Moving to S/4HANAWhat to expect when making the switch

The business need for a switch to S/4HANA

For many businesses that are operating on legacy

SAP platforms, the proposition of moving to

S/4HANA may be a daunting one for several

reasons. From the cost to the timescales involved,

the internal change management needed to the

custom code and business logic currently in place,

it can be easy to consign a potential move to the

‘too hard basket’.

However, as the global pandemic has shown us only too clearly, the

ability for businesses to pivot and adapt quickly and effectively is

critically important – which is why it’s vital to ensure your business

has all of the technological foundations and insights it needs to

succeed today, and flourish tomorrow.

The business need for a switch to S/4HANA

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Does your current system adequately support your existing business processes?

COVID-19 has changed consumer behaviour forever, and throughout the

pandemic, the businesses that are more advanced in the digitisation of their

operations are the ones that have subsequently fared better. The challenges

presented by COVID-19 particularly may have shone a harsh light on the tech

stack you have in place at present. Does your current system adequately

support your existing business processes? Is it flexible enough to adapt

quickly to current and emerging challenges?

Regardless of the pandemic, however, we’re operating in a world where it’s

more important than ever before to have the very best strategic insights,

from the demands and expectations of customers to the strategic challenges

that lie ahead.

Having data-fuelled intelligence to defend against disruptive new entrants to

the market, or – better still – to become the disruptor in your market, can

provide a significant competitive advantage.

There’s rarely a shortage of data collected and stored by businesses today,

but the challenge is to use it meaningfully to support timely and effective

decision making, and your tech platform needs to offer world-class reporting

and predictive analytical tools that are embedded into its core, enabling

businesses to get deep insights into every aspect of their operation.

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Is it flexible enough to adapt quickly to current and emerging challenges?

Some businesses have taken a watching brief on migration to

S/4HANA so far, and understandably so: they want to ensure

that, when they make the move, they’re moving to an evolved

and mature solution.

The current iteration of S/4HANA – the seventh generation – is

now tried and tested and is successfully running a huge variety

of businesses of all sizes in a wide range of industries – and

can be relied upon to do everything a business expects, and

more besides.

The new RISE with SAP offering – business transformation as a

service – includes S/4HANA, hosted on Public Cloud, Private

Cloud, and OnPremise – as its core component. It also includes

access to a number of other tools to help you identify business

improvement opportunities and get the most out of a

connected technology platform.

Summary

The businesses that have been able to adapt, pivot and

respond quickly are the businesses who are more advanced in

the digitisation journey.

Your operational platform must be flexible and robust enough

to enable you to adapt quickly and easily to deal with emerging

challenges.

A new generation of solution is needed to extract data insights

that can make a significant change.

From La Liga to Toyota, Deloitte to Hewlett-Packard, there are

over 8,100 customers live on SAP S/4HANA globally.

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Understanding the business value in

S/4HANA

Every financial decision a business makes today is scrutinised more

than ever before. If you request budget or propose investment into a

long-term business solution, a robust business case needs to be

produced. Often, this is the ultimate blocker to new projects getting

off the ground.

On face value, you might think that S/4HANA’s primary benefit is a

better user experience than your current solution. And if that’s the

case, it simply wouldn’t make sense to transition from a business

perspective.

It is true that S/4HANA is built on the proven capabilities of SAP, and it

does offer a significantly upgraded user experience (UX), which

incidentally can be dialled down if needed to manage the change

inside the business.

Does upgrading to S/4HANA really offer business value?

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The key benefit of upgrading to S/4HANA lies in the embedded machine learning, artificial intelligence (AI) and predictive analytics that can enable routine tasks to be automated and greater insights to be extracted.

However, the key benefit of upgrading to S/4HANA lies in the

embedded machine learning, artificial intelligence (AI) and

predictive analytics that can enable routine tasks to be automated

and greater insights to be extracted. Those insights can then

support decisions that lead to cost efficiencies.

Processes such as predictive stock in transit, reduced off-contract

spend, sales predictions and financial account reconciliation are

just a handful of insights that S/4HANA can automate, bringing with

it cost and time efficiencies, as well as business improvements.

SAP research shows S/4HANA customers have experienced

business improvements across every level of their organisation, and

part of SAP’s new RISE with SAP – business transformation as a

service – offering are tools that enable you to identify improvement

opportunities and model their potential impact.

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SAP S/4HANA customers have seen a 10% to 20% increase in customer satisfaction.*

A 25% to 30% reduction in risk and compliance cost.*

60% to 70% increase in on-time delivery, while from a CIO’s standpoint, it’s enabled a 75% lower total cost of ownership and 10% to 40% increase in productivity.*

*Source: SAP's Performance Benchmarking

From a CEO’s perspective, S/4HANA customers have seen a 10-20 per

cent increase in customer satisfaction.

From the CFO’s chair, there’s been a 25-30 per cent reduction in risk

and compliance cost.

Within the employee’s remit, there has been a 60-70 per cent

increase in on-time delivery, while from a CIO’s standpoint, it’s

enabled a 75 per cent lower total cost of ownership and 10-40 per

cent increase in productivity.

As businesses evolve, it’s important to establish a new modern digital

core as a foundational platform on which to build and scale.

Bolting new best-of-breed technologies onto an aging legacy system

may seem like a good idea from a time and cost perspective –

however, will likely only generate diminishing returns.

A move to S/4HANA presents the opportunity to decommission legacy

systems and consolidate the tech stack used by the business –

reducing costs and streamlining processes and data silos.

Summary Understanding the business benefits of a move to S/4HANA

is critically important to build a robust business case. RISE

with SAP’s starter pack can help identify and quantify the

biggest opportunities for your business.

As well as a significantly improved UX, which can be dialed

down if needed, S/4HANA offers embedded machine

learning, artificial intelligence and predictive analytics that

can provide measurable business outcomes.

Research demonstrates improved business performance of

those adopting S/4HANA across every business function.

A library of case studies on the impact S/4HANA has had

on global businesses is available for support.

And, as S/4HANA is now onto its seventh iteration, it’s now proven –

with many case studies and references from global businesses to

demonstrate the business outcomes that are possible.

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The inside track on S/4HANA implementation

The perception of the time it takes for a tech implementation is typically shaped by our

previous experiences. And, when you think back to the multi-year projects of years gone

by, it’s easy to assume that conversion to S/4HANA would be similar in both nature and

scope.

And, because S/4HANA is significantly different from ERP or ECC, it can be perceived as a

seismic shift that is just not worth it.

In truth, there will be some businesses whose current solutions will be falling incredibly

short of their requirements and will need a full and major transformation to S/4HANA.

This, however, would certainly take months, rather than years.

However, for most businesses, they will not require such an immediate change.

S/4HANA – how long does it take to implement?

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Many businesses will have a solution that’s currently fit for purpose, and conversion to S/4HANA would enable it to unlock serious business benefits,

such as embedded intelligence and analytics, streamlined business processes, intuitive, consumer-grade user experience, superior architecture and

functional scope, and establish that modern and scalable foundation for the future.

Conversion to S/4HANA would enable it to unlock serious business benefits, such as embedded intelligence and analytics, streamlined business processes, intuitive, consumer-grade user experience, superior architecture and functional scope, and establish that modern and scalable foundation for the future.

In cases such as this, taking a somewhat phased approach, rather

than a single, ‘big bang’ step, can be beneficial.

Implementing a new enterprise core, or an extended enterprise

core, as opposed to an enterprise transformation, can be a

sensible first step; and this can reduce timescales significantly.

By implementing some focused, selective innovations on top of the

mandatory core, you can get some quick wins in the organisation –

getting users on board with the change and demonstrating

business benefits too.

Other elements can be pulled back too – such as UX – which can

help ease a new system into a business as part of a structured

change management process.

This needs to be balanced, however, as the project needs to

deliver enough innovation to secure support for further evolution.

Once you have this foundation in place, you can create a roadmap

for smaller, simple implementation projects over a period, making

the overall conversion significantly more manageable.

By implementing some focused, selective innovations on top of the mandatory core, you can get some quick wins in the organisation.

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One of the most important things to decide about S/4HANA

implementation is the approach you take, and your technology partner

can help guide you through the options.

There are three approaches: Greenfield, Brownfield or a Hybrid model Bluefield, and there’s no one size-fits-all answer.

The path you choose depends on a number of factors because every

business’s circumstances are unique.

Whichever approach you take, of course, there are several things you

can do to prepare the groundwork for migration to a new platform.

Custom code is something that causes significant concern for clients

on a conversion journey, so identifying custom code or business logic

that’s in the legacy system and will be needed in the future state can

save significant time on that implementation path.

Brownfield, Greenfield or Bluefield: Which approach is best?

The Brownfield approach is the most common path businesses take, and

it’s suitable for those businesses where the current solution is broadly fit

for purpose but needs upgrading to tap into native benefits of S/4HANA –

and they don’t want to lose current data, configuration or investment in

historic customisation.

A Greenfield approach is usually recommended if you want to transition

to industry best practices quickly, or if everything needs a cleanse.

Usually, this approach is suitable for businesses whose system doesn’t

reflect the business of today or its processes – maybe as a consequence

of mergers and acquisitions, or perhaps due to heavy customisation.

The Bluefield Hybrid option is an increasingly viable path. Although

naturally more complex and costly than the other options, it can be

worthwhile in those circumstances where customers want a selective data

transition which will enable them to retain the good elements, while

cleansing and removing baggage.

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There is a range of mature and capable tools available to help

identify this and implementing them early is vitally important.

Of course, a transition such as this provides an ideal opportunity to

assess what truly differentiates the business from its competitors –

the justified customisation – and the historical, cultural norms,

which should be challenged and removed.

In terms of the implementation path itself, it’s essential to have an

implementation partner to fast-track the process. An experienced

partner can use agile methodology, including a suite of tools and

accelerators to ensure a project runs smoothly and at pace, and

can also offer a fixed cost, fixed scope solution.

Using this agile methodology, the average greenfield

implementation takes ten months, and the average brownfield

implementation takes seven months – significantly reduced

timescales from those multi-year implementations we’ve all

experienced before.

Summary The implementation of S/4HANA is significantly quicker

than the multi-year projects businesses undertook in

years gone by.

Only a business operating on a system that’s not fit for

purpose will need significant transformation.

A phased approach to demonstrate business benefits

can achieve some quick wins.

The implementation process can be sped up by

identifying custom code and business logic needed in

the future state.

On average, greenfield implementation takes ten

months, and brownfield implementation seven months.

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Final Thoughts

From putting together a robust business plan to being involved in the

implementation, via a myriad of decisions, moving from an existing

ERP or ECC solution to S/4HANA is a big undertaking.

The business benefits it realises today, however, will ensure the

business is in the strongest possible position to take advantage of

whatever tomorrow brings.

One key component of this process is, of course, finding the right

partner to advise, guide and manage the implementation – a partner

that understands your sector, your industry and your business – and

can advise on best practice. Another component, which is equally as

important, if not more so, however, is how the change process is

managed internally.

According to McKinsey, 70% of digital transformations fail due to

people. From the CEO not setting high enough aspirations to senior

leaders not being well enough equipped to lead the change, the last

hurdle businesses need to jump in the transition to S/4HANA is a

significant one.

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70% of digital transformation projects fail due to people.

To ensure this does not happen, it’s essential to emphasise change

management as a stream of the project to give it the requisite focus and

attention.

It’s vitally important to communicate well and often from the top down.

This helps to manage and embed the change. The degree of change –

and the timescales involved – can be built into the project scope and

roadmap, while education and training on needs to be made available to

support the use of a new system and changed processes.

There are significant resources online; however, the intuitive new UX

reduces the need for major training. The user experience and

programme intelligence are such that it meets expectations of the

technology we all use in our day-to-day. This familiarity ensures that

S/4HANA is picked up and embedded as part of employees’ day-to-day

routines more quickly than is often thought possible.

As you’d expect, the right partner can help you manage this change

process, ensuring the transition to S/4HANA is as smooth and seamless

– and painless – as it possibly can be.

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It’s vitally important to communicate well, and often, from the top down. This helps to manage and embed change.

Edenhouse, part of Accenture

Quartz Point

Stonebridge Road

Coleshill, Warwickshire

Birmingham B46 3JL

Get in touch

+44 (0) 330 058 6020

edenhousesolutions.co.uk

info@edenhousesolutions.co.uk

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