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Business Trends

Digital Transformation Journey

Technological innovations lead to major transformations or disruption in industries with significant impact on business models, operations and productivity.  Organizations need to explore and understand how to harness the power of technological advancements to make their business more intelligent to transform core business and explore new business models.

Keeping in mind competitive advantage in digital era, companies need to be visionaries (Early adapters) and should keep customer needs as the core of transformation plan as shown in figure 1.   It is also critical for IT and Business to work hand-in hand to plan their digital transformation.

Figure 1: Geoffrey Moore Technology Adoption life cycle

To embrace the digital transformation journey, customers are facing challenges to understand various aspects such as product roadmap, right solutions, system architecture, high-level project plan, new business models, estimation of project timeline and identification of precautionary measures they need to take to de-risk SAP projects.

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In this blog, we’ll provide information on decision framework to support customers throughout the lifecycle of SAP S/4HANA transition:

1. Transition Options

Here are few options to transition to S/4HANA :

  1. New Implementation: In Greenfield or New Implementation, customer is either new to SAP or plan to redesign the complete system by doing reengineering and process simplification based on ready-to-run business processes with a clear focus to adhere SAP Best Practices with guided configuration and on a clean core.
  2. System Conversion: In System conversion or brownfield approach, current ERP system is moved to SAP S/4HANA with an aim to bring current business processes to new platform. Scope of the project is to perform technical conversion of system. Customer can also adopt new innovations at later point in time to follow a phased approach.
  3. Selective Data Transition: This approach consists of variety of scenarios that go beyond the standard options. System transition follow shell approach. Project is put in place to follow an approach to change only a part of system configuration or functionality, while retaining the rest of the system.

Based upon business specific requirements, customers plan to go for one of the above-mentioned approaches. Project plan and timeline of the project depends upon landscape complexities and functionality customer is using.  Every approach has their own set of steps involved.

2. Business or IT Driven Projects

Every project is either driven by Business or IT thereby capturing the right synergies of two independent units to accomplish the vision and mission of an organisation.

Business transformations are generally driven by Business to embrace the current markets trends, market innovations, explore new portfolios and enable new possibilities to gain competitive advantage.   The focus is to achieve intelligent automation, gain insights with predictive capabilities and provide digital age user experience. Greenfield Implementations are generally driven by Business as innovation projects with core driver as business value and capabilities.

IT sponsored projects are typically conversions, which lay the foundation for incremental innovation projects driven by the business.  Landscape transformation are generally driven by IT to consolidate the systems, simplify the complex fragmented landscapes, improve the business processes, embrace new technologies and handle the challenges of customizations. System Conversions are generally IT driven projects with objective to reduce TCO, lower the cost of operations and deliver operational efficiency leveraging new technologies.

SAP S/4 HANA is new product line which enables customers to improve business processes and consume innovations at a faster pace to run best in a modern economy.

3. Leverage Accelerators, Tools and Services provided by SAP

Development of Intelligent applications bring a major transition in industries with significant impact on business models, operations and productivity.

Discovery based planning approach such as market research, operation specifications, appropriate assumptions, milestones planning should be followed when a company plans for new ventures like new targets, new markets, new alliances, use innovative technologies and install new products etc.  To boast speed and agility of innovation, optimize the use of available resource, take advantage of economies of scale and streamline the processes customer can leverage SAP Tools and Techniques.

Tools such as SAP Transformation Navigator covered in and SAP Readiness Check are used to scope the digital core or discover the journey to SAP S/4HANA, obtain product roadmap and map the innovation path towards Intelligent Enterprise.

Another important aspect for organisations is to understand best practices, industry benchmarks and to establish global standards while working in global framework. SAP is providing multiple offerings to customer to boast time to value with SAP provided Accelerators such as SAP Model Company to speed up deployments and hit fit to SAP standard to obtain maximum value.

Custom code portfolio is another area where customers face lot of challenges and struggle a lot to reduce the maintenance cost. As part of transition, customers’ needs to gain transparency of custom code, perform proper analysis of custom code and define the scope of custom code management.

4. Deployment Options

With SAP S/4HANA below deployment options are available:

  1. Cloud: In this case, customer can leverage Software as a Service [SaaS], infrastructure-as-a-service [IaaS] and platform-as-a-service [PaaS] option. Customers can go for Public or Private Cloud as per the business needs.
  2. On Premise: On-premise deployment option gives organizations full control of system in terms of hardware, software and plan their maintenance schedules as per requirement.
  3. Hybrid Scenario: In this case, customer can opt for hybrid operating model that consists of mix of on-premise and cloud deployments or hybrid cloud model that consists of mix of public and private cloud deployments.

All the options share same code line, simplified data model, and consistent user experience. They are designed for in-memory, brings new business capability, adopt innovation along with simplification of the IT landscape.

With the advent and lot of advancement in cloud platform and trend that continues to gain momentum, lot of customers from past few years are making a move to check cloud affinity and implement cloud solutions to reduce TCO, ensure scalability and faster time to value. To support the customers, SAP is also focusing on “closely partnering” with the IaaS hyper-scalers such as Amazon, Microsoft, and Google.

5. Embrace Innovations

Understand how Intelligent enterprise/technology innovations can reshape & evolve the customer business by incorporating new capabilities, enable skilled workforce,  get insights and provide enhanced user experience by overcoming all the challenges.

For innovations, customer should understand the portfolio of Intelligent Enterprise, get clarity on engagement plans provided by SAP and ways to secure innovation investment, while taking advantage of the latest SAP and partner creativity.

6. Agile Methodology

Prospects of fast-moving, adaptive organisation is key aspect with changing market dynamics. Adopt an agile approach as a part of strategic move to embrace new ways of working with agile release cadence as well as culture that embrace frequent change.

In traditional model, incumbent businesses find it hard to undergo a change due to long time established processes, business models and reluctant ecosystem in place towards change.   Agile methodology and approach would help in reducing the gaps or challenges customer are facing and assists in early adoption of game changing technology and adherence to new digital market standards.

To summarize, customers who are planning and evaluating their digital transformation journey can prepare a strong business case to enable Intelligent Enterprise.

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