Implementation of the SAP S/4HANA Private Cloud

Three historically grown companies with 120 company codes. More than 165 processes to be revised or redesigned. More than 60 interfaces and over half a million transaction data items to be migrated.

These are just a few of the facts and figures that reflect the sheer scale of this greenfield implementation of SAP S/4HANA Cloud, Private Edition at Veolia.

The German arm of the global group had already started planning the entire reorganization and harmonization of the company and the move to SAP S/4HANA around five years earlier.

The company’s initial goal was to switch from SAP ECC to SAP S/4HANA in the public cloud (formerly called Multi-Tenant Edition), that is, to a very lean, very flexible SaaS solution from SAP.

“Our primary goal in switching to SAP S/4HANA was to simplify our entire architecture and our processes,” says Matthias Frische, project lead for the SAP S/4HANA implementation at Veolia Germany. “So it was clear to us that a purely technical migration would not be enough to achieve this.”

“Instead, we needed to seize the opportunity presented by the switch to SAP S/4HANA to reposition ourselves in a number of areas – for example, by introducing a uniform accounting system, a new control concept with completely new FI/CO objects and a standardized chart of accounts, the SAP Fiori user interface, changed roles in the organization, or even a virtually merged IT organization.”

In 2020, Veolia commissioned GAMBIT Consulting to design and implement the new SAP S/4HANA system. The GAMBIT experts designed the rollout and began implementation in the fall of 2021.

In the run-up to the project, however, the decision makers at Veolia changed their mind about the type of cloud operating model they wanted to use. They no longer wanted the three existing and historically grown SAP ECC systems to be merged in a public cloud, but in an SAP S/4HANA private cloud system instead (as an “extended edition”).

The private cloud edition has the same scope as the SAP S/4HANA on-premise solution. This means that it combines the functional scope and expandability of classic “on-premise operation” with the advantages of a modern cloud solution. The private cloud edition is operated and hosted by SAP.

The consolidation of the systems and the necessary process harmonization at Veolia turned out to be the greatest challenges in this project due to the high level of complexity involved.

First of all, the 120 companies of the three business lines had to be standardized in terms of processes. Furthermore, Veolia owns various minority interests in companies – in the municipal sector in particular – which will also need to access the newly established or revised processes in the future. “Even as experienced SAP consultants, this was not the kind of project we come across every day,” says Fabian Fröhlingsdorf, project lead and principal consultant at GAMBIT.

“It was really exciting due to the project requirements and the starting point. And for me personally, the project was enormously appealing because it involved implementing a modern target architecture in the private cloud that would give Veolia lasting flexibility.”

The great flexibility of digital system architectures based on SAP S/4HANA is primarily a result of the “keep the core clean” approach, which keeps the core of the SAP S/4HANA system virtually free of changes and modifications.

In contrast to what was standard practice in the past, necessary developments and applications are nowadays no longer implemented directly in the core of the system. Which means that the code of the core remains untouched.

Any applications and individual enhancements that are required are connected to the core system – for example, as side-by-side developments or business apps – via corresponding API interfaces.

“This is exactly how we did it at Veolia. For example, we connected two business warehouse systems and two human resources systems as well as around 50 existing peripheral systems to SAP S/4HANA via the SAP Cloud Integration Platform. We also developed via the SAP Business Technology Platform,” explains Fabian Fröhlingsdorf.

To simplify and harmonize business processes, the project team relied on SAP Best Practices. SAP Best Practices are preconfigured, integrated, out-of-the-box business processes.

With the help of a fit-gap analysis, the consultants first examined in detail what proportion of Veolia’s business processes could be covered by SAP Best Practices. A total of around 165 processes were revised or newly set up on the basis of the best practice standards.

Following three successful test migrations and two test phases each lasting one-and-a-half-months, the go-live finally took place in January 2023.

Following the completion of the productive data migration and a two-day validation phase by the user department, all users were activated in mid-January after the user departments had gone live.

“We received a lot of praise for the go-live, which – despite the usual limitations to be expected in a project of this size – went very well all in all,” says Matthias Frische. “Thanks to the whole project team, and especially to the GAMBIT team for their outstanding performance and fantastic support during this project, which is so important for Veolia.”