Phase 4 of the SAP S/4HANA Journey: Prepare and Modernize

There are many key steps in completing a successful SAP S/4HANA® journey, including what many call Phase 4: Prepare and Modernize the environment in preparation for the S/4HANA implementation. There are several aspects that need to be considered, including the SAP ECC system or legacy systems, other third-party applications, governance processes and the various strategies to be put in place to help ensure a successful program. Proper preparation and modernization activities will also help to gain benefits in advance of the rest of the SAP S/4HANA journey, reduce common risks in large SAP S/4HANA transformation programs and avoid significant delays while improving the likelihood of success of the SAP S/4HANA implementation.

Let’s first look at preparing for the journey.  There are several things to consider as part of this process.

Governance:

S/4HANA implementations can be very complex, and whether executing a new implementation (Greenfield) or a system migration (Brownfield), organizations should ensure that governance processes are adequately established and staffed. As part of this effort, it is critical to introduce a program governance model. This model should include an executive sponsor, steering committee, program management office, business process owners and third party oversight. In addition, this model should include the details around project communication (e.g., meeting cadence, status reporting, etc.), as well as a risk management process, escalation process, scope management process and a clearly defined change control process. Each of these will help maintain control over the program, with accountability up and down the structure.

Program Execution Strategies:

Once a governance model is established, it is time to define the various strategies that will be used to execute the program. As the organization shifts towards execution, it is critical to develop strategies for managing both the overall program and the key workstreams within it. When looking at the overall program, it is important to consider an ecosystem strategy. Key components of this strategy would include partners that may be needed to implement, support and guide the implementation, how and when to utilize SAP and their support services to reduce your overall risk, and what third-party applications may be needed to ensure a comprehensive solution at go-live (e.g., Vertax, ADP, EDI solutions, etc.).

Another critical aspect to be defined is the implementation approach and deployment strategy. Components to consider include whether to do a new implementation (common for companies that are looking to simplify an old ECC system, or coming to S/4 from another ERP), or a system migration (from legacy SAP), typically done by companies that have strategic customizations, stable environments or that just have a lower tolerance for risk. Also consider how to deploy. There are several options, but most customers typically do either a geographic roll-out with a global template, or a limited functional roll-out with a roadmap to expand functionality after the initial go-live.

In addition, it is important to begin considering more tactical strategies. For example, from a process perspective, will the organization use a model company as a standard to support business transformation and simplification, or instead seek to do a more comprehensive blueprint and build to current processes? Questions to consider around data include: will data need to be archived to reduce the amount of data that needs to be migrated? How will data be cleansed, and who will be responsible for owning the data throughout the process? Setting up a clear and simplified data governance model is critical to harmonizing and reducing data redundancy and the overall data footprint for the S/4HANA system. Other concerns: How will the system be tested? Will automation be deployed? Will offshore models be leveraged? How should end users be trained?  What training option is best — train the trainer, classroom style, SAP training or online options?

Finally, it is important to consider security and controls as critical strategies. These are often items that do not get the appropriate attention during the heat of battle in an implementation, and companies can end up spending a significant amount to remedy incomplete or poorly designed solutions after the fact. Tomorrow, we’ll publish a blog that goes into more detail on this critical step.

Modernization:

The second part of this Phase Four process is to modernize the current environment. There are several activities to perform during this stage, and all are important for minimizing risk in the S/4HANA implementation.

First and foremost, organizations currently running SAP should run the available tools from SAP against the environment. These include the SAP readiness check, SAP pathfinder report, and simplification list.  Many customers use SAP’s Move program to help with this analysis. Findings from these tools will include items such as program/code remediations that must be fixed with either automated or manual methods to make the code S/4 HANA compatible, functionality gaps from ECC to S/4, areas where new functionality exists that may help enable processes that are supported differently in the current environment and requirements for a Unicode conversion.

It is also important to look at third party bolt-on solutions and SaaS solutions that integrate with current systems. Review and apply any required upgrades or patches prior to kicking off the S/4 implementation. This will also aid in determining if any interfaces must be remediated and if any can be retired and replaced with standard S/4HANA functionality.

Finally, it is a good practice to make sure a sound patch management and upgrade process is in place to help manage the environment going forward. This will help to minimize business disruption and ensure that the entire application architecture remains well maintained, well into the future.

The Phase Four: Prepare and Modernize step in the S/4HANA journey is critical to minimizing risk during implementation. With a sound governance structure, well-defined strategies for the key workstreams in the project and clarity around implementation and deployment, the program will be off to a solid start.  Additionally, by assessing and addressing the technical aspects of the environment, organizations can pull tasks forward and reduce the number of moving pieces that need to be addressed during the implementation. Together, both steps help position the project for success.

Visit Protiviti’s SAP consulting services page for more information on our solutions.