Building the Business Case for SAP S/4HANA

Building the Business Case for SAP S/4HANA

One of the biggest challenges of migrating to S/4HANA isn’t just understanding its new features and benefits. It’s about helping the rest of the business understand where the value lies.

It’s more difficult than it sounds. S/4HANA is usually seen as an IT project. And while IT is usually enthusiastic about the prospect of simplifying databases and becoming more efficient, in reality, these benefits aren’t seen as essential to the rest of the business.

Leaders tend to think of S/4HANA as a mere upgrade. An extension of what has come before. However, the resources and investment needed are significant. Spending millions of dollars on an upgrade to help IT work slightly faster doesn’t justify the investment and the effort at the board level. To really explain the value, you have to see the wider picture.

Financial savings

There are a number of strategies to really getting across the value of S/4HANA. But first, you have to understand the challenges.

Businesses are usually very aware of costs linked to their core business. For example, if they’re a manufacturer, their finger should be on the pulse of all figures associated with manufacturing their products. What might be harder for them to understand are the other internal and operational costs.

You can add up the invoice raised against materials and machine parts. But costs relating to people and inefficiencies are much harder to pin down. Yet this is one of the key areas where S/4HANA adds value.

So, one strategy is to really define and communicate the value here. If you have access to a business’s financials, that’s great – it will enable you to make some really personalized projections relating to reduced operating costs.

In my assessments, I prefer to use the ‘moving the needle approach’. Rather than tell a business leader that they’ll save a large percentage, right out of the gate, I’ll show them the incremental benefits they can achieve by just improving some aspects of their core business. A lone percentage may not be that impactful but it’s more realistic, and easier to grasp; and then the conversation can evolve into bigger numbers and possibilities.

The wider vision

Another strategy is linking S/4HANA to the wider business vision.

Generally speaking, business leaders don’t care what ERP system is running in the background. They will usually think in terms of capabilities and outcomes. Specifically, they care about the capabilities they’ll need in the future to stay competitive.

You often hear about the ‘cost of doing nothing’. Well nowadays, that cost is extremely high. The pace of innovation is lightning fast, and businesses need to adopt the technology that will enable them to keep their competitive edge.

More often than not, these technologies rely on a backend that seamlessly processes large volumes of real-time data. And again, that’s exactly where S/4HANA comes into play.

It really pays to look at the wider picture. Yes, there’s a serious investment involved. But there’s no question that businesses need to digitally transform. Leaders are looking at the so called “emergent technologies”, such as AI, IoT, Machine Learning, Analytics, blockchain, etc., and trying to figure out how they can be deployed in their own business.

S/4HANA is therefore a key part of that wider transformation journey, because it’s the intelligent ERP and the foundation for all of that to happen. And let’s not forget about the employee benefit too. The better user interface, efficiency and automation S/4HANA brings leads to serious savings, which frees up employee time to work on more engaging projects, and that is a fundamental principle of the Intelligent Enterprise.

In many cases, we’ve seen these projects lead to new product lines and additional revenue streams – all of which can be directly or indirectly tied back to S/4HANA. Now, if you don't have compelling business drivers behind it, you’ll need to be more creative.

Business and digital transformation initiatives should always be in synch in order for companies to achieve operational excellence and become more sustainable over time.

The adoption of Business Process Intelligence (BPI) opens us up to a whole new set of possibilities

The SAP Intelligent Enterprise framework has the industry-standard E2E processes already embedded in SAP S/4HANA – such as Lead to Cash, Design to Operate, Sources to Pay & Recruit to Retire – However it is imperative that organizations not only analyze their current processes (and identify potential issues) but also monitor them for deviation to ensure optimized operational efficiencies.

Leveraging tools like SAP Signavio which delivers a comprehensive suite of business transformation solutions that enable companies to streamline their business processes, and manage them more effectively in the long run.

Conclusion

So ultimately, business process redesign and benefits realization are things that you should always consider during the business case stage, so your company can make progress towards business process transformation in a more consistent way, as you move forward on your S/4HANA roadmap.

Also, when presenting your case, consider who you are talking to and what their pain points are. For instance, a conversation with a CTO may differ from one with a Line Manager. You should be able to pivot from features to business outcomes, as you switch your audience, but to do so you need to utilize the right approach and be equipped with the right tools and data.

Finally, use figures based on financial performance and business outcomes as often as possible. Speak in C-level terms, but more importantly, consider the long-term and relate the proposition to the company's overall vision. 

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