SAP’s new business suite has been building momentum since the launch of this next-generation platform in February 2015, and this week at TechEd, SAP announced that it has exceeded 1,300 customers for its SAP Business Suite 4 SAP HANA (SAP S/4HANA). Customers have begun to see the value of SAP S/4HANA, however there are still many questions on when and how to best migrate to the new platform.
In Part 1 of this SAP S/4HANA blog, “Why SAP HANA or SAP S/4HANA? Key Enablers That Will Drive Value to Your Business,” I outlined the real, high-value drivers of moving to SAP S/4HANA: speed and agility; operational reporting; enhanced productivity; cross-functional transparency; simplification; and digitization of solutions. These benefits demonstrate the promise of this revolutionary new platform, but they are not inherent to the migration of SAP S/4HANA. The key to realizing these benefits is in the process, and its success is in the hands of your company and the implementation partner you choose. As I said before, there are some speed and simplification benefits that are immediate and the bulk of what SAP S/4HANA can do for your business is only realized through a proactive approach to its implementation.
At HCL, we call this an Agile Benefits Creation (ABC) approach, which focuses on three steps to adapt to SAP S/4HANA. The approach helps clients realize the benefits and adapt an agile approach in migrating to SAP Business Suite powered by SAP HANA and SAP S/4HANA. This method allows businesses to realize those high-value drivers in small sprints based on their internal resources and appetite for change. As a transformational and outcome-based company, HCL’s thought leadership begs the question: What if we upped the stakes?
Projects are traditionally funded based on perceived and promised value, which may or may not be realized. As long as the scope is delivered, the value is perceived to have been realized. HCL’s ABC approach does not stop at the delivery of the scope, but will also monitor and measure the actual benefits created as per the original project charter. Once the value is realized, a portion of the value created can then be allocated to the next enhancements or innovations. Funding each project off the value realized from the previous project not only reduces your direct investment but it also limits the impact on internal financial resources.
Perhaps somewhat radical and controversial, I feel this “self-funding” approach is critical for businesses to continue innovating and transforming in today’s digital economy. Imagine, for example, spending $1 million on a project with an expected $5 million in value. Once you realize that $5 million, you take a percentage of that and use it to fund the next project. It’s bold, but it keeps you investing and growing. It also fosters a sense of accountability, both from the business and the partner, which is important for the success of these initiatives.
Breaking the Mold
Technology transformation is critical to a company’s continued success, but it’s also perpetual and often expensive and disruptive. An environment that encourages a sense of accountability through these short project cycles can break this mold, making these projects affordable and less disruptive while getting your company to realize benefits earlier.
Migrating to SAP HANA and SAP S/4HANA is a perfect project for this agile approach because most of the changes happen in the background. For the average user, very little is different. Sure, some transactions are faster and there are some performance improvements, which on its own may seem inconsequential, but re-align these benefits and you will find the benefits do become material.
But it doesn’t happen magically; you have to streamline the end-to-end process and take each step along the way and in doing so, create those benefits. It takes an active program and participation to realize that — and that’s where agile comes in. The ability to avoid time spent on high-volume processes, and instead put those hours toward something else, has a massive impact on your businesses in terms of productivity and can result in direct savings. Rather than using ten resources, you only use eight — what are you doing with those extra people or hours? You apply that time to the next project.
When Should You Migrate to SAP S/4HANA?
f your research into SAP S/4HANA and these blogs have sufficiently convinced you that a move to SAP S/4HANA would be beneficial to your company, the last question I can answer for you is “when.” It’s time to consider SAP HANA and SAP S/4HANA when your company’s:
- Traditional SAP ERP Central Component is not supporting business needs
- Technology needs a refresh or consolidation is needed
- Budget has funds available for innovation
- Transformation or consolidation program is lacking
- Licensing is being taken into consideration
Just remember: Simply migrating to SAP Business Suite powered by SAP HANA or SAP S/4HANA isn’t going to automatically give your company measurable results. You actually have to take a proactive approach to realize the real, value-add benefits of this technology. Think of SAP HANA as a Porsche. You bought the Porsche as an upgrade from the regular sedan you were previously driving. On the surface, the Porsche is the same as your previous vehicle — it has a steering wheel, brakes, four wheels, etc. —and you could drive and use it in a similar fashion as the regular sedan. However, you invested in a Porsche for several reasons: for its speed, performance, slicker design, and smoother drive — in other words, the overall “experience.” Unless you take the time to learn how to drive faster, take corners faster, break faster, you may have just as well saved some money and kept your sedan. A good race driver or copilot, who has experience driving a Porsche, can help you learn and experience all the benefits the vehicle has to offer.
For more information on HCL’s SAP practice, visit www.hcltech.com/systems-integration/sap.