Transformation is a key topic for the majority of organizations operating in the SAP space today as organizations must transform and modernize if they are to remain competitive in today’s rapidly changing business environment. But while the risks in updating infrastructure are generally understood, those around transforming applications and programs are often less well known. Automation technologies can help reduce the risk involved and accelerate the transformation process Recent SAPinsider research showed that, while the most common type of transformation that is occurring is focused on infrastructure, almost as important is updating and redesigning business processes and redesigning business models with a digital mindset. For many organizations the move to SAP S/4HANA is an opportunity to transform infrastructure and processes as part of a broader project. But there are risks to the move, particularly when it comes to customized applications and processes. To better understand the challenges and risks that organizations are facing when it comes to transforming processes and applications, SAPinsider sat down with Arndt Hoffmann, Chief Strategist and a founder at smartShift. With over 20 years’ experience with automating transformations, Hoffmann speaks with customers daily about transformation and the challenges that they are facing when it comes to completing those transformations.

Customization Can Impede Transformation

The upcoming end of maintenance of existing SAP ERP systems in 2027 is a target for many organizations that are planning for organizational transformation. “Innovation from SAP happens with SAP S/4HANA,” says Hoffmann. “If you’re running an older system, you’re not able to participate in those innovations. Moving to SAP S/4HANA and being able to consume these innovations faster is the biggest driver for many companies.” But many of these organizations have been running their existing SAP systems for 10 or even 20 years, and so they’ve become highly customized. Hoffmann says that there are good reasons for these customizations. Organizations are trying to differentiate themselves and their business processes when they put these customizations in place. They also need to localize their systems to meet certain requirements. But problems arise when they need to transform these systems to modern platforms like SAP S/4HANA. Customizations can not only be seen as an impediment to transformation, but they may also deter organizations from embarking on transformation projects at all. “The first thing you need to do,” states Hoffmann, “is to start analyzing your assets. What do you have in the system? What do I need? And what do I use?” In a typical SAP system, Hoffmann has seen that anywhere from 40-60% of the custom objects in the system aren’t actively in use. While this code doesn’t need to be moved to new system, even identifying what is in use and what is not can be a complex and time-consuming task for organizations. This is where automation can help streamline, accelerate, and reduce the risk of the transformation process.

The Impact of Automation on Transformation

When transforming or consolidating systems, Hoffmann says that organizations are looking for some specific goals. One of the biggest goals they want to achieve is in accelerating the project. Accelerating any project can be beneficial, but the bigger the project the bigger the benefit the acceleration can bring. But they are also looking to clean up their SAP repositories and modernize applications from a business and technology perspective. These are all areas in which automation can offer significant benefits in the transformation process. “Automation is the differentiator,” says Hoffmann. “Organizations that have their own differentiated business processes don’t want to throw that away. They want to retain that difference. Automation allows you to retain your strategic processes, but still give you the option to move to a more modernized state with the concept of clean core at the end.” Using automation, smartShift have seen significant success with many customers. In one case a global food company was able to eliminate 30,000 hours of manual work related to their move to SAP S/4HANA by using smartShift’s Intelligent Automation to streamline and accelerate the process. Another example is where a large auto manufacturer was able to reduce their custom code footprint by over 50,000 objects and close to 10 million lines of code across multiple systems, significantly reducing risk both from a transformation and a security perspective. These examples show that automation can have a major impact on transformation within the enterprise. Other organizations have seen the benefits of automation around testing. Hoffmann mentions a customer that was making thousands of code changes and each change required a change document and testing to verify that it worked correctly. Using an automation tool, such as those provided by smartShift, it’s possible to audit the technology rather than each individual change that is made which can significantly reduce testing requirements.

Automation Is Equally Valuable Post-Transformation

“The goal of transformation is to create cleaner and more manageable systems that are upgrade-ready,” Hoffmann says. “And from a big strategy perspective it might be the move to SAP S/4HANA, a brownfield transformation, whatever the first step towards that goal is. But once that system is in place you are going to make changes to it on a regular basis—weekly or monthly. And then every two or three years you have a big release or upgrade. To achieve this, and be able to continue to innovate, it’s important to keep systems clean so that you can innovate over and over on a regular basis.” Organizations can start with the cleanest possible system, for example by doing a greenfield implementation of SAP S/4HANA, but Hoffmann says that can often result in projects not being able to reach their goal and provide all the functionality that an organization needs. But even moving forward with a system conversion can produce challenges particularly as organizations may have to keep their existing ERP system and their new SAP S/4HANA system running in parallel for some time for example during staged rollouts across multiple instances, regions, or subsidiaries. Hoffmann remembers one customer that was managing over 2,000 transports every two weeks in a dual maintenance scenario, something that is essentially impossible without automation.

What Does This Mean for SAPinsiders?

As organizations approach the move to SAP S/4HANA, they must understand as much about their existing environments as possible if they are to streamline and accelerate their move. But, in addition to learning more about their environments, organizations must also understand the potential risks in any transformation project. What should SAPinsiders do when planning a transformation project?

• Explore solutions that will help provide an understanding of your existing environment, particularly when it comes to the customizations that make your implementations unique. Every SAP implementation is different. While variations often occur in the infrastructure and configuration side, the biggest difference is in how the system has been changed post implementation. Customizations allow an organization to align standard systems with the processes and methodologies that make them unique. But customizations also add complexity, especially over an extended period as they are modified, replaced, and adapted to meet new requirements. Technologies like automation that provide insight into what customizations are in use, as well as into custom code, can help provide the insight needed to make any transition smoother.
• Look for partners who have experience with transformation, particularly when it comes to SAP systems. Many partners offer services to help organizations running SAP systems transition to new infrastructure or new solutions, but not all have the same level of experience with ensuring that those transformations are successful. SAPinsiders looking to embark on these projects should ensure that the partner they engage with has the experience they need with the type of transformation that their project involves. Not every partner has years of experience working with updating and transforming SAP systems,and as the approaching end of maintenance approaches in 2027 it may be more challenging to locate the partner with the experience you need. Ensure that you find a partner with the right experience to meet your specific needs.
• Assess technologies that can help automate the transformation process itself. Transforming SAP systems can be a monumental task for some organizations, especially those who have had their systems in place for many years. While automation technologies are often considered for areas like testing or process automation, one of the biggest benefits of automation is how it can automate the transformation process itself. Not only can automation streamline and accelerate your transformation, it can also help reduce risk and help make overstretched strategic resources more available to focus on innovation.
• Evaluate how you can leverage technologies that facilitated transformation in the post transformation period. Investing in new technologies requires an investment of both time and resources. From a resource perspective the technology must initially be purchased, then internal teams must be educated on how to effectively use and leverage it. And this takes time. While organizations may see a return on their investment if they are able to cut weeks or months off a larger project, utilizing this technology beyond the initial transformation project can yield much larger returns. Take the time to evaluate how the technologies you use to facilitate transformation can provide benefits beyond the initial project, and how they can be leveraged as part of your regular processes.

 

About smartShift

smartShift Intelligent Automation™ is trusted by global brands to drive innovation. smartShift helps customers accelerate the transformation of their SAP systems to next-generation cloud computing environments. smartShift’s solutions have delivered thousands of application modernization initiatives, analyzing and converting over 2.5 billion lines of code, eliminating risk, and freeing up strategic resources to focus on growth.