- Improved distributor invoicing processes
- Extended the life of SAP ECC 6
In today’s fast-evolving digital landscape, businesses often feel pressure to migrate to the latest software versions. However, for Idemitsu, one of Japan’s largest domestic petroleum wholesalers, the focus was clear: stability, efficiency and a future-proofed composable ERP strategy to support ongoing digital transformation efforts. Composed of five business segments: petroleum, basic chemicals, functional materials, power/renewable energy and resources, the 113-year-old organization has multiple initiatives in play with the goal of achieving carbon neutrality and a circular society by 2050. With that primary goal, Takayoshi Sawai, Deputy Director of the Digital ICT Promotion Department, and his team look to evolve Idemitsu into a digital-first IT organization.
SAP ECC 6 with composable architecture
For Idemitsu, becoming a digital-first organization meant rethinking its current IT ecosystem. A major focus of Idemitsu’s efforts was their distributor invoicing system. Originally built with the SAP Business One framework, the system posed several challenges. Invoice discrepancies due to unit differences in receipts and payments required manual interventions, slowing the entire invoice-to-cash cycle. By decoupling the invoicing function from SAP and utilizing specialized applications around the edges, Idemitsu could accelerate invoice processing while reducing delays, manual dependencies and potential errors.
Migrating to SAP S/4HANA was a potential path, but Idemitsu performed an in-depth application rationalization exercise that ultimately determined that S/4HANA’s benefits didn’t align with their functional needs. They weren’t experiencing any database performance issues, preferred a vendor agnostic approach to AI and didn’t find value in the UI updates offered by S/4HANA. And they concluded that none of those features would help them achieve their goal of improving the invoicing process. Instead, they needed a streamlined, composable solution that would enable rapid adjustments to their distributor invoicing process without being locked into the vendor’s platform from core to edge.
With SAP ECC 6 as a stable core, Idemitsu adopted a composable strategy allowing it to innovate around the edges to build and integrate best-fit applications around SAP. Unlike SAP’s “side-by-side extensibility” approach that only allows composability within the SAP ecosystem, Idemitsu wanted to develop custom solutions for distributor invoicing and other functions outside of SAP, eliminating the need for costly customizations. Using a more flexible system, Idemitsu could plug in specialized applications to enhance specific business processes, thereby avoiding the rigidity of a fully integrated ERP. This shift marked a significant departure from traditional, tightly coupled ERP environments, instead embracing a flexible architecture that meets their diverse business needs across the organization, from manufacturing to HR.
The composable approach offered more freedom in selecting solutions tailored to the distributor invoicing process. This allowed Idemitsu to enhance the user experience for their distributors, process invoices faster and improve accuracy. With this modular structure, Idemitsu can now easily adapt to new invoicing scenarios as their business requirements evolve without disrupting the core ERP system. “We are reimagining and adding functions to our existing SAP ECC 6 release supported by Rimini Street, resulting in improved data quality control and more automation. The partnership with Rimini Street helps accelerate our digital transformation initiatives without the disruption,” Sawai said.
Stability and cost efficiency enable innovation without limits
Idemitsu’s decision to not adopt S/4HANA immediately reflects a broader vision for their IT landscape. Rather than committing to a single-vendor AI strategy, Idemitsu is building an enterprise-wide AI approach independent of SAP, which enables them to integrate AI in a more holistic way based on business needs. Sawai explained, “Rimini Street allows us to prioritize business needs over vendor demands, ensuring our technology roadmap is free and clear of obstacles. Rimini Street’s expertise makes vendor-imposed end-of-support deadlines no longer a problem, giving us the ability to take full control over how we want to design our systems to best fit our vision.” Additionally, by partnering with Rimini Street, Sawai was able to cut the annual vendor maintenance fees in half and use the savings to continue funding innovation.
Choosing to stay with SAP ECC 6 allows Sawai to focus budget and resources on innovation without the time and expense of upgrades to access features that delivered no value to their IT roadmap. Rimini Support™ for SAP ECC, provides Idemitsu with a stable ECC 6 core so that they can focus on plugging in the best-fit applications to achieve the goal of accelerating invoicing, reducing the need for manual intervention and reducing the risk of errors.
This stability was crucial as Idemitsu transitioned to their composable architecture, as any disruption in their core system could affect the surrounding modular applications. With Rimini Street’s 24/7/365 proactive support model and access to deep SAP expertise, Idemitsu was able to leverage the data in ECC 6, extend the life of its SAP investments and pursue its goal of becoming a digital-first organization without the limits imposed by traditional ERP systems. “Our plans include many more years in partnership with Rimini Street, ensuring our mission-critical system is always available and to maximize our SAP investment as we plan out the future needs of the business,” Sawai said.
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