Bringing out the best in Phase Zero, and how to make it a success!

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Most clients engage in a ‘Phase Zero’ study on whether – and sometimes, how – to move to SAP S/4HANA.

In the past three months, I have seen more and more SAP clients and potential clients thinking about SAP S/4HANA. I don’t have an exact number, but I think it must be at least 50 across Europe. During this time, I probably gained a stone in weight and became friends with public transport and Uber drivers in many cities. But I also learned a lot.

All these clients are asking the same questions. Very few have a fixed view of what they should be doing, and many are discovering that the approach they assumed was right then is not the one that they will end up using. As always, the market is moving quickly, and new strategies for migration are appearing.

Most clients engage in a ‘Phase Zero’ study on whether – and sometimes, how – to move to SAP S/4HANA.

The worrying thing I see is how many SAP users who want to look at SAP S/4HANA fall into one of two categories. They either never move out of Phase Zero, and decide it’s not for them, because they’ll have to rework everything, to change the approach, and to challenge the premise on which the phase was commissioned –  or they find they have way more activities than they envisaged that they’ll have to complete once Phase Zero is complete, and before they can truly kick off the project.

These are some of my observations to help avoid issues in Phase Zero:

  • Don’t enter Phase Zero with a really fixed idea about the business case, or about how you plan to move to SAP S/4HANA. This philosophy will constrain you, and will in most cases cause disappointment or even failure. Have an open mind.
  • Conversely, a business case without any idea at all about how to move to SAP S/4HANA will not fly, or will need substantial re-work. One large and complex client we met has an excellent anticipated ROI of less than six months, but cannot work out how to move, so the project is stalled.
  • Doing Phase Zero without reference to a real SAP S/4HANA system – either a model company, a demonstrator, POC, or partner template – means there is no guarantee of a solution being available, nor of a plan being developed at the end.
  • Partners/advisors who say SAP S/4HANA is an 80% proposition and then walk away are not doing a very good job. It’s 80% of what? Does it mean 80% of standard, and none of the hard components? It is not a good basis to move forward, and you will need more proof to get a good plan and to move forward.
  • If the business is not bought in, from the beginning, Phase Zero will be seen as IT-driven, with little value – and it will be parked.
  • It seems most clients don’t always trust a business case or Phase Zero proposition that is offered by someone trying to sell licenses (sorry for this observation, SAP).
  • If you only look at core SAP S/4HANA, the business case will be harder. Looking at the intelligent enterprise will make it fly. In other words, don’t ignore the platform.
  • Don’t simply collect 13,000 requirements from your current user base. You will end up with a business case and a solution based on what you have now, and with more bespoke work.
  • A Phase Zero without a team that has strong practical SAP experience may have large gaps. You don’t simply want theorists who are good with PowerPoint.
  • IT savings and hosting don’t often get it over the line, but they are important – as is presenting Phase Zero as a chance for IT transformation.
  • Don’t ignore the massive business change that is needed in IT. There will be people who try to make Phase Zero seem too difficult, and who do not have open minds.
  • Look at the big issues facing the business, and not just the current SAP solution. These are the things that push the case through board approval.
  • A good Phase Zero will include, as a minimum, a business case, estimates of cost, a change plan, a license audit, and proposed architecture, internal and external resource requirements.
  • A business case with thousands of small improvements that do not support an enterprise-wide revolution are unlikely to be approved. How can you tell if these small improvements are because of SAP S/4HANA , or whether they could be achieved on your current platform?
  • Make sure Phase Zero addresses issues today, tomorrow, and well into the future. You will have SAP S/4HANA for another 20 years, so it needs to be relevant , even if those challenges are not completely understood yet.
  • Phase Zero moves into projects more easily if they align with a major business event, such as a merger or a new regulatory phase.
  • Don’t ignore the licensing implications, and think about the new skills, new contractual arrangements with partners, and a move to an infrastructure that can support an SAP S/4HANA project
  • Phase Zero should be as short as possible. It is hard to maintain momentum and engagement. Doing a detailed design is not needed: just address the architectural and functional issues.
  • Badging this as an upgrade with no benefits may not fly.

This list may appear to be a bit negative, but I could turn all of them on their head and make them positives – and I expect you could, too.

If you want to learn more about our approach, or if you have issues with your own current Phase Zero output or project, please contact me and also share your points of view on this.

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