End-to-end SAP S/4HANA Implementation for SAG

Business Challenge 

In order to optimize and improve internal business processes, SAG wanted to migrate to a modern integrated business platform. The absence of direct integration between corporate solutions based on legacy 1С and CPS platforms posed a number of difficulties for their business: 

• The internal financial system lacked detailed quantitative- and cost accounting, while the quantitative accounting system could not provide a detailed accounting of costs and revenues. As a result, the company received multiple streams of unconnected data.  
• The legacy systems could only provide a fragmented overview of the core business processes.  
• Due to data fragmentation and fractured workflow, SAG had to put significant effort into the reconciliation and merging of data streams, which, however, did not produce the required results.  
• The ability to make timely strategic decisions was another critical factor and an essential requirement of the modern market.  
• Inability to receive timely reports and analytics affected and slowed down other business processes, while also creating an imbalance in resource consumption.  
• In order to minimize the influence of the human factor, the level of automation had to be increased.  
• On top of that, new cost centers emerged in a dynamically developing company, making it more difficult to establish proper control over them without a unified system.  

A unified modern ERP platform was the best way to get accurate analytics, timely reports, and effective insights. Deeply integrated with manufacturing, such a system would encompass all business processes: from the order placement and production capacities load to the initial production redistribution and transfer of the ready-made products from the warehouse to the stores.  

Solution  

According to Muzaffar Khamdamov, SAG finance controller and SAP project manager, SAG selected Tietoevry Create Ukraine (formerly Infopulse) as an implementation partner based on our extensive expertise with BA & BI technologies, great resilience, and the best price/quality ratio. Direct support from SAP and close collaboration between our and client’s teams were instrumental for the success of this complex migration project.  

In order to suit SAG business needs – specifically, the production of carpets – we had to build the architecture of the solution from the very ground up. SAP S/4HANA ERP platform was selected for this migration as the most effective system on the market capable of solving all business challenges. Our experts carefully studied all the aspects of our client’s business in order to ensure that the solution would cater to the needs and requirements of our client.  

To achieve seamless integration, our experts had to migrate massive amounts of data from multiple isolated systems for further consolidation. Data migration and the creation of the non-standard databases and reporting required a tremendous joint effort from both ours and from the client’s teams.  

A number of modules were created within the integrated SAP platform to digitalize, manage and consolidate all the company’s production- and business processes, including manufacturing, sales and purchases, quality control, accounting and finance, logistics, and others. Since the system is deeply integrated within numerous aspects of the manufacturing process, the initial rollout to a modern ERP platform had to be as perfect as possible. We conducted numerous acceptance tests and fixed all inconsistencies quickly, which helped to avoid halts of production and delays in the delivery.  

The Infopulse (now Tietoevry Create Ukraine) team is very responsible in terms of task execution. I can confirm that the partner’s team has proven themselves to be top-level experts. They fully grasped the subtleties of our production processes, and worked closely with the SAG team, fulfilling all our requests. Their consultants helped us train our employees, thus making it easier to transition from older systems. They got in touch with us at any time of the day and night. Now, all SAG employees, and there are hundreds of them, are working in a single unified system. 

- Shukur Safarov, Internal SAP MM Consultant, SAG 

Technologies & Tools 

• SAP S/4HANA  
• SAP Mill Industrial Solution 
• SAP BI 
• SAP Enable Now 
• SAP PI/PO (SD) 

Business Value 

Pleased with the outcome of the migration project, SAG received the following benefits from this digital business transformation project: 

• Detailed margin analytics at the product- and customer levels 
• Accurate product cost accounting and correct pricing 
• Improved inventory traceability 
• Ease of business scalability 
• The ability to analyze costs up to the level of equipment and vehicles, etc.  

A unified SAP S/4HANA system helped our client streamline and consolidate their core business processes, from procurement and production to logistics, warehousing, sales, and financial accounting. Besides, SAG is now able to receive all necessary reports and analytics at any time and in full, allowing their top management to make timely strategic decisions, as well as further optimize and develop the company’s business.  

As the next stage of SAG digital transformation, we implemented a similar SAP migration project for SAG’s carpet and synthetic turf factory. Now, together with SAG we plan to perform a similar migration for their linen mill, which produces fabrics for bedding and clothing. The consolidation of all business processes into a joint network will allow our client to get a better overview of the operational and financial activities of the SAG group of companies.  

As SAG grows its business and aims to expand market presence, we strive to utilize the newest, most powerful technologies to improve all our internal processes. Migration to SAP S/4HANA platform has become an important step conducted fully in line with our business transformation strategy. I would like to express my sincere gratitude and appreciation to our reliable partners in this complex migration project, for their expertise, professionalism, and commitment to quality. SAG is already enjoying the results of this digital transformation project on multiple levels. In the end, digitalization will help SAG achieve our strategic goal – to be among the Top 5 world-leading manufacturers of the high-quality carpets. 

- Muzaffar Khamdamov, CFO, SAG