Siemens ERP Transformation Case Study

Overview

Company: Siemens AG

Industry: Industrial Manufacturing, Energy, Healthcare, Infrastructure

ERP Solution: SAP S/4HANA (Cloud & On-Premise Hybrid)

Project Name: Project Centurion

Timeline: 2018 - 2023

Scope: One of the world's largest and most complex ERP transformatons, replacing over 500 legacy systems across 600+ legal entities in 94 countries.

The Challenge

Siemens, a sprawling industrial conglomerate with 300,000+ employees, faced significant challenges:

Fragmented Systems: Hundreds of disparate legacy ERP systems (primarily older SAP versions and custom systems) created data silos and inefficiencies.
Manual Processes: High reliance on manual workarounds, spreadsheets, and nonstandardized processes slowed operations and increased errors.
Lack of Real-Time Insights: Inability to get a consolidated, real-time view of global financials, supply chains, or performance hindered strategic decision-making.
High Costs & Complexity: Maintaining and integrating numerous old systems was extremely expensive and complex.
Need for Agility: Required a modern, flexible plaƞorm to support digitalization (IoT, AI, Analytics) and adapt to rapidly changing markets.

The Solution: Project Centurion

Siemens embarked on a massive, phased transformation to SAP S/4HANA

Single Global Template: Defined standardized "best practice" processes for Finance, Supply Chain, Procurement, Sales, and Project Management across all divisions and regions.
Hybrid Deployment: Used a mix of private cloud (for core ERP) and public cloud (for specific functions like Ariba for procurement) for flexibility and scalability
Massive Data Migration: Consolidated data from 500+ legacy systems into a single S/4HANA environment, ensuring data quality and consistency.
Focus on User Adoption: Extensive change management, training programs (training over 100,000 users), and user-centric design were core to the project.
Phased Rollout: : Implemented division by division and country by country over 5 years, minimizing disruption. The final major rollout (Siemens Healthineers) completed in 2023.

Results & Benefits

        Massive Efficiency Gains: Automated over 1.5 million manual transactions annually
Dramatically Faster Financial Closing: : Reduced group-wide month-end closing from ~15
days to just 2 days – enabling near real-time financial reporting.
Significant Cost Reduction: Achieved hundreds of millions of Euros in annual cost
savings through system consolidation, reduced IT maintenance, automation, and process
optimization.
Improved Cash Flow: Reduced Days Sales Outstanding (DSO) through better invoicing and
collections processes enabled by the new system.
Enhanced Supply Chain Visibility:  Gained real-time insights into global inventory levels and
logistics, leading to reduced inventory holding costs and improved planning. 
"One Source of Truth": Established a single, integrated, real-time data foundation for the
entire company, eliminating data silos and inconsistencies.
Foundation for Digitalization: Created the essential plaƞorm to seamlessly integrate
advanced technologies like AI/ML for predictive maintenance, advanced analytics, and IoT
data. 
Increased Agility:  Enabled faster response to market changes, mergers & acquisititins
integration, and new business model implementaton.

      

"Real-Time" Success Case

Very Recent Completion: The final major rollout phase concluded in 2023, making it a current example.
Measurable, Tangible Results: The benefits (like 2-day close, 1.5M automated transactions, €100M+ savings) are concrete and reported post-implementation.
Addresses Modern Challenges: It tackled fragmentation, lack of real-time data, and the need for a digital core – key challenges for large enterprises today.
Scalability & Complexity: Demonstrates that successful, large-scale ERP transformation is achievable even for the most complex global organizations.
S/4HANA Showcase: It's a flagship example of a successful global S/4HANA implementation at scale.

Key Lessons

Strong Leadership & Vision: Executive sponsorship and a clear strategic vision from the top were critical.
Standardization is Key: Defining and enforcing global processes was fundamental to achieving integration and efficiency.
Phased Approach Mitigates Risk: Rolling out incrementally allowed for learning and reduced business disruption.
Invest Heavily in Change Management: Training and preparing over 100,000 users was nonnegotiable for adoption.
Data Quality is Paramount: Rigorous data migration and cleansing were essential for the "single source of truth."
Partnership Matters: Close collaboration between Siemens, SAP, and implementation partners was vital.

Siemens' Project Centurion stands as a contemporary benchmark for successful, large-scale ERP transformation, delivering real-time data, significant efficiency gains, cost savings, and a powerful foundation for future digital innovation.

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