Kemira New Business Model

Europe-wide centralization and standardization of the supply chain, cross-country process harmonization, system transformation, and roll-in of 11 countries into a global SAP group template

Complete business model restructuring: Redesign of company-wide process and SAP sys-tem landscape supply chain management | SAP system landscape transformation (SLT)

Corporate Business Solutions

Restructuring at Kemira: A New European Business Model with a Centralized SAP Platform in 12 Months

cbs Corporate Business Solutions. The Materna Group Management Consultancy.

New European Business Model with a Centralized SAP Platform

About Kemira OYJ

Kemira is an international chemi-cals company. Kemira provides cus-tomers in water-intensive indust-ries with concepts and solutions to improve water quality and quantity management as well as energy, wa-ter, and raw material efficiency.

The Kemira Group has over 5,000 employees in 40 countries. In 2010 the Group generated sales of ap-proximately 2.2 billion . Its head-quarters are in Helsinki, Finland.

The chemicals company Kemira

established a completely new

business model in Europe with

the help of cbs Corporate Busi-

ness Solutions.

The project, completed in the

record time of just one year,

saw the entire reorganization

of organizational structures,

business processes, and the

SAP company platform, with mi-

nimal invasive restructuring du-

ring ongoing daily operations.



Initial Situation

The strategy of the Kemira Group a global chemicals com-pany headquartered in Helsinki, Finland is to focus on serving water-based industries and munici-pal water treatment. The company serves customers in water-inten-sive industries in three segments: Paper, Municipal & Industrial, and Oil & Mining.

In 2009 the chemicals company made the decision to establish a new, centrlized business model in Europe. A centrlized supply chain, new shared services, harmonized business processes, together with a standardized performance ma-nagement and reporting, would be the cornerstones of a new, corpo-rate business concept deployed for all countries and units.

This business model was imple-mented within the scope of a com-prehensive restructuring program. The aim of the NBM (New Business Model) project was to adapt the organizational structure, business

processes, and the existing SAP-based system landscape of the Kemira Group to suit the concepts of the new business model. To achieve this, an existing global SAP template system had to be restructured during ongoing ope-rations and 11 countries incor-porated in this fully redesigned, standardized, harmonized, and consolidated SAP world. At more or less the same time, three ad-ditional countries were brought into the new structure of the new business model as a direct roll-in.

An enormous transformati-on project completed in just 12 months in collaboration with the consulting partner cbs Corporate Business Solutions, which, as the main contractor, supported the project with comprehensive re-structuring consulting.

Departure from Complex Business Structures

Kemira in Europe in 2009: 13 country organizations, 17 ope-rative legal entities that work in

the companys three business seg-ments Paper, Municipal & Indust-rial, and Oil & Mining to generate 50% of the Groups sales.

These are decentralized ma-nagement structures arranged ac-cording to both regions as well as industries (segments), developed over time, highly local, and fea-turing different process flows.

But at the same time, Kemira Europe is also a collection of tight-ly intertwined organizational units interacting with each other in many ways, with a high throughput of internal goods and value flows. A spaghetti network of intercompa-ny transactions, business proces-ses spanning countries, numerous point-to-point integrated IT pro-cesses, and heterogeneous appli-cation systems, including SAP as the main software platform.

Customer Statements

Jyrki Mki-Kala, CFO of Kemira: NBM has been such a major pro-ject and it has involved so many countries and

the outcome has been just great!.

Timo Kokkonen, Project Manager Kemira: Thanks to cbs strong leadership, established methods, and innovative tools, we succeeded in delivering on ambitious project plans in a short time and very economic-ally. Direct quote: This was the best SAP project in the long history of SAP projects at Kemira.



The SAP world has matured over time and now comprises a total of 160 permanent establishments, a fully integrated SAP Business Suite system landscape with SAP ERP at its center, with over 20 company codes and around 200 plants, en-hanced by SAP CRM, HR, BI, and APO.

Kemira in Europe in 2009 is a company organization that pre-sents many faces to its customers. The market and brand presence in the countries lacks consistency. Sa-les, distribution, the supply chain, and customer service are charac-terized by heterogeneity; there is little unity in the European busi-ness over the business segments borders.

bility, the company value was to be increased in a sustained manner.

Changing the Business Model in an Existing, Well Developed Global SAP Template System

The New Business Model (NBM) project was set up to implement the new business model. Its aim was to adapt the Kemira Groups organizational structure, business processes, and SAP-supported IT system landscape to reflect the transactional and organizational concepts of the revised model. A comprehensive transformation project that affected the entire company, almost all functions and departments, and the IT organiza-tion.

The Project Planning Challenge

To establish the concrete confi-guration of the business model, it was first necessary to develop the organizational model and design the European template processes. A key challenge was how to design and implement a process in an exis-ting global SAP environment that was already extremely well develo-

Restructuring Establishing a New European Business Model

Kemiras management was resol-ved to take a big step. The organi-zation and business processes were to be transformed from the ground up to create more centralized con-trol of the entire company and achieve overall improvements. The aim was to foster global company control according to segments and create a centralized business mo-del for all countries and units. Stab-le, standardized business processes and clearly defined, harmonized intercompany processes would un-derpin this new model. The supply chain would be centralized, shared service functions would be estab-lished, local production sites and sales units harmonized, centralized planning and strategy processes, shared business terms and condi-tions, and a standardized key figure system for performance manage-ment and management reporting would be created.

These measures were intended to realize benefits in terms of ef-ficiency, costs, and revenues in the whole of Europe. There was to be a new orientation toward profita-

The Project in Numbers

11 Project locations in Europe

17 operative legal entities

160 SAP permanent establish-ments

2,000 end users

Systems affected: ERP, BI, APO, CRM, HR, XI, HFM

Functions affected: Sales, Purchasing, Finance, Cont-rolling, Plant Maintenance, EH&S, Manufacturing, Authoriza-tions

More than 100 key users

10 cbs consultants in the core team; in total up to 25 consultants involved

Project term: 12 months



ped. Which project approach was best suited? The greenfield ap-proach of building an entirely new system would have meant an enor-mous amount of work and would have required a long project. The model would have had to have been established from the ground up before the 11 countries could have been incorporated. The exis-ting SAP assets would have remai-ned unused.

Solution Approach: Everything Done by a Deadline - Ready for Use in a Year

The management consultants at cbs presented an alternative soluti-on. Using specific methods and cbs own, high-performance standard tools, it would be possible to carry out a comprehensive and targeted

transformation of the existing SAP template system and connected IT landscape (in the form of a brown-field approach). The restructuring and roll-in of the 11 countries in-

A Comprehensive Restructuring Program

The project requirements went far beyond a purely tech-nical system landscape trans-formation: Restructuring the existing SAP platform implied changing the process configura-tion and converting and harmo-nizing structures and dependent data. High throughput rates in intercompany business meant ensuring minimum downtime in achieving the go-live. On top of this came the country roll-ins, adapting the structures and pro-

cesses there, and migrating and adapting local data.

Therefore, the challenge was to integrate and plan a highly complex company program with requirements at several levels and manage its entire executi-on in such a way to ensure that the new solution could go live at the precise cutover moment. No mean feat, especially in light of the situational conditions in a company that had previously been decentralized and closely interwoven.

volved (in the first stage) into the redesigned European template would go live on a single deadline in the form of a big bang adoption.



Project Timeline

The project was split into de-sign and implementation phases. The IT design was limited to three months, while organization-al as-pects were considered beyond this period. Thanks to cbs comprehen-sive expertise, it was possible to identify the relevant points at the beginning and schedule decisions accordingly.

In the SAP-related area, the design phase was followed by a build. In other words, the design was implemented and verified in a corresponding integration test in the selected countries. After that, the other countries were handled one by one, taking into account their country-specific attributes. In the second half of the project, the main task was to carry out cut-over tests, which involved rehearsing the implementation and assessing

it in simultaneous tests in all coun-tries. Three of these tests ensured a seamless go-live at the turn of the year from 2010 to 2011.

Methodology

The extremely high professional, technical, organizational, and time requirements of the project could only be met using the M-cbs me-thodology and the technical inno-vations of the SHC Framework, a standard software solution for SAP system transformations.

Technically achieving such com-plex data changes to new business processes is, in itself, no trivial mat-ter. And to accomplish this system transformation in record time and go live with it over a weekend was in large part possible only because of the use of the cbs methodology for SAP restructuring projects in

combination with cbs own stan-dard software. With M-cbs and the cbs SHC Framework, all required business objects and data, inclu-ding the histories of all SAP mo-dules, were one by one selectively transferred, converted, and put into production on the deadline. On time, in scope, and in budget.

Why cbs?

From the very beginning, accor-ding to a later statement from the chemicals company, cbs was more or less predestined for the restruc-turing project. We just didnt know it at first. But when we learned that cbs was intimately acquainted with this type of business model restruc-ture on an SAP platform, the con-sultants from Germany had our full attention. They were, quite fran-kly, the competent restructuring consultants for this complex task the best ones with the relevant



experience at an international level and the comprehensive expertise to complete the implementation successfully from a single source.

Indeed, cbs could offer best practices for a quick and successful implementation on an SAP plat-form: Expert knowledge of the SAP-specific characteristics of or-ganizational structures and proces-ses, the methodical competence to master complex projects, expe-rienced program and project ma-nagers who could lead this kind of major project while sticking to tight deadlines and budgets and drive the project both professionally and technically, specific expertise, and a powerful standard software tool certified by auditors; an allrounder capable of transforming the sys-tem and modifying/migrating data.

A further reason why cbs was selected as the partner for achie-ving success was the methodical approach of minimal invasive sys-tem restructuring that the compa-ny could offer. This created a bene-fit for the customer that broke all records at Kemira: by saving time. Only with this approach was it pos-sible to completely transform an existing SAP landscape during on-going operations with roll-ins in 11 countries and achieve a ready-for-use solution within 12 months.

Why cbs - the deciding cbs success factors for Kemira

The solution offering of comprehensive restructuring consulting, from designing the business model solution (organi-zational model and process de-sign as well as SAP development) to technical implementation at system level

Comprehensive experience with this type of business model restructure on an SAP platform

Excellent customer references

High cost effectiveness of the cbs offering

Innovative technical possibilities for changing data to the new business processes with a minimal invasive method

A highly qualified cbs project team with the relevant experi-ence for this particular type of project.

Outlook

The success of the project is the perfect reason for Kemira to inclu-de further countries in the New Business Model. cbs continues to be a successful Kemira partner. Just two months on, on March 1st, 2011, the next three countries were incorporated into the new business model.

In the first three months of 2011, Kemira, together with cbs, implemented a standardized ma-nagement information system on the basis of SAP BusinessObjects. The second phase for this dash-board-based information system took place in the first half of 2011.

Benefits

Increased profitability through:

1. Greater process compe-tence and efficiency

2. Optimized control of and value creation in compa-ny-wide material flows (supply chain efficiency)

3. Optimized inventory ma-nagement and reduction of inventory costs

More efficient use of the companys own capital standardization of the supply chain

Centralization of certain functions creation of shared service centers

Standardized view of customers and outward presence toward customers (one company on the mar-ket) improved customer service

Pooling of inventories reduction of intercompany transactions

Standardization of processes

cbs Corporate Business Solutions The Materna Group Management Consultancy

Im Breitspiel 19 69126 Heidelberg - Germany T +49 6221 3304-0 [email protected] www.cbs-consulting.com

Documents

Kemira New Business Model