Deployments of SAP S/4HANA continue to go well. A survey (
link here) conducted by the Americas SAP User Group (ASUG) in 2022 revealed strong customer satisfaction rates. Customers claimed improved company performance, a more-capable environment for business innovation, and improved process efficiency among other benefits attributable to their new S/4HANA systems.
As would be expected with large transformations, there were also common challenges, specifically in the areas of competing business priorities, skill shortages, and inadequate approaches to managing organizational change. These are typical issues that can lead to schedule overruns, incremental costs, sub-optimal processes, and user resistance.
The activities of "Phase 0" need to happen prior to the actual configuration of the new system; generally a few weeks or months prior to actually touching the software.
SAP customers can reduce the risks and costs of ERP deployment by investing in “Phase 0” - activities intended to align the organization to a common set of objectives and reach agreement on what the new system will look and act like. The activities of "Phase 0" need to happen prior to the actual configuration of the new system; generally a few weeks or months prior to actually touching the software.
Below are “Phase 0” recommendations for avoiding common pitfalls of ERP deployment.
"Phase 0" Activities and Objectives
Align leadership
Conflicting goals and objectives will plague an implementation from beginning to end. Leadership across all functional areas needs to work towards the same objectives. For example, the head of manufacturing cannot have a different set of objectives that conflicts with objectives of the head of sales. Decision points will be reached during the implementation, and a set of common objectives and performance goals will help resolve many of the potential conflicts faced by the implementation team.
Recommendation: With guidance and participation of executive leadership, determine 3-5 key performance indicators and improvement objectives to guide the design of the new ERP. The SAP Signavio Collaboration Hub can be set up with the company’s key performance objectives to help keep all leadership marching to the same drum. It is essential that a strong company leader be assigned to enforce the alignment and quickly resolve differing opinions that arise during the project.
Identify improvement areas
An ERP implementation is a terrible thing to waste! Every company has things they want to do better. It might be a need to improve on-time delivery, improve inventory performance, decrease employee turnover, etc. An ERP implementation is the ideal time to address a few key performance improvement opportunities. Why carry over configuration weaknesses of the previous system to the new system?
Recommendation: Companies already running previous versions of SAP ERP can use SAP Process Insights to quickly assess their use of their current system and uncover potential improvement opportunities across most functional areas. Process Insights will also compare process performance to industry benchmarks to provide improvement recommendations.
Design improved processes
Many processes impact many people within a company including business users and IT people. Tapping into the collective knowledge and expertise of this group is important for 1) getting the best process improvement ideas, and 2) helping avoid resistance to change when the new system is being rolled out.
Recommendation: Bring the business user and IT communities together to collect process ideas, explore options, and select the options that best serve the organization. SAP Signavio Process Manager provides a process design environment where people can collaborate to analyze current business processes and design new processes that provide the desired performance improvements. Process Manager optionally accesses SAP Best Practice process libraries to accelerate process design for companies with greenfield implementations, as well as “back to standard” and “clean core” strategies.
By the end of Phase 0, there should exist a process blueprint based upon the company’s strategic objectives that will guide the configuration of the new ERP. The better phase 0 is conducted, the better the overall implementation will likely go. “Phase 0” is very much about reducing the potential risks associated with ERP implementations.
Beyond "Phase 0"
System implementation and change management
With future-state processes designed, finalized, and approved, activities such as system configuration and other tasks, frequently referred to as RICEFW activities, can proceed in accordance with the processes defined in Phase 0. This is also the right time to begin developing the training plan, particularly for processes that are different from the prior system’s processes.
Recommendation: The Signavio Collaboration Hub provides process specifications that can be referenced throughout the implementation. Process flows from Signavio can be transferred into SAP Solution Manager or Application Lifecycle Manager (ALM) to facilitate ERP configuration. Future-state process flows can also be used to generate training materials with SAP EnableNow.
Conformance monitoring (post go-live)
Your extended team has now spent months defining how the new system will be used to achieve the company’s objectives. But what if the user community fails to comply with company-approved processes? What if they resist the change or believe they have a better way of doing things? What if they were not trained adequately? What if the new process fails to meet their requirements?
Recommendation: The ability to routinely and systematically monitor actual process execution was not practical just a few years ago, but now is very possible and practical using process mining technology. SAP Signavio Process Insights will provide process conformance monitoring across S/4HANA processes, and SAP Signavio Process Intelligence will provide conformance monitoring across end-to-end processes that include SAP and non-SAP applications.
Continuous Improvement
Your new S/4HANA system is live and the implementation team is celebrating. But the job is not over. There are still improvements to be made going forward. This could be due to new or changing requirements, newly-identified improvement opportunities, or simply because there were some needed changes that were not included in the ERP implementation.
Recommendation: During “Phase 0”, a collection of business processes was built based upon old processes and new, improved processes. The Signavio Process Manager potentially holds the specifications for all these now-current processes. This becomes the foundation for an enterprise-wide continuous improvement program that systematically monitors process performance and helps process managers make intelligent decisions about new, ongoing improvement opportunities. As with the Conformance Monitoring above, Signavio Process Insights and Process Intelligence provide this level of detailed process performance analysis to make data-driven decisions about future improvement projects.
Summary
Investing a few weeks or months at the beginning of an S/4HANA implementation to align the company leadership, agree upon improvement objectives, and design new and better processes can reduce risks and also save months of work later in the project by compressing implementation schedules. Improved digital collaboration and communication during process design not only helps ensure better business processes but also facilitates change management with improved user acceptance.
Why not make change management a core competency?
As a bonus, the work done early on to determine future-state processes provides the baseline for ongoing continuous improvement programs with digital monitoring of user conformance and ongoing identification of the best improvement opportunities for the company. In essence, this encourages an enterprise culture of continuous improvement and process excellence.
Change is ongoing, and the best companies will be those that manage change the best. Why not make change management a core competency with the right people, tools, and data needed for properly managing organizational change? "Phase 0" activities will 1) reduce the risks and costs of your S/4HANA implementation and 2) establish a digital foundation for your company's ongoing continuous improvement program.
Chet Harter is a member of the SAP Signavio Global Center of Excellence and can be reached at chet.harter@sap.com.
