Grow with SAP fuels Phoenix Global's digital transition

Going with Grow with SAP

As the company emerged from the bankruptcy, it decided to modernize all systems and processes, according to Jeff Suellentrop, chief information and technology officer at Phoenix Global.

"We have essentially replaced every single piece of technology in the company in the last two years; we are revolutionizing the industry by leveraging digital [technologies]," Suellentrop said. "Our goal is to be a fully integrated, paperless organization. A lot of these things were pencil and paper two years ago, so we've made a very large transition there."

From an application perspective, the company is replacing an inadequate Sage ERP system and OneStream Software for financial services.

In 2023, Phoenix Global decided to focus the digital makeover on SAP S/4HANA, Suellentrop said. The company signed on for Grow with SAP, a packaging of applications and services centered on S/4HANA Cloud Public Edition and designed for SMBs.

Implementation began in 2023, and Phoenix Global began to deploy S/4HANA Cloud at various company sites, starting in the U.S. by mid-2024, he said. More sites are being rolled out across the company's global locations, and legacy Sage and OneStream systems are expected to be retired in late 2025 or early 2026.

SAP S/4HANA Cloud will be the core ERP system for finance and supply chain processes. Other applications include SAP Enterprise Asset Management to run maintenance shops, SAP Ariba for purchasing, SAP Analytics Cloud Planning for financial planning and S/4HANA professional services functionality for contract management.

The importance of the SI

Phoenix Global is working with Syntax Systems, a systems integrator based in Montreal that specializes in SAP and Oracle implementations and managed services.

Suellentrop acknowledged that the eight-month project to design and implement the initial phases of Grow with SAP was ambitious, but the original schedule was even more aggressive.

"It was actually a six-month build, but it turned into eight because we were exiting bankruptcy and we couldn't go live because of some things with that and some other business challenges," he said. "We have also sunset or replaced every single system, or are in the process of sunsetting them."

One of the key reasons for a relatively quick and smooth implementation and live rollout is the company's decision to minimize customizations in the cloud, according to Suellentrop.

That's how we're able to jettison all of our technical debt and all of our process debt, by skipping straight to best practices.

The company established the core outcomes it wanted to achieve, then built a business process master list and implemented fit-to-standard processes.

"That's how we're able to jettison all of our technical debt and all of our process debt, by skipping straight to best practices," he said. "We have some small customizations around pricing, which almost every organization does, but we're in the 3% to 5% range or less of any true customizations."

Another critical component of the project is the involvement of Syntax Systems, Suellentrop explained.

"I preach to everyone that the SI is the most important part of these big transformational changes," he said.

Phoenix Global interviewed three other SIs prior to selection, and Syntax won the job in part because of its previous experience in building metals and mining industry best practices, Suellentrop said.

"They're very familiar with our industry, and they were also willing to sign on because we're doing this in a much more hybrid agile process than your traditional SAP implementation," he said. "We're fairly aggressive on our timeline, and we're much more agile on continuous duration as we deploy this."

It was this level of industry experience, along with Syntax's ability to meet Phoenix Global's aggressive implementation schedule, that sealed the deal, according to Suellentrop.

"The other SIs we interviewed were weak in one of those areas -- either they didn't have the depth in our industry or they were very regimented in their implementation methodology and couldn't move at a more agile, digital pace," he said.

Phoenix Global plans to continue to use Syntax as its managed provider for the SAP application services after all systems have been rolled out, he added.

Digital environment enables AI use cases

Suellentrop anticipates that the new digital environment on S/4HANA Cloud will enable Phoenix Global to take advantage of AI capabilities. The company is in workshops now, looking at AI tools from both SAP and Syntax.

"We've already deployed two robust AI models on our maintenance side and our safety side," he said. "We have a list of outcomes or use cases and are pairing those with what SAP and Syntax are delivering to plot out the roadmap for the next AI pieces that we're going to deploy."

One of the first use cases for AI is in preventive maintenance, Suellentrop said.

"We have thousands of pieces of heavy equipment, and we've already improved our downtime and utilization with our prebuilt AI and how we've built [S/4HANA Cloud]," he said. "We've taken almost three days out of acquisition of parts, and we've made that more proactive."

The company is working on AI modeling to help schedule maintenance by predicting failures and outages, which could save the company millions of dollars, according to Suellentrop.

"Steel mills run 24/7, and there are times when we'll have one or two pieces of heavy equipment sitting around that could cost $2 million apiece," he said. "But with the AI model that we've already built, we're able to reduce that down and drive utilization up."

Jim O'Donnell is a news director for Informa TechTarget who covers ERP and other enterprise applications.