SAP S/4HANA Customer Trends & Innovations Spotlight with Mark Chalfen, PwC
Every day there is news about SAP S/4HANA regarding the value, importance, and impact it can have on an organization. From Christian Klein, SAP, CEO’s remarks, Fourth Annual Wells Fargo TMT Summit and many other industry articles, presentations, videos, customer successes, and thought leadership.
Recently an article came out from diginomica, A conversation with PwC’s Mark Chalfen on all things SAP S/4HANA which shared excellent insights, best practices, and lessons learned.
From these many observations and trends, it became apparent that Mark Chalfen, a global SAP S/4HANA expert, former SAP mentor, and ex-boxer has a lot of knowledge and experience to share that can help us all cut to the chase and demystify myths.
Mark is a thought leader for SAP Finance, with decades of IT and business experience, a former SAP moderator, regular contributor to “SAP Financials Expert” magazine, and has worked closely with various SAP Finance Product Management teams on future product development. He has a passion for helping customers transform their business with SAP S/4HANA and helping them become stronger during the pandemic.
Recently we caught up with Mark to ask four very specific questions around emerging stronger during COVID, post implementation adoption, business process simplification, and how students (Next-gen) can position themselves for an exciting SAP S/4HANA career.
Global Solution Owner Financial Planning & Analysis at SAP SE
Director at PwC & Global
SAP S/4HANA Expert
1. Michel Haesendonckx (MH) – EMERGING STRONGER: Can you share one or two high level examples of SAP S/4HANA customers emerging stronger during this pandemic and these turbulent times?
Mark Chalfen (MC): The past 12 months have certainly been unpredictable and challenging, however there have been a number of clients who have adapted to new ways of working.
I recently worked with one client who completed their full SAP S/4HANA roll-out to over 30 countries during COVID lockdowns with a fully remotely team. All of the design workshops, build, UAT and even cutover activities were fully remote.
It was interesting to watch how teams quickly adapted to the change. Collaboration tools became central to ways of working and communication became crisper. There are also some cost savings to the program as large teams are not travelling every week.
I believe a lighter touch delivery method will continue into 2021 and beyond.
Also, I have also been involved in a few conversations with clients who were questioning the timing of the program due to the impact of COVID. The same executives who were challenging the need to perform a business transformation enabled by SAP S/4HANA were the first in the line asking for real time analysis of the impact of COVID on their business and what-if scenarios so they could adjust accordingly.
By completing their journey to SAP S/4HANA, this enabled the creation of a unified data model, real time reporting, and with the power of SAP HANA, the ability to speed up their business planning activities. As a result, organizations are unlocking their data and providing insights that their executives, leaders, and employees were struggling to access prior to SAP S/4HANA.
2. MH – ADOPTION: When working with SAP S/4HANA customers what are the key considerations that you see to get adoption in place (beyond the importance of harmonized data)?
MC: I focus on Greenfield S/4HANA implementations – and there is always a clear business need to move to SAP S/4HANA. Whether that be to take out X% of the cost of Finance, or to reduce manual offline processes and integrate with core business platforms like SAP Ariba, Salesforce or Workday.
Once the outcome is defined the program needs to be set up to achieve those outcomes or benefits.
Having a strong Program Governance, with Senior Executive leadership ensures your program is one of the top activities that is going on within the client, removing conflicts from other higher priority activities. The business sponsorship then needs to be reflected in the volume and quality of the business stakeholders working on the program.
Having key stakeholders who are part of the top talent and are well respected will ensure you get the true voice of the client when designing, building and testing the new system. I have seen some clients fail when they have kept that pool of talent inside of the business performing BaU (business as usual) and have brought in externals to represent the business within the program, their voice and opinion will not be as well respected.
Performing SAP S/4HANA as a Greenfield approach, the level of change will be more significant than a regular upgrade “system conversion”. ERP’s can have 1000’s of users and the level of change can be significant. Adopting SAP Standards and removing the level of customization will mean tasks are performed in a different way, RPA (Robotic Process Automation) can now be adopted to automate some manual high-volume tasks – and the level of out of the box reporting is typically higher. Big bang Greenfield programs can be a massive risk, so I typically see either a functional or country level deployment approach first, so not all users are impacted at once, and the level of change can be released in manageable chunks.
Linked to change is training, the look and feel of SAP S/4HANA is much different to that of SAP ECC – so getting used to Fiori app tiles instead of t-codes (transaction codes) can be a challenge as well as the change in the process steps and tasks. Business users are a smart bunch, and some will memorize t-codes or key data values, such as material numbers, or GL accounts. Just showing a business user the search tool within the Fiori launchpad is a way to remove some of the fear of a new system, if you want to know the GL (General Ledger) account for a certain accrual GL account – type the name in the search bar and the account will appear.
Lastly and I touched on it before, the scope is key. Mirroring your old SAP ECC solution in SAP S/4HANA will not provide the value executives are looking for. I believe the age of monolithic ERP’s has gone, and a simpler, smarter and smaller ERP core working with best of breed cloud applications makes for a more agile structure.
Agility is something a number of the current SAP ECC install base organizations will struggle with due to highly complex design. Focusing on the flow of data and designing processes right to left when you execute them left to right enables opportunities for simplification. There will always be complexity as businesses are diverse and different, however the complexity needs to drive value.
3. MH – BUSINESS PROCESS SIMPLIFICATION: What should customers consider in addressing their business processes and how the business will work after the SAP S/4HANA migration?
MC: One of the biggest lessons learned from delivering large transformations 15-20 years ago was how the program was set up. I remember vividly working on a 100+ person local team, where there was a big room for the SAP team, and a different room for the process consultants. We also had target operating model and change teams, but my point is that the door was typically closed, and people did not wander freely between the two.
Two sets of documents were built to sign of the design – a process design document and a system design document. When we got to UAT, the client was left scratching their head as the vision they had and thought they were getting was not the same, due to gaps and misalignment between the two.
Fast forward 15 years and designing SAP S/4HANA has to be done looking across system, process, data and analytics. The use of SAP Best Practice scope items means a system can quickly be stood up to show what the final system will look like, most consultancies have a number of accelerators here, as well as out of the box business processes to a L3/L4 level.
SAP S/4HANA has a great repository of out of the box analytics and I know most consultancies have their own catalogues that they can share with their clients as well as a number of RPA scenarios that are aligned to their process models. In turn, this can mean you are designing with 50+% of the system, process, data and analytics already agreed and known, which provides much more confidence to the client and can shorten the time to complete the build.
SAP S/4HANA can be a great improvement on SAP ECC for a number of clients, and therefore adoption is normally high. By bringing the key business users on the journey of the program, visualizing the end state early and constantly showing progression will make adoption higher. Adding in RPA scenarios will mean some business users will no longer have to perform mundane activities, but can now start to add value and be more reactive in their day to day activities.
4. MH – STUDENT TALENT: As SAP S/4HANA deployments continue to grow, what advice do you share with students (the next generation) in terms of the types of skills they should develop to support implementations and adoption? How can they best get a foot in the door to be part of the Intelligent ERP marketplace at your firm or in the industry?
MC: SAP S/4HANA programs require different skillsets compared to previous SAP ECC deployments. Starting off in SAP S/4HANA, I always recommend a potential consultant to learn the business as well as the system, that will make you a broader consultant and typically this will speed up your learning journey.
The technology has changed as well, learning SAP Fiori or SAP HANA were not skills that were previously required. When I work with graduates, shadowing a team lead, being part of design workshops and understand the “why” are important skills to grasp. My personal journey was dependent on knowing a few hundred t-codes, having an in-depth knowledge of the IMG (Implementation Guide) to compliment my own Financial qualifications and experience.
With the new shape of SAP S/4HANA programs having a strong grasp on data, the flow of data and how that integrates into other Cloud applications become the hot skills I personally look for. Being able to translate a business requirement (typically in business speak) into what that means to the system, process and data design is more relevant.
Being a problem solver, an inquisitive mind and always learning are attributes that I look for. Even if you have been doing SAP ERP work for over 25 years, you are always learning.
I first started as an end user, then super user and then worked on delivery programs, and that is one I would recommend as it provides a good bases for you to grow from. I believe early consulting roles are now better aligned at providing exposure to a number of different skills. The best way to learn is from personal experience from those around you – moving to a high performing client or delivery team will provide you exposure to more experienced consultants where you have the ability to mimic and learn.
The future work of SAP S/4HANA consulting is an exciting place to be over the next few years and one I would recommend.