Published on the 23/07/2024 | Written by Heather Wright
But it’s tranche 2 which will deliver real benefits…
Zespri International says it’s starting to see ‘interim benefits appear and accrue’ from its NZ$160 million Horizon ERP project, based on SAP S/4Hana private cloud, but expects the real benefits to come from tranche 2 work, now underway.
Tranche 2 will see all the kiwifruit co-op’s operations moved onto a single SAP S/4Hana platform, with a portfolio of modular projects included.
“The critical component of our digital strategy is completing the Horizon program.”
Horizon’s work covers modernisation of the essential processes and systems across finance, supply and demand planning, sales, supply chain, quality management and grower community-focused solutions.
“The critical component of our digital strategy is completing the Horizon program,” Zespri says in its annual report.
“We have made good progress on all our digital initiatives through 2023/24 and are starting to see the initial benefits of our investment in Horizon become visible. Tranche 2 will unlock the larger intended benefits of the program when we can be solely on a common platform and decommission our legacy systems and temporary system integrations.”
Horizon, which kicked off in 2020, is Zespri’s ‘largest-ever digital transformation’, modernising legacy systems set up long ago for a much smaller industry.
The company, which logged global operating revenue of NZ$4.2 billion in 2023/24, is a long-time SAP user. Its previous iteration was a highly customised ECC deployment with bespoke .Net applications. In 2014, it moved to a SAP environment hosted on Microsoft Azure public cloud in what was hailed in 2014 as the world’s largest production SAP migration to Azure.
It’s an investment the company admits was necessary after years of under-investment in its digital infrastructure.
More than $143 million has already been spent on the project, with a much reduced spend of $20.4 million in 2023/24, less than half of 2022/23’s $50.2 million spend.
Tranche 1 of the program concluded in November 2022 – three months later than its initial due date – when all finance capability was moved onto the SAP S/4Hana cloud platform, along with related capabilities to achieve a base platform for the organisation’s in-market supply chain operations. SAP Integrated Business Planning was also implemented to assist with end-to-end demand and supply planning capability.
Horizon’s SAP portfolio also includes Business Technology Platform capabilities including Analytics Cloud, Integration Suite, Extension Suite and partner solutions from OpenText, Tricentis and Celonis.
The latest spend included delivering the first tranche 2 project, dubbed New Canopy, which re-platformed Zespri’s strategic advice and knowledge base.
“Unlike tranche 1, which was a large-scale, monolithic global go-live, tranche 2 is a portfolio of more modular projects prioritised on a rolling plan delivering solutions each year over the next three to four years,” Zespri says.
The company says tranche 2 is currently ‘in the research and development phase’.
It says the body of work is a ‘significant’ new challenge for the company, with four specific programs of work delivering a range of prioritised projects.
The largest of those four programs is the onshore fruit supply program planned for both New Zealand and northern hemisphere-origin fruit and tackling the historically most complex of Zespri’s legacy systems including those that interface between the post-harvest sector and Zespri.
Zespri says is looking to ‘explore and simplify’ the onshore supply chain and grower processes that have been in place for 20 years or more.
A grower enablement program is planned to transform digital experience for Zespri’s grower communities, while an in-market supply chain program will complete the remaining solutions for Zespri’s market based operational teams, and a sustainability program also planned to ensure key sustainability targets are measured and able to be reported.
“Horizon’s end goal for tranche 2 is to enable operational business efficiency, resilience and scalability which many of Zespri’s legacy systems cannot support in the current state,” Zespri says.
AI is also playing a part with Zespri saying it is a key component in the organisation’s solution design thinking to help accelerate and automate key processes or enhance capabilities for internal or external user experience.
Zespri admits tranche 1 ‘had its difficulties to embed through 2023’ with investment of time and effort required to stabilise and embed the new ways of working and deliver targeted improvements based on staff experience.
Tranche 1 in now in business-as-usual support mode with continuous improvements.
The company says it is also accelerating its ability to analyse processes and data to gain insights on business performance, with a view to even greater business efficiencies in the years to come.
While Horizon is a ‘sizeable portion’ of Zespri’s digital roadmap for the next three years, the company says it’s also working on other initiatives to enable a digitally-led future operating model through to 2030.
