When our client, a global leader in technology, set out to transform its business with SAP S/4HANA, the goal was not just a system upgrade. With operations spanning over 40 countries and more than 100 subsidiaries and joint ventures, our client aimed to create a digital backbone capable of supporting innovative business models incl. digital service models, improving customer satisfaction, and driving operational efficiency at scale.
But before diving into system design, one fundamental question needed to be answered:
Is the current company operating model fit-for-future?
A structured start: The Target Operating Model Review
To answer this, we jointly conducted together with the client a structured Target Operating Model (TOM) Review as a crucial first step in the transformation journey. Rather than jumping directly into solution design, we took a step back to assess the existing framework across five key dimensions:
- Governance & Organization
- Performance Management
- Business Process Model
- Material & Value Flow Model
- Legal & Tax Model
A current state assessment created transparency across all of the above mentioned dimensions. It confirmed which parts of the operating model were already transformation-ready – for example, the Business Process Model, which required only minimal changes. Key business scenarios were aligned and documented and later used to structure requirements for future end-to-end processes. This ensured a completeness of the critical business scenarios for S/4HANA solution design and ensured continuity in critical business operations.
From fragmentation to steering clarity
While some areas proved mature, the newly established business sector revealed critical gaps in steering, particularly regarding profitability and accountability. These included:
- Unclear responsibilities for profitability steering
- Inconsistent KPI structures across management layers
- Limited transparency in product and service performance
In a second step, the TOM Review was followed by an in-depth analysis and redesign of the client’s steering model. A future-state design was developed based on three key elements:
- Clearly defined steering objects, strongly oriented toward the company’s digital product and service logic as well as commercial structures – providing a structured basis for managing and optimizing both internal and external business areas
- A focused KPI model, harmonized across steering levels to drive alignment and strategic clarity
- A streamlined P&L structure with clearly visible value drivers to enhance performance steering
This model laid the blueprint for improved decision-making, financial transparency, and effective performance management across all steering levels.
Shaping the transformation
The Target Operating Model Review did more than identifying improvement areas, it defined actionable guardrails for the transformation journey. The results have been used by the project team as working assumptions for the Finance & Controlling design of the S/4HANA implementation. This ensured that all TOM related requirements would be reflected in the upcoming solution blueprint.
By combining an initial readiness check with a targeted redesign of critical performance levers, this project proved how the right foundation can turn complexity into clarity and accelerate value across the entire transformation.
