From strategy to execution – How to transform successfully to SAP S/4HANA
If you are still running on SAP ECC (on premise) and are considering a move to SAP S/4HANA Cloud or have already started your SAP S/4HANA transition, then you want to ensure that this investment generates value. Generating value means that you change how you run your business beyond just switching ERP t, i.e. your business processes – during the transition and continuously beyond.
This blog post is part of the SAP Community Spotlight campaign series from SAP Signavio, where we walk you through how we help customers to transform and stay competitive. This blog will focus on how you can generate value for the business while going through an end-to-end process transformation.
Key questions while transforming to SAP S/4HANA
To transform with impact, we believe that Business Process Management (BPM) should be part of your transformation project as well as your daily operations, helping to answer these key questions:
How do you ensure that your transformation adds VALUE?
Transforming how you run your business by transforming your business processes will enable you to unlock the true value of SAP S/4HANA. If BPM is a part of your transition to SAP S/4HANA, this ensures that even in cases where your goal is If you go one step further and make BPM an integral part of your SAP S/4HANA transformation, you add even more value to your business. You do this by re-thinking the way your business processes are run today where it matters most and continuously improving once you have completed your transition to SAP S/4HANA.
How do you make your transformation as FAST as possible?
ERP transformations are widely known as being over time and budget – and by no means fast. By following a fit-to-standard approach based on our standard process content, and only deviating where it adds business value, you can make your transformation faster. You also prevent increased maintenance efforts because of unnecessary enhancements and ensure that you automatically benefit from innovations in the future which improve standard processes. In simple terms: You start fast, and you stay fast.
How do you ensure that change is MANAGEABLE?
You’ve probably heard the saying: “never change a running process or system – it works”. This is usually done to avoid any change, as change is always associated with risk. Transparency of process change, and collaboration which defines the new way of working, can reduce risk drastically and thereby making change manageable. This change is a necessary ingredient in adding value to your transformation and even makes your ERP systems more manageable.
I trust you have already discussed these and many other questions in preparation for your SAP S/4HANA transformation in your company. When it comes to process-related questions, there are two categories into which the key questions can be clustered:
- Transition: Questions in relation to the required re-design of your processes in line with simplification items and compatibility scope, impacting on effort, time, costs, and risk
- Value: Questions in relation to the value of the transition overall and the value of process-related changes eliminating the debts of the past such as no-longer required enhancements as well as leveraging SAP S/4HANA capabilities in particular
- It is important to remember: if the value is not transparent, projects might be deprioritized, there is less buy in from the business users, and there’s a limitation in the scope of change, etc.
From strategy to execution
Customers that have already transformed to SAP S/4HANA made their transformation a success by finding a balance between re-thinking business processes and re-using processes. This ensures that the move to SAP S/4HANA becomes a truly company-wide business initiative – and not just an IT project. To identify the right set of business processes where change was required, successful customers took the following four dimensions into account.
Figure 1: Four dimensions to transform successfully
Transforming successfully means that you connect all four dimensions:
- translating your business strategy into a set of well-defined processes that need to be analyzed and re-designed
- leveraging innovative ‘technology’ and ‘automation’ capabilities during the implementation
- and ensuring transformation success by putting people at the centre of the transformation.
Once the new processes are live, your business users are enabled, and the processes are executed, the next step is to continuously analyse process performance. This is done to determine whether processes can be enhanced, and if that’s the case, then an incremental (re-) design is required. As your business strategy evolves to meet your customer, supplier, employees and other demands, processes need to be adapted.
Figure 2: From strategy to execution: Transform successfully by connecting the four dimensions
A process transformation suite for collaborative change
SAP Signavio Business Process Transformation suite is a modular and integrated, cloud-based, business process transformation solution. Figure 3 below shows the individual solution capabilities and how they support the individual transformation steps.
Figure 3: SAP Signavio Business Process Transformation Suite
- SAP Signavio Journey Modeler and SAP Signavio Process Manager allows you to design end-to-end journeys and processes.
- SAP Signavio Process Governance supports process governance such as the approval of process changes by impacted process stakeholders.
- Our integration to SAP Build Process Automation allows you to automate processes using low-code no-code capabilities for example.
- SAP Signavio Process Insights provides fast insights into your current process performance and individual process KPIS and provides you with correction and innovation recommendations on improving your processes even further.
- SAP Signavio Process Intelligence is our Process Mining solution for which we provide business accelerators giving you additional deep insights into your processes.
- Our integration to SAP Solution Manager and our partnership with LeanIX ensures that SAP Signavio is integrated in an end-to-end toolchain.
- SAP Signavio Process Explorer provides you access to our SAP Signavio Value Accelerator such as our SAP business process models & journeys.
- SAP Signavio Collaboration Hub provides process transparency and enables collaboration among all stakeholders.
End-to-end business process transformation methodology
Let us take a closer look at how Business Process Transformation Management and Application Lifecycle Management allow you to improve your business processes and innovate solutions when transitioning to SAP S/4HANA. Customers execute their processes supported day-by-day by an SAP ERP or a Non-SAP ERP, a combination of both or in many cases even with multiple systems.
- Customers who aim to improve their business processes typically do not know how well they perform. Therefore, it is often required to analyze their processes, understand where processes are broken, and how they can be improved.
- Based on the findings, currently executed processes can be enhanced and improved immediately to realize value, or the insights can be considered when designing new processes.
- During the design of the new processes, SAP standard process content is the foundation. If you rethink your business processes, it enables you to think “standard again” and improve processes.
- Once you have completed your process design, the hand-over to the Application Lifecycle Management takes place, where the technical process design, the build test and deployment of the solution takes place.
- When the implementation is completed, the business is enabled in executing the process running in the new solution, the process changes will be executed, and you will start to analyse them entering a new round of process improvement.
Figure 4: End-to-end business process transformation methodology
A true End-to-End process transformation methodology that starts with the analysis of your processes, continues with enhancements and process re-designs, integrates into the Application Life-Cycle Management, and supports users in executing revised processes. You will continuously execute such improvement cycles to ensure that you can continuously improve your processes.
SAP Signavio is a key pillar of successful SAP S/4HANA transformations
Your individual transition path to SAP S/4HANA influences the steps we have just looked at. If not already done you will assess your current state, your desired future state, derive valid transformation paths and compare them, figuring out which is the right one for your organization.
There are three main ways you can transition to SAP S/4HANA with a significant impact on the number of processes you re-think and re-use.
- In a solution-driven transformation you will initially re-use most of your processes, and re-think processes where it is required due to simplification items and the compatibility scope mainly (required changes). A solution-driven transformation is executed as system conversion.
- In a selective transformation, the number of processes you re-think is much higher. You want to use much more capabilities in SAP S/4HANA right from the start to improve your processes, and you want to eliminate no longer required and used enhancements and used process variants. You harmonize processes – potentially as you want to consolidate your existing SAP ERP systems while moving to SAP S/4HANA. A selective transformation is executed as a selective-data-transformation.
- In a process-driven transformation you re-think most of your processes, and re-use only some processes – potentially even none if you are new SAP customer. A process-driven transformation is executed as new implementation.
The picture above only illustrates the main transformation scenarios. Your ratio of re-thinking and re-using processes will look different. There are many shades of grey. It will be a result of considering your business strategy to determine processes that require re-thinking, as well as processes that must be changed due to simplification items and compatibility scope as well processes that can be simplified as process variants are not used or enhancements are not differentiating your organization and having them results in costs without value.
Let me close by saying: No matter how you transform and how big or small your process change is I can say that based on my experience, SAP Signavio is a key pillar of successful SAP S/4HANA transformations.
As part of our Spotlight campaign, join us on our live webcast on February 28 to learn more and join the discussion on how SAP Signavio can help you transform your business. And if you’d like to learn more about these topics, please follow the SAP Signavio topic page and SAP Signavio blog feed. You may also ask and answer questions about SAP Signavio, as well as follow me for similar content. And feel free to leave questions and comments below.
Thanks so much Michael, this is a great overview of the steps necessary. I like too the link to effective people management within the transformation a topic I'm keen to dive deeper into in the community with customers and learn about their people programs as part of the overall transformation.
In your summary you mentioned that there is also a video that brings the various blog posts on this topic together and in this you mentioned making these transformations fun - that's also something we can certainly ask the community here to contribute to - how did you make transformation FUN !