In the constantly expanding SAP universe, ‘fit-to-standard’ has become the catchphrase du jour. However, what really hides behind the corporate jargon, and what does it look like in practice? Here we examine the real meaning of ‘fit-to-standard’ and how the mass standardisation it refers to will create a new future for the enterprise.
Standardisation, an implementation framework
‘Fit-to-standard’ is the implementation approach advocated by SAP to enable faster adoption of S/4HANA. It consists in using the best practices in the industry to create a clean core solution for the business so it can function properly using SAP systems. ‘Fit-to-standard’ is hardly a new concept, but there has been renewed focus on it as organisations strive to digitalise properly, to be more compliant and to decrease the cost of running their systems over time. Ultimately, this optimal approach promises to provide businesses with a stable core ERP system which will be agile, flexible and easily adaptable to technological and innovation needs. This is provided that S/4HANA’s applications are used appropriately, and that businesses run effective change management programmes to support employee adoption of new systems and processes.
Unleashing new capabilities
A standardised ERP core means that all the data generated and used by the different modules are defined in a single standardised format. This makes it easier for the enterprise to use external applications for digital connectivity, thus facilitating innovation. It also transforms the way day-to-day responsibilities and activities are conducted, allowing the enterprise to focus on improving business outcomes. Each new SAP release aims to offer many new tools and innovative applications (standard capabilities) that can help businesses tackle tasks better and more efficiently. Below are some of the features and functionalities of S/4HANA products which use the standard business processes and the corresponding data generated*:
- Business Event Handling: automation of actions based on internal and external events
- SAP Co-Pilot for collaboration and automation
- Robotic Process Automation using AI: this has potential in multiple streams
- Industry specific functions and applications
- Business Process optimization using Machine Learning capabilities: automated Invoice Matching during Vendor Invoice clearing is a standard feature available in S/4HANA and is powered by Machine learning capabilities, for instance.
Standards: a bedrock of digitalisation and innovation
To understand the reach of S/4HANA, the best analogy is the smartphone revolution of 2006-2010. Before the advent of smartphones, cellular phones were capable of making and receiving calls, sending messages, playing simple games etc. Their key capabilities were limited to specific forms of communication. However, when the new generation of smartphones emerged, it completely changed the way we live, interact and work, reshaping society. These powerful machines – so small they can fit in a pocket - have become an extension of us. They allow us to be constantly connected to the world and, thanks to myriad apps, be much more efficient in how we run our daily lives. All of this, however, depends very much on how well one uses the different features and applications available in smartphones today. S/4HANA is essentially the equivalent for the enterprise today. The better the enterprise uses the available capabilities and integrate them with all aspects required for business success, the greater the impact.
To achieve the best results from S/4HANA implementation, it is therefore important for businesses to identify and utilise all the additional standard features and functions available to them. This must be done early in the solution design phase, as it will allow the business to land in a much higher plane at go-live and enable it to realise value benefits much faster than normal. An excellent example is the incorporation of standard Robotic Process Automation (RPA) features in the business process design for enabling automation.
Remember to ‘show and tell’: it’s crucial to demonstrate to business users the key features and functions that will add value to the enterprise and their own job. In the older days, business would chase work to get it done. But, with an intelligent enterprise, work should be intelligent enough to chase business proactively.
The face of work will change dramatically in the next 10-15 years. Transformation will require a new mindset, especially as each S/4HANA (Cloud or On-premise) release will require businesses to upgrade their knowledge and think wider. As core processes get standardised, it’s an exciting opportunity to participate in shaping the future of work.
* Note that some of the current standard capabilities from S/4HANA which are not part of the standard business process flows are also mentioned.