BASF, the chemical industry giant, is shifting its SAP IT framework to the cloud-based S/4Hana ERP system. This move was highlighted during the SAP Sapphire conference in Madrid.
Petra Scheithe, senior VP of digitalization at BASF Business Services, shared insights about this new chapter in BASF’s longstanding partnership with SAP. For 40 years, BASF has relied on SAP solutions, and its headquarters in Ludwigshafen is just 30 minutes from SAP’s base in Walldorf.
BASF plans to adopt a hybrid system that combines SAP S/4Hana Cloud with its extensive existing systems. This approach aims to simplify management and focus on maintaining a streamlined core. By doing so, new customizations will be cloud-ready, enhancing operational efficiency over time. The company also plans to integrate SAP’s AI and sustainability tools into its operations.
The coatings division has already launched its first S/4Hana system. BASF operates in four main sectors—chemicals, materials, industrial solutions, and nutrition/care—as well as four specialized units that deal with agriculture, surface technologies, catalysts, and battery materials.
Scheithe noted that BASF is using SAP’s Joule copilot for SuccessFactors HR and is exploring its application in core business processes. In December 2024, BASF and SAP renewed their strategic partnership, which now includes the Rise program focused on cloud migration.
BASF’s existing SAP setup is a single global instance, which has become cumbersome over the years. They’ve developed a complex system that includes over 300,000 custom objects. Transitioning to S/4Hana provides an opportunity to clean up and better manage these processes—a crucial step for their Winning Ways strategy aimed at leading green transformation in the industry.
The strategy includes a significant €10 billion investment in a Verbund site in Zhanjiang, China, which integrates production, energy, and logistics. As part of its restructuring, BASF is looking to create multiple business-specific SAP instances to meet varying market needs.
BASF initiated its S/4Hana instance for coatings in 2022 using a clean core strategy. That segment went live in March, on schedule and within budget. Next, they’re rolling out S/4Hana for battery materials and testing new processes for agriculture. The clean core strategy aims to keep the system standard with minimal custom changes.
BASF has also embraced the Rise program to ensure its systems align closely with SAP standards and to tap into innovations in AI. Scheithe is particularly eager about SAP’s recent acquisition of WalkMe, a tool that enhances user experience with smart automation and guidance through workflows, although BASF hasn’t implemented it yet.
Joule is currently being utilized in HR tasks, and Scheithe is interested in its potential for developers. Given the extensive customization in their legacy system, BASF seeks tools that can enhance developer efficiency. This technology could be pivotal in refining their core system.
Thomas Saueressig from SAP emphasized the significance of this partnership, stating that BASF’s transition to S/4Hana Cloud positions them for future growth and resilience, equipped for the fast-paced business landscape ahead.