NIPPON EXPRESS HOLDINGS, INC.

Due to the intricacies of contractual terms and the complexity of contractual changes that could arise in lease management, many companies have previously managed such operations using dedicated lease management package systems outside of their core systems, or, where the number of contracts was limited, simply handled such work manually. NX Group, under the auspices of Nippon Express Holdings, is no exception to this. Its grasp of reporting of lease accounting data at its various overseas group companies thus does not extend beyond the B/S or P/L level.
NX Group has, in the past, used a core system built making the maximum use of SAP S4HANA® standard features, under a concept of Fit to Standard, and resolved to adopt SAP Contract and Lease Management for SAP S/4HANA®, an SAP standard feature, in its lease management as well. While SAP Contract and Lease Management for SAP S/4HANA® has garnered growing attention in Japan as an SAP solution aimed at the compulsory application of new lease accounting from FY2027, NX Group went with SAP Contract and Lease Management for SAP S/4HANA® in order to support IFRS 16 at its overseas group companies.
However, SAP Contract and Lease Management for SAP S/4HANA® has still only rarely been implemented in Japan, rendering its suitability for operational requirements and the formulation of a feasible implementation plan points of concern.
In this context, ABeam Consulting supported the company from 2019 in a project to renew the company’s core systems. Because this led us to better understand NX Group’s operations, and to possess a track record of being able to carry out support in line with expectations, and because we had worked on many SAP projects at other clients, and had a wealth of experience in implementing systems for lease management, NX Group decided to ask for our help in this project from December 2023.

Due to a dearth of past examples of SAP Contract and Lease Management for SAP S/4HANA® implementation, we adopted a PoC approach for this project. We efficiently tested the usability of SAP Contract and Lease Management for SAP S/4HANA® based on general lease management requirements rooted in ABeam Consulting’s knowledge related to lease management, rather than the requirements of the companies where we would be implementing the system.
During actual testing, we communicated in a timely manner with the client, adopting an attitude of making proposals about issues that arose. By quickly formulating high feasibility approaches, we were able to define overseas subsidiary lease management operations using NX Group’s standard SAP Contract and Lease Management for SAP S/4HANA® in as little as three months.
We also complied with the Fit to Standard policy that employs defined NX group standards during the actual implementation of the software at overseas subsidiaries, as a result of which we achieved high-quality, stable operations over the half-year implementation period, keeping post-operation fault incidents to the single digits.

ABeam Consulting took the lead on this project, due to our experience and knowledge of SAP system implementation and lease management.
Working under a complex division of roles in which ABeam Consulting was responsible for the actual changes to SAP Contract and Lease Management for SAP S/4HANA®, while a separate company was in charge of implementing other modules necessary for the project, we coordinated closely with other project stakeholders and maintained proactive communication, thus managing to comply with budget and schedule, and achieve the implementation of new operations and systems to a high degree of satisfaction.
We thus reduced a three-step manual process that followed the conclusion and evaluation of leases, consisting of “(1) asset-side depreciation calculations,” “(2) debtor-side redemption calculations (including interest calculations),” and “(3) accounting document registration,” down to a one-step manual process of “(1) entering contract information into SAP Contract and Lease Management for SAP S/4HANA®,” resulting in a dramatic decrease in lease management work.
For their part, Nippon Express Holdings was also able to visualize lease accounting data for its overseas group companies that had implemented SAP Contract and Lease Management for SAP S/4HANA®, which it had previously only grasped through B/S and P/L level reporting, in a way that allowed them to directly approach the data that underpinned that reporting.
We were also successful in limiting costs relative to using external packages by making use of SAP standard features. Because this system operates on AWS, we were able to support it flexibly just by adding storage (Amazon EBS) for the SAP S/4HANA® overseas deployment portion, including SAP Contract and Lease Management for SAP S/4HANA®, thus limiting costs, even in terms of platform costs.
Going forward, following the trial implementation, we will deploy SAP Contract and Lease Management for SAP S/4HANA® with increased quality to other locations and contribute to enhancing the IFRS settlement features.