S/4 Hana: On track with individual transformation roadmap

In order to determine the right way to migrate to S/4 Hana, it is not enough to just look at isolated elements, as many business cases do. For example, the potential benefits that the next-generation SAP Business Suite will bring to the business departments are often emphasized.

One example of this is the integration of the machine (IoT) in the service area, which relieves the service technician, but can mean more work and higher qualification requirements for the service planner in the back office.

Savings through S/4 Hana can lead to greater effort and risks elsewhere, which requires costly transformations and adjustments. Companies are therefore well advised to consider and weigh up their requirements holistically.

Based on the business strategy, processes, organizational structures, technological requirements and the existing system environment must be taken into account.

Decision matrix

To analyze and evaluate these factors, Apsolut developed a decision matrix that supports companies in creating an individual S/4 Hana transformation roadmap. It highlights the elements of corporate strategy, business processes, organization and roles as well as IT strategy.

Corporate strategy:

If a company strives for growth in response to market shifts, the priority is on the simple integration of acquisitions, the conquest of new markets or the expansion of internal resources.

This requires the definition of standardized business processes and the development of templates, as well as the use of supporting functions such as an integrated CRM within S/4 Hana Enterprise Management for analytics, marketing and campaigns.

If a company is focused on stability or is planning a restructuring, inefficiencies must be eliminated, work processes optimized and financial bottlenecks removed in order to increase profits disproportionately while maintaining constant sales growth.

This can be achieved by outsourcing parts of the company or introducing and automating central functions, for example in finance or human resources. Companies should consider using the cloud for this - not only for cost reasons, but also because it simplifies outsourcing.

When a company is founded, the focus is usually on a single product and its continuous improvement with the aim of quickly producing new variants and integrating partners closely into development and production.

The customer side should not be neglected either, which can be achieved through targeted customer service as well as the integration and evaluation of the rating portals of social media channels.

Suitable products based around the "digital core" S/4 Hana must be selected for all of the aforementioned corporate strategies and implemented as part of an individual transformation roadmap.

This is particularly true for companies with a focus on innovation ("digitalization") that want to quickly produce new products and services in a volatile market.

Business processes:

Business processes must be prioritized based on the corporate strategy. One example is the customer integration of an end-to-end sales and marketing process or an automated real-time information flow into product development with data from the production, use or operation and service of a product.

Another option is process optimization, for example as part of an operational excellence initiative, for which the areas of sales, purchasing, finance and human resources are simplified and automated.

The process integration of customers and suppliers must also be taken into account. Based on the business process, the process steps are evaluated and compared with the new functions of S/4 Hana or corresponding products.

Organization and roles:

The organizational structures, roles and responsibilities in the company change with the corporate strategy, which is often associated with process harmonization and optimization through new functions.

This also has an impact on the customer-specific S/4 Hana transformation roadmap. For example, the planned centralization of areas within shared service centers or the adaptation of views and transactions, which is necessary due to the change in the work content, responsibilities and roles of an employee.

Access via mobile devices, which can be simplified by an individually configured SAP Fiori design, is an option. Change management is essential in order to involve employees in the changes in the best possible way and increase their acceptance of them.

IT strategy:

The IT strategy, which forms the technical basis for the S/4 Hana transformation, is also derived from the corporate strategy. The existing application landscape must be analyzed with regard to the system and application lifecycle, the value of the application ("best of breed"), the use of technological innovations as well as the risks, security, complexity and maintainability.

The selection of technical products and solutions is also influenced by budgetary requirements for the one-off transformation and total cost of ownership (TCO) - in comparison to the quantifiable benefits in terms of increased sales or cost savings for the company.

Analysis of the IT and SAP infrastructure

In the next step, the system and application landscape is analyzed and inventoried in order to find out to what extent future customer requirements are covered by existing applications.

Questionnaires and workshops can be used to identify the type of applications, functions, degree of localization, software, databases, interfaces, documentation, availability of internal and external expertise, license costs, TCO and existing risks.

Special programs are available for SAP systems that allow automatic analyses of the use of standard transactions as well as calls to existing developments. This enables a direct comparison with the new S/4 Hana functions.

As a result, a company gains transparency as to which functions are used and how, how many in-house developments there are, for what purposes they are used and whether associated documentation exists.

Technical key figures, such as performance and peaks, are also determined. The technical analyses also take into account the customer's own systems and third-party products.

S/4 transformation roadmap

As soon as the customer's strategic goals and current technological status have been determined, the requirements for the new S/4 landscape can be derived - as the basis for the customer-specific transformation roadmap. As a rule, several scenarios are designed from which to choose.

S/4 projects are highly complex. The reasons for this are that every changeover has a major impact on the company, there are numerous requirements for the new solution and there are a large number of product and transformation variants and their possible interaction.

To reduce complexity, the Apsolut consultants applied the "House of Quality" methodology from product and service development to determine the application landscape and the S/4 transformation roadmap.

In the "House of Quality", the customer requirements are weighted and compared with the existing product features or those to be developed. The resulting degree of fulfillment of the functions can be read from the evaluated work and decision matrix, which forms the result and core element of the Quality Function Deployment (QFD) method.

QFD is part of the Six Sigma methodology, which visualizes customer requirements (Voice of Customer). It is used to collect and evaluate the often vaguely formulated customer requirements and to bring about a technical product decision based on the degree of fulfillment of the customer requirements.

The matrix provides a fact-based decision-making basis for the Management Board and divisional management. Another advantage of the evaluation matrix is that the weighted customer requirements and their functional coverage show the priority and sequence of implementation, on the basis of which the corresponding Scrum teams can be defined in an agile approach, for example.