Ditch the Legacy Baggage: A Guide to a Smooth and Effective S/4HANA Transformation
Over the years, SAP has become the largest and most popular enterprise resource planning (ERP) provider in the world. By creating a centralized system for businesses that enables every department to share common data and work from a single source of truth, SAP now dominates the industry. In fact, 99 out of the 100 largest companies in the world are SAP customers.
The reason why is clear: SAP offers an incredible ability to optimize and automate processes in all areas of a company with solutions for every type of organization. Now, with its latest migration to S/4HANA required by 2027, it will offer even more robust solutions for supply chain management.
There is just one problem: Although the ERP systems have evolved, many organizations have not. Instead, all too many continue to fit their outdated processes in to the latest advancement, striving to create complex custom solutions out of simple out-of-the-box add-ons.
With the upcoming transition to S/4HANA, it has never been more crucial for organizations to break these old habits. It is high time that we say goodbye to customization woes and hello to a more efficient, future-ready SAP system that optimizes business processes and unlocks true ERP potential.
Let’s explore some of the key challenges and how we overcome them.
- Status Quo | Change Management
One of the biggest challenges organizations face when transitioning from SAP ECC to S/4HANA is breaking free from old habits and the status quo. Many organization shave become comfortable with their existing processes, even if they are inefficient or outdated. The fear and uncertainty that comes with change can often hinder organizations from embracing new features and ways of working more effectively.
- Fear of Failure | Past Failures
SAP implementations are known for their long duration, complexity and high costs, and organizations fall under pressure to justify the price tag associated with S/4HANA. The fear of failed implementations in the past, and the potential impact it can have on the business, can often lead organizations to choose the path of least resistance carrying over existing solutions to S/4HANA.
- Knowledge Gap
The transition from SAP ECC to S/4HANA brings with it new ways of accessing the system and transacting with it. SAP has been actively releasing new Fiori applications that provide a modern and intuitive user experience. However, many organizations maintain a knowledge gap when it comes to supply chain management and how to use Fiori applications. This can create a barrier to adopting S/4HANA and result in underutilization of the system's capabilities.
Overcoming Challenges and the Value Add
In the current state, organizations tackle such challenges in different ways. Some try to take a technical upgrade path, where they simply carry over the customizations from ECC to S/4, simplifying the solution in a few minor ways. Other organizations go through the Greenfield implementation where they start from scratch, incurring large costs. Neither of these approaches address the challenges. The goal for organizations is to recognize unnecessary customizations, and become more knowledgeable, not only in supply chain optimization, but also in utilizing the benefits of SAP.
It’s Time to Consider a Transformation Approach
A transformation approach can help bridge the knowledge gap on supply chain management and SAP. It provides education and hands on use of supply chain functions/management in the live system to key stakeholders and business process owners. As a result, organizations can more fully leverage the integrated capability of SAP and more readily react to changing market conditions. This ensures that organizations have the necessary confidence, knowledge, and skills to fully leverage the capabilities of S/4HANA and make informed decisions about business processes.
A good way to achieve this goal is to commit to Reveal’s methodology. By doing so, organizations embed strong change management structure to create a culture of continuous improvement. Value optimization involves engaging key stakeholders and business process owners in the migration journey and empowering them to make decisions aligning with the strategic goals of the organization. By breaking free from the status quo and embracing change, organizations can optimize their business processes and unlock new levels of efficiency and productivity.
Furthermore, a transformation approach can help organizations identify and highlight unnecessary custom solutions outside of the SAP system. By conducting a thorough analysis of the existing system landscape, organizations can identify areas where standard functionality can meet the requirements of the business.This not only reduces the complexity of the system, but also eliminates the cost of maintaining unnecessary custom solutions in the long run.
Lastly, a transformation approach can help organizations avoid the expense and time consumption of starting from scratch with a Greenfield implementation. By leveraging the existing investments in SAP ECC and transitioning to S/4HANA, organizations can achieve the desired level of transformation without the need for a complete overhaul of their system landscape.
Remember, transitioning from SAP ECC to S/4HANA is a critical step for organizations looking to unlock their system’s true potential and optimize their business processes. With the right approach, the elimination of old customization habits and a focus on change management, organizations can maximize the value they derive from S/4HANA. By leaving behind old habits of customization and embracing the future with S/4HANA, organizations can streamline their processes, reduce maintenance costs, and leverage the latest advancements in technology.
