Cleaning up now lays the foundations for a seamless future transition to S/4HANA
“No money for digitization! SAP customers postpone IT projects.” This was the headline in the German newspaper Frankfurter Allgemeine Zeitung at the end of last year. The software industry and consulting firms are currently contending with shrinking budgets of their industry customers. While companies do see the need for further digitalization, in the wake of the corona crisis many simply lack the funds to modernize their often complex software platforms. These are the findings of the annual survey conducted by the German-speaking SAP user group DSAG, which represents more than 3,700 companies in the DACH region.
As SAP customer sales have declined, almost every second company has considered postponing their transition to the new and improved S/4HANA software version or putting it on a back burner. However, not only has the Covid crisis made customers more cautious, their priorities have also changed. While areas such as supply chain management, IoT, or artificial intelligence still remain high on the agenda, keeping businesses up and running is the number one priority. This is also reflected in the DSAG survey. According to this survey, companies are focusing more on software to increase the efficiency of existing processes. Only about one-third of respondents considered the development of new digital business models their most important task.
You don’t have to switch to S/4 tomorrow, nor the day after, but you should start getting ready for your individual business transformation.
What’s more, uncertainties about the market situation are curtailing innovation generally. We know that only too well. In a crisis, companies tend to be preoccupied with a completely different set of issues than innovation and new business models.
But is putting IT projects on hold the right solution in the long term? No at all! The world keeps turning. Eventually, all companies will have to make the switch to S/4 – there is no alternative. The smart businesses have to put in the groundwork now to smooth the way for the transition. Because, when the time comes, no company can afford a spiraling, costly megaproject that takes five to six years. Time is the critical factor.
One big clean-up instead of many small ones
A host of legacy issues? It’s a problem lots of businesses face. Heterogeneous systems, add-on non-sap solutions, Z-coding, inconsistent processes, and uncontrolled data growth are very common. Only recently, I was asked by the CIO of a well-known healthcare group: “Given that I first have to do a thorough clean-up, which is a lengthy process, how can I combine this as efficiently as possible with the migration to S/4?” Bingo, my specialist subject! Take your time. It is important for clean-up activities in particular to be guided by S/4. Otherwise, you’ll end up needing to complete not one, but several clean-ups.
If I, as an IT manager, want to know quickly what a transition to S/4 means for me without having to involve the business departments, a system analysis is a good start. The SAP Readiness Check and other available analysis tools are used to scrutinize processes, data, systems, and technologies with minimal business involvement. We consultants then interpret these results in terms of the impact of a transition to S/4.
What preliminary projects can I initiate? Which processes can I standardize now to benefit a future control model? What about implementation of the new G/L? What is your vision for harmonization of charts of accounts? Do we need to remove a division because it will be sold in six months? Carve-outs are extremely time-critical challenges for IT departments. Removing a division in a business-compliant manner within only a few months is challenging.-Abteilungen. Dieses Herausschneiden geschäftskonform in wenigen Monaten zu realisieren, ist anspruchsvoll.
Get a head start!
Authorizations are one important issue. Many companies are using ancient authorization concepts. On no account should these also be transferred to S/4. A drastic ‘cull’ of old role concepts is therefore in order – another preliminary project requiring considerable time and effort. Believe me, you’ll be happy to have this one crossed off your list.
There are a number of tasks to address. My advice, therefore, is to start now! You don’t have to switch to S/4 tomorrow, nor the day after, but you should start getting ready for your individual business transformation. Prepare for the future in good time. Secure your competitiveness. Give yourself something of a head start! You want to be a first mover.
As American economist Milton Friedman (1912-2006) once famously said: “Only a crisis – actual or perceived – produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around.”