A value-driven SAP S/4HANA transformation!

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Sun Tzu said, “Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.”. While customers are making investments on SAP S/4HANA for the next possible 20 years, are you harvesting the significant value SAP S/4HANA transformation provides?

As the SAP portfolio lead for Europe, I engage in multiple conversations with customers. I often hear, ‘business ambition should be the driver of the transformation’. Over the last 4 years if there’s something abundantly clear to me, is that the usual “What value does SAP S/4HANA bring?” is not the right question to begin with, in order to get the best out of the SAP S/4HANA based transformation. This often directs the conversation to a limited and focused aspect around the “core operation” improvements but SAP S/4HANA has the potential to deliver a significant more. Instead “Why should we transform?” is a better one. It draws the bigger picture of assessing ambition from a business standpoint, and then set the target according to the transformation levers that can be actioned. IT including SAP S/4HANA is one of the transformation levers, but not the only one. For instance, servitization is high on the manufacturing agenda – evolving from a pure product-based offer to a mix of products and services, sold on a subscription model, has a major impact on business and IT-architecture. This ambition dictates a change in operating and business model, creating new organizations and processes, and SAP S/4HANA together with other solutions can bring the total potential to life.

In this age of the VUCA (Volatile, Uncertain, Complex, Ambiguous) world, ever changing business must be dealt with agility and flexibility. Capgemini’s Renewable Enterprise is key to success here. With almost every one of the Fortune 100 clients I’ve worked with, the customer has made it clear they can no longer want to engage in a 5 or 10-year blueprinting exercise of transformation plan with detailed process design, global core solution and deployment etc., as they did in the past with their SAP system. The ability to evolve almost in tandem with the pace of the business change, triggering new ways of designing both IT architecture and transformation roadmap is the need of the hour.

As a response, we developed the Multi-Pillar SAP S/4HANA Architecture (MPSA), an architecture standpoint, where SAP S/4HANA is a ‘core open platform’ that can be connected and integrated with a wide ecosystem of best-of-breed solutions, typically cloud apps or microservices. In the yesteryears of SAP world, almost everything was built in SAP, thus creating a heavily customized monolithic block difficult to evolve to any changing needs. Today, a well-thought agile architecture based on SAP S/4HANA, cloud services, vertical solutions and a solid integration platform enables significantly more flexible way of handling evolutions. “Create a Simple SAP S/4HANA lean core and built the value around” is the guiding principle we tell our clients. It helps create value faster, in phases and in more tangible forms.

A Value-driven transformation roadmap is a more complex but second way to maximize benefits of a SAP S/4HANA supported transformation. We have a 5-step method to identify “Quick wins” that can be put in place before the finalization of the SAP S/4HANA move, thanks to the open MPSA framework. The larger impact comes in the form of roll-out strategy being much more modular (a combination of business processes, countries, domains to best fit with the expected business value).

Until you understand and formulate the strategy, building tactics alone in this age of digital transformation will certainly spell doom! And you can have the best strategy, but if you miss the timing, the cost (financial or otherwise) would not maximize your returns!

At Capgemini we have helped hundreds of customers get the best from their SAP S/4HANA transformation, starting with a SAP S/4HANA transformation assessment, focusing on the business ambition and levers, translating them into achievable target business models, operating models and architecture based on SAP S/4HANA, with an Agile roadmap to deliver business value faster. To learn more, carry a maturity assessment or see our demo’s & accelerators live in action, visit us or contact me directly!

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