The Digital Twin and SAP S/4HANA in Defence

Back in March 2021 I wrote a blog introducing the topic on developing Digital Twins of Business Operations for SAP enabled transformations. In this edition, we take this in the context of the Defence industry.

Strategic modernization of Defence sector:

In support of strategic modernization and readiness priorities of Defence forces, there is a need to have an instant view across a network of hundreds of distinct source systems at the tactical level to produce real-time, data-informed decisions. Most of the communications on a modern battlefield involve replenishment of materials and fuel, as well as critical ‘command and control’ tactical decisions, all of which rely on robust ERP. Therefor ERP is one of the strategic sources to integrate with C2 platforms and provide views on critical maintenance components, shipment, and finance data, enabling logistics transparency and optimized fill rates.

However, after lengthy, expensive and complex implementation programs, Defence forces often find themselves with systems that fail to meet user requirements and are now obsolete, e.g., Defence organizations wanting to adopt SAP’s Defence Forces and Public Security solution as part pf their digital strategy are often confronted with migrating their landscape to S/4 HANA on an on-demand infrastructure.

This is where establishing a Digital Twin can support the design of an S/4HANA-enabled operating model and help clients re-engineer their process and operations landscape, while pivoting to organizational changes over the years to come. The digital twin of the customers SAP landscape helps in incubating, evaluating and prioritizing transformation opportunities in line with the digital defence roadmap.

The “S” in S/4HANA, is for “simple.”

As SAP plans to discontinue the mainstream maintenance of its existing ERP solutions by 2027, organizations are considering various methods in their transition to SAP S/4HANA®.

This presents a golden opportunity to transform operating models, processes, data, and technology to create an organization that adapts easily and with agility, while also accelerating the value of their S/4HANA roadmap.

Efficient, effective, and secure migration starts with data harmonization and end-to-end business process standardization, before launching a new, digital core.

It’s best to approach this strategically:

• Design a frictionless, agile operating model, where global end-to-end processes are standardized and designed towards a common S/4HANA-enabled template
• Assess digital opportunities to streamline, optimize, and automate processes, with AI-enabled controls and automation zones
• Establish and integrate best practices and KPIs
• Review existing SAP and technology architecture, with a view to minimizing customizations and assessing other digital tools (including platforms, workflow, robotic process automation (RPA)/artificial intelligence (AI) integration, data management, knowledge management etc.)
• Enable simplification of the core by aligning with the overall business and IT roadmap to gain adoption
• Conduct appropriate cost benefit analysis of future opportunities and prioritize, with assigned ownership.

Enter the digital twin for S/4HANA

As the tools of innovation improve, the capabilities of digital twins are enabling more companies to improve performance and drive stronger business outcomes.

A digital twin of an organization is a virtual replica of an actual process, product, or service that enables you to analyze and optimize that process, product, or service in a digital instance to simulate the impact of change before they become reality.

The impact on business operations is to simulate the impact of change for any organization, using metrics, volumes, and data that can be integrated into the model.

Capgemini delivers digital twin at Large Defence Organisation

Capgemini recently worked alongside an organization on such a program. The aims were to:

• Design an S/4HANA-enabled operating model to enable the client to recreate its process landscape and adjust to organizational changes over the years to come
• Identify, evaluate, and prioritize opportunities for transformation in line with the business’s SAP S/4HANA migration roadmap.

The digital twin was set up to address the full scope of finance and accounting, supply chain, procurement, master data, and HR. The cloud-based SAP S/4HANA operating environment covered globally standardized processes, all modeled within the BusinessOptix platform. This model was enriched with AI and RPA-zones, roles and activity owners, S/4HANA Fiori-transactions, and integrated controls, to function as the North Star for our client’s organization.

As a result, over 200+ ready-to-use process flows emerged that the organization could immediately introduce, significantly reducing the time and cost expended on training and onboarding. Fully deployed digital cloud operating model platform, designed for the client.

The net outcome of all this is that the business is now able to merge the migration of its system landscape with the organizational changes it is making as part of its digital transformation.

The ultimate goal – a frictionless enterprise

In summary, developing a digital twin for SAP S/4HANA enables businesses to remove bottlenecks from current processes, simulate the impact of organisational change and establish a common design towards a digital future. . The ultimate outcome is what we at Capgemini term the Frictionless Enterprise – an organization in which data can flow seamlessly between people and processes, intelligently, and as and when it is needed.

Innovation is possible when data is available, digitized and freed from silos by a connected data platform. Once that is achieved, defence organizations can such as blockchain, cloud data-lakes, predictive analytics, and machine learning for deeper, real-time insights into business processes, faster decision-making and improved mission readiness. Both from the traditional ERP platforms and the emerging digital data environment, SAP will lead defence customers off legacy platforms onto an innovation platform like SAP S/4 HANA, which can harness all the intelligent technologies that come with digitization.

To learn more about how Capgemini’s integrated D-GEM for SAP S/4HANA solution enables our clients to determine and operationalize their unique S/4HANA journey, contact: sanket.a.solanki@capgemini.com

Learn more about how Capgemini’s Frictionless Enterprise approach implements ways to detect, prevent, and overcome frictions in our clients’ business operations, delivering enhanced business outcomes in a value-focused way.

About Author

Sanket Solanki advises clients on implementing finance transformation opportunities across their operations that address their future strategic vision, whilst designing and developing agile business and operating models, augmented with AI, to drive sustainable business outcomes.