Key steps to implement SAP S/4HANA

ERP implementations can transform a business’ productivity – but they also come with huge risks attached. Experts from Project One explain how companies can best adapt to SAP’s latest offering, S/4HANA.

There are many, many variations on Enterprise Resource Planning (ERP) solutions. Independent consultancy Project One has extensive experience helping their clients get to grips with a wide range of them. While the firm has no ties or alliances to specific vendors, a number of its largest clients are aligned to the SAP world, meaning the firm has recently gained significant experience and insight from programmes implementing the new S/4HANA system.

“S/4HANA is not an upgrade from ECC6,” they clarify. “It is a fundamentally different product based on the HANA database. Both on-premise and cloud solutions are available, and the latter will drive clients to adopt a vanilla solution. This represents a ‘once in a lifetime’ opportunity to re-design business processes to align with best practice. Real time analytics, enhanced revenue opportunities and IT simplification are all quoted benefits.”

Due to the likely significant process changes this must be a business-led transformation programme which is inherently complex and will need a multi-year lifespan to conceive, plan and execute. So, how can companies get the most from this change?

“As with most cross-functional and IT enabled programmes, these types of change are complex and often experience delivery issues,” the experts explain. “We’ve summarised our collective wisdom to bring you the five key areas to avoid and mitigate risk with.”

Programme ownership

First of all, companies should start with “a clear vision” to help ensure executive sponsorship. Like any digital transformation, a move to S/4HANA should be “business led” according to the consultants, and should be understood as a business change project enabled by systems change.

They continue, “Invest in change management from day one, recognising how to tailor a transformation to your firm. Invest in a network of internal Change Agents, Super Users, Adoption Leads to ensure uptake and support across the business. And keep communications super simple, as S/4HANA can become overly complicated and the business users can quickly become lost and disengaged.” 

Business data

Perhaps most importantly, firms need to consider data migration – which has proven to be “one of the most consistent workstreams that causes issues and delays across S/4HANA implementations”. According to Project One, it is not a simple data migration route to move from ECC6 to S/4HANA, so having a clear definition and process for data migration can help avoid the potential root causes of data migration failure. This also includes defining a concept of data ownership and planning for data migration needs to be defined and agreed in the early stages of the programme.

The advisors go on, “Legacy data is typically years old and has been subject to extensive customisation; the business often struggle to fully understand the business implications of the SAP data objects. Be very clear architecturally what the Master Data Objects are and where they are to be mastered, and how they will flow. Invest time to ensure people understand the difference between master/transaction data, and how they underpin business processes.”

Programme governance

At the same time, good governance is central to most transformation campaigns. This means that firms need to get the right sponsors, stakeholders and level of communication all aligned to the process. 

“The definition of how decisions will be made should all be worked out at the beginning,” the experts note. “Ensure a business design authority is appointed and empowered from the outset. Although the end-point may seem a long way off for the business it is vital they engage at the outset to avoid costly errors and risk of re-work downstream.”

Scope and sequence

“Ensure scope alignment with the vision and ambition for change,” the experts maintain. “This means cross checking scope questions with the vision as the scope will inevitably evolve through the discovery stage.”

They advise firms to be specific, as scope has many dimensions. For example, there are functionality, legacy systems, sourcing, business and geographic sequencing of implementation to consider – and each decision will affect time and cost. When deciding which order to prioritise this, there is no right sequencing answer for a multi-business or multinational roll-out, and while many firms start with finances, an analysis of pros and cons can help tailor the right solution.

Delivery team

Firms should ensure a ‘One Team’ ethos of shared outcomes and success when implementing S/4HANA. Involving the wider business early on can ensure a shift from “Programme ‘push’ to Business ‘pull’”, as the programme gets into deployment phase. Investing in teambuilding can also help keep change resistance to a minimum throughout the implementation.

“Getting the right people involved at the outset is fundamental to success,” Project One’s professionals argue. “It’s common for resources to change over the lifetime of the project, so attend to stabilising the core of the team and plan for succession of key people. Don’t assume business teams know their processes 100%. Moving to S/4HANA is a lot about unpicking deeply embedded processes, which have been left to their own devices for a significant period of time.”