In the dynamic business world, adaptability and resilience are paramount. The client, a trading and distribution focused company with an annual revenue of half a billion Euros, faced challenges due to rapid growth and acquisitions. This inorganic growth created an enterprise environment with a diverse and non-integrated organization, unclear responsibilities, legacy supply chain network, fragmented processes, and multiple ERP systems, altogether hindering further growth and scalability.
The company’s initial attempt to become ONE company simply through a S/4HANA transformation program to replace multiple ERPs with one joint S/4HANA system had failed due to the lack of a defined common Target Operating Model. After three years of project duration, the project was stopped without successful implementation.
Recognizing the issue of outdated and diverse operating models and driven by the need for profitable growth, the client pursues a new S/4HANA transformation. To ensure the company is set for the future and for success in the next ERP transformation attempt, the client partnered with cbs to evaluate and define a new Target Operating Model to become ONE company. This Target Operating Model provides the framework and design guardrails for what is to be enabled by S/4HANA.
Defining a fit-for-future Target Operating Model
cbs guided the company Executives and Management Team through a Target Operating Model project to evaluate options and define a fit-for-future target picture. Six critical dimensions were considered during this 12 week project:
- Governance & Organization: Newly defined organization structure with central group functions and regional business units comprising clear accountabilities and responsibilities.
- Steering Model & KPIs: One harmonized steering concept and key performance indicators (KPIs) in line with the steering relevant business dimensions.
- Business Process Model: Process areas destined for standardization and harmonization vs. required differentiation due to market specifics.
- Material & Value Flow Model: A streamlined and optimized flow model considering the cross-European distribution strategy.
- Legal & Tax Model: Consideration of compliance and legal aspects were woven into the fabric of the new TOM.
- Enterprise Architecture & Technology: A solid technical foundation has been laid out to enable the TOM for a scalable and customer centric business.
Based on the aligned Target Operating Model, a roadmap emerged, allowing the S/4HANA transformation to start in conjunction with other system independent TOM implementation activities.
Equipped with a defined TOM, the client is setup to restart its transformation towards ONE company. Within the next 2½ years, the client will transition into its Target Operating Model and is set to execute the S/4HANA implementation with the required guardrails.
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