How SATS’s cloud transformation took flight during COVID

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For gateway and food services provider SATS, operations need to run like clockwork, health crisis or otherwise. As the main ground handling and in-flight catering service provider of Singapore Changi Airport, the company has to make sure its IT infrastructure can handle the inevitable changes of the business.

However, given SATS’s expansion plans, it was clear as day that relying on its old on-prem enterprise resource planning (ERP) system simply won’t fly.

Frontier Enterprise spoke with Donald Lum, Senior Vice President and Group Head of Technology, SATS, and Eileen Chua, Managing Director for SAP Singapore, to navigate their cloud partnership amid the most turbulent of times.

“SATS was using ECC with numerous bespoke customisations and configurations over many years to cater to our ground handling and catering operations. SAP ECC was an on-premises system that became expensive to maintain and customise over time. As (the) SATS business evolves and expands, SATS is faced with continuing challenges with the SAP ECC legacy ERP design and non-standardised processes. Hence, this resulted in a need for a revamped ERP platform,” said Lum.

Because of their long-standing partnership, SATS and SAP carefully charted a course for the former’s cloud migration and transformation.

“The migration of ECC 6.0 to (the) S/4 HANA private cloud edition happened at the height of the pandemic, and this was not just a technical migration but a complete transformation for SATS. Together with our systems integration partner Accenture, SAP has partnered closely with SATS to weather the storm, in influencing executive decisions to transform, upskill, and pivot to be future-ready,” said Chua.

Collaboration amid a global crisis

When COVID-19 lockdowns started to be enforced around the world in the early part of 2020, numerous businesses remained at a standstill. The aviation industry was among the casualties of the pandemic, yet airports needed to remain operational as a critical infrastructure.

For SATS, it was a clearance to take off with their IT infrastructure transformation plans, with the significant reduction of travellers providing a clear runway for operational re-evaluation.

Working with SAP’s teams, SATS migrated to the S/4HANA private cloud, a software as a service hosted on SAP’s servers and maintained by SAP. The cloud version is available to enterprises in both private and public editions.

“The private cloud edition comprises complete S/4HANA functionality and extends geographical reach. It can also handle businesses that require high-performance latency that covers their core business strategies, but at the same time provides greater agility, flexibility, and quarterly upgrades cycle,” Chua noted.

According to Lum, its main reasons for upgrading its ERP platform were to:

  • Increase automation in financial functions.
  • Improve data governance and data quality.
  • Improve decision support/analytics capabilities.
  • Improve profitability analysis reporting.

“S/4HANA was chosen for its cloud-native design with built-in standardised finance processes. It is considered the digital core where we use and integrate with several other SAP systems, such as Ariba for sourcing to invoicing, Concur for staff’s claims and travel expenses, and Success Factors to integrate employee information for workflow routing and approvals. We also integrate other existing systems that we use in SATS, such as flight information/schedules, warehouse inventory management system, and supply and demand planning system,” Lum shared.

Aside from integration capabilities, Lum noted that SAP S/4HANA also provided SATS with new functionalities.

“Some key outcomes and new capabilities with S/4HANA, with the integration of Ariba, are that we have acquired greater clarity and visibility in our costs to serve, enable profit and loss, and cost variance analysis on demand. That gives us the agility and greater flexibility in crafting our financial and global procurement approaches to adapt to the changing business environment. Better category and supplier management through Ariba (also) allows us to implement our vision for a digitally integrated supply chain throughout our network, to drive scale and cost efficiency,” he explained.

Further, the move to S/4HANA private cloud diversified SATS’s cloud hosting to gain cost-efficiency, and improved their overall cybersecurity posture, among others.

“To manage our implementation, SAP created a custom support structure for SATS, elevating our experience with the platform. There are many more new features within S4/HANA that we have yet to unlock, such as the Fiori Analytics app. With SAP as the software provider, we were able to reduce infrastructure costs and the always-available service on the cloud,” Lum added.

Digital resiliency

With its newfound flexibility and scalability, the sky’s the limit for SATS to explore emerging technologies and discover new use cases for their business.

“We will be looking to glean and provide management insights from data that S/4HANA captures. This will enable SATS to use data and drive the next stage of growth across our operations in terms of cost and resource optimisation, efficiency, and resiliency in the digital supply chain. The use of AI (artificial intelligence), IoT (Internet of Things), and data analytics for real-time, predictive decision-making will help us stay ahead of the curve,” said Lum.

Meanwhile, Chua praised the massive digital transformation across verticals during the pandemic, citing SATS’s example as a blueprint that would allow enterprises to weather uncertainties in the future.

“Technology can be a boon if businesses are prepared to adapt. The pandemic has pushed companies to an inflection point where embracing technology is no longer an option, but a necessity. It has also made workers more vulnerable. SATS took this opportunity to embrace changes in technology and accelerate training programmes to equip their workers with the right digital skills, taking this crisis as an opportunity to stay resilient for the future,” she remarked.