Following the path to the digital enterprise

SAP S/4 – A CORNERSTONE OF SIKA’S DIGITALIZATION STRATEGY

18.11.2021 / IG SAP CHHEIKE SILLER-MORAWSKI / ANDREAS KISSLING

Following the path to the digital enterprise

WE ARE SIKA

Sika is a specialty chemicals company with a leading position

in the development and production of systems and products

for bonding, sealing, damping, reinforcing and protecting in

the building sector and motor vehicle industry.

WHAT WE DO – BUILDING TRUST

18.11.2021 IG SAP Talk | Sika's S/4 Journey3

SIKA AT A GLANCE25,000 EMPLOYEES

100 COUNTRIES

300+ PLANTS WORLDWIDE

6 NEW & EXPANDED PLANTS IN 2020

83 NEW PATENTS IN 2020

1 ACQUISITION IN 2020

7.88 BN NET SALES IN 2020 (IN CHF)

WE ARE THEREOur products might not always be visible but the results they achieve bring clear added value to customers and society.

FOCUS ON ATTRACTIVE MARKETS:

CROSS-SELLING, LIFE-CYCLE MANAGEMENT, ONE STRONG BRAND


Waterproofing Roofing Building Finishing

Flooring & Coating Sealing & Bonding Refurbishment Industry

Concrete

FOOTPRINT EXPANSION SINCE 2015

CREATING THE FOUNDATION FOR FUTURE GROWTH


+11 Subsidiaries

+46Plants

+27Acquisitions

>7,000New employees

Digitalization

Market Penetration

Innovation

Operational Efficiency

Acquisitions

Values

6-8%annual growth

25%of sales with newproducts

0.5%pts non-material cost improvementas % of net sales

15-18%EBIT marginUntil 2020: <15%

>10%Operating free cashflow per year as % of net sales

>25%ROCE by 2023

SUSTAINABILITY

12% CO2 emission reduction per ton sold

REVENUE GROWTH

SAVE COST – INCREASE PRODUCTIVITY

ACCELERATION OF IMPLEMENTATION

1

3

2

4

RELEVANCE IN THE DIGITAL WORLD


SIKA’S STRATEGIC TARGETS 2023

DIGITAL IMPACT ON OUR GROWTH STRATEGY

Ag

ile

IT

/ B

ig D

ata

An

aly

sis

SIKA’S DIGITAL VISION

CREATE IMPACT WITH 5 BUILDING BLOCKS


Grow revenue

Build new revenue streams

with digital services and new

business models

Enable acceleration

Drive growth and adoption by

leveraging Sika’s decentralized

organization

Sika’s

digital visionIncrease relevance

Differentiate on the market,

stay relevant and grow by

transferring offline strength

to digital

Save costs and increase

productivity

Use digital technologies to

drive down costs and increase

productivity in manufacturing

Customer

centricity

Operational

excellence

(Industry 4.0)

Effective

knowledge

worker

New business

models &

Innovation

Digital Building Blocks

1

3

2

4

1. Established core platforms as a fundament for digitalization

Customer Centricity

Operational Excellence

(Efficiency)

Effective Knowledge Worker

2. Provide powerful integration platforms (SAP BTP, SAP PO, Mulesoft)

3. Develop Apps on flexible cloud platforms

DIGITAL IT ARCHITECTURE

SOLID CORE & FLEXIBLE BOUNDARY CONCEPT

9

Data

Process

Eco-System

Integration

18.11.2021 IG SAP Talk | Sika's S/4 Journey

SAP S/4Strategy

Coming from a heterogenous ERP landscape …:

53% of Sales to Third on SAP platform (and most of IC sales)

47% of Sales to Third on other ERP platforms (roughly half are from acquired companies)

Some 100 companies are running local ERP installations like Axapta, JD Edwards, SAGE, local brands

… which is hindering:

process and data standardization (Sika BdP)

integration of acquisitions

drive global digitalization initiatives

2019: Alliance program based on 4 pillars

Global implementation of SAP

(2 Tiers: Sika Alliance / SAP ByD)

Enhance Functionality (e.g., TM, DMC)

Migrate to SAP S/4

Review standardized core processes

NEW SIKA ALLIANCE PROGRAM

LEVERAGE 2 TIER SAP PLATFORM


Time to consolidate our ERPs globally

Dual ERP Strategy with common a data base / format / process template

Sika’s company landscape is very heterogeneous in terms of: Company size

Process complexity

Maturity of the organization as well as markets

SIKA’S DUAL ERP STRATEGY

BASED ON THE SAP STACK


A “one fits all” ERP

strategy will fail!

SAP S/4HANA Midsized to large companies

Complexity in business processes

Leverage the full platform eco-system

Significant process automation needs

SAP ByD Small companies

Cloud ERP processes sufficient

User base with limited process

knowledge

Tier 1 Tier 2

SIKA’S ERP STRATEGY

WHAT DO WE AIM TO DELIVER


Fast integration of acquired companies Sika Processes / Data Scalability Proven Experience Project Methodology

Provide transparency for business decisions Real Time Data Transparent Reports Harmonized Data Scenario Simulation / Analytics

Strong governance Access Control SoD Audited Operation Process Owners

Strategy support: efficiency increase BdP Processes Planning Tools Automation Integration Capabilities

Enable Sika’s digital roadmap Artificial Intelligence Machine Learning Analytics Development Platform

Provide global modern ERP platform Alliance Template Newest Technology Hybrid Cloud / Mobile Regional Competence

SAP S/4Implementation

SIKA’S JOURNEY TO SAP S/4HANA

COMMITTED TO GROWTH AND INNOVATION

15

SAP

Alliance

Template

Greenfield

ECC 6.0

Alliance

pilots US

+ AT

Industrialized Alliance

Rollouts EMEA +

Automotive

Implement new

S/4HANA

features

2005 2010 2015 2020 2025

R/3

2000

GoLive

S/4HANA

Industrialized Alliance Rollouts

Americas, EMEA, Automotive, APAC

Digital Core

Enterprise Suite

S/4 Upgrades

EHP8


SAP S/4SAP ECC 6.0SAP R/3

EHP7

HANA

DB

IBP

TM

MDG-S

SuccessFactors

MII US

MDG-M

GTS

MII CH

DMC

EWM

LES

Concur

APO

SAP S/4 Enterprise Suite will provide the modern platform for process digitalization

In parallel the intensified global Rollout Program to drive standardization

ROADMAP TO DELIVER NEW DIGITAL ENTERPRISE SUITE

ROLLOUTS & BUSINESS PROJECTS IN PARALLEL

2018 2019 2020 2021 2022 2023 2024 … 2027

Alliance

Rollouts

and

Integration

Acquisitions

Deliver

Intelligent

Enterprise

Suite

A uto mot ive + 8 S / 4 p r o j e c t s *

A mer icas + 1 6 S / 4 1 3 p r o j e c t s *

BW/4HANASAP S/4HANA

Digital Core

SAP

SuccessFactors

EWM S/4HANA

EMEA + 1 4 S / 4 p r o j e c t s *

A PAC + 1 3 S / 4 p r o j e c t s *

GTS e/4HANA

IG SAP Talk | Sika's S/4 Journey18.11.202116

Template based,

centrally hosted and

globally managed,

single client ERP

Replace Product Compatibility

End-of-

Life

Compatib

ility

Mode

End-of-

Life

*S4 projects 2021

and beyond

SAP S/4 JOURNEY – PREPARE THE FUTURE

STRATEGIC CHOICE – BASIC QUESTIONS


Why When How

SAP landscape identified as core

digital platform of Sika – very

important to be ready to innovate

Reduce impact on global ERP Rollout

plan – limit the risk and Business

impact (6000 User vs 9000 User)

Make the project digestible – fast time

to value

Limit change impact and training

No further innovations to current

systems – need to follow a

modernization strategy

Adequate time to convert from

compatibility mode to equivalent

S/4HANA solution – back to standard

Leverage existing Sika Template

Solutions, access historical data

Start the transformation to the digital

core, automate business processes –

benefit from SAP digital journey

Have the matter of choice in the

selection of project partners

Explore new functionality after

migration – limit the scope to a

technical conversion

Hybrid architecture, composable

systems – become faster, agile as

innovation is accelerating

War of talents – be attractive as

employer

Ability to manage rollouts, other

projects and change requests in

parallel – limited freeze

Digital Core Early Mover System Conversion

S/4 HANA CONVERSION

FIGURES AT GLANCE


25’000+ ADAPTED OBJECTS DURING THE CUSTOM

CODE CONVERSION

2 POC CONVERSIONS

18INPLACE / DOWNTIME OPTIMIZED

CONVERSIONS

2000+ PO CHANNELS / INTERFACES

3100+ OSS NOTES S/4HANA IMPLEMENTED BY SIS

CONSULTANTS

1000+ ACTIVITIES IN THE CUTOVER LIST

46 HOURSBUSINESS DOWNTIME DURING THE GOLIVE

WEEKEND

280+ OPERATIONAL CHANGE REQUESTS

REALIZED IN PARALLEL

3100+ INCIDENTS AND SERVICE REQUESTS IN

PARALLEL

8 SAP ROLLOUTS IN PARALLEL

SAPLEAD IMPLEMENTATION PARTNER

10EXTERNAL CONSULTING PARTNERS

6000 DAYS JOINT EFFORT INCL. SIS TEAM

25’000+ TEST CASES EXECUTED

1000+ BUSINESS TESTERS AROUND THE GLOBE

INVOLVED

2.7 TB NETDATA BASE SIZE PRODUCTIVE ERP SYSTEM

2183BATCHJOBS MIGRATED DURING THE S/4

CONVERSION PROJECT

60+ PROCESS CHANGES (SIMPLIFICATION

ITEMS) IMPLEMENTED

50+ OWN DEVELOPED SOLUTIONS BUILT FROM

SCRATCH

SAP Business Systems

SAP LANDSCAPE @SIKA – HIGHLY INTEGRATED

ILLUSTRATIVE


Supporting Systems

Fiori Launchpad

Learning Hub

S/4HANA Core

FI/CO STP

PM QTC

MM WM

MDGPP-PI

PPDS EHS

19

SAP ByD

FI STP

QM QTC

PP

4-TierS/4HANA ERP

Landscape

58 Company

Codes

40 Countries

250 Plants

+6’500 Users

SuccessFactorsEmployee

Central

Learning

Management

Succession

ManagementCompensation

Variable PayPerformance

Management

Onboarding

Solution

ManagerSolution

Documentation

Ticket Management

Change Management

Transport

Management

SAP BTP

Integration Suite

Identity Authentication

Services

Transport

Management

KYMA

Adobe document

Services

SAP PO

SLD

Cloud

Connector

System

Implementation

Running System

NON-SAP

Prod./WHS

Applications

Galileo

TIG

XAPI

Prologistics

Financial

Applications

DNB

Cortera

Covline

Salesforce

Vertex

3rd party WHS

Extension Suite

Cloud

Satellites

IBP Leonardo IT

ConcurAnalytics

Cloud

Ariba DMC

On-Premise

Satellites

HR TM

GTS

MII LES

BI

EWM

Hybris

eShop

GRC

VIM QM

nMain phases S/4

conversion project

Oct

2019

Nov

2019

Dec

2019

Jan

2020

Feb

2020

Mar

2020

Apr

2020

May

2020

Jun

2020

Jul

2020

Aug

2020

Sep

2020

Oct

2020

Nov

2020

Dec

2020

Jan

2021

Feb

2021

Mar

2021

Apr

2021

May

2021

Cu

rre

nt

Liv

e E

CC

17-Apr

Refresh

AEI/AEQ

S/4

PO

C

AEP S/4HANA POCConversion

Prepare

AEQ ECC 6.0 EHP8

New landscapeAEQ S/4HANA

IPC AED S/4HANA AED AEQ AEP AEI AES all on S/4HANA

Defined satellites connected

All business-critical satellites connected All satellites connected

Ne

w S

/4 l

an

dsc

ap

e

Realization

Conversion consists of 2 phases1

POC conversion

Delta training

Production conversion

to S/4POC and sandbox conversions

Project

Preparation

Alliance landscape

AED AES AEI AEQ AEP Satellites Current ECC Landscape on HANA DB

Guiding principle: Constantly changing landscape – Business process improvement projects / rollouts / application maintenance – limited freeze during S/4HANA GoLive

DoC

IPC

Downtime optimized conversion

In place conversion

Business:

Proc. tests 1

2 3

SIS:

Proc. tests

Business:

Retests

SIS:

New CC

Delta test

Business:

New CC

Delta test

Te

sts

DoC

DoC

Go Live

April 18

Project

development

stop

Test landscape business Final conversion

AEP ECC copy for Data Correction

Su

pp

ort

Sy

ste

ms

Technical Conversions:

DoC & IPC

Technical

Conversions


S/4HANA PROJECT PLANNING

DIFFERENT LAYERS

20

TEST MANAGEMENT

JOINT-EFFORT BUSINESS ORGANIZATION AND IT

21

SUCCESS

Test LandscapeSept – Nov 2020

914 SIS Tickets

14’768 Business Tests

1’717 SIS Process Tests

Testers - Globally Distributed Team

58 company codes in 40+ countries

1000+ Business & Consultants & SIS

201 SAP OSS Tickets

Final Conversion Delta TestsMid Feb – End Mar 2021

383 SIS Tickets

6’914 Business Tests

1’738 SIS Process Tests

93 SAP OSS Tickets


FINAL PRODUCTIVE CONVERSION APRIL 2021

18.11.2021 IG SAP Talk | Sika's S/4 Journey DoCDowntime optimized

conversionIncreased system sizing

Cu

rre

nt

liv

e l

an

dsc

ap

e

AE

PE

CC

Conversion transports

from AED dark green

AE

PE

CC

AE

PE

CCSatellites reassigned

AEQ AEP S/4 dark greenGo Live

sapaep.sika.com

DoC

Activation triggers

Fr, Apr-09, 09:00

AE

PS

/4

No changes of critical master data in finance

Workbench lock and no import of transports at all

to AEPImport of noncritical customizing to AEP grey possible, no technical restrictions for business

No import of critical customizing to AEP grey, special check of transport, special approval

No postings to previous periods

Import of “non-critical objects”

and workbench objects

GoLive

procedure

Business

downtime

FI-AA postings restricted

Import of “non-critical objects”


Sa

tell

ite

s

Satellites assigned to

AEQ AEP ECC grey

Last import

of “non-critical objects”


22

HARD SYSTEM FREEZEPHASE OF LIMITED CHANGES

Extract from cutover plan – 1000 activity tasks

CUTOVER PROCEDURE DURING UPTIME AND BLACKOUT PERIOD

TEAMS INVOLVED FROM EMEA AMERICAS APAC – BUSINESS + IT


System upgrade plus

post conversion

So, Apr 18 05:00Fr, Apr 16

18:00Sa, Apr 17 3:15

System

closing

System

tests

So, Apr 18 19:00

GoLive

Thu, Apr 01 18:00 check

readiness to start final

conversion

… until Thu, Apr 08 17:00

upgrade pre-processing tasks

Fri, Apr 09 09:00

activation trigger

…. until Thu, Apr 16 24:00 SUM upgrade during uptime

phase

Start conversion

during uptime

So, Apr 18 21:45

Sun 05:00 system activation tasks,

reassign interfaces

Sun 06:00 reversible tests

Consulting teams

Sun 10:30 reversible tests

Business users

Sun 14:30 AEP live release

Sun 15:00 release all

interfacesSun 17:00 NON-reversible

Business tests

Fri 18:00 closure EMEA/APAC

satellites

Fri 24:00 shutdown AEP and

closure activities – all teamsSat 01:15 closure FIN team

Sat 01:30 pre-conversion audit

reporting LVTF, closure activities

FIN team

Sat 03:00 Closure activities SAP

Basis

Sat 03:15 start SUM

downtime Sat 04:00 FIN delta conversion &

migration

Sat 05:30 main import 26.000 OSS

notes / XPRA

Sat 13:30 SUM Post phase

Sat 20:00 Upgrade phase

finished – start of activationSun 00:30 activation FIN

Sun 02:00 after-conversion audit

reporting LVTF

Sun 19:00 GoLive approval and agree on high priority issues

for immediate fixing

Sun 21:45 release all users on all

systems and activate all batch

jobs

Business uptimeBusiness downtime Fri 24:00 – Sun 21:45Business uptime

Point of NO-

return

Milestone: closure of all

systems finished Sat 03:15

Milestone: functional teams

start activation Sun 04:15

Milestone: release for GoLive

AEP Sun 19:00

Milestone: release all Users on

all systems Sun 21:45

BEING LIVE ON S/4 – SO WHAT´S NEXT

GET THE MOST OUT OF THE PLATFORM


Keep the system in shape

Stable but flexible and clean Core

Simplification with principle of ONE

Upgrade frequently to increase usage of standard by offering innovation

Drive the usage of the system

Investigate if user workaround inefficiencies and remedy

Increase efficiency based on End2End process design

Foster the pace of innovation

Increased user productivity with embedded analytics, new user experience (Fiori, Mobile, Speech,….)

Automation with Machine Learning, prediction, intelligent Robotic Process Automation

Cloud first – but not only – inclusive ecosystem of Apps, Services and Solutions

Organizational transformation – global operations

Hybrid Architecture

Security

Near-zero downtime

Covid pandemic started already in an early project phase – virtual teams and globally distributed teams,

difficult home office circumstances, required increased effort in information and team collaboration

No landscape freeze – ongoing system extensions, Rollouts and Projects – strict Governance of parallel

system changes – all had to be included in the final delta test phase

Functional gaps in S/4HANA – high number of SAP OSS tickets

Functional impact was higher than expected – even a technical S/4 conversion goes beyond a classical

upgrade project

Missing localizations for LATAM (ACR) –additional licenses were required

Downtime optimized conversion – technical highly complex

Global test management – very high effort for the Business organization within a given short time

System landscape planning – incorporating learnings

Add-Ons – upgrade beforehand required and complex adaption to the new S/4HANA software

LSMW replacement – due to Business Partner concept, new concepts for data loads / updates to be

evaluated

Understanding of the new data model – S/4 is a new software!

SOME OF OUR KEY CHALLENGES

25 18.11.2021 IG SAP Talk | Sika's S/4 Journey

INGREDIENTS FOR S/4HANA CONVERSION PROJECT SUCCESS

Create landscape diagrams for each conversion cycle – including the connectivity to the

satellite systems and transports – assure architectural due diligence

Start as early as possible with cutover plan preparation for the test system conversion cycles

– must become perfect by the time of production conversion


Select the implementation partners that suit best – elaborate the right team composition

Build up your team’s skill – Business Team and Functional Consultants

Make sure that the Development Team fully understands the new software development

concepts and technologies

Transparency

in both

functional and

technical

architecture is

key

Make sure that there is enough focus on pertinent hardware planning and performance

testing

Evaluate und use the adequate tools for testing, custom code correction

Reassess and clean up the custom code – manage your RICEFWS

Conversion test cycles are the backbone of the project

Verify the simplification items – close attention to the ones requiring a business decision or a

preparation project

Check the compatibility of the add-ons in advance and decide how to deal with each before

the conversion – whether it can be kept or uninstalled

TOGETHER WE LANDED SUCCESSFULLY


Documents

Following the path to the digital enterprise