NS, the Dutch Railway Company, migrated three SAP ECC systems to a single S/4HANA environment
Until recently, the application landscape at the NS was extremely complex, which was an obstacle to innovation. The NS realized that if it wanted to become a data-driven organization, it would have to rationalize its IT environment and introduce a much simpler structure. This simple structure is based on the digital core: SAP S/4HANA.
18 oktober 2022
‘In the past, our IT infrastructure looked a bit like this,’ says process expert finance Stan Jilesen, holding up a photo of a plate of spaghetti. ‘The NS has four business units – the general NS Group, NS Reizigers, NedTrain, and NS Stations – and we had three different SAP ECC systems, alongside hundreds of other systems. For example, there were 120 revenue systems alone.’
Digital core with satellite systems
The NS obviously needed to rationalize. The number of applications has been drastically reduced. One of the most important parts of this rationalization process involved migrating what were three different SAP ECC systems to a single uniform S/4HANA environment. Stan: ‘We made an informed choice for a “digital core” – SAP S/4HANA – and we’re keeping it completely standard. It contains all the processes not specifically designed for the NS, such as finance and purchasing. If something isn’t compatible with our digital core, we prefer to use one of the satellite systems around it, such as SAP Ariba, Anaplan, or Infor CPM. If we can’t automate the process with these systems, we look at innovative solutions such as low-code solutions, robotic process automation (RPA), AI, and process mining.’
In 2017, a team led by NS started compiling an inventory of what was needed to migrate from three ECC systems to a single S/4HANA environment. The objectives were clear:
- A single source of facts containing real-time control information;
- Organizational agility;
- A chain-orientated solution for the entire NS family;
- Lower costs through efficiency and reliability;
- End-to-end traceability;
- A state-of-the-art ICT landscape.
Phased migration, live with MVP
In partnership with myBrand Conclusion, implementation began in November 2018. The NS Group and NS Reizigers business units, which were already using the same SAP ECC system, were tackled first. The new landscape went live in early 2020. Then work began on the NedTrain business unit, which includes the Supply Chain Organization responsible for train maintenance. ‘This was the most complex part of the whole migration process, so it took the most time. In comparison, the NS Stations business unit was relatively easy,’ says Stan. These two business units migrated during the COVID-19 pandemic, when employees were required to work from home wherever possible. ‘It didn’t hinder our work. In fact, we coped well with it,’ he says.
The bigger challenge lay in standardizing the often complex processes. Since it’s impossible to tackle everything at once, Stan’s advice is to go live with an MVP if necessary. ‘That’s what we did at NedTrain. We focused on the user stories with the most value, and implemented them live first. We’re now starting process mining, to investigate where we can achieve efficiency gains in the processes that add the least value.’ NS Stations and Nedtrain switched to the new SAP S/4HANA system in January 2021 and February 2021 respectively.
Fully standard SAP
NS is happy with the decision to keep SAP fully standard. ‘It allows us to keep up with developments, and upgrade to new releases relatively easily. Given we’re still working with the on-premises version of S/4HANA, it’s still quite a bit of work to implement such a new release. For this reason, we freeze the landscape for nine weeks during such an upgrade. We’ve implemented test automation to accelerate this process and quickly translate changes into production.’
Apps for users
The biggest change for end users is that they now only use apps, and no longer the backend application. ‘That's a huge improvement on how they worked before,’ says Stan. ‘It’s much more user-friendly, and keeps improving too. Initially, many existing apps were given a Fiori look, but the functionality remained similar. Now the content of the apps is also being improved, with efficiency gains.’ The broad report options are another big improvement. ‘You can create almost any report imaginable in S/4HANA. Additional tooling is no longer necessary, which saves our organization considerable time.’
Support in high places
Looking back, Stan is very satisfied with the process. ‘The collaboration with myBrand Conclusion went very well. We managed to maintain the momentum throughout the process, partly because we had a director in a high place at the NS championing our cause; the CFO. The project team had a meeting with him and other directors once every two weeks to make decisions. Without that support from the top, it would never have been possible to migrate so quickly.’