When it comes to digitization projects such as an S/4HANA migration, management teams often focus on which areas, workflows or processes should be changed and how these projects should be implemented. In this commentary, Dr. Steele Arbeeny, CTO of the SNP Group, recommends that the focus should be on the company's business goals. In this way, digital transformation pays off and new business values can be unlocked.
In the wake of the pandemic and the associated digitization efforts, the migration to the new SAP S/4HANA business suite has become a priority for many companies. And yet S/4HANA can only be as good as the tangible benefits derived from it. It happens time and again that companies opt for a relatively simple technology upgrade – without checking whether this upgrade actually delivers new value. Alas, that way a lot of potential is wasted: After all, the new benefits and innovations that S/4HANA offers can't be achieved through technology updates alone.
Ultimate goal: Unlocking new business value
The overarching goal of an S/4HANA implementation should be to unlock new business value. Therefore, the first step in any transformation project is to identify the objectives – and thus asking "why": Why is it critical for your company to transform? Where should it position itself in the future? In practice, quite a few companies skip this important step. Instead, they focus on the "how" or "what" of their digitization project – and arrive at a destination where they wonder what the costly conversion has ultimately achieved.
An S/4HANA migration can even lead to a negative return on invest (ROI) if careful light was not shed in advance on what the transformation is intended to achieve.
No S/4HANA migration without a well thought-out strategy
Due to their complexity, S/4HANA conversions are clouded with uncertainty. This uncertainty largely stems from a lack of information and upfront analysis at the beginning of the project. Important decisions – such as whether to perform a combined cloud migration, a simultaneous IT modernization, or the choice of implementation method – need to be thoroughly examined. In doing so, the choice should not necessarily fall on the lowest-risk solution, but should always be based on the perspective of the company's own business goals. Companies are not left to their own devices here: Experienced service providers such as SNP provide support in mastering complex digital transformation processes.
Leveraging the potential of S/4HANA – with the right partner
A common example from our everyday business shows how important goal-oriented collaboration with partners can be: if we talk to a company about the main reason for migrating to S/4HANA, in nine out of ten cases we get the answer that the benefits of the platform's advanced analytics capabilities are to be leveraged. These analytics capabilities are a big draw for organizations, and rightly so. Then we hear that the same company took a greenfield approach to migrating to S/4HANA because re-implementation seemed like the easiest and lowest-risk path. The snag is this: No historical data is transferred during a greenfield migration – but the data is actually needed to take advantage of S/4HANA's advanced analytics capabilities. An experienced service provider clarifies this and provides an alternative migration approach with which the greatest possible benefit can be derived from the conversion.
Ultimately, the strategic planning and execution of transformation projects suggest some parallels with professional sports: when athletes train for a race, they do so knowing the route they will run on the day of the race, the number of kilometers, and the type of training they will need to complete in order to reach the defined goal. A similar approach should be taken to digital transformation: Project managers who figure out at the beginning of the process why transformation is needed and what the business benefits will be will know exactly what they are working toward, how they are doing it – and, most importantly, why they are doing it. In this way, it can be ensured that the transformation pays off in the end and that one's own company can derive competitive advantages from it.
This article first appeared on CIO.com.
About the Author
Dr. Steele G. Arbeeny is CTO of SNP Group and architect of numerous mission-critical systems across multiple industries, including technology, financial services, healthcare, pharmaceuticals and manufacturing.