Faced with an aging on-premises ERP system, U.S. Sugar took time to plan a move to S/4HANA Cloud and settled on Rise with SAP when it felt the conditions were right.
In a move to modernize an outdated SAP ERP system, agricultural giant U.S. Sugar settled on Rise with SAP to transition to S/4HANA Cloud.
Debuting in 2021, Rise with SAP offers on-premises customers a simplified path to the cloud with SAP as the sole vendor to manage cloud deployments on a hyperscaler of the customer's choosing. The ERP giant has claimed strong cloud sales centered on the momentum of Rise with SAP. In 2023, the vendor positioned it as the vehicle for innovation, making technologies such as generative AI available only through Rise.
However, there is some evidence that the momentum of Rise has stalled. Gartner recently reported that Rise with SAP sales dropped from a peak of 71% of S/4HANA Cloud sales in the third quarter of 2023 to 41% of sales in the second quarter of 2024.
Nonetheless, Rise with SAP came at the right time, with the right package of services for U.S. Sugar, according to Carl Stringer, vice president of IT and employee benefits at U.S. Sugar.
Headquartered in Clewiston, Fla., U.S. Sugar is one of the country's largest agricultural businesses. The company plants and harvests sugarcane, which is then transported to mills where it's refined and sold in bulk or packaged and sold to retailers.
The sugarcane is sourced from 34 independent growers in Florida and sent to one of two refineries -- one in Florida and another in Savannah, Ga., that the company recently acquired.
U.S. Sugar was founded in 1931 but has invested in IT to manage the operations and drive business processes, Stringer said. In 2007, the company moved from a distributed, non-ERP system of applications to a consolidated, on-premises SAP ERP Central Component (ECC) 6.0 system.
Agriculture, until about 15 years ago, wasn't a high-tech business, but we view technology as strategic enabler. We invest a lot in technology on the agriculture side, in the factory and in core IT for the business.
Carl Stringer Vice president of IT and employee benefits, U.S. Sugar
"Agriculture, until about 15 years ago, wasn't a high-tech business, but we view technology as a strategic enabler," Stringer explained. "We invest a lot in technology on the agriculture side, in the factory and in core IT for the business."
U.S. Sugar used SAP ECC core functionality for key business processes including payroll, finance and accounting. For operations, the company is asset-intensive and uses SAP Enterprise Asset Management in its warehouses, he said.
There was no SAP application for the processes in the company's production zones when it implemented ECC, so it developed custom agricultural applications in-house that integrate with ECC.
"We have a sophisticated custom program that we wrote internally to manage the logistics of sugarcane," Stringer said. "It matches the consumption of the factory with the harvesting and ties that all together with the logistics of the rail transportation, provides alerting, predictions, forward-looking analysis and the ability to reset if there's a rain event."
The company also extended the ECC system out to its growers, he said, via a laboratory information portal that provides ECC data on quality, pricing and contract terms. This has led to U.S. Sugar partnering with SAP to develop intelligent agriculture applications, including automating operations or using advanced analytics.
Taking time to move to the cloud
Eventually, however, around 2015 the SAP ECC system began to show its age and limitations, and U.S. Sugar began to contemplate an upgrade centered on a move to the cloud. The company did not seriously consider moving to another ERP, as it was too familiar with SAP and a change was "fraught with danger," Stringer said.
At the time, the company was not considering S/4HANA Cloud as it believed moving to the cloud was risky, he said.
U.S. Sugar is located in the middle of Florida, which is prone to hurricanes, so consistent, reliable and fast internet connections were not dependable at the time. S/4HANA Cloud also did not have sufficient functionality in the earliest releases.
"We stayed on premises and decided to take a step back and take our time with the move to S/4HANA, hopefully to when that technology would have improved the internet connection," Stringer said. "We also figured that SAP would make some large changes and enhancements in the product, and we wanted to see what other people were doing and how they did it with S/4HANA and we wanted the integrators to get more skilled."
Rise with SAP key to tech future
In 2021, the company started to think again about making the move, initially considering running S/4HANA on premises, but then settling on S/4HANA Cloud. Another key driver was U.S. Sugar's acquisition of Imperial Sugar in 2022 in Savannah, Ga., that was running a "prehistoric" on-premises version of the Oracle-owned PeopleSoft, according to Stringer. Having two facilities in different states presented integration challenges and because the PeopleSoft system needed replacement, the cloud became a more attractive option -- particularly when Rise with SAP came out.
"[Rise] is a fully integrated platform -- true software as a service," he said. "Prior to Rise, you had to figure out all your hosting and support for yourself."
Rise with SAP has matured, and the anticipated introduction of AI and sustainability capabilities made it the best choice for the cloud migration, as staying on premises might lead to an innovation cul-de-sac, Stringer explained. He pointed to SAP's concept of a clean core, where companies simplify processes and rely on best practices in order to have a cloud-ready system.
"We've been very interested in AI, but somewhat skeptical and worried about hallucinations and having data getting out of the environment and into the cloud," he said. "That's the foundation of why SAP has this Rise clean core approach, so they can run AI and be confident in the results and the data."
U.S. Sugar signed onto Rise with SAP in July 2024 and is breaking the project into two phases. The first will roll out functionality for payroll and HR, which is expected to go live in the first quarter of 2025. The second is a full implementation of S/4HANA Cloud, private edition, which is scheduled to start in the spring of 2025 and go live in the fourth quarter of that year.
Choosing private over public cloud
S/4HANA Cloud, private edition was selected over the public cloud edition because U.S. Sugar wanted to have more control over upgrade and testing schedules, Stringer said. The company also must decide whether it will do a technical lift-and-shift upgrade or a greenfield style implementation that examines business processes for consolidation where needed.
To help with this, the company implemented SAP Signavio, the business process analysis and mapping application, he said.
"This allows us to look at our processes in ECC and the best practices in S/4HANA to see how they overlap and how things can be improved," Stringer said.
The move to S/4HANA Cloud is expected to provide several benefits that go far beyond ECC's functionality, including the Fiori interface for a streamlined, modern user experience, he said.
U.S. Sugar is implementing some tools it has access to through Rise with SAP that would not be available if it had stayed on ECC. These include SAP Sustainability Control Tower to document and update sustainability data, and SAP Business Technology Platform for interface, workflow and other development needs.
The company is also using and co-developing SAP Intelligent Agriculture, an agribusiness optimization application as part of the global SAP agribusiness consortium, Stringer said.
"We're going to test drive some things like harvest scheduling using AI and fertilizer application, potentially using AI," he said. "You can use your own model with your own secret sauce so to not reveal it and have it integrated with Intelligent Agriculture."
Support for the migration project is strong from all levels of the organization, particularly from the workers in the Savannah refinery, who are ready to move off PeopleSoft, Stringer said. But the company is taking change management seriously to ensure a successful rollout.
"We have to put a lot of time and effort into trying to make this as successful as possible," he said. "Particularly in Savannah, where they're coming from this very old technology to this new cloud-based technology."
Jim O'Donnell is a senior news writer for TechTarget Editorial who covers ERP and other enterprise applications.
