Undertaking an SAP S/4HANA digital transformation project is a significant undertaking for any business.
As the earliest end-of-mainstream-maintenance deadlines for SAP ECC approach, SAP customers report they are still at the outset of their transformation journeys, with many having only recently begun the process of preparing their business for SAP S/4HANA transformation and evaluating the myriad complexities of doing so.
At a recent ASUG Tech Connect customer panel, three organizations in early stages in their migration journeys—PBF Energy, Fluor Corporation, and Commercial Metals—provided attendees with a glimpse into the current state of their SAP S/4HANA transformation projects. Moderated by Jennifer Dubler, Customer Evolution Lead, U.S. Southwest Region at SAP, the panel was composed of the following IT leaders:
• Kumar Kalidindi, Director of IT, Enterprise Strategy, Commercial Metals Corporation
• Kent Wiedel, Director of Information Technology, Fluor Corporation
• John Viggiano, Vice President of Enterprise Applications, Architecture and PMO, Fluor Corporation
• Carol Cardaci, Senior Manager of Operations and Support - IT Applications, PBF Energy
Each panelist shared insights on on-going SAP S/4HANA transformation efforts and offered attendees practical advice on how to approach their own migrations.
The Starting Line
At Fluor, a leading engineering and construction company that also provides maintenance and project management services, Viggiano and Wiedel currently contend with a highly customized ERP system that’s over 22 years old.
The enterprise’s IT system encompasses over 50,000 batch interfaces, 2,600 custom objects in its environment, and 1,700 custom function modules. As Viggiano and Wiedel evaluate this system against standard SAP S/4HANA capabilities, each interface requires assessment, from daily high-volume connections to occasional but critical data exchanges.
Internally, Fluor leaders are in the “phase-zero phase” of evaluating their system and are focused on building a strong business case for SAP S/4HANA to ensure organizational buy-in ahead of transformation and promote effective adoption of the solution post-implementation. Viggiano and Wiedel discussed demonstrating the capabilities of SAP S/4HANA to finance stakeholders, to show benefits that can stem from data-driven decision-making. The company’s governance framework balances IT delivery with business transformation goals. After a thorough request for proposals (RFP) process, Fluor chose its implementation partners based on both technical expertise and culture fit, a balance they encourage other companies to pursue.
“A lot of our emphasis on trying to get our customer base engaged,” Wiedel said. “Everybody’s saying, ‘Nothing’s broken, so why do we have to do this now?’ That type of situation goes on, so we’re spending a lot of time getting our organization ready for SAP S/4HANA.”
Commercial Metals Corporation, which produces rebar and related products for the construction industry, has only just conducted an SAP S/4HANA shell conversion pilot, setting up an SAP HANA instance and converting select data to understand remediation needs and likely-effort levels. “We’ve tried to understand what level of effort would be required to mitigate custom code,” explained Kalidindi.
“We’re doing the core transformation as a technical business case right now, but we’re trying to transform [more than that,] In terms of treasury, transportation, production, Signavio process planning,” added Kalidindi. “That’s where the primary value is in our case.”
Commercial Metals Corporation found only limited value in core transformation alone but saw an opportunity to consolidate external functions through the process; the company is still assessing the potential for larger business transformation through SAP S/4HANA, accounting for why the company is still in the early stages of their journey. Like many other SAP customers, Commercial Metals Corporation will need to balance transformation goals with ongoing business requirements, maintaining operations while systematically modernizing its landscape.
PBF Energy implemented SAP ECC in 2008; the system handles financials, plant maintenance within their refineries, project systems, and asset management. Meanwhile, a separate risk management system runs their ERP and invoicing. SAP document number ranges reset yearly across company codes, complicating historical analysis. Furthermore, the enterprise doesn’t use SAP Profit Center Accounting, limiting financial tracking capabilities. As a lean IT organization, PBF Energy is focused on continuous education and partner engagement while continuing to build internal support for change.
Laying the Groundwork
By launching an archiving initiative ahead of any larger transformation, PBF Energy is currently focused on the modernization of its data landscape. “I moved nine hundred gigabytes of log segment stuff out,” noted Cardaci. Working with OpenText, she found ways to meet both retention rules and access needs. Cardaci moved old records to OpenText’s secured database, where departments could still retrieve data when needed.
Team members at Commercials Metal Corporation, meanwhile, aren’t simply running tests in their SAP S/4HANA shell conversion pilot. Instead, team members documented every adaptation requirement, performance implication, and process change—an impressively thorough checklist that has helped the organization to plan out resource allocation and establish realistic timelines. The shell conversion process highlighted specific areas that will demand attention during full migration, and the pilot additionally provided concrete data for building a business case and implementation roadmap.
Beyond company-specific preparations, all three organizations face broader compliance challenges in terms of data archiving. Legal requirements in this area vary widely across industries and even specific data streams: 7-10 years for general records, 30 years for HR data, plus country-specific rules and regulations.
Navigating such challenges at Fluor comes down to “data compliance and data privacy,” Viggiano said. Working within the business to determine what legal obligations and regulations required from a retention standpoint led Fluor to uncover business areas where the organization had been storing 15-20 years’ worth of data—despite only being required to retain the previous five.
“Some of our cases go back many years, and sometimes they’re still being litigated,” he said. “As long as the data in those cases can be isolated—we leveraged a partner to find solutions to all of those, so we were able to satisfy lawyers and HR people, somehow, to get it all done. It’s possible.”
Even before selecting specific cloud-migration options, companies must first untangle a complex web of interfaces and integrations if they’re to effectively move to SAP S/4HANA. Fluor manages hundreds of interfaces through SAP Process Integration/Process Orchestration (PI/PO), carefully weighing cloud integration options and costs.
Data egress and ingress expenses become significant with high transaction volumes, as is the case at Fluor. “Given the volume of the data we submit daily to all our third parties, it’s not just hosting the environment,” said Wiedel. “It’s also sending that data, receiving that data, and building out the scale of that environment.”
Evaluating SAP integrations will be part of Fluor’s larger evaluation of whether to take a brownfield, greenfield, bluefield, or on-premises cloud approach to SAP S/4HANA, Wiedel said, and considering API-based alternatives and middleware consolidation opportunities will additionally inform Fluor’s integration strategy, with the team analyzing each interface’s volume, frequency, and business criticality.
The Road Ahead
Commercial Metals Corporation plans to leverage RISE with SAP on Microsoft Azure in its SAP S/4HANA transformation, especially given positive feedback from those who’ve made use of this methodology in recent years. RISE effectively fits the company’s existing infrastructure, and the business-transformation-as-a-service bundling of SAP assets that RISE represents aligns with what Commercial Metals Corporation is already pursuing in consolidating systems.
“We had reservations when we looked at RISE two to three years ago,” Kumar noted. “But we’ve talked to customers in the last year, and they’ve implemented with a lot of confidence.”
Commercial Metals Corporation, meanwhile, is developing a “hub-and-spoke” two-tier approach: SAP S/4HANA Public Cloud for new acquisitions and RISE with SAP on Public Cloud for legacy operations. The company favors this strategy with current mergers and acquisitions in its pipeline.
While the legacy business will embrace RISE with SAP on a public cloud model, any new M&A will first be evaluated for an SAP S/4HANA Public Cloud model.
“We started doing some modeling for an M&A we currently have in the pipeline, and the plan is to stand up a platform, either one or multiple instances of S/4 based on the target business unit, and bring them on,” Kumar said. “Long-term, we will determine whether we move them back to the legacy system or, if they’re mature enough, we can transform that legacy business into the public cloud.”
While not encompassed under the RISE banner, this two-tier approach aims to help the organization grow flexibly while updating systematically. The planned integration design should prevent technical complications across multiple SAP systems, laying the groundwork for smooth future acquisitions.
Proactive Moves
With technical strategies in place, success ultimately depends on people. “The first thing is truly getting the business to engage with you,” Viggiano emphasized. “Some of the best and brightest out there executing projects in the field for us will lay the groundwork for the future.” Many of Fluor’s original implementation team members now hold leadership positions, proving that project experience accelerates careers but also setting the stage for stronger collaboration between business and IT stakeholders in a way that has put Fluor further ahead of others in its SAP S/4HANA journey.
At Fluor, experienced team members work alongside newer staff, passing on critical knowledge through daily collaboration. This mentoring approach keeps projects moving while building lasting expertise within the organization.
With SAP’s 2027 maintenance deadline approaching, companies are rushing to lock in skilled partners with industry expertise and success in similar projects. Considering this, early partner engagement helps secure necessary resources before market constraints intensify; as the deadlines approach, partner resources will be stretched thin, and it will become more difficult to adequately staff transformation projects.
As Fluor continues to move forward with SAP S/4HANA transformation, “we’ll err towards the sign of choosing the standard” in terms of limiting customizations in various business processes, Viggiano said.
“We'd love to be bringing in some of our bespoke systems and best-practice environments back into SAP, as that's where we have customization; that’s what’s going to limit our ability to adopt and get the value out of this significant investment that we’re going to make with SAP,” he added.
“That's what we’re going to try to hammer with our business leadership is that we’re going to make an investment in the next 20 years,” he said. “Now is the time to simplify and to take advantage of this capability and let SAP continue to innovate around areas that we’d customized before.”
But to do so, companies must balance competing priorities: technical needs versus business goals, custom code versus standard features, and current operations versus future flexibility. Each organization charts its own course toward SAP S/4HANA, but points of focus like preparation, clear value identification, and change management are consistent across the on-premises SAP customer base, and many customers are still in preliminary stages of aligning business strategies, requirements, and limitations to pursue upgrading their ERP systems.
Companies starting their journey toward SAP S/4HANA can learn much from organizations going through the process of evaluating transformation. With maintenance deadlines approaching, their experiences are more relevant than ever.