Moving to S/4HANA...service – includes S/4HANA, hosted on Public Cloud, Private Cloud, and...
Transcript of Moving to S/4HANA...service – includes S/4HANA, hosted on Public Cloud, Private Cloud, and...
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
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