NNS Implements SAP S/4HANA to Enable Digital Shipbuilding

By Fred Donovan, Senior Editor, SAPinsider

Newport News Shipbuilding (NNS) builds the ships at the heart of the U.S. Navy’s strategic force: aircraft carriers and nuclear submarines. 

With $5 billion in revenues and more than 25,000 employees, Va.-based NNS is the largest military shipbuilding company in the United States. 

It was founded back in 1886 as the Chesapeake Dry Dock and Construction Co. Over the years, it has built more than 800 ships, both Navy and commercial ships. It is one of three divisions of Huntington Ingalls Industries, along with Ingalls Shipbuilding and Technical Solutions.  

As it entered the 21st century, NNS accelerated its effort to transform into an integrated digital shipbuilder. “The digitization of our business was a driving force for our migration to SAP S/4HANA. It is the foundation for our integrated digital shipbuilding journey,” says Greg Robinette, IT Systems Architect, Newport News Shipbuilding (NNS). 

“We examined the SAP S/4HANA platform and found that it supports our transformation to a digital shipbuilding enterprise,” he adds.  

Avoiding Disruptions was a Priority 

The first step on NNS’s SAP S/4HANA journey was to understand the scope of the project and determine what was in place already. The company set up special teams composed of senior-level developers and systems engineers to carry out this migration phase.  

NNS faced a unique issue. The life cycle of a ship can span decades, so interrupting the shipbuilding process is not an option for the defense contractor. Based on this need to minimize disruption, the company chose a “lift and shift” approach to SAP S/4HANA rather than a greenfield implementation. 

At the same time, the company made significant replacements in finance and environmental health and safety. So, it was a brownfield migration with “patches of green,” explains Robinette.  

“Those patches of green were important, and we did them well. But if we had to do them for the entire enterprise, it would have been a much different effort,” he adds. 

To minimize disruption, the company set up a dual maintenance path. “Whenever things were done in our SAP ERP Central Component system, we also did the equivalent in our ongoing build of the SAP S/4HANA system, and then we managed both. So that was a bit of extra overhead,” Robinette says. 

In addition, the data migration for SAP S/4HANA was a significant challenge. The company hadn’t archived its financial data in 20 years due to the product life cycles for ships. However, the data still required conversion from the existing ERP system to the new SAP S/4HANA structure.  

 “We did a complete validation down to the penny and dollar level, across 20 years of data. That was a compliance requirement,” he relates. 

Cooperation is Key to Success 

Robinette stresses that the journey to SAP S/4HANA took a lot of cooperation between IT and business units. “Figuring out everything was a journey and took a high degree of cooperation. One of our lessons learned was to bring the business in as early as possible,” he advises. 

The company’s status as a U.S. defense contractor impacted the migration. The company’s compliance group “really stepped up” to work with the project management team to ensure the migration complied with regulatory requirements.  

In addition, NNS worked closely with SAP National Security Services (NS2). All of the employees of NS2 are U.S. citizens working on U.S. soil to comply with U.S. law.  

As an independent subsidiary of SAP with nearly a thousand employees, NS2 offers SAP software advisory and strategy, design and assessment, implementation and migration, and integration services to defense, financial services, aerospace, energy, pharmaceuticals, and other highly regulated industries. 

NNS also used the SAP STAR+ service, which analyzes a company’s system information and other input to propose tailored roadmaps and recommendations. The service helped NNS “by crunching a whole bunch of transactional and system data and laid out where we were going to be most impacted by the migration,” Robinette relates.  

The migration to SAP S/4HANA “was an opportunity to look at our business process alignment and realign what we’re doing with the SAP security core and migrate that at the same time,” Robinette says.  

Lessons Learned 

In terms of lessons learned, Robinette says that his team got caught up in the execution plan and didn’t communicate early enough with the business units affected by the implementation. “Early communication of your execution plans is important,” he says.  

“Once we got rolling, people felt we were providing an adequate level of communication. The project manager was available to everybody along the way,” he adds. 

Another key lesson learned was to take advantage of the tools and documentation that SAP provides. “SAP makes a lot of information available. SAP gives you notes in the simplification list for SAP S/4HANA. The SAP ecosystem is built in the way that there are different choices you can make as you drill down into these notes, which takes you down different paths. You don’t know which path to take unless you go into the notes,” Robinette says.  

SAP also provides a readiness check for SAP S/4HANA that shows an organization where it will be affected by the implementation based on the SAP product line.   

“I used the readiness check with best practices. I could see what SAP’s design was and where they changed some things. I could tell how far off we were on our configuration and deployment. It’s helpful because not every company deploys SAP S/4HANA in the same way,” he says. 

Robinette relates that converting employees, customers, and vendors to business partners was a challenge for his company. In SAP S/4HANA, the business partner is the leading object and single point of entry to master data. 

“The business partner structure in SAP has tremendous scope. It goes across different systems and does many different things. When you convert to it, there is a lot of learning that needs to be done,” he says. He recommends getting help with the conversion process. 

What Does This Mean for SAPinsiders 

• To minimize disruption during your SAP S/4HANA implementation, consider setting up a dual maintenance path. NNS performed maintenance on its existing SAP ERP Central Component (ECC) system and its SAP S/4HANA build at the same time during the migration. This enabled the company to solve technical problems in SAP S/4HANA along the way before going live. This could be a helpful approach for organizations looking to minimize disruption during the go-live phase.   

• NNS took a hybrid approach to its SAP S/4HANA migration. It used a brownfield implementation for most areas but used a “greenfield” approach for areas that required major changes to function properly in SAP S/4HANA, such as finance and environmental health and safety. Such an approach could be beneficial for organizations that face similar challenges in which certain IT components need major revisions, but most only require moderate adjustments for the migration.   

• Take advantage of SAP’s tools and documentation on your SAP S/4HANA journey. For example, SAP’s simplification list for SAP S/4HANA provides notes to help with migration strategies. You should use the tools and advice available to minimize disruptions and ensure you have a relatively smooth transition to SAP S/4HANA.  

Company Snapshot 

Newport News Shipbuilding 

Headquarters: Newport News, Virginia 

Industry: Defense 

Employees: 25,000  

Annual revenue: 5 billion U.S. dollars 

Company details: Newport News Shipbuilding was founded back in 1886 as the Chesapeake Dry Dock and Construction Co. It is one of three divisions of Huntington Ingalls Industries, along with Ingalls Shipbuilding and Technical Solutions. It is the largest military shipbuilding company in the United States. 

SAP Solutions: SAP S/4HANA, SAP Fiori, SAP SuccessFactors, SAP 3D Visual Enterprise Generator, SAP governance, risk, and compliance solutions, SAP S/4HANA Finance, SAP Analytics Cloud, SAP Solution Manager 

Watch a short video featuring Greg Robinette.