Complete business model restructuring: Redesign of company-wide process and SAP system landscape supply chain management | SAP

system landscape transformation (SLT)

Restructuring at Kemira:
A New European Business Model
with a Centralized SAP Platform
in 12 Months
Europe-wide centralization and standardization of the supply chain,
cross-country process harmonization, system transformation, and
roll-in of 11 countries into a global SAP group template

Corporate Business Solutions

New European Business Model with a Centralized SAP Platform

The chemicals company Kemira

established a completely new
business model in Europe with
the help of cbs Corporate Business Solutions.
The project, completed in the
record time of just one year,
saw the entire reorganization
of organizational structures,
business processes, and the
SAP company platform, with minimal invasive restructuring during ongoing daily operations.

cbs Corporate Business Solutions. The Materna Group Management Consultancy.

About Kemira OYJ

Kemira is an international chemicals company. Kemira provides customers in water-intensive industries with concepts and solutions to
improve water quality and quantity
management as well as energy, water, and raw material efficiency.
The Kemira Group has over 5,000
employees in 40 countries. In 2010
the Group generated sales of approximately 2.2 billion . Its headquarters are in Helsinki, Finland.

New European Business Model with a Centralized SAP Platform

Initial Situation
The strategy of the Kemira
Group a global chemicals company headquartered in Helsinki,
Finland is to focus on serving
water-based industries and municipal water treatment. The company
serves customers in water-intensive industries in three segments:
Paper, Municipal & Industrial, and
Oil & Mining.
In 2009 the chemicals company
made the decision to establish a
new, centrlized business model in
Europe. A centrlized supply chain,
new shared services, harmonized
business processes, together with
a standardized performance management and reporting, would be
the cornerstones of a new, corporate business concept deployed for
all countries and units.

processes, and the existing SAPbased system landscape of the

Kemira Group to suit the concepts
of the new business model. To
achieve this, an existing global
SAP template system had to be
restructured during ongoing operations and 11 countries incorporated in this fully redesigned,
standardized, harmonized, and
consolidated SAP world. At more
or less the same time, three additional countries were brought
into the new structure of the new
business model as a direct roll-in.
An enormous transformation project completed in just 12
months in collaboration with the
consulting partner cbs Corporate
Business Solutions, which, as the
main contractor, supported the
project with comprehensive restructuring consulting.

This business model was impleDeparture from Complex

mented within the scope of a comprehensive restructuring program. Business Structures
The aim of the NBM (New Business
Kemira in Europe in 2009: 13
Model) project was to adapt the country organizations, 17 opeorganizational structure, business rative legal entities that work in

Customer Statements
Jyrki Mki-Kala, CFO
of Kemira: NBM has
been such a major project and it has involved
so many countries and
the outcome has been just great!.
Timo Kokkonen,
Project
Manager Kemira: Thanks to cbs
strong
leadership,
established
methods, and innovative tools,
we succeeded in delivering on
ambitious project plans in a
short time and very economically. Direct quote: This was the
best SAP project in the long
history of SAP projects at Kemira.

the companys three business segments Paper, Municipal & Industrial, and Oil & Mining to generate
50% of the Groups sales.
These are decentralized management structures arranged according to both regions as well as
industries (segments), developed
over time, highly local, and featuring different process flows.
But at the same time, Kemira
Europe is also a collection of tightly intertwined organizational units
interacting with each other in many
ways, with a high throughput of
internal goods and value flows. A
spaghetti network of intercompany transactions, business processes spanning countries, numerous
point-to-point integrated IT processes, and heterogeneous application systems, including SAP as
the main software platform.

cbs Corporate Business Solutions. The Materna Group Management Consultancy.

New European Business Model with a Centralized SAP Platform

The SAP world has matured over

time and now comprises a total of
160 permanent establishments, a
fully integrated SAP Business Suite
system landscape with SAP ERP at
its center, with over 20 company
codes and around 200 plants, enhanced by SAP CRM, HR, BI, and
APO.
Kemira in Europe in 2009 is a
company organization that presents many faces to its customers.
The market and brand presence in
the countries lacks consistency. Sales, distribution, the supply chain,
and customer service are characterized by heterogeneity; there is
little unity in the European business over the business segments
borders.

The Project in Numbers

11 Project locations in Europe
17 operative legal entities
160 SAP permanent establishments
2,000 end users

Restructuring
Establishing a New
European Business Model
Kemiras management was resolved to take a big step. The organization and business processes were
to be transformed from the ground
up to create more centralized control of the entire company and
achieve overall improvements. The
aim was to foster global company
control according to segments and
create a centralized business model for all countries and units. Stable, standardized business processes
and clearly defined, harmonized
intercompany processes would underpin this new model. The supply
chain would be centralized, shared
service functions would be established, local production sites and
sales units harmonized, centralized
planning and strategy processes,
shared business terms and conditions, and a standardized key figure
system for performance management and management reporting
would be created.
These measures were intended
to realize benefits in terms of efficiency, costs, and revenues in the
whole of Europe. There was to be
a new orientation toward profita-

Systems affected: ERP, BI,

APO, CRM, HR, XI, HFM
Functions affected: Sales,
Purchasing, Finance, Controlling, Plant Maintenance,
EH&S,
Manufacturing, Authorizations
More than 100 key users
10 cbs consultants in the core
team; in total up to 25
consultants involved
Project term: 12 months

cbs Corporate Business Solutions. The Materna Group Management Consultancy.

bility, the company value was to be

increased in a sustained manner.

Changing the Business

Model in an Existing, Well
Developed Global SAP
Template System
The New Business Model (NBM)
project was set up to implement
the new business model. Its aim
was to adapt the Kemira Groups
organizational structure, business
processes, and SAP-supported IT
system landscape to reflect the
transactional and organizational
concepts of the revised model. A
comprehensive
transformation
project that affected the entire
company, almost all functions and
departments, and the IT organization.

The Project Planning

Challenge
To establish the concrete configuration of the business model, it
was first necessary to develop the
organizational model and design
the European template processes.
A key challenge was how to design
and implement a process in an existing global SAP environment that
was already extremely well develo-

New European Business Model with a Centralized SAP Platform

ped. Which project approach was

best suited? The greenfield approach of building an entirely new
system would have meant an enormous amount of work and would
have required a long project. The
model would have had to have
been established from the ground
up before the 11 countries could
have been incorporated. The existing SAP assets would have remained unused.

Solution Approach:
Everything Done by a
Deadline - Ready for Use
in a Year
The management consultants at
cbs presented an alternative solution. Using specific methods and cbs
own, high-performance standard
tools, it would be possible to carry
out a comprehensive and targeted

transformation of the existing SAP

template system and connected IT
landscape (in the form of a brownfield approach). The restructuring
and roll-in of the 11 countries in-

A Comprehensive
Restructuring Program
The project requirements
went far beyond a purely technical system landscape transformation: Restructuring the
existing SAP platform implied
changing the process configuration and converting and harmonizing structures and dependent
data. High throughput rates in
intercompany business meant
ensuring minimum downtime in
achieving the go-live. On top of
this came the country roll-ins,
adapting the structures and pro-

volved (in the first stage) into the

redesigned European template
would go live on a single deadline
in the form of a big bang adoption.

cesses there, and migrating and

adapting local data.
Therefore, the challenge was
to integrate and plan a highly
complex company program with
requirements at several levels
and manage its entire execution in such a way to ensure that
the new solution could go live
at the precise cutover moment.
No mean feat, especially in light
of the situational conditions in
a company that had previously
been decentralized and closely
interwoven.

cbs Corporate Business Solutions. The Materna Group Management Consultancy.

New European Business Model with a Centralized SAP Platform

Project Timeline

it in simultaneous tests in all countries. Three of these tests ensured

The project was split into dea seamless go-live at the turn of
sign and implementation phases.
the year from 2010 to 2011.
The IT design was limited to three
months, while organization-al asMethodology
pects were considered beyond this
period. Thanks to cbs comprehenThe extremely high professional,
sive expertise, it was possible to technical, organizational, and time
identify the relevant points at the requirements of the project could
beginning and schedule decisions only be met using the M-cbs meaccordingly.
thodology and the technical innoIn the SAP-related area, the
design phase was followed by a
build. In other words, the design
was implemented and verified in a
corresponding integration test in
the selected countries. After that,
the other countries were handled
one by one, taking into account
their country-specific attributes. In
the second half of the project, the
main task was to carry out cut-over
tests, which involved rehearsing
the implementation and assessing

combination with cbs own standard software. With M-cbs and the
cbs SHC Framework, all required
business objects and data, including the histories of all SAP modules, were one by one selectively
transferred, converted, and put
into production on the deadline.
On time, in scope, and in budget.

Why cbs?

vations of the SHC Framework, a

From the very beginning, accorstandard software solution for SAP ding to a later statement from the
system transformations.
chemicals company, cbs was more
or less predestined for the restrucTechnically achieving such com- turing project. We just didnt know
plex data changes to new business it at first. But when we learned that
processes is, in itself, no trivial mat- cbs was intimately acquainted with
ter. And to accomplish this system this type of business model restructransformation in record time and ture on an SAP platform, the congo live with it over a weekend was sultants from Germany had our full
in large part possible only because attention. They were, quite franof the use of the cbs methodology kly, the competent restructuring
for SAP restructuring projects in consultants for this complex task
the best ones with the relevant

cbs Corporate Business Solutions. The Materna Group Management Consultancy.

New European Business Model with a Centralized SAP Platform

experience at an international level Comprehensive experience

with this type of business model
and the comprehensive expertise
restructure on an SAP platform
to complete the implementation
successfully from a single source. Excellent customer references
Indeed, cbs could offer best
practices for a quick and successful
implementation on an SAP platform: Expert knowledge of the
SAP-specific characteristics of organizational structures and processes, the methodical competence
to master complex projects, experienced program and project managers who could lead this kind of
major project while sticking to tight
deadlines and budgets and drive
the project both professionally and
technically, specific expertise, and
a powerful standard software tool
certified by auditors; an allrounder
capable of transforming the system and modifying/migrating data.
A further reason why cbs was
selected as the partner for achieving success was the methodical
approach of minimal invasive system restructuring that the company could offer. This created a benefit for the customer that broke all
records at Kemira: by saving time.
Only with this approach was it possible to completely transform an
existing SAP landscape during ongoing operations with roll-ins in 11
countries and achieve a ready-foruse solution within 12 months.

High cost effectiveness of the

cbs offering
Innovative technical possibilities
for changing data to the new
business processes with a
minimal invasive method
A highly qualified cbs project
team with the relevant experience for this particular type of
project.

Outlook
The success of the project is the
perfect reason for Kemira to include further countries in the New
Business Model. cbs continues to
be a successful Kemira partner.
Just two months on, on March
1st, 2011, the next three countries
were incorporated into the new
business model.
In the first three months of
2011, Kemira, together with cbs,
implemented a standardized management information system on
the basis of SAP BusinessObjects.
The second phase for this dashboard-based information system
took place in the first half of 2011.

Benefits
Increased profitability
through:
1. Greater process competence and efficiency
2. Optimized control of and
value creation in company-wide material flows
(supply chain efficiency)
3. Optimized inventory management and reduction
of inventory costs
More efficient use of the
companys own capital
standardization of the
supply chain
Centralization of certain
functions creation of
shared service centers
Standardized view of
customers and outward
presence toward customers
(one company on the market) improved customer
service
Pooling of inventories
reduction of intercompany
transactions
Standardization of
processes

Why cbs - the deciding cbs

success factors for Kemira
The solution offering of
comprehensive restructuring
consulting, from designing the
business model solution (organizational model and process design as well as SAP development)
to technical implementation at
system level

cbs Corporate Business Solutions. The Materna Group Management Consultancy.

cbs Corporate Business Solutions

The Materna Group Management Consultancy
Im Breitspiel 19 69126 Heidelberg - Germany T +49 6221 3304-0
contact@cbs-consulting.com www.cbs-consulting.com