ABB moved from seven ERPs to just one version of SAP in nine months. Previously the different methods of reporting created a culture of dependence on spreadsheets and manual intervention. Getting away from this to understand that there is one version of the truth in SAP is a huge change management exercise, and one that few conquer well. Andrew Marshall and Martin Smith from ABB will share the approach they used to give their business confidence that SAP produces reliable reporting data without manual intervention. After going live in December 2009, they have invoked an approach to continuously improve and optimise their processes with SAP. Now the CFO’s ambition is to complete reporting on day three. If you want a fresh, people-focused approach to get the most from your SAP’s reporting capabilities, attend this session. Andrew Marshall, General Manager Shared Accounting Services, ABB UK Martin Smith, FICO Systems Architect, ABB UK

1. Martin Smith and Andrew Marshall – ABB UK
Help your CFO make more timely decisions
and sharpen your company‘s competitive edge
© ABB Group
October 25, 2010 | Slide 1

2. Agenda
Brief overview of ABB
ABB UK SAP Transition experience
ERP Landscape
Implementation process overview
Challenges
Tangible benefits
What does this mean for the CFO?
Critical success factors
What would we do differently?
Single item generating most improvement
© ABB Group
October 25, 2010 | Slide 2

3. Power and productivity for a better world
ABB’s vision
As one of the world’s leading engineering companies, we
help our customers to use electrical power efficiently, to
increase industrial productivity and to lower environmental
impact in a sustainable way.
www.abb.com
© ABB Group
October 25, 2010 | Slide 3

4. Introduction
Martin Smith
FI/CO System Architect, ABB UK
4 years with ABB
SAP Project Responsible for:
Roles and Authorisations,
SOX,
UAT
Andrew Marshall
General Manager, Shared Accounting Services, ABB UK
14 years with ABB
SAP Project Responsible for
Single sets of Master Data
Compliant and reconciled transition of legacy financials
Member of “One Simple ABB” concept team
© ABB Group
October 25, 2010 | Slide 4

5. Power and automation are all around us
You will find ABB technology…
orbiting the earth and working beneath it,
crossing oceans and on the sea bed,
in the fields that grow our crops and packing
the food we eat,
on the trains we ride and in the facilities that
process our water,
in the plants that generate our power and in our
homes, offices and factories
© ABB Group
October 25, 2010 | Slide 5

6. ABB UK and Ireland Overview
Part of ABB Group
>$32Bn Revenues
100 countries / 117,000 employees
12 main locations across the
UK and Ireland
>5,000 Customers
2,200 employees
£650m revenue in 2009
Over 5,000 customers
Head offices: Daresbury and Dublin
Currently 2 shared service centres
Moving to 1 centre from Jan 2011
SAP in UK
BaaN in IE (current transition to SAP)
© ABB Group
October 25, 2010 | Slide 6

7. Some ABB Customers
© ABB Group
October 25, 2010 | Slide 7

8. ABB UK SAP Transition Experience
© ABB Group
October 25, 2010 | Slide 8

9. UK ERP Landscape – 2006
2006 Supported Age Issues
LP PA DM PS PP Revs % of System
Oracle 32% 10 Yrs Totally unsupported
Vax Mfg 10% 26 Yrs Bespoke (1 expert)
JD Edwards 7% 10 Yrs Old AS400
Agresso 8% 7 Yrs
Sanderson Mfg 5% 4 Yrs Unstable
Baan 32% 8 Yrs Old Version (4c4)
Vixen 5% 16 Yrs Limited support
One Simple ABB Project
2008 Revs %
LP PA DM PS PP
SAP 100%
© ABB Group
October 25, 2010 | Slide 9

10. GB ERP and F&A – Pre SAP
Finance Operations HR Payroll
ABACUS
Credica
AMF
Open Uptime
Comp SCOT
Agresso G Ceridian
IN
Vixen NT PWA Payrite
OU
A CC
Sanderson Excel Ernie
ET
HE
Open Accs DSVax Oracle Ceridian
EA
SPR Oracle Ceridian
L
CE Edwards Excel Ceridian
EX JD
© ABB Group
Baan PWA Ceridian
October 25, 2010 | Slide 10

11. GB ERP and F&A – To be
Finance Operations HR Payroll
ABACUS
Credica
BASWARE
Comp SCOT
MySAP Ceridian
© ABB Group
October 25, 2010 | Slide 11

12. Implementation Process Overview
NOT Finance or IS lead project
Designed as business-wide project
Each business was stakeholder – full engagement
UK Management team (board) = STECO
Defined and dedicated team for UK
Plus business support teams
1:1 relationships with SAP consultants
Module by module
Ring-fenced project – entirely divorced from day to day operations
Series of “gates” and checkpoints at critical phases
Phased (separate business “types”) implementation over 9 months
© ABB Group
October 25, 2010 | Slide 12

13. Implementation Process Overview
This approach enabled
Business buy-in
Senior management involvement (STECO) gave project priority /
gravitas it needed to succeed
SAP project as a “single function” (separate accounting/separate
management) enabled critical FOCUS
Modular approach gave full, in depth understanding of each
element at a module level
Downsides to this approach
Team pulled in different directions by own businesses
Inevitably added time to project
Modular focus reduced overview – increased “Silo” mentality
Made dependencies less visible
© ABB Group
October 25, 2010 | Slide 13

14. Challenges
Breaking the spreadsheet culture
Building confidence in the SAP numbers
Despite the CFO having confidence, we probably spent
the first 6 months after go live “proving” to businesses that
the information in SAP was correct
Reducing the number of journals
We found that our Business Controllers were having to
complete/correct the actions (or lack of them !) of the
business
The wider business had to learn that our SAP isn’t just a
finance system
Accounting during the month, not just at month end, in
particular dealing with Results Analysis & Settlement errors
© ABB Group
October 25, 2010 | Slide 14

15. Tangible Benefits
Single ERP system (from 7 disparate)
Significant improvement in availability, completeness and accuracy of first run
numbers
Final reporting maintained at 5 days (group requirement) but…
Quality vastly improved
Availability of numbers much sooner
Belief in numbers significantly greater
Analysis/reconciliation time more available
Now believe 3 day reporting is a real possibility when required
Reduced costs
Shared Accounting Services 50% size of pre-SAP
50% reduction in Overdues
Better visibility of debt, improved debtor reporting etc
© ABB Group
October 25, 2010 | Slide 15

16. Tangible Benefits
Purchase order compliance
Vastly improved and standardised supply chain process
Helped increase PO coverage from about 50% (records difficult to obtain!!!)
To 100% compliant under SAP (fully measurable!)
Vast improvement in Matching rates
From about <20% (records difficult to obtain !!!)
To 65% and growing
Faster payment – now above industry average at 86% - 90% paid to terms
Reduced SOX controls from 800 to 300
Standardised
More easily defined, operated and tested
lower cost
© ABB Group
October 25, 2010 | Slide 16

17. What does this mean for the CFO
PRE SAP POST SAP
Multiple communications One communication
from various sources source directly from SAP
Significant effort to One version of the truth
achieve degree of
confidence in numbers
Flash result achievable
Delayed finalisation of
sooner direct from SAP
numbers
More time for CFO to
CFO forced to perform
review and analyse –
extra activity
instead of creating
© ABB Group
October 25, 2010 | Slide 17

18. Critical Success Factors
Business led approach
Dedicated team
We did not aim to “Save the World”
Being flexible to change approaches as SAP mist lifted
© ABB Group
October 25, 2010 | Slide 18

19. What would we do differently?
Despite vast improvements (eg)
Quicker, more visible, greater accuracy, consistency, reduced cost,
more credible etc …
…the knowledge that we have gleaned whilst using SAP has
prompted us to question why we did not “do more” (eg):
(Ironically) Better reporting
Order to Cash / Procure to Pay cycles well catered for
Further standardisation through more restricted practices
Less scope creep allowed during project
© ABB Group
October 25, 2010 | Slide 19

20. Single item generating most improvement
Steering Committee being represented by UK Board
Committed
Informed
Strong
Supportive
© ABB Group
October 25, 2010 | Slide 20

21. SAP Project in Summary
Providing
Right
Information
Delivering
Excellence
© ABB Group
October 25, 2010 | Slide 21

22. © ABB Group
October 25, 2010 | Slide 22