The move to SAP S/4HANA is a critical element in an organization’s digital transformation and consists of three main stages. First, organizations must prepare for the transition. This involves addressing major topics like building a business case, getting business buy-in, data cleansing and preparation for the updated data model in SAP S/4HANA, replacing or re-engineering customizations, choosing the type of deployment that will be used, and preparing the people impacted by the change. The second stage involves the deployment of SAP S/4HANA itself. Although this stage will run much more smoothly if preparations were thorough, it still involves working with a implementation partner, completing multiple dry runs and solution testing, and completing the challenging implementation itself. The third stage involves the go-live, adoption of the SAP S/4HANA system, supporting end users as they adapt to new processes and SAP software, and scaling for value. Managing all these tasks over the duration of the project can be complex even with an experienced partner. To learn more about the topic SAPinsider spoke with Chip Sherrill, Advisory Partner in SAP Technology and Transformation at PwC.

Establish an Enterprise Data Model Prior to Deployment

“Everything starts with data,” states Sherrill. “The first step is having a well-structured enterprise data model. The challenge is that most clients we see have evolved their functionality in a specific way over time and they need to re-establish a refined, revised enterprise data model. This will allow them to answer their most critically important questions before they reach the next step. And the structure of that enterprise data model will allow them to facilitate decisions at every level in the organization’s business processes.” A properly constructed enterprise data model can satisfy both internal and external stakeholders in a common way, something that is extremely important. But Sherrill says that it’s also important to always keep the end goal in mind. The data model in SAP S/4HANA has been enriched with the Universal Journal which provides the ability to embed differentiated capabilities to facilitate decision making at each level of the organization and in every business process. “One of the challenges in managing this data model is that these models have grown and developed through acquisitions, mergers, and divestitures as well as the addition of new product lines and capabilities over time,” Sherrill explained. “There are also customized steps that may be happening outside the solution that aren’t aligned with SAP models. These incremental changes can accrue over time and result in deviation from the data model. This is where it is critical to assess data, usage, and requirements from the start, and those assessments must be continuously evaluated during the course of the project.” Defining the enterprise data model effectively involves having the right internal team members engaged with the project and a clear understanding of business requirements. Although an implementation partner may bring expertise with SAP S/4HANA, there can be a lack of familiarity with what makes a business unique or even resistance to change from internal teams. What organizations like PwC aim to do is work hand in hand with key stakeholders to ensure that there is a detailed understanding of business processes that will help not only establish an enterprise data model but help set goals and objectives for the entire SAP S/4HANA project. “Any technology change must align with business goals, objectives, and process changes. These impact people. Making sure the right people are on the project team, understanding who is being impacted and how, and working together to navigate through that is a key ingredient to making the change real and lasting,” says Sherrill.

Pursuing Fit to Standard Adoption

"Fit to Standard" adoption methodology helps to streamline and accelerate the deployment process. The approach involves adopting the standard best practices provided by SAP rather than customizing the software extensively. "Fit to Standard Adoption" entails:

1. Adoption of Best Practices: PwC’s industry edge solution provides pre-configured business processes that are considered industry best practices. The "Fit to Standard" approach encourages businesses to adopt these processes as they are, reducing the need for custom developments.
2. Workshops and Assessments: During the implementation, show and tell workshops are conducted to assess the business's current processes against industry edge leading practices processes. This helps in adoption of the pre-configured solution with confidence, identifying any key gaps and determining whether the business can adapt its processes to fit the standard solution. The right people need to be involved, and the decision shared, so that you are not “undoing” or “revisiting” decisions at testing, because people were not involved or informed during workshop activities. Not having these decisions understood up front will slow down deployment.
3. Configuration over Customization: The “Fit to Standard” approach emphasizes standardization - configuring the system using built-in tools and settings rather than custom coding. It still allows for some level of flexibility and businesses can choose to customize if necessary, but these should be exceptions and not the rule. This ensures that the system remains stable, easier to maintain, and quicker to upgrade. Not only does your deployment go faster, but support and future needs do as well.
4. Reduced Implementation Time and Cost: By limiting customization, the implementation process can be faster and more cost-effective. This approach also reduces the complexity of future updates and upgrades.
5. Focus on Organizational Change Management: Since adopting the standard processes may require changes in how a business operates and/or is structured, change management becomes a crucial component. Organizations need to engage and prepare their leaders and teams early for changes in processes and workflows so that the deployment goes faster and go-live can become a “non-event”.

By adhering to the "Fit to Standard" methodology, organizations can leverage extensive industry experience and proven practices, leading to more efficient and effective business operations.

Address Major Tasks at the Beginning of Deployment Projects

“One of the challenges I see in SAP S/4HANA deployments is when something is identified mid-project that takes time to understand and resolve,” Sherrill states. “This can sometimes delay the entire project. It’s much more cost effective and less risky when these complex challenges are addressed early in the project, if not at the very beginning. This will provide a working prototype that keeps the project on track.” These challenges may be topics like cyber risk or be regulatory in nature and what partners like PwC can do is provide the process and industry expertise to allow them to be effectively addressed. They also provide guidance on putting preventative measures in place to ensure that future challenges are identified before they occur. This includes organizational change management which is something many companies do not always manage well despite having highly skilled technical and SAP teams because business teams are often late additions to the deployment stage process. According to Sherrill, all these topics should be planned for and addressed early in the deployment stage, helping limit potential mid-project disruptions.

Maintain Project Focus

Despite the significant investment that organizations make in moving to SAP S/4HANA, one of the challenges that Sherrill has encountered is with maintaining focus. Given that most projects are part of a multi-year transformation initiative, organizational leadership can change, and questions be raised on the value of the initiative. Although most organizations build a great use case and plan, what can delay these plans is when there is not an ongoing reference back to decisions made during the preparation and design stage. Or there is a missing reference baseline to refer to when making decisions. Working with a partner like PwC can help organizations identify some of the key metrics that should be measured over the course of the project and help them put in place the guidelines for referring back to these KPIs. The PwC Benchmarking group can also help organizations define and measure broader KPIs to perform comparative analysis across industries and functional areas in addition to those most relevant to the SAP S/4HANA project. Whatever goals are measured, Sherrill says that it is important to maintain a focus around why decisions were made. This allows team members to understand the basis of the decision rather than simply being told to execute on it.

Supporting Business Readiness

Transitioning to a solution like SAP S4/HANA, requires dedicated time and people in the business supporting and playing integral roles on the deployment teams. This sounds simple, but in reality, it requires organizations to strategically assign people to the project team who can dedicate a significant portion of their time for the duration of the project deployment phase. This may require changing people’s roles in the business to enable them to focus on this transformation to serve as project team leads, business testers, trainers and change agents. But it is well worth it. Sherill advises people in various levels of an organization, across multiple affected business areas of an organization, in multiple affected regions allows for a holistic view building confidence that the solution and tool meets the business needs. Trainers and change agents should also be testers so they can provide insights to their colleagues who will be experiencing the changes with them. “This also helps build understanding and trust in the change before and while it occurs,” he notes. With a focus on data, addressing the biggest complexities first, and maintaining focus, organizations can help ensure that their SAP S/4HANA deployment runs smoothly from start to finish.

What Does This Mean for SAPinsiders?

Many organizations are either moving to SAP S/4HANA or are in the process of preparing for that move. Given the complexity and duration of these projects, especially if the project is part of a broader transformation initiative, it is vital that time be dedicated to both planning for the project as well as putting in place guidelines for the success once the deployment is underway. Given these needs, how should SAPinsiders prepare so that they can ensure a successful move to SAP S/4HANA?

• Establish a well-constructed enterprise data model. Many organizations that are running SAP ERP systems have been doing so for years. For most this has resulted in not only customized code but also in modifications to processes and data models to support each organization’s unique requirements. With the move to SAP S/4HANA there are not only changes such as the Universal Journal but there are other simplified table structures that are supposed through the virtual data model. Without an effective enterprise data model it will be difficult for organizations to manage the transition into the new system as well as support the way data flows across the enterprise from new and updated business processes.
• Involve business teams to identify the biggest or most complex tasks during the planning stage. Some of the biggest delays in ERP deployment projects come when a task or key design need is discovered that was not identified during planning. This will delay the project while a resolution is found or, in a worst-case scenario, even stop the project temporarily. To avoid these situations, it is important for IT teams to work closely with business teams to ensure that the biggest tasks in the project are identified ahead of time so that they can be addressed at the beginning of the project. Doing so will ensure that appropriate time is allocated for their completion, and they will not occur unexpectedly later in the project. Experienced deployment partners such as PwC can help organizations identify these complex issues based on their experience with hundreds of ERP deployments and thus help reduce the risk of potential roadblocks cropping up during the project.
• Establish a baseline that teams can reference when making project decisions. Most organizations dedicate a significant amount of time to planning for their move to SAP S/4HANA and building the business case is often identified as one of the most challenging parts of the project. However, even when this is done thoroughly organizations do not always put metrics and decision matrixes in place to ensure that deployment teams have a reference point to help understand how and why decisions should be made during the project itself. Establishing these criteria is very important to the success of the project as it will allow project teams to have a baseline when it comes to making project decisions and they will understand why they are being made.
• Plan for the change. Involve the business and ensure that they are educated about the changes that are happening. Reaching the testing phase, or even go-live, and discovering that the business does not understand the solution, why it was designed the way it was, and how they need to operate, will slow down both the program and the benefits it delivers. Business teams are busy, but it is imperative that they are involved and lead the implementation in conjunction with IT.
• Align with a partner that has the experience to help address these needs. A partner, such as PwC, that has worked on hundreds of SAP S/4HANA deployments and has skills and experience not only in the product but in creating business cases, identifying critical KPIs, recognizing common project roadblocks, and working with organizations to address these challenges offers significant benefits with any SAP S/4HANA deployment. It is important to choose a partner that can not only provide experienced, professional consulting services but can also help develop insightful strategy.

Key Takeaways

Over the next few years many organizations are likely to start a transition to SAP S/4HANA. While it is essential to have a thorough preparation, just as important is ensuring that the project does not encounter delays or roadblocks during the implementation process as these can increase costs and delay timelines. This is why it is just as important to focus on the deployment stage of any project as it is the preparation for that project. Working with an experienced partner can help achieve these goals as well as providing the framework for ongoing success.

• Establish an enterprise data model and ensure that it includes both that which will be included in SAP S/4HANA as well as that which will be utilized across other parts of the enterprise.
• Identify and address the most significant tasks at the start of the deployment stage in order to avoid delays or bottlenecks mid-project.
• Use the business case established during the preparation stage to identify and track key metrics and KPIs in order to provide a baseline for decisions once the project is underway.
• Implement a comprehensive testing protocol that is clear to testers, involves team members from across the organization, and provides multiple test cycles to ensure the go-live solution behaves as designed.
• Communicate with impacted business users regularly so they have an opportunity to understand what is changing, ask questions, and have time to transition to new processes and technology.

About PwC

PwC is a leading global professional services network focused on building trust in society and solving important problems. We work with clients from all industries to transform their business by developing and implementing innovative strategies, experiences, and technologies, in ways that are faster, more agile and accountable. At PwC, we offer a new equation for better results. One that helps people and processes enable powerful technology with implementation that gets it done right—with minimal disruption and maximum impact. With offices in 157 countries and more than 295,000 people, we help organizations and individuals create the value they’re looking for, by delivering quality in assurance, tax and advisory services.