Transform Your Critical Organizational Functions

 

Many organizations are currently struggling with the question what to do with S/4HANA. Should we migrate now, or is it better to wait and realize other initiatives first? And how does this relate to our ambitions on digital transformation and possible improvements on Your Organization and Technology?

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Digital transformation has an increasing impact on all of us. Driven by technologies such as Big Data, Internet of Things, Cloud, mobile, robotics, artificial intelligence and machine learning there is an increasing connectivity between people, organizations and devices. Organizational processes will be further automated and new potential data flows will emerge, which can be used to get better insights for improved decision-making and organizational innovation.

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Within this digital environment SAP is positioning their S/4HANA solution as the ‘digital core’ for the ‘digital organization’ or ‘Intelligent Enterprise’ and many organizations are currently facing the question when they should make the move to S/4HANA. Do it now or wait? And when the decision is taken to migrate, what is the scope and how can the migration be performed best? Answering these questions for your organization in a structured way, taking into account both a organizational and technology perspective, will highly influence the success of your migration to S/4HANA and the value it brings to your organization.

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SAP, have recognized that new technology was needed to better support organizations in a digital world. SAP’s answer to this is SAP HANA, a technology based on using an in-memory database and the possibilities this technology offers for a different method of storing, processing and using data in transactions and reports OLTP and OLAP. The starting point is that data is handled much faster which benefits transactional processing e.g. faster MRP but also provides better insights such as real-time reporting and innovation using Internet of Things and machine learning. HANA was initially released in 2012 with a capability to accelerate reporting but since then it has grown into an overall platform for the digital organization including key components such SAP Fiori (new user interface), SAP Leonardo (digital innovation and business insights), S/4HANA (support for core ERP business processes) and other SAP products (integration with additional non-core processes).

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Strategy for S/4HANA

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Defining your S/4HANA strategy is about focusing on the realization of value through S/4HANA given the context of your own Organizational and Technology environments. You do not simply start with the actual migration and deployment and see what happens. It means that you take time to understand the current situation, set a clear vision how S/4HANA and related organizational improvements can add value and clearly define what activities need to be done related to design and preparation before actual migration will take place. Also taking into account that the decision to migrate to S/4HANA is typically taken against a background of cost reduction and keeping an existing (complex) SAP environment running.

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One of the key enablers to create value through digital transformation and S/4HANA is the realization of a solid backbone with a standardized (OneOrganization) and simplified organizational process landscape and application landscape. For successful delivery you need an end to end methodology with a clear focus on value, organizational improvement and technology realization supported by strong project and change management. This end to end view starts with a clear S/4HANA strategy and roadmap.

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SAPDAY Can Help You With Your S/4HANA Journey

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Value Delivery

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Value is at the heart of the SAPDAY methodology and these activities ensure that all decisions taken, related to your process and application landscape are made from the starting point that it will add value. The key component is to understand the value drivers and define a clear business case that is updated each time you get new information during the strategy & roadmap phases. The business case is also used as part of stakeholder management and to get approval for the following steps. Value drivers can relate to financial benefits, including cost reductions, but also to less tangible benefits, such as lowering risk e.g. by replacing legacy SAP and increasing compliance. Where possible value drivers are quantified using data analytics. Typically tooling is used to support the analysis and quantify the benefits and costs.  SAPDAY will build your S/4HANA Value Delivery Model.

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Organizational Improvement

 

Although an S/4HANA migration consists of many technology related activities, it is in essence still about the best way to support your organizational processes and therefore not just a technology project. The key component of the organizational view is to understand what improvements can and should be made to your process landscape standardization, harmonization and simplification and how S/4HANA can contribute to this. These improvements are not necessarily done during an S/4HANA migration, but can also be done before the migration as a preparation project or after the migration as an improvement project. Timing is part of your S/4HANA strategy and highly relates to the preferred migration approach e.g. brownfield or greenfield (please refer to SAPDAY's Insights Article "SAP S/4HANA Brownfield or Greenfield Implementations). SAPDAY will not only improve your process flow but will also assist you to transform elements such as organization, people, master data, management information, reporting, security and controls.

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Technology Realization

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There is a large technical component to each S/4HANA migration. Related to the application itself but also to the architecture e.g. integration, Cloud vs. On Premises and infrastructure. Key component is to define what your future application landscape will look like. What S/4HANA modules and related Cloud applications such as Ariba, C/4HANA etc. can be used to support each business process and how do these modules integrate. SAPDAY will perform an SAP readiness check, especially when using a system conversion scenario (brownfield) which means the existing system is updated to S/4HANA. The SAP readiness check covers topics such as the simplification list the delta functionality between ECC and S/4 and the custom code analysis. These analyses are typically supported by tooling, such as SAP Solution Manager tooling.

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Change Management

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Determining the strategy is about making choices that will have a long term impact. Choices that not only affect technology but also have an impact on your organization. Managing this change is not only a key factor for the successful realization of the S/4HANA migration but also commitment for the strategy itself. The end to end methodology provides a framework for managing these changes in a structured manner.

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Project Management

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Because of the long term impact and various issues that need to be addressed when determining the strategy it is best to perform these activities in a structured, project based manner with a specific team with planning and budget. Clear documentation makes it easier to integrate the results into any other possible initiatives in your organization and it provides a solid basis for the next phases.

 

As mentioned, these various perspectives are closely related and will be handled simultaneously. For example, when analyzing the possible business improvements on the fly you will also check the possible use of new S/4HANA functionality.

In addition to the various perspectives we also see a number of phases. These project phases indicate a certain chronological order that needs to be followed to ensure a structured way of decision making. However it is important to note that on a more detailed level activities are not that strictly separated and can be run in parallel both within a phase as between phases.

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