Selective
Many industry customers evaluate the two transformation approaches - reimplementation or conversion - and say, "Neither of them fits into our strategy and innovation concept; we lack the business case for operational added value."On the one hand, you want to take proven processes with you, and on the other, you want to establish valuable innovations in the company, streamline production and logistics processes, and create added value in the process. The time factor hovers over everything.
An S/4 conversion usually has a duration of one year - but with a significantly lower innovation share. In 2019, existing SAP customer Viessmann showed how things can be done differently: a manageable project duration with innovation measures and the inclusion of historical data and mature processes. The selective path impressed with the world's largest S/4 project to date in record time.
In S/4 conversion projects, the number of stakeholders is growing: IT, finance, production, logistics, new customer interfaces and business models. In some companies, IT remains the driver - especially when mature solutions are already in place and the switch to S/4 as a digital platform is to be made quickly in order to take the next steps with the business units.
In other cases, functional areas such as sales or service demand rapid digitization. In the concert of IT projects, it is not about the one S/4 project, but about digitization or transition programs - with the S/4 transition as a part. Today, Selective S/4 Transition has evolved from a compromise to a silver bullet. You divide large programs into small packages and lift the organization onto a digital platform with innovations.
With the view from this plateau, the rest of the program is underway. Companies today understand that this first innovation hub prepares further stages well. Anything else takes too long; most run out of steam before the summit. For the volume of change, the 80/20 rule comes into play: identify topics that really add value, solve many pain points and, above all, still need to be addressed globally.
In this way, project runtimes of months instead of years and a big bang can be realized. The innovative Enterprise Transformer software is critical for data migration in such projects: Users leave a manufactured part behind in production on Fridays and come back on Mondays to continue building the part as if nothing had happened.
What do we see now that SAP legacy customers have taken the selective path to S/4? First, that there are few new implementations or system conversions. Most companies are looking at lighthouse projects and want to achieve the same successes in the foreseeable future with optimized business processes and innovative technology.
The result must justify the cost; the selective approach offers the best cost-benefit ratio. Viessmann is still a showcase for this approach: with 6000 users and 30 billion data records, the project was completed in 18 months.
In addition to this path, there are now new reference projects for digital innovation in the industrial environment from the USA, also due to new SAP offerings: CBS successfully completed the transformation from ERP on-premises to the S/4 private cloud for Steel and Pipe Supply. The selective transition focused on what was really necessary and targeted innovation: transforming finance, selecting, reducing and integrating processes and historical data. Initial customer conversations confirm to us that the trend to run these systems in the cloud will not remain just an American path.
