Translator and navigator
In search of guidance and roadmaps, Jörg Dietmann, CEO Nagarro ES, found time for an interview to provide guidance to the SAP community. This E-3 interview is also an update to the joint November 2020 cover story with the topic of ERP conversion.
E-3: Dear Mr. Dietmann - from a partner perspective, which SAP transformation program do you recommend to existing customers: Move, Conversion or Rise?
Jörg Dietmann: This is a question to which I cannot give a quick answer. So first I would classify the terms. SAP Movement is a program to move customers to S/4 - it is not about a specific method or deployment. The goal is solely the path to S/4 Hana.
A conversion - sometimes also called a brownfield - on the other hand, refers to a method of converting the existing ERP and the validated and efficient processes to SAP S/4. Rise with SAP is the latest offering related to SAP S/4 Hana Cloud from Walldorf and is a bundle of S/4 Cloud, BTP, SAP Business Network and Business Process Intelligence. As different as each company is, so is the path to S/4.
In this respect, there are also many different paths, whose specific advantages and challenges must be evaluated individually for each company. Only this much is clear: If SAP customers want to stay with the provider, S/4 Hana is the next logical step.
E-3: A comprehensive S/4 transformation permanently changes the organizational and operational structure of existing SAP customers. What is Nagarro's offering in this particular release change?
Dietman: We see our role as translator on the one hand and navigator on the other. With S/4, SAP is converting its many years of market leadership and experience in ERP to new modern technology, which thereby makes it possible to open up new opportunities for companies.
As an SAP partner, we deal with SAP 24 x 7 and, thanks to our close partnership, not only have an excellent network to Walldorf, but also a deep understanding of SAP's way of working and language. However, our special added value then also lies in looking beyond the SAP horizon, because we want to accompany companies in the direction of Intelligent Enterprise and show where the path can lead.
Here, we either start directly with roadmaps or we take a step back together and first evaluate where the company currently is using a tool-supported approach. This is essential for digital transformation: putting all processes and systems to the test and seeing where we have a delta between the actual and the target.
E-3: Where do you see the biggest challenges for a classic ECC 6.0 user?
Challenges? In terms of business management and organization,
Technical or licensing?
Dietman: We always emphasize that no two companies are alike. In this respect, there is no one-size-fits-all answer here either. The challenges are heterogeneous. From a business perspective, deployment in the cloud has advantages. There are now many approaches to using the digital transformation for potential savings - especially with regard to EaaS models on a subscription basis and the associated change from capex to opex.
E-3: This leads over to the
Hyperscalers, right?
Dietman: Hyperscalers are another trendy topic. However, this does not automatically mean cost savings if a company maps its entire structure on hyperscalers. Customers are well advised to work with a partner who has a holistic view and filters out the best of all worlds - on a customer-specific basis.
From a technical perspective, companies are confronted with completely new possibilities that can be used as a basis with S/4, such as machine learning, artificial intelligence or robotic process automation. Automated processes, in turn, create the freedom to focus on other topics or to reorganize the company.
E-3: And beyond the technology, what else should be considered?
Dietman: Separate from the technical argumentation for the switch to S/4 Hana is the licensing discussion with its very own challenges. First of all, the topic of SAP licenses belongs in the development of every S/4 roadmap. Not least because it is a central cost component of the transformation to S/4 Hana.
Thorough consideration when selecting the right license conversion can not only potentially save costs, but also significantly optimize the use of SAP software. Whether product conversion or contract conversion makes sense must be assessed on a customer-specific basis.
E-3: An existing SAP customer who asks you to explain Intelligent Enterprise, what do you say? A Nagarro elevator pitch!
Dietman: The Intelligent Enterprise is a vision for businesses, never a target state. Companies moving toward the Intelligent Enterprise focus on integration, efficiency, and people at the center - both employees and customers.
The Intelligent Enterprise creates more freedom for new topics and more time. At the core of the Intelligent Enterprise are integrated end-to-end processes that deliver real value. The efficiency gained then creates new opportunities for companies to think in new ways. Flexibility and individuality are important here.
After all, success is no longer defined solely in terms of profit and sales - as the pandemic has shown. Today, the focus is much more on employees and their values, such as sustainability and social commitment.
E-3: How do you assess the necessity and functionality of process mining?
Dietman: Process mining provides complete transparency over digitized business processes and is suitable for standardized processes that run entirely in digital back-end systems. In this respect, process mining is very helpful in identifying inefficient processes.
But the necessity depends on what you want to achieve. Of course, you can also have your processes evaluated by consultants. But then never with the speed and transparency that you achieve with the tool-based approach.
E-3: Who is better: Celonis or Signavio?
Dietman: You can't say that across the board. Celonis is certainly the market leader and pioneer in the field of process mining. But Signavio is much more broadly positioned when it comes to business process management and is certainly more present for our customers at the moment due to the takeover by SAP.
E-3: There is a survey from Switzerland according to which 40 percent of SAP's existing customers have switched to Hana, but only a small proportion are convinced by S/4: Do you see a similar situation or where does the S/4 Hana transformation stand?
Dietman: My subjective assessment, shaped by the many discussions I have had with our customers, is confirmed by the latest Lünendonk study. We are at a different point here. The pandemic may have forced some companies to pause their S/4 Hana projects, yet the majority of SAP customers plan to fully complete their ERP modernization by 2025.
E-3: Your personal experience from discussions with SAP existing customers?
Dietman: What else I personally want to say about digital transformation and the acceptance of SAP S/4 Hana: The implementation of S/4 as the new central core of the IT landscape is such a complex matter for companies that the need to get the workforce excited about the transformation is often overlooked.
The human factor in particular must be taken into account in the context of such a project - lack of trust, lack of motivation, or low and outdated competencies are often the focus here. Employees - regardless of whether they are end users, managers, key users or IT staff - should actively participate in the transformation project and be accompanied into the new era both professionally and culturally.
E-3: And the goal?
Dietman: This is the only way to create acceptance and know-how and, incidentally, to make the project more cost-effective by avoiding problems with training or other information flows before they arise.
E-3: Can you outline the biggest challenges for a successful S/4 release change in the coming years up to 2027/2030? What needs to be considered in the future?
Dietman: The most important message for users is certainly if you are an SAP customer and have not yet dealt with S/4 Hana: Get it done quickly. Most companies underestimate the time required, as there can be a lot of preliminary projects.
And in the meantime, S/4 has reached such a level of maturity that there need be no more concerns here. Because remember: The consulting market is not growing, and anyone who doesn't deal with the topic until 2027 will feel like they're at the fruit counter in the supermarket at 10 p.m. on Saturdays.
E-3: Thank you for the interview.
