Spanish Retail Giant Undergoes SAP Refresh

The client

The client is a Spanish retail company, founded in 1975, and headquartered in Spain. Originally known for manufacturing working clothes, the client is now known for the different commercial brands that compose it. With shops in more than 90 countries globally, the client is one of the world's biggest retail companies. As a 'fast fashion' brand, their focus is on designing, manufacturing and distributing in a quicker way, staying constantly aligned with changing fashion trends.

Generating revenue of over €27 billion, they employ more than 165,000 people around the world, including more than 55,000 based in Spain. The client has seven main brands, all of which have an international reach. As well as being a global leader in the retail sector, they have an extensive, worldwide logistics and distribution network.

The challenge

The client's AS400 payroll system was developed three decades ago, and while it has been maintained and upgraded over this period, it is no longer suitable for the scale and complexity of the client's operations. Such outdated technology has resulted in maintenance and upgrade difficulties, to the point where the system posed an operational risk. As such, the client is facing the inevitability that a new system must be implemented.

As one the largest Spanish companies in terms of both the number of employees and the various types of collective agreements in place, the scale of the undertaking and the number of people it involves is considerable. Furthermore, once any migration is started, it absolutely cannot falter or stall, as it centres on such a critical function of the client's processes.

The focus of the challenge was to demonstrate a SAP HCM solution that could not just support all of the client's payroll processes for their Spanish employees, but also provide them with a deep understanding of the proposed architecture, likely timescale for implementation, how it would plug the gaps between their legacy systems and the new solution, etc.

To prove the solution to the client's satisfaction would require the configuration and development by NTT DATA of 24 discrete process cases to establish how this would work.

It entailed multiple, collaborative sessions working with the client's payroll and technology departments to give them full comprehension of the scope and architecture of the proposed solution. These sessions were necessary to build a complete understanding of the payroll processes from both a functional and technical point of view, and to allow for the identification of other processes that would be impacted by the change. The sessions would furthermore have to provide both proof of the solution's concept, and peace of mind for the client that operations would not be disrupted.

The solution

The proposed solution, SAP HCM, provides strategic HR, payroll and management services with an intuitive user interface and extensive data analytics. In this specific case, and to demonstrate both its capabilities and its suitability for the client's specific needs, 24 separate process studies were developed and demonstrated as a proof of concept. This covered everything from accounting and Meta4 integration to absences and management of employees overseas.

With payroll being closely integrated with a number of other processes within the group, an impact assessment of the SAP solution on the client's back-office operations was also undertaken. This will ensure the clients gain a wider understanding of any changes to business processes and payroll interfaces, and familiarise them with the solution architecture.

A strategy was laid out for successful implementation of the new payroll system for all of the client's many Spanish companies to demonstrate that the transformation would be a smooth transition, without operational disruption.

The result

The proof of concept provided the client with clear evidence that transformation would be effective, seamless and implemented without delaying day-to-day operations. Successful outcomes were demonstrated for the 24 process cases, and other tool aspects that were requested by the client were also warrantied.

The process proved SAP HCM's suitability for the transformation, with its utility and flexibility clear not just on the 24 processes identified, but also on day-to-day issues that inevitably occur within payroll systems, such as unforeseen personnel absences. The client also gained clarity on how the proposed solution deals with issues that can arise around 'how' questions: how to provide required information to legal entities, how to correctly carry out reporting duties, etc.

Successful testing showed how, through SAP PO, the client would benefit from SAP HCM's integration with their accounting practices and other functions, and the additional agility they would gain in their payroll activities, the amount of process automation they could leverage to free up staff to undertake other tasks, and the reduced timescales for all their main processes.

From a human perspective, the client was taught how to use the new system through a series of manuals and some 40 videos, designed to demonstrate how all the SAP HCM solution's tools work and their ease of use. This included an hour-long training video on processes within the business, and four, two-hour-long technical training resources for the IT area.

Why NTT DATA

NTT DATA is an expert SAP HCM and payroll processes partner, meaning that NTT DATA can best provide a wide overview and understanding of the new SAP payroll processes. NTT DATA and the client have an existing relationship concerning other technical SAP projects.

Importantly, NTT DATA provides a fresh and agnostic point of view on the client's needs, proposing a solution that combines different business units into a holistic solution that goes beyond just technical requirements to take user experience and extended functionality into account.

With that in mind, NTT DATA offers both business and entrepreneurial vision alongside their technical expertise and experience, meaning that even in complex cases such as this, a real solution with a realistic timing plan and architecture design are proposed.

Finally thanks to NTT DATA's international presence, any future SAP HCM transformation roll-outs in other territories could be carried out by in-country teams.

What's next

The guidance provided by NTT DATA has given the client the confidence they needed in the solution, and they have begun implementation of SAP HCM in all the Spanish companies, with an anticipated duration of 24 months. They are well-placed to undertake similar transformations for international payroll projects, and are likely to undertake a review of their personnel administration systems with a view to similar transformation.

Having been furnished with clear data and proofs of concept on the benefits of digital transformation, the client can plan for reengineering other HCM areas with confidence, cognisant of the risks, digital impact and costs.

This article has been reprinted with permission from the website of "https://leap.nttdata.com/".