An Insider Look at Ingevity’s SAP S/4HANA Business Transformation

In the year 2021, many companies are focused on building a digital platform that can support technologies like analytics, automation, machine learning, and artificial intelligence to help them become more agile in the face of disruption. Ingevity is a specialty chemical company based in Charleston, South Carolina currently undergoing an SAP S/4HANA business transformation initiative as part of its 2021 agenda.

Since joining Ingevity, the company’s VP of IT and CIO, Michael Mullis, says it’s been a busy ride as the company figures out what the future needs to look like. The year 2021 includes the next big phase for Ingevity from a technology perspective, and the company is finding that it’s not only about technology upgrades — it’s also about organizational redesign.

Here’s what Mullis had to say about where Ingevity is today, how he helps prevent burn-out among his employees when undergoing a migration remotely, and his thoughts on SAP’s new RISE offering.

Q. Tell us about your current SAP landscape.

Today Ingevity runs a 20-year-old, heavily customized version of SAP ECC 6.0. It was originally designed for a different industry and implemented by our former parent company, which was a paper manufacturer, so the system has been tailored over the years to meet the needs of the chemical industry.

From a planning perspective we run SAP Advanced Planner and Optimizer and OMP, along with SAP Business Warehouse. As we move forward with SAP S/4HANA we’re implementing SAP Integrated Business Planning to replace both SAP Advanced Planner and Optimizer and OMP, as well as various other software-as-a-service (SaaS) offerings from SAP to extend the solution.

Q. Where are you right now in this multi-year transformation journey?

We launched our transformation initiative in July of 2020 — during the pandemic. So that’s been an interesting journey in its own right. How do you implement a global business transformation leveraging SAP in a remote working environment? We had to figure that out early on and it can be done. Our systems integrator partner is Capgemini, so they’ve done a lot to help us hit the ground running and get that program off the ground. We’re about to exit the build phase and enter the testing phase. Our first deployment of SAP S/4HANA is scheduled to occur in October 2021.
Ahead of this, we decided to start by deploying SAP Integrated Business Planning modules to get some quick wins and early benefits. We’re deploying the modules in phases, starting with demand planning and then moving on to supply, and so on.

Q. What are some of the lessons learned from 2020 working remotely and managing this kind of project through disruption, and how has this experience changed your outlook for 2021?

I’ve been in the SAP space for more than 20 years and I’ve done multiple SAP implementations during that time, and the biggest hurdle of this implementation has been not being able to get together in the storming-norming-forming phase of bringing a project team together.

For many of our people, this is their first SAP project or first major implementation. We’ve had to rely more heavily on our systems integrator to make sure that the methodology and the process is clearly understood and articulated in advance of each of the different phases.

We’re also doing an agile implementation, which we’ve never done before, so that’s different to the traditional waterfall and has been a learning curve. Despite the challenges, we keep telling folks to just trust the process. It works, we’ll get through this. Do we hit every date with every deliverable? No, but that’s okay. In those cases, we readjust.

Another challenge is that people are getting burned out, as they do on every project, but in the remote workforce they’re getting burned out in isolation. We’re very focused on that from an internal organizational change management perspective, keeping tabs and keeping an eye on the team and making sure people have an opportunity to voice concerns and checking in regularly.

Michael Mullis, VP of IT and CIO, Ingevity

Q. What organizational changes have you made to accommodate a remote workforce during this transformation project?

Ingevity has multiple layers of leadership engagement. I’m a member of our executive steering team. We realized fairly quickly, during the design phase when key decisions were being made around what the solution was potentially going to look like, that without having the face-to-face meetings and the ability to pull people in as needed, we were missing a layer — a second tier of leadership — between the executives and the folks working on the project. We spun up an operating committee below the executive steering committee, and we’ve pulled a lot of the key business owners, stakeholders, and decision makers into that, including our heads of supply chain, finance, operations, manufacturing, and customer service — the folks who really own the relationships with the organization and the different parts of the business.

The executive steering team reports on things like whether we need guidance in certain areas or support from SAP or from our partners at Capgemini. And then the operating committee is more focused on identifying what decisions we’re making, what the impacts are, and how, as leaders of the organization, they can help us drive that message.
The operating committee has become a key vehicle for us to really help understand whether we’re making the right decisions and whether we’re communicating effectively.

Q. When SAPinsider surveyed our CIO community in our 2021 research, one of the questions we asked was about primary drivers of current strategies. The top responses were increasing process efficiency and supporting new business models and new business strategy. A third primary driver was managing through this disruption. Do those priorities resonate with you?

Those do resonate, and for Ingevity, I would add that a top driver for us is to become more agile. We had an antiquated platform that was limiting our ability to really do new and innovative things with SAP.

We were on an enhancement pack that was something like 12 versions behind where SAP currently is on ECC. So for us to even implement some new functionality that had been available for several years, it would have required significant effort and regression testing and all sorts of work for us just to turn on one piece of new functionality.

Moving to SAP S/4HANA leap-frogs us forward with all of the new functionality available in the latest version, and in preparation for the migration journey we moved all of our new and existing SAP systems to the cloud — to Microsoft Azure.

Ingevity is constantly looking for opportunities to grow both organically and inorganically and so moving to the cloud helps us become more agile and better positioned to very quickly and easily spin up the services that we need to support that new business.

Ultimately, we’re building a digital platform for the company so getting the core in now helps us position ourselves for technologies like artificial intelligence, machine learning, and robotic process automation.

Q. We also asked leaders what skill sets and technology investments they’re prioritizing, and they identified cloud and SAP S/4HANA, as well as analytics, automation, and artificial intelligence. Why are those skill sets and technologies important from an investment standpoint for Ingevity?

I’ll start by talking about analytics, and for us to get there we actually had to take a step back and focus on master data management and master data governance. We did not have a serious focus in that space as a company and we weren’t really positioning ourselves to leverage data as an asset.

As part of our transformation initiative we’re putting in a master data governance platform and tools, which ultimately, by re-engineering our business processes through SAP S/4HANA, gets us to a point where we can start slicing and dicing the data and doing real-time analytics.

We’re excited about the analytics side of it and integrating machine learning into our business functions with our plant floor operations.

Then we can start looking at things like predictive and preventative maintenance, not just scheduling maintenance for equipment. There’s a ton of opportunity in that space and we’re starting to invest in our people to help them learn and train up on these skillsets as part of this business transformation.

Q. Can you say more about how you are bringing these skillsets into your organization?

That’s the topic of the day right now: organizational design. We’re focused on business processes and technology as an enabler; now we need to focus on what does the organization need to look like as we prepare to deploy and support this new technology. For example, we’re considering creating different centers of expertise for supply chain, planning, finance, etc.

Ingevity has historically operated a very traditional organizational model with business systems and analysts who brokered the functional requirements and the technical requirements between the business and the technical guys doing the work.

That’s the model we’re in today, but I don’t believe that will be the model that we end up with when we go to SAP S/4HANA. We’ve built so much knowledge and capability within the project team and ultimately, within the business; we don’t want to lose that.

Q. Will you take a different approach to outsourcing once the transformation is complete?

Probably not. We’re heavily outsourced today. My IT team is fairly small and we rely on a number of strategic partners in that space on the business side. I don’t see a lot of change happening in the way we go to market with partners but it is part of an active discussion right now.

Q. What does success look like to you considering everything Ingevity is aiming to accomplish in 2021?

I think there will be a huge sense of pride and accomplishment, because as I mentioned earlier, to do this in a 100% remote manner has really been a challenge, but the team has been up for it and has maintained good dialogue, communication, and a regular cadence of touch points to help people understand what’s expected.

We’re doing a pilot go-live in October, and then we start the final deployments in early 2022; we aim to be fully deployed by April 1, 2022 as the current target. It will definitely be a sigh of relief, but then we’ll have to ready ourselves for what comes next. April is not the finish line. It’s really just the starting point for what our future looks like in this space.

Q. What are your thoughts on the RISE with SAP announcement and will it impact your transformation roadmap?

It’s interesting because my takeaway from what I’ve seen and listened to and spoken about with others is that RISE with SAP appears to be more targeted towards folks who have not yet committed to the SAP S/4HANA journey, and they’re trying to make it easier for companies to get to the cloud with SAP S/4HANA driving the business by bundling all of those pieces together.

Ingevity has already moved to the cloud leveraging Microsoft Azure and we did it ourselves and somewhat manually prior to this offering. And we got there, and it works, but I really see the end result as much the same. I’m in a model where I’m not going through SAP for everything. They’re not managing my cloud hosting partner, which I actually prefer because I’m going to SAP to make sure that my system and the applications and the functionality are working correctly. I’m going to my partner to manage my Microsoft relationship for infrastructure as a service. But that said, I do like what they’ve done, because it really should help and make it easier for others to start their journey.