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SAP AG

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SAP : Feed the World with $100 Million in Procurement Synergies

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05/21/2019 | 09:43am EDT

When Canadian-based Nutrien literally sprouted from the merger of agricultural leaders Agrium and Potash, one major promise was $100 million in procurement synergies.

Nutrien's leadership team took center stage at the recent SAP Ariba Live event to talk about how the company exceeded this target in the first year after the merger.

'We decided as a company to be the first ones out of the gate to go with an enterprise cloud solution for procurement,' said Shane Curley, vice president of Strategic Procurement at Nutrien. 'Our target for year one was $75 million, and we exceeded that.'

As the largest provider of crop inputs, services, and solutions in the world, Nutrien's purpose is to help growers increase food production. It's not a vision that company leaders take lightly. In fact, procurement set the bar high as the organization transformed legacy processes from two agricultural leaders with about 10 different enterprise resource planning (ERP) systems between them.

While procurement owned the transformation process within that group, Jason Ruiter, senior manager of IT at Nutrien, credited everyone's willingness to share responsibilities with the project's success. IT changed the way it operated, becoming a partner that procurement could trust. The combined team worked together from due diligence during the vendor selection process through every project phase.

'Our IT organization went through a transformation, we had to learn more about the organization, becoming procurement experts,' said Ruiter. 'We spent a lot of time understanding who we were, studying business processes to streamline and centralize the procurement operation. After going through a lengthy evaluation, SAP Ariba stood out for its end-to-end [capabilities] and for the depth of its solution. Looking at their support offerings, supplier enablement, total cost of ownership, speed to value, and being integrated with multiple ERP platforms, it became very clear it was the right solution.'

Due Diligence Pays Off

Both data-driven and people-oriented, Nutrien's implementation team adopted a rigorous yet agile strategy that factored in how the new procurement system would change buying processes and employee behavior. Advance planning with IT and procurement in partnership was critical to project success.

'Get your functional and technical teams set up and involved early,' said Curley. 'We had the luxury of months before the merger to work through processes, come up with a plan, go through proper sourcing processes to sort this all out. We made the plan and spent lots of time working collaboratively in workshops. We put the teams in place ahead of time, and that was key, because as you work through the processes, they're there from the initial stages through the build and when you get to the end of the project you have a big knowledge transfer at the end.'

Major Lessons Learned

Much more than a technology story, Nutrien's journey reflected the company's multi-year transformation. It encompassed change management to help people adopt the new procurement processes, including catalog planning and supplier transactions. Curley advised companies to over-invest in change management because 'this is transforming the way the business is going to run, and the way of working for both buyers and suppliers.'

Getting the right people involved and speed were also important. Although the team had ample planning time in the run-up to the merger, the program needed to move forward as soon as the merger closed.

'The biggest thing that was a lesson learned for us what that you have to do this quick,' said Stephen Wiens, solution delivery manager at Nutrien. 'You can't build the support model once you have it stood up. Find the SAP Ariba skill set quick. Engage stakeholders early so you can invest in the sustainment and be successful.'

Teamwork was the unifying theme across the entire project. 'Don't short-change change management,' said Sean Thompson, senior vice president, business network and ecosystem at SAP Ariba. 'Badge-less teaming and spirit and trust and the relationship with a big business goal and big business sponsorship of leadership, these are all the recurring themes.'

Follow me @smgaler

Disclaimer

SAP SE published this content on 21 May 2019 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 21 May 2019 13:42:07 UTC

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Sales 2019 27 402 M
EBIT 2019 8 097 M
Net income 2019 3 320 M
Debt 2019 9 525 M
Yield 2019 1,40%
P/E ratio 2019 37,7x
P/E ratio 2020 25,7x
EV / Sales2019 5,06x
EV / Sales2020 4,60x
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