How to get the best out of your S/4 HANA implementation

When an organization is planning to implement S/4 HANA, there are two questions one must answer to get the best out of the investment:

  • What is the best approach for the implementation that maximizes the improvements to your business?
  • How to prepare the new organization for the changes?

The focus and approach of the organization and the implementation partner will determine the success of the project. As with every major project to obtain the desired outcomes, the SAP S/4 HANA implementation should clearly define the objectives and ensure the expected outcomes can be measured. Change is never the goal but rather the path to obtaining the desired business improvements.

  • A strong business case should support the project
  • Business, not IT, should own the project 
  • The main focus of the project should be on change management to drive the transformation of the organization towards integrated and improved end-to-end processes.
  • Standardized end-to-end processes and industry best practices will also allow to increase automation and empower employees to focus proactively on issue prevention and exception handling.

Business focused implementation

The approach to a new SAP S/4 HANA implementation should focus on re-design and change management instead of lift & shift. Lift & shift is understood here as moving an application or process from one environment to another without stopping to re-design and leverage the benefits of the new system. 

There are three main implementation types in moving a company to SAP S/4 HANA:

New implementation (greenfield) – for customers who are new to SAP ERP or companies who want to re-implement their SAP core solution.

System conversion (brownfield) – for existing SAP customers who want to upgrade and refine their current system to the latest SAP S/4 HANA solution.

Automated conversion (bluefield) - similar to brownfield, but heavily supported by automated tools. Usually applicable for the conversion of massive ERP deployments where manual approach would take too long.

Implementation type varies based on current ERP, size of the organization, and its strategical goals. However, to maximize the benefits of S/4 HANA, the focus should be always standardizing and simplification of business processes, not on technology.

Choosing the right approach is not enough. The project also needs a compelling business case; for example improvement of stock turnover by more efficient supply chain implementation or improvement of credit management and cash collection processes to reduce the Days Sales Outstanding (DSO). 

A strong business case will allow the project to have clear and verifiable objectives that can be monitored and help to drive the changes with the stakeholders. 

Adequate methodology

The business-centric approach also requires a matching methodology that emphasizes the crucial role of the business in the project delivery. One that builds on industry best practices and that works with the size of the enterprise, that allows quick identification of processes that do not fit to the SAP standard and one that facilitates corrective actions with the standardized end-to-end processes as an ultimate goal.

SAP has developed SAP Activate as the methodology aimed at delivering S/4 HANA projects, but system integrators can add value by bringing their own accelerators on top of SAP Activate.

But the best methodology won't deliver the project. One also needs a project team where business resources play key roles supported by skilled technology consultants that can drive the fit-to-standard approach. The times where the project team could work in disconnection from the business are over. To achieve the desired business goals, we need daily interactions and often corrective actions during project delivery. One of the best methods to facilitate those interactions is the use of Agile methodology. For large scale Programs, however, it might be better to use Scaled Agile Framework (SAFE) that adds program level governance to the underlying Agile.

Transformation into a more proactive organization

One of the main blockers for a successful S/4 HANA implementation is an organization not adapting to the new processes. S/4 HANA expects organizations to embrace the changes and learn to adapt constantly. SAP is releasing new releases of S/4 HANA products often, and to remain at the top, organizations have to keep adapting.

With S/4 HANA Cloud product, the early adoption is forced every three months. With S/4 HANA STE (Single Tenant Edition) ideally every year but not less than once every two years. With S/4 HANA On-Premise the schedule can be flexible. Every organization has a chance to choose the pace that suits.

The project delivery relies on business users to drive the change. In the past, business users were trained closer to the end of the project. The expectation of today is for everybody to keep up with the ever-changing knowledge by self-training through SAP Knowledge Hub. Such an approach is aimed to guarantee the best Return of Investment after implementing S/4 HANA as well as its longevity.

Last but not least; the drive for Standardized end-to-end processes may require changes in the structure of the organization, redefinition of the business roles or even creation of the new ones. To facilitate this process SAP offers a free of charge Business Scenario Recommendations that can be requested following the instructions on Request SAP BSN. This report helps to identify the business drivers for process innovation and required changes based on the current use of SAP ECC system.

Conclusion

To summarize, the implementation of S/4 HANA is not an IT exercise. It is a complex process that is meant to transform the whole organizations. It is not a one-off activity but rather an ongoing transformation. All that to continually improve on the way to achieve business excellence.

Having a deeply experienced business team balanced with exceptional functional/technical resources and a strong project discipline is the secret to success.

Contact our industry experts at Tenthpin Management Consultants if you would like to learn more.

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About the Author

Nuno Fava

Partner – Portugal

Nuno is our logistics, procurement and order to cash process expert.