Maxim Integrated is a 35-year-old, Fortune 500 company that specializes in engineering and manufacturing analog and mixed-signal integrated circuits. The San Jose, California-based company counts more than 7,300 employees across more than 25 countries and generates around $2.3 billion in annual revenues.

To help manage operations, it began working with SAP’s Enterprise Resource Planning (ERP) platform to help transform its manufacturing process for better inventory control.

Gaja Nagarajan, managing director for cloud and enterprise apps at Maxim Integrated (pictured), explained that this includes use of SAP’s ERP Central Component (ECC) software for core ERP functionality. He added that Maxim also runs various SAP cloud offerings, including the SAP Customer Data Cloud, Commerce Cloud, and the SAP Landscape Transformation (SLT) HANA platform integrated with on-premises and other software-as-a-service (SaaS) applications.

Nagarajan recently responded to several questions from SDxCentral on the transformational move it has undertaken, why it felt the need to make the move, and what it learned from the process.

What was the initial spark for Maxim Integrated to work with SAP?

Gaja Nagarajan: Almost a decade ago, Maxim commenced its digital transformation journey. SAP was chosen to be the ERP of choice to replace three legacy, disjointed ERPs. To optimize, organize, and improve our inventory cycle and effective management of business processes, SAP was the obvious choice.

How had Maxim previously dealt with these issues?

Nagarajan: Maxim’s homegrown legacy systems relied heavily on human touch points to pull/push data out of multiple ERP systems into massive data warehouses resulting in delays and challenges with data accuracy and effectiveness. It also required heavy IT support to sync and operate our existing technology, which was a major time and effort spend, as well as an inability to differentiate customers from employees, and could not integrate with other cloud applications.

What other platforms or vendors did Maxim Integrated look at as part of the process?

Nagarajan: Various leading ERP vendors and solutions were reviewed prior to narrowing down on SAP’s ERP solution.

What are some of the biggest benefits Maxim Integrated has seen from the move?

Nagarajan: A couple of quick ones: single global instance; shorter cycle to close books during every quarter; inventory visibility; reduced days of inventory; and effective SOX [Sarbanes-Oxley Act] and SoD [separation of duty].

SAP is also an industry leader in customer identity management. They provide a comprehensive and integrated Customer Data Cloud solution. The company’s global presence was also quite attractive, as well as the option to integrate with other SAP solutions like Commerce Cloud, ERP, HANA/SLT, etc.

SAP’s Hybris Distribution model and Commerce Cloud solution allows our operations to be more streamlined and allows us to respond quickly to changes in demand.

What were some of the challenges Maxim Integrated needed to work through as part of the process?

Nagarajan: One of the biggest challenges was development skillset. In addition, legacy integration and consolidation, and significant extension to SAP to cater to semiconductor shop floor management.

What do you learn from the migration that you wished you had known before you had begun?

Nagarajan: In the beginning I’m not sure we were 100% ready for the complexities of the project. We had to build comprehensive systems to link and effectively manage our B2B subcontractors using electronic data interchange (EDI) and RosettaNet data transfer for real-time work in progress (WIP) and inventory moves across our global partners.

Now that you have moved through the process, what are some features, services, or support functions you would like to see going forward?

Nagarajan: We’d like to see an integrated EDI tool, as well as an effective SLT HANA solution to replace process Integration/exchange infrastructure (PI/XI), business objects data service (BODS), and a traditional data exchange platform.

What is some advice Maxim Integrated would offer to companies looking to integrate cloud platforms into their operations?

Nagarajan: Pick a best of breed solution instead of relying on just one option. Maxim runs 47 cloud applications tightly integrated with SAP ERP. We adopted ERP First, Cloud First, and a “no-more-boxes” approach for our application rationalization and deployments thus helping us reduce dependency on custom applications and reduce integration points.