Transparent Target Operating Model for SAP S/4HANA Transformation

⇨ A successful SAP S/4HANA transformation depends not just on implementing new technologies but on strategically assessing and defining the TOM to effectively operationalize the company’s strategy and growth objectives.

⇨ A TOM encompasses key company areas such as governance, organization, business process models, material and value flows, and enterprise architecture.

⇨ CBS offers TOM-related consulting services, leveraging deep expertise across all pertinent business and technology domains to support effective transformation.

As enterprise platform requirements evolve to meet demands for globalization, scalability, and transparency, a flexible IT landscape becomes essential. The SAP S/4HANA transformation offers a unique opportunity to align IT infrastructure with current and future challenges, enhancing value creation. However, successful realization depends not just on implementing new technologies but on strategically assessing and defining the TOM to effectively operationalize the company’s strategy and growth objectives.

A transparent and future-oriented Target Operating Model (TOM) is critical for the success of an SAP S/4HANA business transformation. Without clear visibility into the TOM, organizations risk encountering delays, costly surprises, or even failure of the transformation due to reliance on outdated models. A TOM sets up the foundation for critical aspects such as finance, for example, it delineates responsibilities for profit and loss statements and management reporting structures, essential for developing a robust controlling concept. In the supply chain, TOM serves as a blueprint for aligning the system’s requirements with the company’s strategic objectives considering it is vital for defining efficient procurement, intercompany, and distribution processes.

In S/4HANA transformation projects, it is critical to set up a transparent and future-oriented Target Operating Model (TOM) to avoid embedding outdated structures into the new system, which can be costly and inefficient to alter later. The TOM encompasses key company areas such as governance, organization, business process models, material and value flows, and enterprise architecture. It includes both standard and market-differentiating processes, along with considerations for legal entities and tax implications.

Prior to or at the start of the transformation, an in-depth review of the existing operating model should be conducted to assess its future viability. If necessary, adjustments are made to define the new TOM, followed by the creation of a detailed implementation roadmap that aligns with the S/4HANA transformation plan.

A future-oriented and transparent Target Operating Model (TOM) is crucial for a successful S/4HANA transformation. Without it, the transformation process not only misses strategic alignment but also encounters increased risks that could jeopardize its success. A well-defined TOM serves as a foundational element for navigating digital transformation challenges, ensuring the company is future ready.

cbs Corporate Business Solutions offers cbs Target Operating Model Framework and consulting services leveraging deep expertise across all pertinent business and technology domains to support effective transformation.