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The four-step recipe for a successful business core transformation to S/4HANA – and what to do after

Of all the business technology transformations, an SAP S/4HANA transformation is among the most challenging. But, with the right ingredients and by following the right steps, you can succeed. In this article, our transformation experts share the secret recipe for success, tested by them in real-life SAP transformations.

Transforming a business and its core systems, solutions and ways of working is tough – otherwise, there would not be a whole transformation consultancy industry around it. Based on our experience, the first key to successful business technology transformation is that you, the leader, drive the change. Following this recipe will start you on a road to transformation success.

Step 1: Start with the key ingredients of your Transformation Journey

Before you do anything else, it is crucial to plan the steps of your transformation. To succeed in your SAP S/4HANA transformation journey, start with these four key ingredients:

  1. Define the strategy including cloud platform aspirations. First, evaluate your high-level corporate strategy and define what benefits you can gain from cloud solutions: better use of your data, more visibility, new innovations, and so on.
  2. Spark interest and excitement in your organisation. Who are your internal stakeholders? Share the news with them! Make sure communication is on point and training is available.
  3. Start building your Transformation Excellence Center. It can focus on solution design, training, solution reusability, risk management, or group purchasing – or all these tasks!
  4. Establish your project management model. You don’t have to do SAP with the waterfall method, there are agile options for project delivery with proven results.   

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Step 2: Add a pinch of business leadership

To succeed in your SAP S/4HANA transformation, you need to engage your business leaders to design and drive the change. How? By using practical, right-sized methods and approaches that are designed specifically for them.

We created the Business Technology Design methodology for business leaders, group management teams, and decision makers to ensure that transformation is driven by business needs – not technology. It gives you tools and practices to review your business processes and see how SAP S/4HANA can support them. The methodology covers, for example:

With these key areas covered, you can easily identify any needs for development, evaluate which potential solutions best fit your business needs, and lead the continuous business capability development.

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Step 3: Add a transition option, S/4HANA edition, and platform type of choice

You can approach the SAP S/4HANA system transformation in different ways depending on your business requirements and the status of your SAP systems. However, all the different approaches share these core principles: the S/4HANA transformation is always a business project, the ERP architecture should be futureproof (with integration capabilities), and you should always understand the current state of the business processes to avoid moving the old bottlenecks into the new system.

To decide the best approach for your organisation, start by considering your SAP Transition options:

  1. Implementation: In a new implementation build a new standard core and fit to purpose extensions.
  2. Mix & Match: Using selective data transition tools keep a selection of historical data, convert to a fresh system, and innovate, all at the same time.
  3. Full conversion: Converting your existing SAP solution, keep your historical data and investments to extensions.

Next, evaluate the most suitable SAP S/4HANA target edition for your business. Will you remain in the on-premises edition or move to SaaS-based editions on public or private cloud editions? Lastly, you need to decide whether you will move to cloud with one of the hyper scalers (e.g. Azure) or would you host your platform on a private cloud?

Step 4: Share the good with your people!

As a business leader, you can make the difference between success and failure in the next transformation by emphasising good communication and ensuring appropriate training opportunities. Effective communication builds commitment and inspires the people around you. Resist the urge to delegate. You need to personally keep telling the transformation story: Be a reliable spokesperson who sees the change as positive and sponsor the transformation.

With good communication and training, everyone will know what the next steps are, what is expected of them and why. Since it is your people who make the transformation happen, you will need to help them adapt their way of working. Luckily, Business Change Management (BCM) is a tool for business leaders to lead the transformation journey and do just that.

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Remember to keep fine-tuning the SAP S4/HANA solution to your taste

If you thought the transformation is over after launching your new SAP S4/HANA, think again! Continuous improvement of your SAP S4/HANA-solution is crucial to ensure you get the best benefits out of it.

It is a good idea to keep the core standardised. Implement the minimum viable solution quickly, and then develop the solution further based on business-oriented goals and user experience. This will ensure the SAP solution grows with your business needs and targets.

Continuous improvement will also help you make sure you get the benefits of new technology innovations. It is also a good way to see if any of the development ideas in your backlog could – or should – be delivered. It also gives you a chance to assess the solution and processes continuously ­with process mining tools, for example. This way, you can optimise the solution and its use.

One last reminder: Don’t forget your people after the project ends! Transformation is a continuous process for them, too. As new people join your organisation, they change roles internally, they come up with new innovations and there are new technologies.

We hope this recipe has given you some ideas and tools to tackle the cycle of transformation with confidence. If you feel like you would rather have a one-to-one with an SAP transformation expert, don’t hesitate to contact us. We would be happy to discuss your SAP S4/HANA transformation with you.