Successful SAP S/4HANA transformation at Salzgitter AG

10th June 2024

Salzgitter AG is one of Germany's leading steel and technology groups.

Being a pioneer in the circular economy, the Salzgitter Group is focussing on the sustainable innovation and transformation of its products and processes in the areas of steel production, steel processing, trading and technology.

Salzgitter AG is setting standards in the industry with its "Salzgitter AG 2030" strategy and the mission statement "Pioneering for Circular Solutions". Strong initiatives and programs such as SALCOS® – Salzgitter Low CO2 Steelmaking make these claims a reality. The group actively promotes further development towards a circular economy through partnerships and networks.

Employing about 25,000 people worldwide in 160 national and international subsidiaries and affiliated companies, the Salzgitter Group lives up to its global claim to growth, profitability and its pioneering position. For the financial year 2023, the group generated about € 11 billion in external sales with a crude steel capacity of 7 million tonnes.

In early November 2023, after several years of intensive project work, an important milestone in Salzgitter AG's SAP S/4HANA transformation program could be achieved. As part of a successful collaboration between the group's own IT service provider Salzgitter Digital Solutions GmbH and consenso Consulting GmbH as the strategic implementation partner, the companies Salzgitter Flachstahl GmbH, Peiner Träger GmbH, Ilsenburger Grobblech GmbH and Mannesmann Grossrohr GmbH were migrated to the SAP S/4HANA-based ERP system during a 100-hour cut-over phase.

A hybrid approach of selective transformation was pursued and implemented to migrate the steel companies from SAP R/3 to SAP S/4HANA. Thus, several ERP systems could be consolidated into a new, centralised SAP S/4HANA system in the steel division for the companies concerned. At the same time, a large number of partner systems communicating with the SAP system via interfaces were integrated into the new system environment using the latest interface technologies.

In terms of processes, each company retains its own individual system workflows in the existing business process model, as these differ greatly from company to company. However, the processes were harmonised wherever significant added value could be created. For instance, processes in the areas of finance and purchasing were harmonised in order to optimise processes across the group and leverage synergies. In addition, master data was mapped with the new SAP business partner object, centralised and integrated into the new steel system via SAP Master Data Governance (MDG).

An effective data migration process was defined and implemented with the support of our partner cbs Corporate Business Solutions Unternehmensberatung GmbH. The selective transition to a new S/4HANA system enabled outdated or inactive data and organisational units/elements to be cleaned up or excluded from the transfer. At the same time, relevant data was delimited and migrated into the new data structures.

Furthermore, the new S/4HANA software offers improved features in a modern and leaner IT architecture, providing a basis for the implementation of technical innovations to optimise existing processes as the project progresses.

Many thanks to all those involved in the project and to Salzgitter Digital Solutions GmbH for their excellent cooperation and partnership, which made this project success possible in the first place. We look forward to further exciting challenges together!

Foto: Salzgitter AG (https://salzgitterag.picturepark.com/WorldPort/Port/Presse)