Coles Group is in the “early stages” of transforming its finance processes that run on SAP, as it seeks 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 back in 2019. Initially it self-hosted the ERP software 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 required infrastructure to run it, along with multiple tools, utilities and platforms”.
Head of finance and corporate technology Cameron Borley told a recent SAP summit in Melbourne that with the two technical upgrades behind it, Coles could now focus on standardising and transforming its processes that run on SAP.
“We still have a lot of manual processes that even an old ECC [ERP Central Component] system could do. Historically that’s what we’ve always done,” he said.
“We’re pretty well placed, but the challenge is the next phase. We need to focus on transformation to transform. It’s not just going to happen by osmosis”.
Such transformation has long been the goal, but the retailer is only now standing up the business case and preparing the finance team to embrace a more frequent cadence of changes.
“People are used to ECC – it’s a 20-year investment. You might do a couple of service packs but it’s not a continual change,” Borley said.
“That’s really the challenge. The immediate hump is how do we standardise what we’re doing, make the most of the assets that we’ve got, but then pretty quickly move into …upgrading regularly.
“How do we make the benefits [of being on RISE] available and take them up? I think that’s a change for the business, in particular.”
Borley said that moving 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 business data cloud.
“I think that’s the key thing – we’ve got confidence in where the product’s going and we understand how the cloud ERP is going to develop,” he said.
So far, the retailer has seen “incremental benefit” from its technical upgrades of SAP, but it’s now looking for “the transformative benefit” of running in RISE with SAP S/4HANA.
RISE, as Borley noted, is “an enabler for transformation, not transformative in itself”.
The real transformation comes from being in a position 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 is not only being on RISE that has laid that groundwork.
The retailer is also attempting to standardise its finance operations on SAP: mapping out its business processes and workflows using Signavio, removing “bespoke solutions” and customisations, and embracing best practice.
It is chasing a goal that is common among many SAP customers, to move away from having a heavily customised environment to a “clean core” where customisation is kept to a bare minimum.
Traditionally, heavily customised SAP environments are costly to maintain and also prevent customers from keeping pace with upgrades or new feature releases.
Borley said that the business is “excited” for the transformation to come.
“They can see that, from a technology perspective, we’ve got the pieces in place. Now, it’s a matter of how we best utilise them,” he said.
“We think we’ve got a lot of benefits available to us and that’s the next part of our journey”.
Other parts of Coles that use different hosted SAP systems, such as Ariba and SuccessFactors, already benefit from quick access to new features.
In the people and culture function, which uses SuccessFactors, the first agentic AI use cases are already being realised.
“In SuccessFactors and Ariba, they’re used to a six-month cycle [of change]; it’s sort of embedded [in those ecosystems], but for [core] ERP it’s not embedded,” Borley said.
Benefits may also be realised outside of finance as well, with more parts of Coles to be run on SAP.
“New builds” of SAP under the retailer’s “cloud ERP” program are underway for its liquor business, as well as to run two fresh milk processing facilities that Coles acquired from Saputo last year.
“We’re moving into an environment where we will have at least three SAP ERPs, so we will have liquor, dairy and finance as a mini-ERP,” Borley said.
