This blog is relevant for System Conversions to S/4HANA On Premise 1610 and higher. In our S/4HANA Regional Implementation Group (RIG) we have helped many customers, partners and colleagues to be successful with their conversion projects. Our main point: it is not enough to simply convert the system technically. Change management and adding innovation is key to your success.
When doing a system conversion to SAP S/4HANA it’s important to consider which business innovations you will adopt at the same time. And those innovations should not be purely the technical platform.
Yes, you heard it right – system conversion projects are not simply a technical upgrade from ECC or some further lower releases! Why?
TECHNICAL UPGRADES DO NOT DELIVER BUSINESS VALUE
And who is paying for that system conversion? The Business. So, if you don’t do any innovations, don’t be surprised if you hear the same complaint we hear all too often from many customers whose IT department failed to include any business innovations:
WHERE IS THE PROMISED BUSINESS VALUE?
And once you are at that point, the business is far less likely to want to pay for the next stage of your digital transformation.
Now don’t get me wrong…
You don’t need to put in every S/4HANA innovation to make a difference, but you do need to
CHOOSE SOME INNOVATIONS that:
- Demonstrate the real business value of digital transformation
- Encourage business investment into the next stage of your digital transformation journey
Now how much innovation the business can cope differs widely depending on organizational culture and appetite for change.
We have seen customers introduce from as little as 10 SAP Fiori apps to several 100s of SAP Fiori apps in their system conversion.
The important thing is to deliver some innovations with enough business impact to encourage the next steps in your digital transformation.
If you are getting started on an SAP S/4HANA system conversion project and looking for a quick read, check this blog SAP S/4HANA System Conversion Overview (don’t forget the attached presentation linked on the blog).
The relationship between SAP Fiori and SAP S/4HANA
Every new S/4HANA release introduces innovative features, which make business processes more efficient for our customers and hence enable them to save cost
A lot of this innovation is delivered through Fiori applications and Embedded Analytics. You can read these great blogs to get further information (written by my colleagues):-
I will, therefore, in this blog only focus on innovations and share the lessons learned with the thoughts centered on customers performing system conversions.
How to deliver innovation in a system conversion
Let me give you an example where a customer has been using SD-FT/MM-FT in ECC for Commodity code solution and Intrastat solution. Upon execution of Simplification Item Check for the conversion to S/4HANA, they find out that these solutions are deprecated (also documented in simplification list). So does that mean, the customer has to stop their system conversion for this reason? Certainly not!
The way forward, in this case, is to adopt innovations around International Trade in SAP S/4HANA.
Here in this blog, I’d like to share what we have learned from our system conversion projects:
- Study and perform analysis on the simplification list, innovations released in SAP S/4HANA digital core, best practices
- Form a team of expert users/business unit process owners and perform an analysis of the processes currently running in the ECC system, list the questions derived from the Simplification List (where a simplification item will impact the current process) and identify the innovation topics from which the business will benefit upon adoption.
- Discuss the questions with your implementation consultants and create a roadmap for evaluating innovation once you have done the very 1st mock-run conversion.
- Customers also have the flexibility to prioritize which innovations to implement first. For adoptions of the identified innovation topics, customers can:
- Adopt them in a one-step approach together with the system conversion project (example: items from the Simplification List)
- They can also innovation at their own pace once they have completed the conversion of their production environment in a phase-wise approach.
A brief introduction to innovations in SAP S/4HANA
Example of Innovations from SAP S/4HANA 1709 release
Innovations in SAP S/4HANA can be consumed by customers, for example, adopting embedded EWM solution or embedded Transportation solution, or adopting embedded analytics solution, latest user experience and there are many more such examples.
Embedded EWM in S/4HANA is available in two versions, Basic Warehouse Management & Extended Warehouse Management. Embedded EWM in SAP S/4HANA and de-central SAP EWM share a common core of warehouse management functions but offer extended functionality such as
- Advanced Labor Management (EWM Labor Management is part of embedded EWM, no add-on or separate product required)
- SAP Fiori UX – simple and streamlined user experience, e.g. Fiori app Pick by Cart
Transportation Management embedded into SAP S/4HANA provides a system and process integration with SAP S/4HANA, harmonize business partner and product master data, manual planning & optimization, latest user experience & work with real-time embedded analytics.
SAP S/4HANA embedded analytics delivers contextualized analytics for SAP S/4HANA embedded within the context of work and tailored to business needs and roles, user experience & consists of Virtual Data Models (based on CDS Views) covering role based operational reports for lines of business.
Customers in their S/4HANA system conversions journey look at innovations from various point of views (examples): –
- Getting rid of a decade old 3rd party WM system
- End users demand a simple and seamless user experience (SAP Fiori Overview Page)
Experience Transformation with SAP Fiori UX – SAP S/4HANA Sales Order Fulfillment SAP S/4HANA with the SAP Fiori UX can summarize and highlight sales order fulfillment issues in real time, prompting inside sales representatives to take action and resolve issues efficiently. The result: Completing the task twice as fast, with the least amount of effort. We have comparisons between old and revised new business process stressing the advantages of the new approach.
Experience Transformation with SAP Fiori UX – SAP S/4HANA End-to-End Inventory Management SAP S/4HANA with the SAP Fiori UX is the tool needed to analyze inventory issues quickly, realize the potential threats in real time, and resolve complications rapidly. The result: Inventory managers and warehouse clerks complete their tasks twice as fast, with the least amount of effort.
Experience Transformation with SAP Fiori UX – Produce with Real-time MRP Insights in S/4HANA SAP S/4HANA with the SAP Fiori UX allows MRP controllers to produce with superior insights and complete tasks twice as fast, using the least amount of effort. With the role-based SAP Fiori launchpad, users have immediate access to the apps needed for daily tasks. SAP S/4HANA aids decision making through powerful graphical simulations, which enhance the overall manufacturing process for users and companies as never before. These software improvements reduce training and labor costs – accelerating business processes and thereby saving the company time and money.
- Some innovations are forced for the customer as the item is now on the Simplification List and they see an opportunity to innovate the business process itself to make it more simple and agile. An example is the Credit Management solution in SAP S/4HANA.
- For example, in ECC the customer is using credit management solution (FI-AR-CR) and now based on simplification this is not available in S/4HANA. The functional equivalent solution in S/4HANA is SAP Credit Management (FIN-FSCM-CR).
- To put it in simple terms, the business users will now have new transaction codes (if using GUI) to handle the credit management solution in S/4HANA such as release documents etc., Risk category, etc.
- For more details, check SAP Note#2270544 – S4TWL – Credit Management
Additionally, I would recommend customers to check the SAP Transformation Navigator. which provides guidance how to benefit most from innovations in different areas depending on where the customer is coming from.
This blog is written based on my own experience and your feedback is welcome.
Brought to you by the S/4HANA RIG
Product Expert (SAP S/4HANA Regional Implementation Group- APJ)