona virus and particulate matter.

What was the initial situation at AAF Europe?

Kreß: In Europe, we operate five factories and various sales and service companies in twelve different countries, with different characteristics and IT systems. Accordingly, there was room for improvement in the consistency of processes, transparency and control capability. To improve this, we needed to harmonize processes and change the organization to become an "intelligent company". The aim was to focus more on the customer, e.g., through valid delivery information, to increase the automation of routine processes, e.g., through machine learning, to obtain a consolidated view of the processes of our units in real time, and overall to accelerate corporate agility, e.g., for opening up new sales channels. In short, to acquire and retain more customers at optimized costs.

What therefore had to change? What requirements did the new approach have to meet for you?

Kreß: It quickly became clear that this was more than just an IT project. It is a cultural change in processes and perspectives. Bringing processes and units onto a common ERP system was not enough for us. It was important to us to also arrive at a common standard in terms of processes. Experience has shown that a traditional approach using company templates can lead to complexity instead of standardization. We therefore wanted a standard that was based on overarching best practices. And more importantly, a standard that evolves automatically.

Schwartz: This brings with it three requirements. First, the system must be preconfigured by the manufacturer with broadband standard processes. Second, this standard must be continuously maintained by the manufacturer, with automatic updates. Third, we needed a viable concept for customizing this standard. From small but important extensions like AAF-individual fields for example in the delivery bill, so we could note in which room the filter should be mounted, to more complex extensions like the specific use of our hand scanners in the warehouses.

KreßThe solution should be usable with low IT effort and a monthly usage fee. We were therefore looking for a scalable, cloud-based software-as-a-service solution. Since the project was to be implemented primarily with the business departments, the new solution had to support this approach conceptually.

You decided in favor of SAP S/4HANA Cloud. What were the decisive arguments in favor of it?

Kreß: S/4HANA Cloud is the best fit for us. It is a preconfigured solution that builds on hundreds of process-related templates, the best practices. These span across all business processes, from month-end closing in the respective accounting standards to batch tracking in the logistics chain. The best practices are also localized to the respective countries, e.g. tax reports.

We also use best practices for the end-to-end integration of processes. This ranges from the connection of the store floor systems to the connection of our house banks to the hand scanners mentioned above. The interfaces are precisely described and stable by SAP, so that updates of all systems are possible at any time.

Important: These best practices are designed and described in a striking manner by SAP on the basis of countless projects, with process flow diagrams, etc. Users could thus directly check the standards and work out the AAF configuration in the fit-to-standard workshops.

Schwartz: S/4HANA Cloud is a true cloud solution. Users access the solution via a secure Internet connection, as in online banking. The subscription includes licenses, HANA databases, and complete managed data center operations here at SAP in Germany, as well as the further development of best practices and localizations, which we automatically receive several times a year via updates, and dedicated contact persons who provide us with operational support. With the IT team, we can focus on providing value-added support to the business units and implementing innovations.

What results are you seeing?

Kreß: We are getting closer to the goal of the "intelligent enterprise". The total cost of ownership is reduced, e.g. due to the accelerated implementation and the significantly lower IT effort in operation. We get improved transparency and agility, easy scalability - and also a much better user experience as S/4HANA Cloud is easily used via browser and mobile device.

For other companies planning a similar project: What do you see as success factors or stumbling blocks?

Kreß: It is a project from the corporate strategy and the specialist departments, a change process. It is not an IT project. A sponsor such as the CEO or owner must play a significant role in the top-down process. He or she must shape the target picture and involve the workforce, moderate the change, define guard rails, prioritize topics and, if necessary, decide on sensitive issues in the steering committee. This is not something that simply happens on the side.

SchwartzWe analyzed early on which units are similar or should become similar: Which employees from the departments represent these clusters "bottom-up", how do we mix skeptics and supporters? This is how we formed the internal core team. We work closely with the SAP service organizations as well as with SAP partner Allgeier. This combination works excellently for us.

COVID-19 has put many companies in a difficult phase. Can S/4HANA Cloud provide relief and support during these times?

KreßDefinitely! The Corona Virus shows the importance of the Cloud and the Intelligent Enterprise. With a cloud solution, it doesn't matter if employees are in the office, at the customer site, or in the home office. And in a smart enterprise, we can better manage unexpected fluctuations in demand or shifts in distribution channels because all inventory, production capacity, contracts, etc. are visible across all units at the touch of a button. We can make easier and more valid decisions to deliver clean air for our customers.

General information on S/4HANA is provided, for example, by the SAP Experts Podcast. Listen to the first episode here:

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