Coles Group is in the “early stages” of transforming its financial processes running on SAP, as the company looks to take advantage of regular feature releases in the managed version of the software it now uses.
The retailer started using S/4HANA for finance in 2019. Initially, it hosted the ERP software itself as an on-premises version in Azure, before moving to a fully managed cloud-based version under RISE with SAP.
A simple explanation of RISE is that “SAP provides and manages the SAP software and the necessary infrastructure to run it, along with multiple tools, utilities and platforms”.
Head of finance and business technology Cameron Borley told a recent SAP summit in Melbourne that with the two technical upgrades behind it, Coles could now focus on standardizing and transforming its processes running on SAP.
“We still have a lot of manual processes, even an old ECC [ERP Central Component] system could do. Historically, that’s what we’ve always done,” he said.
“We are quite well positioned, but the challenge is the next phase. We have to focus on transformation for the sake of transformation. It won’t just happen by osmosis.”
Such a transformation has long been the goal, but the retailer is only now building the business case and preparing the finance team to embrace a more frequent set of changes.
“People are used to ECC; it’s a 20-year investment. You might do a few service packs, but it’s not a continuous change,” Borley said.
“That’s really the challenge. The immediate problem is how do we standardize what we do, how do we get the best out of the resources that we have, and then move quite quickly to…regularly upgrading.
“How do we realize the benefits? [of being on RISE] available and recordable? I think this is a change especially for the company.”
Borley said the move to RISE gave Coles a clear view of the SAP roadmap for the next two to three years, both for core ERP and other SAP platforms such as the enterprise data cloud.
“I think that’s the most important thing: we have confidence in where the product is going and we understand how the cloud ERP is going to evolve,” he said.
So far, the retailer has seen “incremental benefit” from SAP’s technical upgrades, but is now looking for “the transformational benefit” of running in RISE with SAP S/4HANA.
RISE is, as Borley noted, “a catalyst for transformation, and not transformative in itself.”
The real transformation comes from being able to take advantage of more of the newer features and functions that are becoming available in the SAP ecosystem, such as AI with SAP Joule.
It’s not just the fact that we’re on RISE that laid the foundation.
The retailer is also trying to standardize its financial operations on SAP: mapping its business processes and workflows using Signavio, removing “tailor-made solutions” and customizations, and embracing best practices.
It pursues a goal common to many SAP customers, namely moving away from a highly customized environment towards a “clean core” where customization is kept to an absolute minimum.
Traditionally, highly customized SAP environments are expensive to maintain and prevent customers from keeping pace with upgrades or releases of new features.
Borley said the company is “excited” about the coming transformation.
“They can see that, from a technology perspective, we have the pieces in place. Now it’s a matter of how best to use them,” he said.
“We think there are a lot of benefits available to us and that is the next part of our journey.”
Other parts of Coles that use different hosted SAP systems, such as Ariba and SuccessFactors, are already benefiting from quick access to new features.
The first agentic AI use cases are already being realized in the people and culture function, which uses SuccessFactors.
“At SuccessFactors and Ariba they are used to a six-month cycle [of change]; it’s kind of embedded [in those ecosystems]but for [core] ERP is not embedded,” said Borley.
Benefits can also be realized outside the financial sector, with more parts of Coles running on SAP.
SAP “new builds” under the retailer’s “cloud ERP” program are underway for its beverage operations, as well as the operation of two fresh milk processing facilities that Coles was acquired from Saputo last year.
“We’re moving to an environment where we’ll have at least three SAP ERPs, so we’ll have spirits, dairy and finance as a mini ERP,” Borley said.
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