Case Study

Nippon Cargo Airlines Co., Ltd.

Aiming to Shift to High-Value-Added Businesses: A Case Study of Accounting System Restructuring with RISE with SAP

Logistics ERP SAP

Case Study Video

A B-EN-G project manager explains the process of Nippon Cargo Airlines' migration to SAP S/4HANA, the effects of the implementation, and future initiatives. You can get an overview in about 10 minutes.
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Challenges

Support for the current accounting system (SAP ECC6.0) has expired
Increasing needs for accounting business reforms such as paperless operations, simplification and automation of operations, etc.

Implemented Products/Solutions

SAP solution version: RISE with SAP (SAP S/4HANA® Cloud, private edition)
Implementation module components: FI, TRM, CO (Financial Accounting, Treasury/Cash Management, Management Accounting)

Project Background

The financial and management accounting system "i-Account", which was built based on SAP ERP 6.0 in July 2009, has been used as one of the four major core systems together with the flight operation management system (i-Sky), airframe maintenance system (i-Macs), and air cargo transportation system (i-Cargo). It has been used as a global standard accounting system.

However, in anticipation of the OS support deadline in 2023 and the SAP ERP6.0 standard support deadline in 2027, it has become necessary to consider reviewing the current system, such as continuing to use the system or upgrading to a new system.

In addition, there was a growing need for reforms to reduce the work at the practical level by digitizing and automating business processes, and to create resources for consideration and promotion of high value-added work.

Therefore, in December 2020, NCA selected "RISE with SAP" as an upgrade target and began rebuilding the accounting system. The system will be introduced not only in Japan but also at bases in the United States, China, Hong Kong, Taiwan, Thailand, Singapore, the Netherlands, and Italy, and is expected to go into full operation in April 2022.

Project Goals

Purpose: Shift to efficient business operations and high value-added operations by computerizing, automating, and centralizing accounting operations.

Strengthening governance: Centrally manage NCA accounting information including overseas locations
Break away from paper culture: Eliminate communication using paper documents as much as possible, and centrally manage data and trails such as accounting documents on the system.
Operational efficiency: Improve operational efficiency through simplification, automation, and centralization
System simplification: Reduce add-on development by leveraging standard package functionality

Reasons for choosing RISE with SAP

By adopting a cloud ERP whose standard functions are regularly updated, it is possible to incorporate the latest functions.
Previous assets used since SAP ECC6.0 can continue to be used.

Launched in January 2021, RISE with SAP is a new offering that integrates SAP products and services to help companies simplify their transformation towards intelligent enterprises. At its core, SAP S/4HANA Cloud, private edition, is a private cloud application that is subscription-based. It has the right to be updated once a year, and by continuing to add the latest technology using automation and AI, it has the effect of encouraging user companies to digitally transform.

NCA's policy was to streamline the add-on functions that had been developed on SAP ERP to ensure smooth business operations during the rebuild. However, due to the nature of being an international cargo airline, we judged that some of it was worth keeping as intellectual property, and decided to choose RISE with SAP because it would allow us to achieve more sophisticated business management by combining the benefits of both sides with the latest technology.

Project Challenges

First introduction of RISE with SAP in Japan
Fully remote project promotion during the coronavirus pandemic

“The project started during the coronavirus pandemic, and almost all meetings from the requirements definition phase to the production support phase were conducted online. This method is completely different from traditional projects where all involved parties gather in one project room. So, I think it was a big challenge for our company to see if we could successfully complete this large-scale project of introducing SAP S/4HANA."
(Mr. Kenji Naganuma, General Manager, IT Strategy Department)

Results of Project Objectives

1. Break away from paper dependence and improve work efficiency

Achieved operational efficiency and centralized information management by digitizing paper evidence by scanning and implementing electronic approval on SAP.
Number of proof lists that no longer require paper printing (annual estimate): 27,060 sheets/year
Number of paper vouchers stored in cabinets and warehouses (annual estimate): 36 cardboard boxes/year
The abolition of stamping operations has made it possible to work from home.

2. Labor-saving by improving the ease of issuing forms

By improving the operability of the invoice input screen used in the old system, they reduced the company-wide invoice creation work load, and by making it easier to create invoices in the department where the transaction occurs, the eliminated the duplication that occurred in the old system.
Time saved in filing work (annual estimate): 2,860 hours/year
Achieved visualization of the invoice creation process through computerization (eliminating paper invoice request forms and creating a workflow from invoice entry to approval)

3. Improving business efficiency through report automation

The old system required data processing work for tax returns, etc., but the new system reduces data aggregation work by using SAP standard functions that were not used in the old system.
Time saved in data aggregation work (annual estimate): 40 hours/year
*Applicable to work performed once every six months

4. Enjoy the benefits of cloud configuration

Achieved functionality expandability through timely updates and releases of new functions, and reduced infrastructure maintenance and management work by not owning our own servers.
System upgrade rights (can now choose to take advantage of new features when upgrading)

B-EN-G as an Implementation Partner

B-EN-G was the prime contractor for the current system, and in addition to the relationship of trust that was cultivated through subsequent operation and maintenance support, B-EN-G's in-depth knowledge of NCA operations, project management skills, and proactive approach to the latest SAP S/4HANA Cloud were highly evaluated. The company also provided support as a partner for the new project.

Thoughts on B-EN-G after completing the project

“We believe that the fact that we were able to operate on schedule without any major problems or exceeding the planned costs is due to B-EN-G's project management skills and deep knowledge of our systems.”
"Since the work locations are far apart, smooth information sharing and collaboration between project members was essential, but we used a web tool called b-ridge to manage everything from meeting management and document management to project issue management and software change management. It was centrally managed, and it was possible to quickly recognize, share, and resolve issues. I had the impression that the SAP S/4 HANA implementation method was firmly established within B-EN-G. Because of his experience implementing the old system (SAP ERP 6.0), they is familiar with our existing add-on functions, and were very helpful in providing us with appropriate advice when deciding whether to switch to S/4 HANA standard functions.”

(Mr. Kenji Naganuma, General Manager, IT Strategy Department)

“Although there was not enough time between the start of the project and the start date, the issues that needed to be sorted out were clarified, and we were able to start operations without any problems. I have a good understanding of accounting systems, and I think we were able to migrate to SAP S/4 HANA without any major obstacles."

(Mr. Riho Sakurai, Business Systems Team, IT Strategy Department)

“The first monthly settlement of accounts for April 2022 under the new system was during the Golden Week, but B-EN-G also provided special support in line with the settlement schedule of our overseas branches. As a result, there were no major problems and only a few inquiries, but with B-EN-G there, we were able to close our monthly accounts with peace of mind."

(Tomoko Sakagami, Business Systems Team, IT Strategy Department)

*Please note that organization names, positions, numerical data, etc. in the article are based on the time of the interview and may have changed by current viewing.

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