In this series of blog posts, we’ll show you how to master your transformation to become an intelligent enterprise.
In recent years, more and more companies have acknowledged the need to start planning a transformation project from SAP ERP to SAP S/4HANA, due most of all to SAP’s decision to terminate maintenance of SAP ERP 6 at the end of 2027. As a result, many companies are now facing the increasingly urgent task of planning and initiating this transformation.
The transformation from older SAP systems to the modern SAP S/4HANA is a strategically important business decision, but also a complex task.
Because every SAP user company is different, with specific system landscapes, customized business processes, and a different technological infrastructure, it is not possible to use standardized plans as a copy template for your own SAP S/4HANA road map.
More than half of companies that use an ERP system from SAP are still in the basic consideration phase and therefore have an open approach to the design of their own transformation strategy. Some have reservations about potentially losing their years of investment in their ERP system, among other concerns. Rushed decisions, uncertainties in assessing SAP’s current services, and – last but not least – the anticipation of future developments are all key factors.
In this context, it is important to be aware of the added value of carrying out an in-depth preliminary study at first, instead of launching an implementation project immediately.
Which transformation strategy is best for you is highly specific and will depend on your current situation and the business objectives you hope to achieve with SAP S/4HANA. To identify it, many companies carry out an SAP S/4HANA preliminary study, which examines a variety of aspects. To do so, they often use external consultants, to draw on their broad product and industry-specific expertise.
Comprehensive understanding of a company’s current situation is essential for a focused, successful SAP S/4HANA transformation project. In addition to the current SAP systems, this also includes changes to the business, the system architecture, and of course the company’s strategic objectives. The current situation is usually complex and requires a thorough analysis to identify potential opportunities and obstacles. According to study results, 70 percent of companies that have already undergone an SAP S/4HANA transformation stress how important a detailed analysis of the current situation was for the success of their projects.
Therefore, user companies need a detailed road map for the transformation. This will avoid unnecessary complications, together with the delays and increased costs they would cause during implementation. The transformation path to SAP S/4HANA can vary widely, depending on the result of these considerations before the project itself.
There are many hybrid forms between the two clearly differentiated approaches “brownfield” (system conversion) and “greenfield” (initial implementation), which are also referred to as “selective” or “hybrid” adoption.
Overall, companies that carried out a preliminary study beforehand achieved greater satisfaction with their migration projects. In cooperation with the trade magazine “IT-Onlinemagazin”, Scheer published an SAP S/4HANA study in August 2023 that confirms this: 36 percent of the surveyed companies want to conduct a process analysis before their SAP S/4HANA project for this very reason.
A preliminary study goes beyond merely running and interpreting the standard SAP reports for assessing the system status (see “SAP Readiness Check”). Preliminary studies can be more or less work-intensive, ranging from more strategically focused management considerations to far-reaching process analyses that illuminate all operative aspects (as well as organizational aspects where applicable).
A preliminary study should answer specific questions, to create a sound foundation for the transformation. To this end, companies can choose the areas that are relevant for their own preliminary study from the following areas:
The results of the preliminary study serve as the basis for making the decisions in preparation for the transformation project. They provide concrete findings about the steps required to guarantee a smooth transformation.
If the results of the preliminary study are taken into account in preparation for the SAP S/4HANA transformation, the project’s efficiency and its prospects for successful implementation will increase. As such, the preliminary study delivers added value for the transformation project, because the well-grounded decisions will lower the costs and risks of the project as a whole.
As such, the specific results of the preliminary study form the foundation for a clearly formulated road map for SAP S/4HANA implementation. This can also mean that other preliminary studies are needed, for example, to implement new SAP features that are not already part of the main project (such as Business Partners, CVI). Measures for archiving and for improving data quality are often performed ahead of time. In addition, the road map usually defines how the legacy systems will be decommissioned.
In general, conducting a preliminary study prior to the transformation to SAP S/4HANA is recommended in all cases. It enables companies to understand their current situation, identify potential challenges at an early stage, and create a solid foundation for the transformation project. The effort and resources that are invested in the preliminary study pay off in the form of more efficient implementation and reduced project risks.
Your contact person
Dr. Andreas KronzExpert BPM Professional Services
© 2024 Scheer GmbH
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