The transition to SAP S/4HANA – avoid the lift and shift

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Many major businesses completed an ERP upgrade in the last 10 to 12 years. They have since funnelled their resources into eCommerce platforms, cloud technologies, data analytics and MI rather than prioritising further ERP platform upgrades. Understandably, there has been little appetite for C-suite executives to divert finite resources into large-scale ERP transformations without first having the right leadership, culture, skillsets and processes to align their digital ambition or strategy.

In a 2017 Deloitte S/4HANA survey of SAP clients, we found 77% stated their current SAP system was not well aligned to the business, 100% stated they continue to aspire to be a digital organisation and 77% believed their organisation will ultimately migrate to S/4HANA.

But pressing ahead with a major S/4HANA transformation is not always an easy decision. Many clients will want an immediate “fix” to address the burning platform that their legacy SAP software will not be supported after 2025, so they will need to push for an upgrade to S/4HANA. It is vital to have those “tilt” conversations that move towards “Greenfield” or “re-implementation” now. It is the unrealised business benefits brought into reach by S/4HANA that makes these projects worthwhile - to address desired process, system, organisational and behavioural changes. Given the cost of transition, “Lift and shift” is a missed opportunity for transformative change.

So how do I get the best of out an S4HANA programme?
Many companies start their journey through tactical digital implementations of Ariba, Concur or other SAP Cloud solutions. The disadvantage of this transformation journey is that our clients’ fail to realise the bigger business case. This is because they have focused their transformation journey on discreet digital platforms. However, it is data, process, technology and organisational integration that will create competitive advantage in the longer term.

We would encourage you to embrace the concept of ‘clean ERP’. Challenge those deeply entrenched beliefs that a transition to core business operations with zero customisations cannot possibly work in your industry.

You can use your programme as an opportunity to 1) change to an agile way of life, 2) fit to standard, 3) focus on process and organisational change.

By starting with a baseline S/4HANA (digital core) and then transitioning towards integrated cloud differentiators (Hybris, Ariba etc.), it is possible to achieve the ultimate end goal and create a system of innovation (Artificial Intelligence, robotics, Robotic Process Automation) to fundamentally change the way your organisation works.

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