What is the best SAP implementation solution for your business?
You’ll want to know this especially if you’re concerned with an effective SAP S/4HANA® implementation and migration.
Planning an S/4HANA implementation and migration the right way
SAP implementations are projects to integrate enterprise resource planning software into an organization, and they aren’t easy to manage. Why? Because they’re big decisions to make for your business! You’re working with high stakes, perhaps resulting in even bigger business benefits if you’re lucky – but the downside is you’ll have to know the significant risks associated with implementations and migrations as well as how to avoid them.
What you’re going to read right now will clue you in on what those risks are for this SAP bandwagon, but here’s the good news: you’ll learn right here on how to sidestep poor SAP implementation results such as brand damage, decreasing revenue, bad customer experiences, a frustrated workforce, and inflated expenses.
You first need to consider the most realistic view of time and cost for your S/4HANA implementation
Arguably the biggest issue many companies have with S/4HANA implementations as an SAP solution is this: cost. Oftentimes some migrations tend to be way too expensive. That’s something you want to avoid.
Why? Because if you don’t have a solid plan and structure in place for your S/4HANA implementation, the cost for it could get even higher! And time is money.
Imagine every day costing you hundreds more just to make a decision, and you can see the big picture. Plan ahead and consider these very real metrics about your average SAP implementation project:
- Average SAP solutions tend to cost 3-5 times the investment in software
- S/4HANA migrations can easily consume roughly 3% to 4% of your company’s annual revenue
- And worst of all: these numbers can fluctuate wildly depending on numerous challenges in your business.
You might have to seriously align your culture with the transition
Pay close attention to your own company culture – are your employees prepared for the change? Perhaps not. You, therefore, want to document what’s called a “phasing strategy” that aligns with that culture first before outright implementing S4/HANA into your corporate infrastructure.
It’s tempting not to be methodical about all of this, though – most companies just want to change quickly. Avoid that. You have to consider certain aspects such as:
- Internal resource availability
- Team deadline adherence
- Risk tolerance
- And perhaps a host of other variances or factors!
If your team typically takes several months to complete any other project, take that into consideration before even thinking about an S4/HANA implementation or migration that you’d want to be managed within a few weeks. Don’t set your team up for failure....
Determine what needs to change and if you’re willing to change it/them
Believe it or not, but not every SAP implementation is the same. Depending on your business model, industry, goals, what you’re going to want to change may vary compared to even your competitors – so don’t jump on the SAP S/4HANA bandwagon without knowing where you want to go. The bandwagon will have many stops along the way!
That’s not to say there’s something dreadfully wrong with being as ambitious as you can be with your SAP migration, but the fact is you first need to really define what is reasonable, and not just what looks and sounds ideal. Remember: this is all about cost. You need to keep this to a minimum.
S/4HANA and SAP represents serious overhauls, so be sure your project vision aligns with your corporate strategy. Make sure phasing and project scope are flexible enough, too. In other words: make sure the horses are fed first before they pull that bandwagon.
Ensure you have internal and external resources in place
Part of the issue with any successful SAP implementation or S/4HANA migration is that no matter how you manage it, you’re going to have to ‘shut off’ portions of your operations to make it happen. Any company would look at that in fear, asking the perilous question: “What about our revenue? Our profit? Our longevity? Will we survive this transition?”
Of course you will. Ensure you have more than enough resources to carry it on, following with clear definitions and responsibilities between:
- Your organization
- Your SAP system integrator
- Third parties
- Onshore developments
- Offshore channels
Reallocation is a definite. When portions of your operation shut down, if you can manage to fill in the gaps while the S/4HANA migration is occurring, chances are pretty good everything will coordinate smoothly.
Don’t be afraid to outsource or hire for those additional external resources either. Sure, you’ll spend more to outsource and hire, but it’s well worth the investment when comparing to a month, or two, or three in lost revenue, because your company’s essentially ‘shut down’ while it transitions. Ultimately, you’ll recoup the investment over the long haul especially as the S/4HANA migration and/or SAP migration operates much faster and more cohesively because of your planning and mitigation.
Speaking of smoother transitions and faster implementation…
Developing an organizational change management plan is a must, strategically organizing:
- Design and readiness
- Training for everyone
- Workforce transition
- Benefits realization
- Cultural transformation
- Executive and stakeholder alignment (because everyone needs to be on the same page!)
- And, of course, communications (everyone needs to be able to communicate with…everyone!)
In short, make one person in charge of cultural transformation. Make someone in charge of workforce transition. Make someone in charge of training. And so on and so forth. The structure needs to be there. Everyone needs to be held accountable.
And, of course, get this all planned out before moving forward with the SAP implementation project.
But don’t forget about your IT department
Those experts in that division represent the nuts and bolts of your bandwagon. Yes, the horses are fed and ready to pull, but if the wheels fall off, you won’t go anywhere. So define your IT transition plan.
The new migration will give rise to a host of new architectures, requiring new skills your IT specialists will need to acquire if they haven’t already. Make sure they’re prepared with:
- A seamless application decommissioning plan
- Transitioning skills and training new ones
- Who has reporting responsibilities?
- And what about post-go-live support processes?
- And get a longer-term “Center of Excellence” going
Why? Your IT department will maintain the new implementation long after SAP consultants and other project team members have built the bandwagon – all the more reason why you want to ensure they have all the nuts and bolts ready.
And what’s a “Center of Excellence”?
Glad you asked: since your SAP S/4HANA implementation won’t end with completion, you’ll need a centralized headquarters to sustain that new operation continuously.
SAP isn’t a “start it, run it, and leave it” affair. Your IT – and anyone else invested in the project, for that matter – will need a place they can refresh, reinforce and reinvest in the new applications, processes and technology associated with S/4HANA.
Additionally, a Center of Excellence will provide:
- An even clearer support plan for the future
- Increased integration between operations and IT
- Better transitioning for your IT staff
In a way, it’s all about education. Something new’s integrating with the business. You certainly would want to have all your key players on point with new information, new procedures, new techniques, new strategies. Right?
If you’re reading this, you’re interested in SAP migrations but recognize that these S/4HANA implementations are no walk in the park. They’re well worth the effort, but you have do get it done right, and the good news is this: ARIS can do more than just help you get it done right!