Moody’s Corporation has emerged as a case study in how to methodically transform a heavily customized, inefficient ERP environment into a streamlined, strategic asset—balancing strategic, operational, financial, and technological objectives in the process.
Faced with a legacy of extreme customization that made ongoing support extremely challenging, Richard Hornung, Senior Vice President, SAP CoE, restructured the financial organization’s SAP systems, introduced clean-core governance, embraced RISE with SAP, and aligned its enterprise data strategy to position itself for AI-driven innovation.
A Strategic Reset: From Liability to Platform for Growth
When Hornung first evaluated the SAP landscape at Moody’s, he found a system saddled with more than 36,000 customizations and a business culture that regarded SAP as a hindrance rather than a platform for growth. He noted that end users were hampered and frustrated by the system’s rigidity; any effort to modify the system created ripple effects and stymied innovation efforts.
Recognizing that a technical fix alone would not suffice, Moody’s leadership embarked on a broader strategic reset.
Crucially, Hornung introduced a clean-core mandate that fundamentally changed how the Finance Technology team interacted with the business. Customizations would no longer be approved unless they aligned with clear architectural standards and delivered measurable business value.
To bridge the gap between Finance Technology and business units, he also created a business services team staffed by technically savvy business experts. Acting as internal translators, this group aligned operational needs with SAP requirements and fostered new levels of trust between his team and business leaders.
Today, the dynamic has shifted completely. Instead of viewing SAP as a roadblock, business units now actively seek collaboration with Finance Technology to optimize and innovate processes, cementing SAP’s role as a strategic enabler of growth.
Standardizing Processes and Managing Change
The operational hurdles faced by Moody’s were equally important to address before achieving success with transformation. Users were deeply entrenched in legacy processes and highly resistant to change, a situation compounded by Moody’s organizational culture of zero risk tolerance. Early SAP support under HEC (HANA Enterprise Cloud) contracts had been insufficient to meet the organization’s needs, creating additional friction and skepticism among internal stakeholders.
This time around, Moody’s operational implementation began with a shift to RISE with SAP, an engagement model that improved the quality and responsiveness of technical support almost immediately. Without relocating systems or disrupting operations, Moody’s gained access to more knowledgeable service teams and a dedicated customer success manager. Hornung noted this change helped drive renewed confidence in SAP support services and enabled the IT department to drive further system improvements.
Simultaneously, Hornung’s team invested in user enablement. They maintained a permanent lab environment where business users could experience system changes firsthand before a complete rollout. Formally established change management specialists were also embedded within the Finance Technology team, tasked with easing users through transitions and demonstrating how standardized processes could improve speed, reduce effort, and mitigate frustration. This structured approach made process improvements tangible, reducing the operational drag that had long plagued Moody’s systems.
Workforce Optimization and Cost Efficiency
Moody’s also leveraged this modernization initiative to address a growing financial challenge: while the company had invested heavily in SAP over many years, the returns on this investment had been constrained by operational inefficiency and high levels of manual intervention.
When Hornung joined five years ago, he had a very small SAP team, an insufficient headcount given the system’s size and complexity.
Through strategic investment over time, he now leads a robust mission critical team sized to meet the current challenges. This expansion, commensurate with increasing SAP investment, allowed Moody’s to internalize critical expertise, stabilize the environment, and drastically reduce dependency on external vendors.
Over time, process efficiencies driven by the new team structure allowed Moody’s to cut workforce needs for transaction processing by approximately 20%, a significant gain in operational leverage.
The company realized additional cost savings through an overhaul of its reporting architecture. By moving the majority of reporting workloads from SAP HANA to the Microsoft Fabric Lakehouse platform, the team reduced expensive database queries and freed up SAP’s transactional environment for more critical activities. It had previously taken days for data to refresh; this now occurs nearly in real-time, illustrating how financial discipline can be tightly woven into technical modernization.
Technology Modernization: Enabling AI and Innovation
Technologically, the company faced the daunting task of cleaning up decades of accumulated technical debt. A massive clean-core initiative was launched, prohibiting new customizations and creating a backlog of legacy modifications to be retired or shifted to SAP’s Business Technology Platform (BTP). Integration work was also prioritized, with direct system-to-system connections gradually being replaced by SAP’s Cloud Platform Integration (CPI) layer to ensure future scalability and agility.
At the same time, Moody’s leadership saw the need to align SAP modernization with the company’s broader push toward artificial intelligence. Encouraged by the CEO, every employee was tasked with experimenting with AI, leading to the creation of a dedicated AI team and several monetized AI offerings.
Hornung’s Finance Technology team began laying the technical groundwork by implementing real-time data flows and preparing for SAP’s AI features, even as the platform’s offerings in this area continued to evolve.
Although Moody’s expects it will take another two years of focused work to fully complete the clean-core transformation, the technological foundations are now firmly in place. Hornung’s team evaluates every integration, upgrade, and customization to ensure they are in line with Moody’s long-term modernization goals and add no new technical debt.
A Playbook for Enterprise Renewal
The Moody’s case study offers a model for other enterprises facing similar challenges with aging ERP systems. By tackling strategic, operational, financial, and technological issues in parallel, Moody’s was able to convert SAP from a perceived liability into a high-performing asset.
According to Hornung, it was critically important that leadership understood that cultural change had to accompany technical change: empowering users, tolerating risk and failure, and creating an environment where innovation could flourish were key to sustaining momentum.
As Moody’s continues its journey toward full clean-core compliance and greater AI integration, its experience stands as a testament to what is possible when enterprise modernization is approached with structure, patience, and vision.