An Appliance Maker Transforms Its Technology Architecture and Strategy

Our engagement began with an exhaustive analysis of ApplianceCo’s business strategy and capabilities, which revealed numerous pain points and areas of opportunity. Some divisions were initially reluctant to embrace automation or new digital solutions, and while ApplianceCo had a solid base architecture built on SAP, its future success depended on expanding that base and maximizing its potential.

We started by presenting a compelling vision of the industry’s direction to ApplianceCo’s top leadership. Through innovation treks, expert presentations and our proprietary research, we gave the management team an immersive view of the next generation of manufacturing. We clearly laid out how the new systems would drive key business outcomes, and how technology would always work in service to enterprise strategy. We demonstrated that this was not an IT project but a chance to leap ahead, into the future of their industry.

Next we mobilized ApplianceCo’s talent to cocreate the “future state” of the organization. We formed cross-functional, Agile teams of top managers to design business cases for the new software tools that would improve outcomes and user satisfaction. Working hand in hand with SAP’s enterprise technology experts, we helped these teams create and prioritize digital initiatives by function (supply chain, manufacturing, etc.) and aligned these projects with the company's overall digital ambition. The process mapped out ways for ApplianceCo to maximize the return on its investment and quickly modernize the most important business capabilities.

ApplianceCo then began to implement these new programs across e-commerce, supply chain, manufacturing and other functions. The company launched SAP’s IBP and Ariba logistics program to track products from origin to destination. A reinvention of ApplianceCo’s pricing practices, using Pricefx connected to SAP, allowed the company to manage prices and discounts in real time, from the sales floor to the field to resellers. A new model for SKU reduction has reduced complexity significantly, and similar initiatives are underway to reduce complexity in e-commerce, logistics and manufacturing.

The initial results of ApplianceCo’s transformation are encouraging, with around $30 million in cost reductions already captured and a clear plan to realize more in the coming years. Today the company is on track to hit its goal of boosting sales by 25% over five years. The migration to S/4HANA has accelerated a digital transformation that has helped the company gain a 1% to 3% increase in margin.