Several SAP ECC customers ask me when a good time to upgrade to S/4HANA is? My answer has been very consistent – NEVER. DON’T UPGRADE to S/4HANA.
Are you thinking I am suggesting a different system? Not at all. My point is: “Don’t Upgrade. Transform.”
Moving to S/4HANA because ECC will eventually go out of support is not a strong enough business case for any organization. S/4HANA is your opportunity to get current with the market and technological trends and embark on a perpetual transformation journey. Let’s me take a moment to elaborate on this term.
So, coming back to SAP S/4HANA here is the short summary.
SAP status quo is not an option anymore.
There are two key considerations
- One constant in all of the technological trends we referred to in my previous blog, whether its AI, Machine Learning, Predictive Analytics, Blockchain, Robotic Process Automation, is DATA. The availability of good and large amounts of data in real-time. Thanks to SAP S/4 HANA, the infrastructure is in place. However, you need to make sure you keep the data clean and relevant. It requires a detailed data analysis, data models transformation based upon behavioral science, and data scientists are a new normal in every organization’s resource-scape.
- You need to make sure your S/4HANA system, which is the system of record / digital core brings maximum business value, is ready for easy adoption of future market trends, and is ready for continued innovation, whether you use SAP’s innovation platform Leonardo or other 3rd party platforms.
The magic letters that will get you there are S O C. Simple, Optimized, and Clean.
- Start with simplifying your landscape. Your IT landscape might have evolved over some time, and it’s time to do a postmortem and remove waste. Consider consolidation. Consider migration to the cloud. There are several other factors to consider, and I won’t list them all here. Contact me, and I am happy to brainstorm with you.
- Simplify your data models. It’s time to optimize and simplify data models and redundancies. We covered this above.
- Keep the digital core (S/4HANA) clean and simple. Simplify your processes. And of course, optimization should drive simplicity. You are simplifying to optimize, not just to simplify. This reminds me of a statement – ‘perfection is achieved not when there is nothing left to add, but when there is nothing left to remove.’
Each point above is a topic on its own and deserves a deeper dive. I will use this blog to take a deeper dive into #3 from above – the concept of keeping the core clean. It sounds great, but how do we do it?
The first part is something most of us must have already heard. Adopt to best practices. There are multiple ways to do so, such as the use of SAP Model Company. The goal MUST be to adopt standard processes with gaps treated as absolute exceptions and MUST go through a detailed vetting and approval process. Strong executive commitment, well-orchestrated, and managed organizational change and seasoned process teams are some of the keys to enabling this.
However, those of us living in the SAP world very well understand that no customization is NOT an option. Yes, gaps will be minimized to the maximum possible extent, but they won’t be eliminated. Then how do we incorporate gaps (RICEFW) while keeping the core clean? Let’s take a more in-depth look at the extensibility options provided by SAP.
SAP offers the following four types of extensibility options.
The key to keeping the core clean is to stay in the green zone from the above four options. Green is the only zone you can drive in the case of S/4HANA Cloud Essentials edition. The Extended edition lets you get into the yellow zone but is not recommended. Any Prem gives you the option to drive any zone, but the green zone is the only one that keeps the core clean.
Please feel free to contact me if you have any questions or would like to understand details on any of the topics I covered here or anything else related to S/4HANA.