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The need to digitally transform your organization has never been so urgent and top of mind. In today’s climate of unprecedented disruption, leaders are looking for ways to emerge stronger from the intense challenges they face today and become resilient to the unknowns of tomorrow. And as customer needs continue to shift and organizations look for efficiencies, organizations understand they need to invest further in areas like data analytics, automation and cloud technologies.
A key priority in 2021 will be for many organizations to focus on their enterprise resource planning (ERP) systems, especially with the 2027 deadline on the horizon for companies to migrate to SAP S/4HANA. The move to S/4HANA isn’t merely an IT exercise. Organizations with SAP should be looking at it as part of their broader digital transformation. In order to fully embrace the potential of automation and the advanced data analytics that S/4HANA affords, organizations will need to review their end-to-end data, business processes and system integrations, and then develop an overall business value case to guide their transformation journey. This makes the move to S/4HANA one that requires a different approach to the SAP implementations of the past 20 years.
Everyone defines “digital transformation” differently, and the truth is that nearly every definition is applicable. Whether you look at it from an experience lens, an architecture lens, a business lens or a technology lens—they’re all valid ways to define it. And this is what makes these journeys complicated and, at times, leaves executives wondering how to make them a success.
What we see the C-suite struggling with consistently can be grouped into three main categories:
Articulating the business value case of making this significant investment
Making the program truly business-led and technology enabled (and not vice versa)
Embracing the power of what the move to the cloud is really all about, which is the power of data
We believe the move to S/4HANA is a once-in-a-generation opportunity to transform, much like the rapid adoption of the Internet was in the 1990s. Organizations need to take a very different approach to achieve true digital transformation and make the most of the investment.
Most organizations have already set aside the significant financial and human capital resources required to move to S/4HANA. Many executives are struggling with how to articulate the business value case of making this investment, while others see it as a “mandatory” investment and haven’t considered the need or value to build a case. This move is unlike other SAP projects (since the original investment in SAP) and a “lift-and-shift” approach won’t deliver on the benefits of end-to-end digitization. Developing a holistic, business-led value case—as opposed to a technology-led business case—will help you realize the potential of this transformation.
There’s a distinct and compelling business case for every function that you run in the ERP through unlocking end-to-end digitization; delivering stand-out customer and employee experiences; and leveraging data and analytics to deliver on business strategy to grow the business. Whatever you do, take the time to create a fact-based business value case that can stand the test of your CFO’s review and be measured and used as an anchor throughout the journey—because this move is much more than a mandatory investment. A well-defined business value case won’t only fund the implementation of S/4HANA—it will also help you fund all other digital transformation efforts.
Getting the most from your move to S/4HANA requires a very different approach than organizations have taken with SAP projects in the past. Our experience is that a technology-led approach in any move to the cloud may not deliver the results that were expected. Successful implementation needs to be business-led.
The CIO is a key enabler of this transformation, but while an enabler, most CIOs want their peers who run their functions in the ERP to be in the project and leading from a business lens. Many of the functional leaders in the C-suite, who run their functions in the ERP, are struggling to understand what’s in it for them and often delegate the responsibility within their organization. By default, this will make the move a secondary priority and difficult to be truly business-led.
What you want to avoid is having a great “technically configured” solution that doesn’t deliver on the business benefits. You’ll be on your way to making the transformation business-led if you bring the business value case together with an understanding of the end-to-end employee and customer experience the value case will deliver. Once the functional leaders in the C-suite realize the potential, they’ll want to take an active role in the transformation and think strategically about which data and processes they need to create a clear path to a more agile and insight-driven business.
The real power of cloud solutions is what you can do with data. In the case of ERPs and S/4HANA, the potential is achieved by streamlining your data so it can be married with all internal and external sources of data to generate real-time insights to make decisions that you can’t make easily today.
For your implementation to be truly transformative, you must have a data strategy, integrated with your S/4HANA roadmap, to guide your requirements and to help you realize the benefits.
A data strategy that helps you to define the master data environment to deliver real-time data reporting and new insights will be critical to achieving the business value case. A well-defined data strategy will help you (1) align on the data required to deliver on the benefits case and business strategies, (2) identify the best source of all organizational data, (3) understand how to measure and maintain quality data and, (4) manage your data on an ongoing basis. Together, this will define your data governance strategy and integrate your strategic data roadmap with your S/4HANA journey.
The pace of change is ramping up across all industries, so an organization’s ability to harness the power of automation and big data will help them differentiate themselves and win within their market segments. The move to S/4HANA is a once-in-a-generation opportunity to unlock the full potential of digital transformation and get your business fit for growth. By doing so, you’ll help your organization be resilient and agile as it braces for the challenges ahead.
Take this time to reimagine your business to create better, more differentiated employee and customer experiences. This is also a time to prepare your most important asset—your people—for a very different future of work. Plan to reinvest the automation and efficiency gains you’ll achieve toward delivering on your strategic priorities.
So how can you jump-start your transformation through S/4HANA? Explore our S/4 Journey Guide to learn how you can realize the transformative benefits and get a detailed benchmark report on key business drivers.
I also invite you to read more about our ERP transformation capabilities, which focus on a business-led approach tailored to your needs. With our deep industry knowledge, business functional and technical expertise and approach to defining the business value case and implementation journey to achieve it, coupled with our focus on design thinking and user experience, we’ll work with you to plan and deliver a successful transformation with better adoption and buy-in. Done well, this journey starts well before the SAP functional and technical work begins.
Please reach out to me anytime to further explore your needs and discuss the questions and challenges you’re facing as you embark on the next phase of your SAP journey.