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S/4 HANA Assessment Framework

Contents

1.1 Framework for S/4HANA journey for an organization

1.2 What has changed -Major differences in S/4HANA & ECC

1.3 Key influencing factors to keep in mind while doing the assessment

1.4 Client Challenges for migrating to S/4HANA

1.5 Conclusion

1.1 Framework for S/4HANA journey for an organization

We all know in today’s ever changing world of technology it is critical to stay updated and more importantly “adapt/accept” the new.The first step towards any change is the assessment of that change which gives a fair idea how big/small the change is and what are the key factors in doing S/4HANA assessment for a client. This paper provides a framework to carry out an S/4 HANA Assessment and key influencing factors to be considered during the S/4HANA journey

1.2 What has changed -Major differences in S/4HANA & ECC

Before we jump into the key factors to be considered for assessment it is important to understand what are the key differences between S/4HANA and ECC

HANA DB: S/4HANA can only run on HANA DB whereas ECC can run on other DB as well example DB2, oracle etc. In memory DB ensures data is residing in main memory,hence much faster.Data is stored in columnar format,which further enhances its performance.

 Business Partner:Customers & Vendors are migrated to Business Partner concept. No separate customers are created in system.Customer Vendor Integration (CVI) is a mandate with S/4HANA

 Material Master: Material number is now increased to 40 characters from 18.Necessary simplifications are required before migrating to S/4HANA

Advanced ATP: With Advanced ATP in S/4HANA,inventory turns has improved and Back Order Processing is automated. SAP even plans to include APO GATP in S/4HANA Core functionality

 SD Pricing:Technical changes (KONV table is replaced) done in condition technique & pricing model

 Rebates:Existing Rebate process has been replaced by Settlement Management through condition contracts

 Warehouse management:SAP new application EWM will replace the old WM module. EWM has better RF functionality,better replenishment processes & labor management

 User interface:SAP FIORI is a marked improvement over the traditional GUI. FIORI makes processing transactions much easier and also allows transaction processing from mobile devices.

  1.3 Key influencing factors to keep in mind while doing the assessment

We know,each client is unique and so are their requirements & challenges. There is no magic formula which can be used;but there is a framework which applies pretty much to all the clients for any S/4HANA assessment

 There are multiple factors to be considered will deciding upon the S/4HANA migration journey for any organization.Few basic questions which has to be pondered before a deep diving into other factors.

Some relevant questions are mentioned below:

  • How disruptive will the move to S/4HANA be for your organization?
  • What effort is required for your organization to move to SAP S/4HANA?
  • What is the Impact on my existing landscape and architecture?
  • How much Testing Effort and Business Involvement does it require?
  • How can your organization start to prepare for SAP S/4 HANA today?

The above questions has to be discussed during workshops with SMEs and Management as both has to be aligned and see ‘value’ in migrating to S/4HANA. These workshops shall lay the foundation for the approach to be taken for S/4HANA migration. Various options are explained in detail later in this document.

 For further Quantitative analysis following factors can be evaluated based on the ‘weightage’ assigned to them by the client and also how critical they are for them. Further each option can be given points on every influencing factor With the help of this quantitative analysis one should be able to come up with a ‘winner’ with maximum number of points which would be the most favorable approach for them.

Below is a sample given for Quantitative Analysis with various influencing factors: 

Evaluation / Influencing Factor ” Importance of the Factor” – Weightage on a scale of 5 OPTION 1 – Greenfield
(Scoring on a scale of 10)
OPTION 2 Brownfield
(Scoring on a scale of 10)
OPTION 3 Hybrid
(Scoring on a scale of 10)
Option 1 – GF

Option 2

BF

Option 3 – Hyd

Ease of  Change Management Implementation
3 6 6 6 18 18 18
Ability to achieve better User Experience (UX) 3 8 6 6 24 18 18
Ability to Implement Industry Standard Processes  2 8 4 6 16 8 12
Ability to achieve desired Security & Compliance  3 10 10 10 30 30 30
Ability to maintain the Momentum  5 2 6 4 10 30 20
Possibility of continuous availability of resources (Internal) during Project Implementation  4 2 6 4 8 24 16
Ability to minimize the Business Disruption 4 2 6 4 8 24 16
Technical Simplification that is achievable 3 6 6 6 18 18 18
Ability to Redesign the Business Processes  3 8 4 6 24 12 18
Speed to Full Target State Transformation 4 2 6 4 8 24 16
Implementation Complexity   3 2 4 4 6 12 12
Consolidated Results         170 218 194

  1.4 Client Challenges for migrating to S/4HANA

In today’s competitive world, where client is well versed with technological advancement and expertise in their respective business areas it is not simple to address various challenges they are facing. Most of the issues are chronic and are existing since many years in their system.

One need to be well versed with various S/4HANA offerings to be able to map the existing processes with the solutions.Based on various S/4HANA assessments & implementation following are few common challenges which are cited by customer across various industries.

  • Lack of standard SAP offerings:Home grown Processes over a period of many years
  • Client Consolidation:Multiple clients for the same business for the different geography/countries.
  • Outdated coding standards and UI leading in to performance issues.
  • Outdated system architecture leading to high maintenance cost
  • Continuously changing requirements and scope with the view of Global template
  • Evolving business model
  • Non availability of full-fledged ERP system
  • Each country /region follows different ways of working for running business operations
  • Best practices like Just in Time and Just in Sequence processes are managed either on paper, excel or in outdated legacy systems

1.5 Conclusion

Migration to S/4HANA is just not an IT/technical upgrade. It is a great opportunity to incorporate the best business practices and to switch “Back to Standard”. This may involve business process redesign which in turn depends on multiple factors like “Ease of implementation”, “Change Management”,” Degree of Business Disruption” and so on. Based on these multiple factors a correct Roadmap can be decided which will be unique for each client.

I will be covering migration Strategy in my part 2 of my blog which will assist clients in deciding upon the best approach forward. It will highlight the key differences in various approaches like Greenfield/Brownfield or Hybrid. Moreover “On Premise” Versus “Private/Public Cloud” would be another area to be explored.

I hope you enjoyed this read and will publish my second part soon!

Regards

Anupam Jain

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