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Nick Coburn21-Feb-2022 10:22:184 min read

Don’t allow IT to lead your SAP S/4HANA migration. Here’s why.

In our recent SAP S/4HANA research, 52% of SAP customers said they’re planning to migrate to S/4HANA in the next 2 years but only 34% thought it highly-likely their CEO or CFO would sign off an S/4HANA business case.

How telling.

If your IT project is not supporting a key business requirement, why are you doing it anyway? Yes, there may be some examples of ‘pure’ IT projects, but most should be driven by business demand and aligned with the overall strategy and supporting portfolio plans.

To that end, moving to S/4HANA is no different. You could look at it as just a technical upgrade, and many organisations have, but that kind of misses the point.

S/4HANA is a once in a generation opportunity to get things right

For many organisations, migrating to S/4HANA is a once in a ‘career’ generation opportunity to really drive business transformation.

It’s your chance to make up for the missed opportunities of previous programmes, where new technology was implemented that promised to be a robust platform and enabler for business transformation. But that transformation failed to materialise. Often, this is because the business failed to simplify and standardise processes, the benefits were never achieved and the value associated with the multi-million dollar business case was never realised.

So now, you have the opportunity to start again.

Digital disruption is here.

It’s real and it’s happening everywhere. Those who embrace it can achieve significant competitive advantage. Big data, analytics, IoT, automation, artificial intelligence. Big buzz words. But what do they mean from a business perspective?

So why even move to SAP S/4HANA?

At the core of S/4HANA is the simplification of business processes and data flows. The most commoditised parts of a business process are prime candidates for outsourcing and Robotic Process Automation. Taking care of the commoditised processes means the business can then focus on those processes which are true differentiators and add real competitive advantage.

S/4HANA brings data to the fore, allowing business to make real time decisions with embedded analytics and intuitive user design, turning information into competitive advantage.

One of the most significant benefits of S/4HANA its ability to enable agile integration of technologies. This connected ecosystem helps to provide seamless customer experiences, connecting people with data via technology.

What all of this means is the case for transformation must be driven by the business, with technology as the enabler. It’s a two way process. Every company needs a vision and strategy. Every company needs a direction of travel. But do you know the art of the possible? Do you understand how technology can support your journey, providing simplification along the way, allowing you to get to your destination more quickly?

In our recent SAP S/4HANA research, the 2025 deadline was stated as the main reason for moving to S/4HANA with 69% of SAP customers rating it as important. 42% ranked it as a very important reason to move to S/4HANA.

This compares with only 19% placing a high importance on the benefits of faster SAP solution.

58% of SAP customers felt that the speed improvement afforded by S/4HANA was not a compelling reason to migrate.

And, In terms of new S/4HANA functionality aligning with business strategy, the group was divided in a Brexit-esque proportion of 52% vs. 48%.

But the key question here is, is your business really aware of the solution benefits associated with S/4HANA? If not, they should be.

Understanding what’s new, what’s changing and why must surely be a fundamental element of determining if S/4HANA supports your business strategy. This isn’t a classic chicken and egg discussion - the business strategy always comes first.

Business strategy is everything

Business strategy determines both a target destination and a direction of travel. Business strategy absolutely comes first.

Once the strategic direction and tactical objectives are clear, then a conversation can be had about what’s the most appropriate suite of applications to enable the business to transform and achieve its strategic objectives.

Understanding the art of the possible may help to shape some of the thinking that goes into the business strategy but, at that stage, it’s not about choosing the technology.

It is all too true that securing executive sign-off is one of the biggest challenges facing potential future S/4HANA projects. Some Systems Integrators claim you can get away with a purely technical, cost savings business case (e.g. smaller databases, fewer servers) – but has anyone achieved this in reality? 

Leading organisations build a business case based on strategic enablement and lose the S/4HANA migration costs as part of a broader business transformation programme. To do this, you need to know what new functionality and benefits S/4HANA offers for each area of your business.

If you need help building your business case for SAP S/4HANA, contact us here.

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