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CLIENT CASE STUDY


Dow Chemical SAP implementation: Next enterprise architecture

Dow Chemical launched an enterprise architecture program to replace most business systems globally with a single instance of SAP.

Overview

Dow Chemical selected Accenture to help replace its enterprise architecture and support new ERP and reporting systems. Close collaboration between Dow and Accenture has positioned Dow for savings and value creation of approximately US$2.5 billion over five years.

Dow Chemical Company combines the power of science and technology to passionately innovate what is essential to human progress. The company connects chemistry and innovation with the principles of sustainability to help address many of the world’s most challenging problems such as the need for clean water, renewable energy generation and conservation, and increasing agricultural productivity.

Dow’s diversified industry-leading portfolio of specialty chemical, advanced materials, agrosciences and plastics businesses delivers a broad range of technology-based products and solutions to customers in approximately 160 countries and in high growth sectors such as electronics, water, energy, coatings and agriculture.

In 2012, Dow had annual sales of approximately US$57 billion and employed approximately 54,000 people worldwide. The company’s more than 5,000 products are manufactured at 188 sites in 36 countries across the globe.

Opportunity

Dow embarked on a journey to transform its basic weighted business into a specialty chemicals and solution business. 

Dow also wanted to execute various joint ventures, acquisitions and divestitures in order to gain access to low cost feedstocks, shed businesses no longer aligned with their new strategy, and drive the acquisition and internal development of new business models.

To achieve these goals, Dow needed a new, adaptable work process and system that could scale, flex and change in sync with different business agreements.

The company had remained on SAP R/2, an older platform of SAP, but began to look for a new solution to meet their needs.

Due to Dow’s extensive relationship with Accenture, as well as Accenture’s knowledge of Dow’s work processes, Dow selected Accenture to help replace its current enterprise architecture and support its new ERP and reporting system.

Solution

With the help of Accenture, Dow launched the Next Enterprise Architecture (NEA) program to replace most of its current business systems with a single instance of SAP ECC/BS7. 

Overall, the scope of the effort touches practically all the modules SAP offers plus additional niche software to support specific business needs.

The new SAP solution is being implemented in a series of key milestones. During the first milestone, Accenture and Dow worked to transition all Rohm and Haas businesses globally to the new SAP platform.

Latin America (milestone two) and Asia-Pacific (milestone three) have also been successfully completed. Milestones four and five, which encompass Europe and North America, are forthcoming.

Dow tapped into Accenture’s program/project management capabilities, delivery methods and SAP expertise globally.

Together, the Dow/Accenture team drove a joint effort in building the solution, conducting tests, and designing and implementing the work process and human change approach supported by the new system.

Results

The NEA program’s first milestone was a major undertaking, with Dow and Accenture moving over US$9 billion of revenue across multiple businesses and functions around the world to the new architecture. The project team went live on time over a well-planned weekend—a remarkable achievement for a program of this complexity.

In addition, the support of the NEA platform was transitioned to Accenture’s Managed Service support organization within 30 days of go-live, and the service was able to achieve “green” performance in all “Critical” and “High” priority support metrics within three months of startup.

Dow’s strategic relationship with Accenture is positioning Dow to capture value in excess of US$500 million annually in cost savings, operational efficiencies and speed to value in acquisition integration, JV enablement and innovation delivery.

This is being driven mainly by the global NEA program and the broader joint solution delivery capability, which has enabled key initiatives such as the successful Rohm and Haas acquisition and Sadara greenfield joint venture. As these solutions and capabilities are implemented, Dow expects cost savings and value creation in excess of US$2.5 billion over a five year period.