De-risking your SAP S/4HANA transformation: Beyond tooling to execution excellence

Thank you so much for joining today's session. We're talking about de risking your S4HANA transformation. Hopefully you all know about our full series on this topic. This is one of our first sessions. So there's some of you great lineup of other sessions on on how to derisk your transformation. Today's session is gonna be a really interesting one. Before I go into it though, I'll just give everyone a minute or two to join. And while we wait, I am just gonna go through some quick housekeeping. So as always, this session is going to be recorded and we will share the recording at the end of the session, probably early next week. So if you want to re listen or share that around, you are welcome to. Any questions? There's a question box at the top right of your screen where you can ask questions during this presentation. We'll save the question answering to the end, but just chuck them in there as you think of them and I'll read them out to Ryan once he completes the presentation. But yeah, today's presentation is from a different perspective than we at EPI-USE Labs would usually present. You know, EPI-USE Labs, if you know us, we have a number of mostly tooling to help get more out of and manage your SAP especially around data. Ryan Egan is our presenter today and he works for our sister company EPI-USE. You likely already know about EPI-USE if you know EPI-USE Labs. Essentially they do a lot of the services around SAP and they use our tooling. So we often work together in projects, not quite that black and white. We do offer our own services as well at Labs. But today Ryan will give us a look at S4HANA transformations from a broader perspective than just the tooling. So really, really good content today. I'm quite excited. I might hand over to Ryan to introduce himself and get into the contact content. Thanks, Ryan. Cheers, Kat. Thanks very much for that. So hi, everyone. My name is Ryan Egan. I am the SAP Cloud ERP transformation lead here at EPI-USE, and I really appreciate you all joining us today. I'm gonna start off this session with a question. My question is, how many organizations begin their S4HANA journey expecting a transformation but end up simply completing a technical upgrade? I think we've all seen it. It happens far more often than we'd like to admit. And across the industry, organizations like yourselves and others are investing millions in ERP programs, dedicating years of effort. And yet when the dust settles, the business asks the simple question, where is the value to be expected? Where is the value we expect And that question is getting asked now more and more often than not prior to that implementation even beginning. And a lot of companies are questioning, should we make them know where is the value? The system might be newer, the infrastructure might be more modern, but the business itself hasn't really changed when you've gone through this process. And that's the gap we're going to talk about today because in most cases, the issue isn't S4HANA. It isn't Cloud ERP. It's the order in which we actually have internal conversations regarding change, which is the issue. So in terms of today and what we're gonna take you through, we're gonna start with taking you through the transformation reality check, discussing what we've seen in the market over the last few years. We're going to talk about the hidden problem with ERP transformations. We're going to answer a mindset question that we've probably all familiar with across all of our company. We typically see, and then we're going to take you through our business value discovery framework and what that actually is and how you can apply that within your business. And then we'll finish with a quick Q and A. So thanks very much for joining me and let's really make this next thirty, forty minutes engaging. So I'm gonna start off with some pretty big and bold logos. I think we've all heard the stories of little Zimmer, Lispun, etcetera, or maybe even your own stories over the past couple of years regarding S4HANA transformations, have potentially failed or failed to deliver the expected ROI. And what's really been the common thread throughout all these projects is business alignment is often missing. So if we I mean, if we start off with a little project, you know, seven years little were going through an S4HANA transformation. They realized after those seven years that the heavy customizations that they had pre in their previous ECC system were inefficient and too costly to operate. For example, little source of inventory management based on purchase prices where in S4HANA Cloud, you assort them by retail prices. Despite the many efforts of the customized solution on both SAP, the partner, and little side, S4HANA was unable to fit in. In addition, there was a major realignment within the business during the implementation that only added to ownership issues throughout the project. The other one which, you know, as a South African organization and EPI-USE we know all too well about as well is SPA-R Group. SPA faced a hundred million in losses due to their failed ERP migration. Led to them abandoning warehouse systems, stock shortages and overall abandoning software. Once again, the blueprint for this transformation was unclear, and that was the issue at the beginning. There was not enough time spent understanding business requirements and aligning technology upfront before the actual technology started driving the business. Zimmer Biomet was a hundred and seventy two million dollar lawsuit. And really what's at the heart of the Zimmer Biome story is they prioritized a strict go live day over actual operational readiness, which resulted in major disruption to the business and ended up a lot of the senior leadership team and Zimmer Biomet leaving. And finally, you know, one from back when I was in Europe and working lease plan. There was a lot of excitement around lease plan as a business, as a fast growing organization and all across Europe. They've grown fast operating in multiple locations all around the world. And when it came to transforming their ERP, they had to move off thirty five different location and industry specific systems into one single monolithic SAP system. The company didn't really decide to listen to the advice of consultants and other partners. Instead, they decided to go with big bang approach to the digital transformation process rather than a potential phased approach. And that unfortunately led to a complete ninety two million write off after custom system that they tried to build was unfair for use. So all of these stories, they I'm not highlighting these to talk about the failures of SAP by no means. You know, you have the same stories with other ERP vendors. I really want to highlight it's less about the technology tools and more about the process that you follow through this. So the real question becomes, are we solving the right problem first? And when we begin with ERP conversations and this happens to nearly every client we speak to, the first couple of questions that clients bring up is immediately within the technical space. We start talking about maintenance options, support packs, whether we're going to stay on premise, whether we're going to move to private cloud, whether we're going to move our doc through public cloud. Then we move to implementation strategies, you know, are we going brownfield, greenfield? What are we going to use selective data transition? And these are all important topics, right? I'm not undermining that. And many of my colleagues, Daniel Parker, Stephen Owens have covered these topics scenarios in great detail in previous webinars. But there's a critical discussion that's often gets missed when we talk about cloud ERP or ERP in general. And that's ERP sits at the very heart of your organization's value chain, connects finance, procurement, supply chain, manufacturing, sales, HR, it orchestrates your end to end processes. So when you transform your ERP platform, you're also changing the way the business operates, whether you like it or not, no matter what system you choose. And yet the conversation about how the business actually wants to operate in the future after this ERP change often happens too late. Sometimes it happens halfway through the project. Sometimes it happens when issues begin to arise around building customizations, etcetera. And sometimes it never happens at all. And that's the big red flag that we see. So before we start discussing architecture, before we start discussing migration strategies, there's one question we really encourage our clients to ask very early in the journey. And that's what mindset does our business operate with today? And what mindset do we want to operate with in the future? Because this is not just an IT decision. It's not just a technology programme, it's a cross department transformation. And whether we like it or not as different business leaders, you know, you need to involve your colleagues. Finance needs to be involved. Operations needs to be involved. Supply chain, procurement, sales, HR. We need to be involved in everyone across the business because this will affect their day to day lives and their day to day operations. And what we often see in reality is that this decision is made by one or two stakeholders within the business. And usually that's somewhere within the IT team or someone within the finance team. Without the broader business being part of that conversation. And that's where we identify risk. That's where risk really begins to creep into these transformation programmes. Over the past few years, working with organizations across different industries, we've seen companies naturally fall into three different mindsets. Okay. And what I'm going to walk you through today is those different mindsets that we see, not just as theoretical models, but as real life scenarios that, you know, I'm sure you'll be able to identify within your business. And, you know, some stakeholders will have one mindset and another group of stakeholders will have another. Right? But identifying this early is really crucial to mapping out what type of project or what kind of change we're going to go through. So the first mindset is what we call the traditional mindset. In this scenario, companies prior the company's priorities is stability. The goal is to move the goal is still to move to the latest ERP platform, but largely they wanna keep processes the same and intact. Typically, this results in, you know, on premise or private clouds deployment. The business says let's migrate what we have today. Let's avoid too much disruption and let's minimize change. A lot of customization and historical kind of decisions remain. Sometimes we actually see this as due to a lack of blueprinting across the organization. So where previous customizations haven't been blueprinted and perhaps there's an unknowingness of what's actually been built in the past and how it actually operates and perhaps a bit of hesitation about moving away from that. But overall process will stay largely unchanged. Now this approach is perfectly valid for some organizations. By no means am I here to be critical of it, But the outcome tends to be tactical improvements rather than transformational ones. You modernize the platform, but the underlying business processes remain largely the same. So the opportunity for optimization or innovation in the future remains still a bit limited. The second mindset is what we call the advanced mindset. And in this case, organizations fully embrace cloud infrastructure, workloads move to the cloud, the system becomes more scalable, you gain the ability to scale resources up and down, and that can drive reductions in the total cost of ownership overall. However, what we often see here is that while infrastructure moves to the cloud, many of the old customizations and patterns remain. The business continues to build heavy modifications. They maintain a high degree of flexibility in our system, which is great, but that flexibility can actually slow them down in terms of adopting innovation in the future. Because every upgrade becomes more and more complex with every customization you build. Every innovation requires adaptation. So while the infrastructure modernizes, the ability to consume innovation doesn't always accelerate as expected. Often, there's a bit of a feeling of being let down by the ****. The final mindset is the future built mindset. And this is where organizations fully embrace cloud principles, not just in terms of infrastructure, but across how systems are actually designed, built and operated. In this model, the focus shifts instead of optimizing purely for the total cost of ownerships, organizations are thinking about total cost of innovation. Okay? And how quickly can we adopt new capabilities? How quickly can we introduce new processes? How quickly can we can ERP support new business models? We see this being very common with companies that have gone through a couple of acquisitions over the last couple of years, you know, they tend to have that kind of change mindset built into them as well. Now the challenge with the future mindset is that this approach unlocks the fastest innovation cycles and the strongest ROI without a doubt, but it also requires significant change. And it requires that the business to accept there will be a change for processes. There will be a change to operating models. And we're going to have to really focus on change management and adoption once we've actually built what it is that we need to build. So that's in summary, the three mindsets that we're seeing across all our the different companies we speak on a day to day basis. What I do want to say and I want to be very clear about this is my goal today is not to tell any company which mindset is right. There is no universal answer and industry dynamics differ, business models differ and regulatory environment environments differ, locations differ. What matters is clarity. Okay? And understanding where your company sits today and understanding where your company wants to go in the future. But those two kind of questions, those are the decisions that will shape every technical choice that follows. So the question becomes, how do we actually make this decision with confidence? How do we bring other stakeholders together? And how do we ensure transformation starts with value rather than starting with technology? And these were the questions that kept coming up and that's exactly why we built the business value discovery framework or the BVD framework as we call it. The purpose of the BVD framework is very, very simple to assess the value of transforming your business and moving to Cloud ERP before the implementation even begins. The idea is that organizations to allow organizations to build a high level business case aligned to their strategic objectives prior to any actual technical work being done. It should provide a clear understanding of what transformation could deliver in terms of efficiency, in terms of innovation, and in terms of ROI before any project team is stood up before any investment is actually made on that ends. The BVD framework is built around three core activities. Each one answers a different dimension of the transformation question. So we talk about the digital transformation advisory, business process analysis, and business process performance benchmarking. So how does it actually work in practice and what does it actually look like? So we'll start with number one, and that's a digital transformation advisory. The first component of the digital transformation advisory is cost department workshops. Okay? Sounds simple, but actually bringing the people together is often the hardest part. And sometimes we do feel like marriage counselors when we run these workshops. But the goal here is simple. It's alignment, right? So we bring stakeholders from finance, operations, supply chain, IT, HR together. And together we assess what the business current mindset is and define the future state of that business and what it wants to achieve. Okay. These workshops create shared vision of the future and of transformation, it allows the business to answer some really critical and self reflective questions, which will later affect the overall programme success. Within there, we within the next step, we have business process analysis. The second activity does what it says on the tin. It focuses purely on business processes. And here we do encourage leveraging SAP Signavio and as a tool, it's really, really powerful tool that, anyone is interested in looking at it, please feel free to reach out. But together with our consultant teams, we analyse your current business processes. We build them into SAP Signavi and map them out that way. And we identify inefficiencies. We identify blockers. We map out those processes against what SAP state are best practice standards and what we also see other companies doing. And the idea is that this gives you as a business a very clear view of where your how your current ways of working differ from best practice and where actually opportunities exist to streamline. Okay? The final step is business process performance benchmarking. And this is the third component focuses on performance benchmarking. So how do we compare your processes against industry peers? Where are you outperforming the market? Where are the improvement opportunities? Where can we actually deliver innovation that has measurable gains? So what we're seeing off a lot is we're identifying areas that we can actually add in automation tools like UI path and or SAP AI or third party AI even, you know, what we're doing, we're identifying it there within that process benchmarking piece. Once we've gone through those three steps, we develop improvement recommendations as well as potential innovation areas. We provide that back to you in terms of a report. We provide you with a Word document, a PowerPoint, but also a spreadsheet so you can focus on different parts of the business and categorize very clearly as well. I'm gonna dig a bit deeper into the Signavio piece and just share some more information because it is so now I've been asked about a lot by the clients and prospects that we've spoken with recently. Sync Navio does not have to be used within this framework. We do encourage it. We do encourage using because we see once you deploy Sync Navio pre project, it's a source of truth for change throughout the whole end to end project and even post go live. Okay? So it does it becomes really valuable from a governance perspective in terms of managing change, but it's not a necessity. And for clients that don't use it, we just do it all through spreadsheets and PowerPoints, etcetera, which adds a bit of time, but, you know, it can be done without it as well. However, if you are using Signavio, the business process analysis is really, really slick and really cool. Before you even start designing your future state, you can use Sync Navio's process mining and analysis to get fact based view of your current processes. Okay? End to end. And that means understanding actual cycle times, identifying bottlenecks, seeing where rework is happening and uncovering different variants that exist across the business. Why that matters from an S4 perspective is because without this visibility, you're carrying the risks of bringing inefficiencies from your old system into your new system or worse. Designing a future based system that's based on flawed assumptions. And I go back here to, you know, sometimes if, you know, probably these processes have been in place for twenty plus years and not everyone's fully clear on exactly how they work or the details behind them and no one's of blame has been changed across the business in those tiny years. But with Sync Navio, you can pinpoint exactly where your risks are. For example, you might find a large percentage of your invoices are being reworked or the approvals are causing unnecessarily unnecessary delays. These insights allow you to prioritize what to fix prior to migration rather than after it. Right? So it's bringing down your cost of implementation and your cost of migration and also de risking as well. What the beauty of this is as well is that instead of debate and opinions in workshops, which is common, I said we go back to the marriage counseling idea, you're using actually real data to decide which processes and which way it should be kept, which will be simplified and which will be eliminated as part of your new systems design. So really we see Sync Navio being the key to how you de risk your ERP project. You go in with full visibility, you address issues upfront and you sign your future based processes of facts and assumptions. Now, the beauty is when you bring the three activities that we mentioned during our BBD framework, so the business process analysis, the benchmarking and the transformation advisory. When you bring them together, you get a complete picture and you get organizational insight, you get people insights, you get process insights. And most importantly, the biggest question that's been asked over the last year or two, you get value insights. So what is the what sort of ROI am I going to generate with this change? You can de risk it completely by identifying potential blockers early and you align or the organization around the direction of travel that you just want to take it. So everyone's staring in the same direction. What we see had an even more value is when we combine this initial kind of BVD workshop or discovery framework. When we combine this business focus analysis with technical assessments, such as our prism framework, which my labs colleagues would have explained on multiple times. And if you're not aware, please do reach out to them. But when we combine these two approaches, business and technical together, something powerful happens. We get a real complete transformation view. So with that information in hand, you can confidently decide how to move forward with S4HANA, which way to which direction of travel you wanna take. And it's not based on assumptions. It's not based on discounts from salespeople, etcetera, but it's actually based on evidence. Okay. You can use that as your bible or your source of truth for moving forward. Now, where has this been done before and where have we been successful? So one client that I want to highlight is one of our recent clients, Land Registry Services here in Australia who moved off an on premise S4HANA that was and they had originally moved off. They moved from ECC to S4HANA. They'd done a migration, not changing anything. But now they wanted to adopt innovation. They wanted to move to S4HANA public cloud, adopt SuccessFactors and BTP. And the idea was that, you know, they were an organization that were public entity that got moved private. They reduced their headcounts, they reduced in size, they reduced in complexity. They felt that old processes weren't fit for standard. They didn't need that complexity. They didn't need those overheads within the business. So what we did is we went through a process of reducing historical complexity. We identified areas where, hey, look, do we really need this? So a really good example was we went from four forty custom objects in their on premise system down to ten. We went through business process redesign around time sheeting and finance. Through that process we realized we're doing they're doing time sheets for two forty staff. But who's approving this? What's the purpose of this when people are salaried? This is a hangover from their legacy days. So we managed to reduce that. And we just overall managed to reduce the complexity and set it up for a different direction of travel the business was now taking. So we have really exciting projects that we've gone through with LRS and a really good example of, you know, mapping out processes, understanding what's there and setting the business up for the future. So, yeah, really, really exciting. So let me close with this thought around s four time transformations and ERP transformations in general. Look. From what we can see, they don't fail because the technology can't do it. The struggle becomes companies begin with technical decisions before aligning on the transformation they actually want to achieve. And when you start with the opposite way around, when you start with the business mindset, you dramatically reduce the delivery risk. You shorten the time, the value, and you max you can maximize the return on your ERP investment in the long run. Okay? So my call to action today to you guys is, you know, start having conversations with different people, different stakeholders across the business, and start coming together. Now if this conversation has resonated with you, if these are challenges that you're seeing in your transformation journey or you've seen other transformation journeys, I'd love to continue the conversation. Our team regularly works with companies to run these BVD engagements, help them clarify transformation directions before the implementation begins. So if you're interested in exploring how this framework could apply to you, please reach out after this session, connect with me through LinkedIn. Happy to share my number and we can have a call. But, yeah, otherwise, thank you very much for your time today, and I hope this will give you a useful perspective on how to derisk your S4HANA transformation journey. Awesome. Thank you so much for that, Ryan. That was really insightful. I got a lot of value from that. I learned a lot as well. I have actually just two questions that have come in so far that, again, if anyone has any questions for Ryan, we do have a couple of extra minutes so that we can answer any other questions. You can tap them into the chat box or the question panel. So, yeah, two time based questions actually. So one was around the success story that you shared. They were wondering for, like, how long that journey sort of took. And the other question was a similar time based question around your B2B framework BVD framework and how long that usually kind of takes as well. Yeah. Sure. So look, I'll answer the success story first. So with LRS, what we did was we broke the project up into two. So we started with a piece of work around the around July last year, which focused really on process design, process discovery and actually mapping out what way their processes work, how they want the future processes to work and answering some unknown questions. As I said, there was a lot of prehistorical blueprints that weren't there for how the system had previously been built and how decisions had previously been made. So we spent the first eight weeks and doing that process design, process discovery, etcetera. And once we had that and that was completed, then we actually started a traditional implementation approach where we looked at doing, you know, implementing and building, you know, configuring and designing the solutions that we spoke about. So Cloud ERP, SuccessFactors, BTP, etcetera. That project has gone for the last six months, we're nearing deployment as we speak. So, yeah, it's been really exciting. And your second question was around the BBD framework. So, look, typically, depends on the organization and timelines with them. But typically we see this process taking about six weeks to do. So to go through those workshops, the business process analysis and the benchmarking, typically six weeks. Sometimes those workshops can be quite hard to get people in the room, so it does take a bit longer, but we're quite flexible in terms of timelines and how we structure it for clients. It's cool. Quicker than I thought actually. But yeah, that was all the questions that have come through. So once again, session has been recorded. Usually it takes us about two business days, maybe three to get EARTA up on our website and I will share the link to that for everyone who has attended today. And I'll also just link in Ryan to that email as well, so if anyone wants to ask him any questions or get any clarifications on anything, then you'll have his email address as well. And once again if you haven't seen the rest of the series that's coming up, we have a monthly webinar planned for basically the next twelve months. There is around a theme come, I think there's that pretty four landing pages you can currently register for, but you can see the other topics that are coming up. There's a few dates that will slightly move, but we have a couple of new sessions to announce probably next week, but there'll be around twelve sessions in total, so you can register for the full series or just pick the ones that you're interested in. They will all be recorded, but of course if you're here live you ask questions and things as well. So thank you again everyone so much for your time today and enjoy the rest of your week and hopefully we'll see you at the next one.