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Case Study

 

Sabre’s Voyage to Becoming a Real-Time Enterprise

Travel Company Takes to the Cloud with SAP S/4HANA Finance

by Ken Murphy, Senior Features Editor | insiderPROFILES, Volume 7, Issue 3

August 8, 2016

A plane in flight

Since its founding in 1960, Sabre has brought new technologies and B2B travel together to provide customers with innovative travel solutions and resources. So as its customers grew to favor digital technologies – such as software-as-a-service (SaaS) applications and cloud offerings – Sabre recognized that it needed advance its own capabilities. To continue with its tradition of embracing innovation, the company chose to adopt SAP S/4HANA Finance as well as a suite of SaaS applications from SAP, all of which was hosted on a private, managed cloud. Learn how Sabre was able to harness this combination of technologies to simplify its org hierarchy, more quickly bring products to market, and consistently deliver innovation to its customers. 

Innovation is in Sabre’s DNA. Founded in 1960 to create the first computerized airline reservation system, today the global business-to-business (B2B) travel technology company’s solutions and travel marketplace are used by hundreds of airlines, approximately 750,000 hotels, and many other travel providers to keep the world moving. Its Airline Solutions, Hospitality Solutions, and Travel Network lines of business power airport check-in kiosks, online travel sites, and reservation networks for airlines and hotels, and otherwise facilitate travel for millions of globe-trotters who interact with Sabre technology through a provider.

As a technology provider focused on consistently delivering innovations to the travel industry, Sabre holds itself to the same high standard for its own business infrastructure. Like its customers who increasingly favor software-as-a-service (SaaS) applications and cloud technologies as a way to shed costs and achieve greater agility and scalability, Sabre planned to adopt similar technologies to drive innovation in its own business.

 “To help the company continue to expand at the scale and pace we had been growing, it was time to modernize the current environment to better support agility and drive innovation for new products and services,” says Steve Strout, Vice President of Corporate Systems at Sabre.

This environment included an on-premise SAP ERP instance that no longer met the needs of a vastly more complex and rapidly growing business. Sabre decided that a technology refresh would provide an opening for the company to rethink its organizational hierarchy, reduce complexity, and pursue tighter integration with SaaS-based applications.

As an example of the limitations of its current state, Strout cites the need for more precise customer-level profit and loss (P&L) statements; maintaining an allocation model that accurately tied revenue to expenses for a specific customer became a complex task with a growing volume of transactions, customers, and products to reconcile across multiple businesses, general ledger accounts, cost centers, and profit centers.

 “It wasn’t that we needed to change our financial model, but rather how we collected the data at a more granular level to make sure it tied back to a specific customer or product,” Strout says. “The decision to restructure our org hierarchy sparked the thought of perhaps driving additional benefits by capturing real-time data and leveraging it in a better way.”

Sabre

Headquarters: Southlake, Texas

Industry: Travel technology

Employees: 10,000

Revenue: $3.2 billion

Company details:

  • Global, B2B travel marketplace used by approximately 420 airlines, 750,000 hotel properties, 260 tour operators, 52 rail carriers, 39 car rental providers, and 17 cruise lines
  • Eight of 10 largest online travel agencies (OTAs) are Sabre customers
  • Airline technology solutions are used by approximately 225 airlines, primarily through software-as-a-service (SaaS) and hosted models
  • Sabre airline technology solutions boarded 585 million passengers in 2015
  • More than 32,000 hotels use Sabre hospitality solutions and software to power their distribution, reservations, property management, retailing, and guest experience solutions
  • Company name is an acronym for “Semi-Automated Business Research Environment”
  • (NASDAQ: SABR) www.sabre.com

SAP solutions:

  • SAP S/4HANA Finance
  • SAP SuccessFactors Employee Central
  • SAP SuccessFactors Talent Solutions
  • SAP Ariba solutions
  • SAP Fieldglass
  • SAP BusinessObjects BI solutions
Jet-Set to Transformation

Streamlining back-end processes would ultimately also allow Sabre to better serve its customers, which was the chief objective behind pursuing a more agile infrastructure. Bringing products to market faster, provisioning new software more quickly, and more dynamically responding to evolving customer demands and expectations were just a few of the benefits that a modern, real-time platform would help Sabre achieve.

After an extensive search from a host of solution providers, Sabre decided an implementation of SAP S/4HANA Finance in a private, managed cloud would best meet its requirements. This included bringing more SaaS applications into the mix, which Sabre did with a plan to deploy and integrate SAP SuccessFactors, SAP Ariba, and SAP Fieldglass solutions with SAP S/4HANA Finance.

Although Sabre has been an SAP customer since 1995, the company did not limit its search for a solution provider to SAP software. “With such a large-scale transformation effort, we wanted to make sure we looked at all of the options to make the best possible decision for the company,” explains Strout. “We walked through our requirements and scenarios and concluded that SAP S/4HANA was the best solution for us.”

Sabre signed a contract with SAP for SAP S/4HANA Finance in September 2015. Seven months later, Asia-Pacific was the first group to go live. Sabre is scheduled to deploy the SAP SuccessFactors solutions in September 2016 and the SAP Ariba solutions in October 2016.

Planning a Route

Largely due to the fact that it was transitioning to a private, managed cloud, Sabre opted to set up a new SAP S/4HANA instance — rather than move to SAP Business Suite powered by SAP HANA as a first step and then migrate to SAP S/4HANA. Setting up a new instance would ensure less disruption to the business, though the trade-off was the potential of far more testing scenarios due to a significant org hierarchy change that coincided with the move.

Sabre was willing to make this trade-off in part because a greenfield approach permitted the company to examine how its processes would translate to the new SAP S/4HANA architecture, which simplifies the data model by removing old tables, aggregates, and indices in favor of fewer column-based tables. The intent was to provide real-time operational analytics and — in SAP S/4HANA Finance — a single source of financial truth.

 “That architecture allowed us to simplify our business models and still get the transactional processes done faster; therefore, we could get a much better, more detailed level of data, record it at a more granular level, and report on it in that same model,” says Strout. “And, with SAP S/4HANA, we could do this in real time.”

Steve Strout

Steve Strout, Vice President of Corporate Systems, Sabre

Improving our capability for delivering services internally helps us better deliver products and services to our own customers.

— Steve Strout, Vice President of Corporate Systems, Sabre

Getting Used to a New Culture

According to Strout, the new system architecture helped spark a realization that further data cleansing would lead to even more accuracy. “It’s not the financial side, but the meta-data around it. We are getting at data we haven’t easily had access to before,” explains Strout.

In addition to a simplified business model, transitioning to a hosted cloud environment drove ancillary benefits, foremost among them the fact that it freed Sabre’s in-house resources to focus on driving innovation for its customers.

 “As a technology company, we have data centers, commodity hardware, and the skillsets to run them,” Strout says. “But at the same time, we saw this as a way to change the company culture by bringing in new feature functions on a more regular basis rather than upgrading every three to five years. Improving our capability for delivering services internally, therefore, helps us better deliver products and services to our own customers.”

Understanding the World, One Customer at a Time

From a reporting perspective, a newfound ability to see data in real time has put Sabre on a path to rethinking its entire business intelligence approach. “We were accustomed to analyzing the data we had simply because it was the data in front of us,” Strout says. “We had the ‘what’ but we didn’t have the ‘so what.’ But now, we can ask ourselves what it is we truly want to know — what business question we are trying to answer.”

According to Strout, a priority in 2017 will be a focus on the next steps of building out a predictive analytics framework. As for other future plans for SAP S/4HANA, or for what’s ahead for Sabre now that it migrated its business infrastructure to the cloud, he says the company will pursue any opportunity that continues to promote its newfound culture of continuous, incremental change. One example will be to leverage SAP Fiori — the native SAP S/4HANA user experience — across both transactional and analytical apps to simplify reporting for the end user.

 “There are a whole host of things over the next 12 to 18 months that we’ll continue to make improvements on to drive simplifications both for our end users and our customers,” says Strout. “The questions we are asking now focus on what will help drive our business faster, improve our product innovation and delivery side, and get products into the marketplace faster.”

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