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SAP intelligent enterprise helps Delivery Hero manage rapid growth
Delivery Hero may only be a midsize company, but its rapid business growth forced it to look for an enterprise-grade ERP product. The company eventually decided on SAP S/4HANA for the core of its intelligent enterprise.
Delivery Hero SE, a global food delivery service, has done something you'd only expect from large, established companies. Founded in 2011, Delivery Hero has built what SAP calls an intelligent enterprise infrastructure around the SAP S/4HANA platform.
Delivery Hero is built on a simple concept: taking online orders and quickly delivering food. But behind this simplicity is an operation that's growing rapidly in size and complexity, according to Johannes Langguth, senior director of finance systems at Delivery Hero. In order to handle the growth, Delivery Hero has implemented an IT environment centered on SAP S/4HANA, an ERP business suite that uses in-memory computing for real-time transactions and data analysis.
The Berlin-based company operates in more than 40 countries; works with more than 200,000 restaurant partners; services more than 1 million orders per day; and has 17,000 employees. The company filed an IPO in June 2018. In December, Delivery Hero sold its German operations to Dutch competitor Takeaway.com for $1.1 billion.
Deploying S/4HANA to meet growing needs
As Delivery Hero grew its business, its operations became more complex and it became clear that the company needed a scalable back-office IT infrastructure, according to Langguth. Initially, the company ran on Excel and "immature ERP systems," he said, but that infrastructure couldn't handle the growing business demands.
"Revenue was growing at 60% and the IT infrastructure has to grow along with it -- you have more amounts per line item, but we also had more line items coming in every month," Langguth said.
The company had SAP, Oracle and Microsoft propose ERP systems that could handle the growth. After consulting with external advisors, Delivery Hero decided on SAP HANA.
"We were looking to build best-in-class technology, and what SAP presented was state of the art," Langguth said. "The HANA database is what essentially drove our decision."
To see if S/4HANA could meet the company's future needs, Delivery Hero worked with the SAP Innovation Center in Potsdam, Germany.
"The [SAP Innovation Center] did some tests on processes we had in mind [for ] ... S/4HANA," Langguth said. "At that time, it wasn't really clear, so they tried it out and told us that it was going to work."
Moving to the SAP intelligent enterprise
One factor that played a major role in the Delivery Hero S/4HANA implementation was the concept of the SAP intelligent enterprise, an ecosystem of integrated applications that provides a comprehensive view of company processes. For Delivery Hero, a key component of its SAP intelligent enterprise was SAP Ariba, the cloud-based procurement platform.
Johannes Langguthsenior director of finance systems, Delivery Hero
Procurement was becoming a vital business process for Delivery Hero as it built a supply chain. For example, the company began to hire drivers and supply them with vehicles, so SAP Ariba's ability to integrate with S/4HANA was critical, Langguth said.
"We had a small procurement system called WPS available, but it was a real nightmare from an integration perspective," he said. "We wanted a nice [user interface] for our end users to make sure that they can select from all the products that we have, but also that's easy for them to quickly bring up their own suppliers, onboard them in the network and have a deep integration natively to the supplier. That was why we chose Ariba."
Bringing in new suppliers is complex, especially for a new company, but SAP Ariba made it easy to build integration workflows for processes like risk assessment, Langguth said. However, Delivery Hero also needed to distribute physical products, such as tablets, to its restaurant partners. A procurement process can be automated by integrating SAP Ariba into S/4HANA.
"We looked at other procurement vendors, and there are a lot of good products on the market, like Coupa. But we realized that there's always a difference between process integration and data integration," Langguth said.
Delivery Hero chose to implement SAP Ariba rather than another procurement platform because it had "tight integration to S/4HANA's core processes," Langguth explained.
Need to keep up with the changes
Building an SAP intelligent enterprise from scratch isn't easy, and Langguth said that there were some lessons learned along the way. For one, because the business was growing so rapidly, the requirements for the S/4HANA implementation changed constantly.
The original Waterfall model deployment didn't work because it relied on predefined requirements and templates. Deploying the technology using an Agile methodology worked better because it allowed for changing business requirements during the implementation, according to Langguth.
Delivery Hero encountered another problem with the nature of the SAP intelligent enterprise itself. Langguth discovered that the SAP intelligent enterprise requires a service-oriented, cloud-based architecture to build processes and integrate data rather than using the traditional SAP NetWeaver platform, which serves as the foundation for most on-premises SAP environments. Langguth said finding employees with the skills, experience and willingness to stick to the development methodology was a challenge.
"You have to convince them to build everything cloud based and make sure you do everything in SAP, not NetWeaver anymore, so the change was hard," he said. "The solutions are really good technically, it's just that you need to find the people who can really work with them."
But Langguth said architecting an intelligent enterprise was worth the effort. He described having various business processes integrated and available in one place as being extremely valuable to the business.
"We can see which sales orders come in, what invoices come in [and] what percentage of them have a PO [purchase order] assigned to them. So you really see the benefits of automation," he said. "Getting the insight across the company, joining data that you wouldn't join before, can really provide a business asset."