Johnson & Johnson completes multi-year SAP implementation: Asia CTO Srikumar Ramakrishnan

 

J&J new technology has delivered a $75 million boost to EBIT in the 2021 financial year, following the completion of its multi-year SAP roll out and further investment in digital technology said Srikumar.

The Healthcare Giant said the largest and final phase of the SAP project was implemented in May 2021.

J&J’s 4S program - ‘Simple, Standard, Single SAP’ - covers eight end-to-end business processes and consolidates J&J’s entire business on an S/4 HANA core, supported by SAP cloud add-ons.

At the time, J&J CTO ASIA Srikumar described the deployment of SAP as a “historic, and game-changing, milestone” and noted, “the underlying business has transitioned without major disruption.”

“Our manufacturing operations have continued uninterrupted, and we now have clear visibility on sales and billing. The system is already delivering material operational insights and efficiencies and helping improve product security and customer outcomes,” he said in a statement.

“Nevertheless, due to delays caused by COVID-19 quarantine and the impact this has on closing accounts and auditing them, we have decided it is prudent to defer our financial results release by two weeks.”

The full results, released today, said the benefits of the completed SAP project will begin to be embedded across the business.

A 20 percent annualised cash return on investment on the SAP project of approximately $600 million is expected by the 2023 financial year.

The transition to the new SAP operating system as well as an impairment review identified $613 million of legacy IT assets that would no longer be used by the business.

J&J is also conducting an organisational structure "to support the new standardised end-to-end processes that were implemented with the new SAP system" that will generate a $25 million bill for redundancy costs.