Strategic Group project

Hella Group lays the foundation for digital transformation with S/4 switchover

Hella, a globally operating SAP customer and listed specialist in the automotive sector, has also taken up this challenge. Now the first project has successfully gone live. First, the Lifecycle Solutions area (sales of accessories and spare parts) was successfully transferred to S/4. Hella has thus laid the foundation for the worldwide roll-out of S/4 to all companies and the cornerstone for the next generation of its enterprise solution. 

In the course of a transfer program, all ERP systems are being transferred to a new central corporate template, with the specific aim of streamlining and improving some business processes and functionalities. Since the transformation is a strategic innovation project, Hella has chosen SAP partner cbs.

Roadmap with Lifecycle Solution

With the intention of consolidating systems and thus saving costs, Hella undertook a detailed roadmap for the S/4 implementation for the next few years. The basic idea of the project was to transfer the so-called Stairs template from the Lifecycle Solutions area to S/4 first. To this end, twelve companies had to be converted within 18 months.

The Stairs template is to be expanded to include the Sharp template (OEM) and act as the base system for all transformations in the coming years. The challenge: The OEM landscape at Hella is far more distributed; although there is one template, it runs on 14 different ERP systems. Basic functionalities such as batch determination, text determination, and partner schemas must first be pulled into the Lifecycle Solutions system; this is done by standardizing from all systems using the lowest common denominator.

The biggest tasks and challenges: working in and with different time zones, insufficient data quality, data cleansing, settlement management and the complex integration of business partners.

"The aim of the project is not just to bring all ERP systems onto S/4 as a purely technical conversion, but to implement a genuine business project in which we sustainably improve central processes and generate added value in order to equip ourselves for the digital future," explains Andreas Berenskötter, Head of IT Business Application Operations SAP at Hella. To this end, the templates for manufacturing companies on the one hand and for trading companies on the other had to be brought together in a new global Hella template.

The biggest challenge of the project was to change the migration approach during the runtime. Originally, the team wanted to perform the S/4 transformation with a brown full-scope migration approach, taking all data with them as completely as possible. However, Hella questioned this approach when the pandemic began, as a more selective approach made more sense from a business and strategic perspective. In order to reduce the effort, it was decided not to bring the complete history of data, but only open orders and purchase orders into the new system. The new design phase therefore started with a selective approach (Selective Data Transition).

"The collaboration with cbs was excellent. The fact that we changed our migration approach shortly before the first integration test was challenging. But everyone pulled together here. With the standard software cbs ET, we were able to successfully implement S/4 Hana. The ET made the data migration fly," Berenskötter sums up. The software-supported changeover ensures downtime-free operation even during the changeover and prevents revenue losses in the millions. Hella has acquired a corporate license for the broad use of ET. This gives Hella the opportunity to carry out complex transformations independently with its own IT team. Martin Hummel, Program Manager of the S/4 transformation: "We were able to benefit from cbs' experience in dealing with S/4 and, after the go-live in the aftermarket area, we are optimally prepared to roll out the template to the rest of the process world in the group." The next project to come out of the cooperation between Hella and cbs is to convert a sales unit in Mexico, which is currently still running on an old SAP R/3 system, to S/4 as well. In the next few months, the global conversion of the OEM systems to S/4 Hana and the move into a new template will then start in a selective greenfield approach.

S/4 and Re-engineering

In parallel with the broad-based S/4 switchover, the company has also fundamentally unified the structures in the finance area in order to optimize transparency and thus make faster and more informed decisions. This includes chart of accounts harmonization, global credit management, parallel accounting and other measures such as the switch to a new fiscal year variant. This moves IT even closer to the business strategy and gives the CFO more steering authority, more agility for reorganizations, and significantly less complexity. Here, too, the cbs experts supported Hella with their know-how in the area of SAP Financials.