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Case Study

Extra Care for Zuellig Pharma

Extra Care for Zuellig Pharma

Understanding the Impacts of Moving from SAP ECC to S/4HANA on Azure Helped one of the Largest Healthcare Providers in Asia to Accelerate its Digital Transformation

Zuellig Pharma, one of the largest healthcare providers in Asia, was moving ahead with its digital transformation. It soon added the upgrade and conversion of its SAP ERP solution from ECC to S/4HANA to its mid-term strategy. However, making the final move required excellent pre-planning to accommodate its complex and customized ECC landscape, including integration to external critical applications. To ensure the whole conversion would land, Zuellig Pharma needed to test the feasibility of a technical conversion to S/4HANA to preserve past investments.

Engaging SoftwareONE with its S/4HANA Conversion Pilot on Azure Program helped Zuellig Pharma confirm the best conversion option to accelerate its digital transformation. Through proper conversion planning, including data and code remediation, Zuellig Pharma reduced the number of issues to be addressed during the actual conversion. The pilot also assisted in finalizing the business case with a better understanding of costs, benefits, and S/4HANA conversion risks.

Zuellig Pharma logo

The Project

  • Customer: Zuellig Pharma

  • Industry: Healthcare

  • Services: SoftwareONE’s SAP S/4HANA Pilot on Azure Program to assess a full-scaled SAP ERP ECC to S/4HANA conversion pilot on Microsoft Azure including SoftwareONE's monitorSimple service to manage the SAP pilot environment and SoftwareONE's PyraCloud FinOps platform to pro-actively manage Azure cloud spend

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About the Customer

Zuellig Pharma is one of the largest healthcare services groups in Asia. With its mission to make healthcare more accessible by providing best-in-class distribution, commercial, and digital services to support the region’s growing healthcare needs, the almost hundred years old company today operates with more than 500 customers, including some of the top 20 pharmaceutical companies in the world. Covering 13 markets in Asia with over 12,000 employees, they serve over 350,000 medical facilities.

Zuellig Pharma's mission of making healthcare more accessible has never been more relevant in enabling the fight against the COVID-19 pandemic. This includes supporting the complex supply chain planning across the healthcare ecosystem, provision of vials and packaging, and assuring that cold chain requirements to support the vaccination program in Asia are met.

More broadly, Zuellig Pharma addresses Asia’s fragmented healthcare ecosystem by providing a range of services and solutions supported by digital platforms to better connect to customers, healthcare professionals, patients, and other key stakeholders. The company has accelerated product distribution to remote areas with innovative last-mile solutions while developing new patient care solutions to improve patient adherence and treatment affordability.

The Challenge

As part of its overall business mission and in support of the complex needs of its customers, Zuellig Pharma launched a digital enablement strategy in 2016 to build a modern and innovative portfolio of digital services.

The migration of the existing SAP ERP system (ECC 6.0) to the Azure Cloud was an important step in this digital transformation. Zuellig Pharma had already demonstrated excellence in its approach to data and information. Through its early adoption of blockchain and mobile technology the company was awarded the Information Visionary Award and the SAP Innovation award in 2019. It was only logical to take the next step on the company's digital strategy by evaluating the adoption of SAP’s newer intelligent enterprise suite built around S/4HANA. Of particular interest was the potential to simplify and automate business processes, while increasing productivity, supply chain efficiency, and time-to-market. The objective was to become even more agile and nimble in responding to market changes and customer needs.

Considering its investments in a heavily customized SAP system, Zuellig Pharma was concerned that starting fresh with a complete re-implementation would be difficult to justify. It needed to understand the feasibility of converting the existing system to S/4HANA, including the magnitude of impact on data, custom code, and business processes. An added challenge was integrating several business-critical applications and understanding any conversion impacts.

The Solution

Based on an existing relationship with Zuellig Pharma, and its market-leading position in migrating SAP workloads to the cloud and to S/4HANA, Zuellig Pharma engaged SoftwareONE to perform a pilot conversion of their SAP ECC 6.0 system to S/4HANA.

SoftwareONE set up a dedicated environment for the pilot on Azure and established connectivity to the existing SAP system on Azure. It copied the SAP ECC 6.0 production environment and converted it to S/4HANA. The conversion enabled a full-scale test without impacting existing Zuellig Pharma operations. The pilot conversion identified issues that need to be addressed before the actual conversion. 

The pilot program enabled Zuellig Pharma to test the S/4HANA conversion and to understand the extent of impacts on data, custom code, business processes, and integration to other applications.

In addition, the project provided data to test and demo the new S/4HANA solution and helped Zuellig Pharma drive adoption in the business community by showcasing the new Fiori user interface and the business processes improvements.

The Result

The pilot conversion of the ECC production system copy (an approximately 3.2 TB database size) was performed in less than four months, including interruptions and delays associated with the resolution of more than 50 critical errors detected during the process.

For the conversion, around 400 customizations (enhancements, conversions, workflows, reports, and forms) were analyzed. These exposed possible errors and warning across the associated 33,000 plus code objects. Active Business Functions and Add-Ons were also analyzed for compatibility.

While the pilot environment did not include any external applications integrated with SAP, the Readiness Check report provided a compatibility analysis for the SAP Business Warehouse Extractors showing the impact the S/4HANA conversion would have. The converted S/4HANA system was integrated with upgraded EWM 9.5 and SAP PO 7.5 systems.

One unexpected result of the pilot project was the extent of issues with the master data that was exposed. Zuellig Pharma had not anticipated this and it showed the need to remediate master data, including the Customer / Vendor Integration with both master data combined into the Business Partner master in S/4HANA.

Overall, the pilot conversion provided Zuellig Pharma with invaluable insight into the preparation activities required ahead of the actual conversion to S/4HANA. This included a master data harmonization project triggered by data quality findings and opportunities identified to archive redundant data.

SoftwareONE provided the know-how for a S/4HANA conversion project and the approach for the pilot. This allowed the S/4HANA conversion to be completed in a short time and with minimal resources (people, infrastructure and cost) required from Zuellig Pharma.

The S/4HANA pilot also enabled a change management program to initiate and drive adoption of the new solution by showcasing the improved business processes and functionalities of the S/4HANA solution. The optimized User Interface using SAP Fiori was demonstrated as part of selected scenarios tested to illustrate the benefits of increased productivity and flexibility, focusing on mobile workers.

Benefits and Outcomes

SoftwareONE’s S/4HANA Pilot Conversion Program delivered the following key benefits to Zuellig Pharma:

  • Demonstrated feasibility of a conversion approach to move from ECC to S/4HANA without going through a greenfield approach, enabling Zuellig Pharma to confirm that path for their S/4HANA roadmap.
  • Greater understanding of the conversion process from ECC to S/4HANA, including detailed analysis of the impact on data, custom code and business processes as well as possible risks and challenges. These invaluable insights and experience will help Zuellig Pharma best prepare for the actual conversion and execute the SAP ECC to S/4HANA conversion in the most efficient way.
  • Confirmed the direction for the warehouse management solution (EWM) roadmap, with the S/4HANA pilot system enabling the assessment of the embedded warehouse management solution in S/4HANA and the decision to instead maintain a separate EWM system, upgraded to the next available release (9.5).
  • Increased support by the business stakeholders for adopting S/4HANA, resulting from the demonstrated benefits, improved business processes, and better user experience.

SAP S/4HANA Pilot Program

The SoftwareONE S/4HANA Pilot Program helps SAP ECC customers who want to convert to S/4HANA on Hyperscaler, leveraging either Microsoft Azure or Amazon Web Services (AWS).

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