Harnessing the full power of S/4HANA

By Peter Wienand, Ralph Seidel and Thomas Zeimentz

As many organizations turn their attention to in some cases long-overdue ERP system overhauls, many are setting their sights higher. Rather than merely upgrading to a new version, CEOs and CTOs understand that the forthcoming migration is a unique opportunity to transform their entire IT landscape and enable the efficient rollout of real-time business operations. Our new publication spells out exactly how companies can realize the full benefit of this exciting, once-in-a-lifetime transformation project.

A clean break and fresh opportunities

When the transition to S/4HANA comes, few will miss the mixed bag of customized processes and workarounds that, through countless M&As and reorganizations, have grown to become the piecemeal IT landscapes often in place today. To make sure this doesn’t happen again, but also for cost reasons, minimal customization seems to make good sense.

This is where harmonization and standardization come into play: Avoiding confusion about crucial differences between the two and understanding how they can (and must) usefully complement each other is the first crucial step. With everyone on the same page, a “house of standardization” can then be put in place as a conceptual framework for both aspects.

Fine in theory, but challenging in practice?

Building this house involves a number of fundamental decisions – such as getting the right talent in the right roles – that must be carefully considered before going ahead with the actual work of harmonization and standardization. But even then, implementation harbors many and varied challenges: Initial ambitions to keep everything clean and consistent can quickly get bogged down when countless change requests flood in during enterprise-wide rollout. That is why the publication details specific categories and criteria as a governance model: This is vital to determine what systems must not deviate from harmonized approaches at any cost, for example, and which processes have how much leeway to accommodate sensible modifications.

Standardization, too, encounters challenges in that it must be measurable, which in turn presupposes relevant and carefully chosen key performance indicators (KPIs). Above all, it is important to know how widely deviations from defined standards are applied (‘breadth’) and by how much processes deviate from those standards (‘depth’).

These measurements should, of course, also be weighted depending on how critical the processes concerned are in practice.

Further practical hints and guiding principles make our publication a useful point of departure for any organization looking to start out on its S/4HANA transformation journey.

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