The shortest path to S/4 Hana

Zur Rose orders over 80,000 items directly from manufacturers or wholesalers of pharmaceutical and medical products every day. On average, it takes just under two weeks for the Zur Rose warehouse to be fully stocked with around 10,000 items.

Logistics expertise and excellence are therefore important core competencies of the company - in addition to its industry knowledge as a medical wholesaler and mail-order pharmacy.

It all started with a simple idea: in 1993, the lawyer and current CEO Walter Oberhänsli wanted to set up a pharmacy in the "Zur Rose" property he had purchased in Steckborn, Switzerland, after the only pharmacy in the town had to close due to a lack of a successor.

As no tenant could initially be found for the new pharmacy, Walter Oberhänsli joined forces with local doctors. Together they founded the Zur Rose pharmacy, which also served as a purchasing group for the founding doctors and ensured a cheap supply of medicines.

This later developed into the mail order business with medicines. From 2001, Zur Rose began to send medicines directly to patients. Against the backdrop of rising healthcare costs, the aim of guaranteeing a safe, affordable and high-quality supply of medicines met with a positive response from customers.

Thanks to his perseverance and legal expertise, Walter Oberhänsli was able to overcome legal difficulties along the way step by step. With the acquisition of the mail-order pharmacy DocMorris in 2012, Zur Rose succeeded in further expanding its market position in Germany.

The company is now the leading mail-order pharmacy in Europe. The Zur Rose Group currently employs over 1,000 people at its various locations and generated sales of 880 million Swiss francs (approx. 808 million euros) in the 2016 financial year.

Strong growth, various subsidiaries and locations in Switzerland, Germany and the Netherlands characterize the Zur Rose Group today. But even with the most beautiful success story, there is no light without shadow.

Acquisitions and rapid growth resulted in a heterogeneous IT landscape with five different ERP systems and three different database systems - typical for an international company.

Heterogeneity is too expensive in the long run

"The expensive thing about a heterogeneous IT environment is not just the licenses. Rather, it is the internal personnel costs for the maintenance and upkeep of existing systems that make the biggest difference"

emphasizes Michael Herrmann, Project Manager at Zur Rose Suisse.

"All of our ERP systems are still hosted internally, so we also have to take care of the infrastructure. Maintaining the different software and managing the resulting complexity ties up a lot of resources. In times of cloud computing and new software generations, such a situation is not desirable in the long term."

In 2015, Zur Rose therefore decided to reorganize its IT landscape. Modernization and centralization were the guiding principles. The new generation S/4 Hana was chosen as the future integrated ERP system, which can also map the planned growth of the Zur Rose Group in the long term.

"This decision also offers the opportunity to uniformly map the order management and procurement processes for both B2B and B2C business, which currently still run on different ERP systems"

explains Michael Herrmann.

Security and data protection

For many years, hardly any other industry has been as strictly and comprehensively regulated in terms of data protection and storage obligations as the healthcare sector. When it comes to the shipment of medicines, the focus is on the safety of the supply of medicines.

For this reason, the legislator has long demanded complete batch tracing and retention periods for patient records, which can extend over several decades.

"This special situation has led to a very high degree of digitalization of processes in our company, long before the term became fashionable"

says Michael Herrmann.

"We have been systematically archiving faxes and other correspondence with business partners digitally for a long time. The storage volume of our systems is correspondingly large - another reason to switch to the planned central ERP system."

Solution for the legacy systems

But what should be done with the legacy systems? The various retention guidelines and documentation obligations make it necessary to be able to create evaluations in the future if required. To do this, the business logic of the previous ERP systems must be retained.

"The conclusion to simply switch off the old systems in the course of centralization is an obvious one, but in practice it is not an easy task to solve. In central modernization projects, this is the real Achilles heel for the successful introduction of a new generation of software"

continued Michael Herrmann.

Parallel to the decision to migrate to S/4 Hana, Michael Herrmann and his team were therefore looking for a central archiving solution for the data and documents of the legacy systems to be replaced.

This should also offer the option to permanently delete data, a functionality that is required in particular by the new European General Data Protection Regulation (EU GDPR). Of course, the new solution should also be cheaper to operate in the long term than the cost of maintaining the legacy systems.

"If you look at the market, you quickly realize that the number of providers in this area is manageable. One provider that fits Zur Rose's requirements perfectly is the Swiss company Data Migration Services AG with its JiVS platform"

explains Herrmann.

The JiVS platform will have to pass its first endurance test this year as soon as the first phase of the conversion to a central SAP system in the areas of master data and procurement is completed in the spring. Some of the data and documents from the ERP system will then be migrated to the new platform, involving several billion data records or around half of the inventory volume.

"This type of archiving is much more than long-term storage in reliable archives. After all, the data and documents remain alive and part of our processes. That's why we - like the manufacturer - speak of historicization rather than archiving"

adds Michael Herrmann.

For example, it is possible to track which patient has received which medication and from which batch over decades. JiVS is implemented by T-Systems Data Migration Consulting, the largest partner of Data Migration Services.

The Swiss subsidiary of T-Systems is responsible for the migration of the data and document inventory and will take over the operation of the JiVS platform in Zur Rose's Swiss data center.

Room for innovation

All legacy systems will be decommissioned over the next three to five years.

"Overall, we expect this to result in six-figure savings in operating costs. We also assume that duplicate cleansing will reduce the storage volume by around 30 percent"

Michael Herrmann is delighted.

"The most important thing, however, is that we will massively reduce complexity in IT. This will create the necessary basis for further growth and the implementation of innovative future solutions."