Project Summary

Siemens AG, a global technology powerhouse with over 300,000 employees, undertook a massive digital transformation project in 2018 to replace multiple legacy ERP systems with a standardised SAP S/4HANA platform. The initiative, dubbed “Siemens One ERP,” aimed to harmonise business processes across 2,200+ operating locations in 190 countries and enable real-time decision making through a unified digital core.

Solutions Adopted

Siemens implemented a comprehensive SAP-based technology stack:

  • SAP S/4HANA as the core ERP system (on-premises deployment)
  • SAP Fiori for modernised user experience and mobile access
  • SAP Integrated Business Planning for supply chain optimisation
  • SAP Ariba for procurement and supplier management
  • SAP SuccessFactors for HR processes integration
  • SAP Analytics Cloud for real-time business intelligence
  • SAP Master Data Governance for unified data management
  • Custom-developed industry-specific modules using SAP Business Technology Platform
  • Integration with IoT platforms using SAP Integration Suite

Implementation Costs

  • Software licensing: €185 million
  • Hardware infrastructure upgrade: €95 million
  • Implementation services: €320 million
  • Data migration and cleansing: €75 million
  • Change management and training: €60 million
  • Program management: €40 million
  • Contingency: €45 million
  • Total investment: Approximately €820 million

Implementation Duration

  • Business case and selection: 6 months (January-June 2018)
  • Design and prototype: 9 months (July 2018-March 2019)
  • Global template building: 8 months (April-November 2019)
  • Pilot implementation (Germany): 7 months (December 2019-June 2020)
  • Wave 1 (Western Europe): 10 months (July 2020-April 2021)
  • Wave 2 (North America): 8 months (May 2021-December 2021)
  • Wave 3 (APAC): 10 months (January-October 2022)
  • Wave 4 (Rest of World): 12 months (November 2022-October 2023)
  • Hyper-care and stabilisation: Ongoing
  • Total duration: 5.5 years (January 2018-June 2023)

Savings and Benefits

  • Annual IT cost reduction: €160 million (30% reduction in ERP-related expenses)
  • Inventory optimisation: €280 million working capital improvement
  • Procurement savings through standardisation: €340 million annually
  • Productivity improvement of 15% in finance operations
  • Order-to-cash cycle reduced by 40% (from 25 days to 15 days)
  • The financial close process has been reduced from 12 days to 5 days
  • 99.8% system availability (up from 97.5%)
  • 75% reduction in system interfaces (from 4,800 to 1,200)
  • Real-time visibility into global operations enables faster decision-making
  • Five-year ROI of 210% with breakeven achieved at 3.2 years