Our successful collaboration with Zalando – Data Management, Analytics and Planning
The vision for an SAP driven company-steering
The vision was to create an SAP driven environment for Financial Reporting and Planning. This included an updated Data Management powered by SAP BW/4HANA, Reporting and Dashboarding on SAC, and readiness for Planning.
Transformation Data Management – how we upgraded 3 BW Systems in 3 months to BW/4HANA
On this, Zalando and SAP published a success story:
The legacy system landscape lacked governance, common architecture and planning compatibility, plus was not fast enough, had no data tiering capabilities and was not suited for direct business use in self-modeling.
Our path to Data Management with SAP BW/4HANA
Together with Zalando and SAP, we sat down in discovery workshops to come up with a target architecture. The core ERP was set up as an SAP S/4HANA system, and SLT was installed to replicate data for the big tables like ACDOCA. The legacy landscape consisted of 3 SAP BW on HANA systems with purposes of Financial Reporting, HR Reporting (on HCM), and Payments Reporting. After analyzing all conversion possibilities, we decided for a green-field approach, setting up blank SAP BW/4HANA systems and use conversion routines to upgrade the legacy business applications to the respective new box.
Challenges on the way
After exploring all available conversion options, the next challenge was to convince the IT management on our suggested path. The main issue was that the legacy reporting needed to flawlessly work on all 3 legacy machines, so in-place conversion was ruled out soon. It also meant that the maintenance needed to continue on all legacy machines, restricting the number of hands available for upgrade and conversion activities.
On top of that, the month-end closing process must not be disturbed by upgrade activities.
Overcome of challenges
To tackle the main challenges, we detailed out a conversion approach that allowed us to form a highly productive team that could take the conversion activities like a well-oiled machine. The team was mixed, giving upgrade management and upgrade activities to our specialists from Dahlbeer, while being supervised and steered by Zalando architecture and IT management. We also detailed out a cut-over plan that allowed smooth transition to the new systems, including synching with closing processes, SAP basis requirements, and deep involvement of business representatives for testing and signing-off data for correctness.
Data Foundation on SAP BW/4HANA systems
Together with Zalando we managed to upgrade all three SAP BW systems to SAP BW/4HANA in only three month’s time. Over 6 terabytes of data have been migrated, and governance rules plus implementation guidelines have been established. Data-tiering, i.e. giving the possibility consider data as cold, warm or hot, has been established, also allowing the available space in the hot-area to be best used (cold data was treated with near-line storage). So the foundation was established to go on and take the next challenges on SAC Reporting and Planning.
Building a data foundation for Steering, Reporting and Planning
At Zalando, a new steering concept was forged, focusing even more on customers. During this business alignment, we started building a new data foundation, to migrate the steering reporting and planning from a Non-SAP solution to a SAP BW/4HANA and SAP Analytics Cloud based solution.
The data foundations main task was to transform the KPI definitions from the non-SAP solution to Data Management on SAP BW/4HANA and business definition on Collibra.
Transformation challenges in KPI definitions for P&L
The legacy system for Financial reporting was treating data from various sources, including a data lake for sales-order based data, and an ERP for financials. Some KPIs followed mixed definitions. The challenge was that the KPIs were well-defined from a descriptive business perspective, but the technical rules behind building those KPIs were not very transparent.
Data foundation for Steering, Reporting and Planning
First we established the data management for S/4HANA ERP based data for Cost Center Reporting and P&L Reporting on our new BW/4HANA system. The KPIs in this area where constructed in a multi-layered architecture, exposing them with BEx Queries to SAC in a live connection mode.
Secondly, we constructed rules for an AWS-based data-lake sales orders with Databricks, and exposed the data to the SAP BW/4HANA using Athena SDA technology.
The tricky thing here was to back-engineer the construction of KPIs in the old non-SAP reporting with the help of business responsibles and find solutions in BW/4HANA to replicate and optimize the KPI implementation. This included also interfaces build for business users to implement ad-hoc logic changes.
Transformation of Reporting
As soon as the major work on the business definition for the new way of steering Zalando was done, we made use of the built data foundation and began constructing reports to allow steering. In parallel, another team was implementing CO-PA on S/4HANA, giving the data foundation the new dimensions that Zalando decided to steer the company with. These new dimensions were integrated to the data foundation and the reports, so that the complete picture was available in SAP BW/4HANA, and subsequently in SAC.
Introducing Dashboards for steering
As soon as the first SAC models were made available, construction of Dashboards started, driven by a central finance department and supported by our consultants. Cost Center Reporting was first established and immediately roled-out. With the feedback from users, the P&L based dashboards were created next, focusing on the different dimensions from the new steering philosophy. Change Management was established, so that the users understand and embrace the new customer-based way of steering.
Performance trouble in paradise
The old non-SAP system was still the leading system for P&L, in part because there was trouble in paradise: the fully virtual construction of KPIs in SAP BW/4HANA and SAC proved to be not fast enough. Solution was to go two parallel paths: First, build a quick fix and materialize the KPIs in an aDSO for fast reporting. This was done for the most important KPIs and dimensions, with the downside of duplicating data and needing to run materializing with every new period. But it fixed the performance trouble immediately, users were happy and we could switch to SAP BW/4HANA as leading system. But the original problem was still there in the virtual layers. Here SAP jumped in and found ways to optimize, which were then taken into account and implemented subsequently, allowing fast reporting on the virtual definitions.
Steering needs Planning and Reporting
With the new Reporting structures well established and the legacy non-SAP reporting switched off, the next step is to complete the business cycle and enable steering by introducing financial planning. There is a non-SAP legacy system in place, which was made ready to cover also the new steering dimensions, but it is not well integrated and creates additional maintenance efforts. So the next step is to harness the power of SAC to allow business planning and forecasting and integrate it with the reporting, to give Zalando the opportunity of seamless and fast steering in challenging economic times.