Preparation Strategies for SAP S/4HANA: An Executive Perspective
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Key Takeaways
⇨ Allocate significant planning time (three to six months) to address the complexities of SAP S/4HANA transformations, which necessitate a thorough approach to preparation and skill acquisition.
⇨ Prioritize change management and align project efforts with business strategy by focusing on key goals rather than 'wish lists' to ensure effective adoption of SAP S/4HANA's extensive functional changes.
⇨ Build a diverse project team that integrates both hard and soft skills, ensuring members are equipped to manage workflows effectively while also possessing strong communication and leadership capabilities.
Recent SAPinsider research reveals that SAP S/4HANA is the most strategic investment among the SAPinsider community. This transformative initiative is unlike any other upgrade SAP customers have encountered, requiring meticulous planning and preparation to succeed.
SAPinsider recently interviewed Mark Slater, Vice President of Digital Business Solutions at Reynolds Consumer Brands, who has led SAP S/4HANA transformation projects at multiple organizations, including Walgreens Boots Alliance.
According to our latest executive research, The CIO’s 2024 Transformation Report Card, 57% of leaders have already implemented or are currently implementing SAP S/4HANA, while 30% are conducting pilot projects or proofs of concept. Slater emphasizes that many common challenges associated with SAP S/4HANA initiatives can be mitigated or avoided with thorough planning.
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What Makes SAP S/4HANA Unique?
The rapid pace of technological change, coupled with SAP S/4HANA’s impact across various domains—such as infrastructure, database, business logic, and code—creates a unique project environment.
“This is a once-in-decades type of scenario, especially considering how fast the technology is evolving and the fact that many companies have been operating on legacy systems for so long,” says Slater. “The scale of change required is significant.”
SAP’s cloud-first strategy further underscores this shift, with innovations like AI and core business applications focused exclusively on the cloud versions of SAP S/4HANA. However, transitioning to the cloud introduces new licensing models, skillset requirements, and operational changes.
Budget Extra Time for Phase 0 Planning
Slater advises project teams to allocate three to six months for planning. “The more time you can spend, the better. Many companies underestimate the effort required to kick off preparation exercises, assemble the right skills, and familiarize themselves with analytical tools,” he explains.
While SAP S/4HANA shares some foundational tasks with other projects, the complexity and volume of decisions make its transformation particularly demanding.
Key Success Factors in the Planning Phase
Slater highlights these principles for success:
- Focus on the “Three Legs” of the Project Stool
Effective SAP S/4HANA projects balance budget, resources, and timelines while adopting a “three-in-a-box” approach that integrates business, IT, and service providers. - Prioritize Change Management
SAP S/4HANA introduces extensive functional changes, necessitating a robust change management program. For example, automation of the journal entry process in record-to-report workflows may significantly alter roles. Slater recommends proactively addressing these shifts by redefining responsibilities and enabling employees to focus on higher-value tasks. - Minimize “Wish Lists” and Align with Business Strategy
Avoid being overwhelmed by team members’ “wish lists.” Instead, organize input to align with business priorities. Slater shares how his team scaled down their initial list of 750 “capabilities” to 400 by prioritizing those that supported their strategic goals and competitive differentiation.
Tools to Support Comprehensive Analysis
Slater emphasizes leveraging SAP tools and consultant expertise to analyze current systems, assess impacts, and plan transitions. Key tools include:
- SAP Readiness Check: Offers a high-level overview of your system’s readiness, identifies simplification items, evaluates database sizing, and provides actionable insights via a dashboard.
- SAP Business Scenario Recommendation (BSR): Analyzes current SAP ECC usage and highlights innovations in SAP S/4HANA that align with business needs.
- SAP Transformation Navigator: Guides companies in building a roadmap by providing insights into landscape impacts and recommending solutions for the transition.
- Custom Code Migration App: Detects obsolete or incompatible custom code, provides detailed reports, and suggests modification strategies.
What This Means for SAPinsiders
An SAP S/4HANA project is inherently complex but presents a valuable opportunity to drive meaningful transformation. Here are three key takeaways:
- Use SAP S/4HANA for True Transformation
Avoid treating SAP S/4HANA as a mere IT project. Reexamine custom code, business processes, and foundational structures—such as chart of accounts and profit centers—to align with long-term objectives. - Master RISE with SAP
Whether or not you adopt RISE with SAP, understanding its contracts, solutions, and services is critical. These agreements can be complex, and Slater advises focusing on the components that will create the most value. - Build a Team with Hard and Soft Skills
Ensure your project team combines functional expertise with strong leadership and interpersonal skills. Team members should not only understand workflows and data structures but also possess the ability to communicate effectively, resolve conflicts, and manage change.
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