July 2020 – S/4HANA will come – there is no way to avoid it. But how do you approach such a mega-project? Which important factors are easily overlooked? And what can be done to implement the project both in a structured and efficient manner? Our article series CH/4NGE is dedicated to the topic of migration to SAP’S new Business Suite. Along the 6 phases of the SAP Activate framework we explain typical challenges, important relations between technology and people, and possible approaches that can be used in the respective project phase.
After discussing the Discover Phase in the last article – and thus topics such as strategy, sponsor alignment and process-based analyses – we will now address relevant aspects from a change perspective in the Prepare Phase.
What happens in the Prepare Phase?
As in the Discover Phase, the first question that arises is: What is actually happening in the Prepare Phase? In contrast to the Discover Phase, where the focus is strongly on decision-related topics such as the business case, digital strategy and implementation approaches, the Prepare Phase – as the name suggests – is dedicated to project preparation. The decisions made are being consolidated and, in some cases, already implemented. This includes the implementation of a prototype project to test the technical-functional feasibility and to introduce the relevant stakeholders to the “look & feel” of the technology including new functionalities.
As a first quality gate it is useful to agree on a suitable methodology to plan the desired implementation scenario. Once this groundwork has been laid, the project is set up with careful consideration of the company-specific circumstances: resources are planned, the project team is set up, necessary learning needs are addressed and a clear scope of the system transformation according to the existing business processes is formulated. Ideally, the “Organizational Change Management” stream (OCM) is set up and a comprehensive Change Architecture as well as the associated communication strategy are developed. “Ideally” because these last two aspects are often neglected in actual practice and their critical importance for success is underestimated – what this means will be discussed later in this article.
If not yet done in the Discover Phase, the existing SAP ERP system is subjected to the SAP S/4HANA Readiness Check. It provides an initial overview of what needs to be taken into account during the Business Suite changeover and which aspects of the Simplification List are relevant. Once these conceptual cornerstones have been clarified, we move on to operational migration planning and thus to a technical level. A Migration Planning Workshop is often used to run through various scenarios by means of simulations. Unused z – codes are removed and business data archived to keep the conversion as lean as possible. It is recommended that you install and configure SAP’s Solution Manager to ensure technical support from SAP during the rest of the conversion.
What are the typical challenges in this phase?
This brief insight into the extensive activities gives you an idea of how complex the changeover to S/4HANA actually is. You have to watch, think and act in all possible directions – and at the same time, a successful sustainable implementation requires empathy and communication as well. But how do you approach such a complex project in a structured manner and what tips help to bring order into the chaos?
A first serious challenge is the project setup. Often widely underestimated, the S/4HANA migration proves to be much more complex and granular from a project management perspective than originally assumed. A lack of experience in this area leads to a strong dependency on external system integrators. These in turn rarely know the organization well enough to adequately assess the impact on it, so that important effects may be forgotten, and significant potential cannot be exploited. Unfortunately, this realization often only becomes apparent when the problems arise: Responsibilities are unclear, unforeseen risks occur or it becomes apparent that an entire project component has been inadvertently disregarded. Time and resources that were saved in the setup must now be spent in addition. This is not only annoying but can have a lasting negative impact on the implementation success.
A carefully thought-out project setup with a multitude of functional and regional sub-projects is therefore an inevitable success factor in the S/4HANA context. Particular emphasis must be placed on close coordination between business and IT, who must jointly drive the project forward in the course of the project. Within the scope of a thorough scope management in the S/4HANA area, an important focus is also on the target picture of the process landscape. Including a thorough check which of the SAP Best Practice processes can be implemented with as little effort as possible. Why is this focus so important?
The target picture provides the technical basis for comprehensive impact analyses, and the following applies: Only those who know their scope can also estimate the impact. Thus, apart from the technical impact, it is essential to pay attention to effects on organizational processes and thus on the roles and skills of the employees. A well-structured S/4HANA conversion enables the creation new role profiles or further developing existing ones at an early stage.
Also a comprehensive Change Management is often neglected. “The S/4HANA conversion is a mere technical switch – so why change management?” This view places the power of human behavior in the background and thus evidently favors the creation of a value gap between technical installation and sustainable implementation, as shown in the last article (link article Discover Phase). So what can be done to avoid this and actually achieve the estimated best case scenario?
The Prepare Phase is of enormous importance for the creation and coordination of a holistic Change Architecture in the context of the S/4HANA Conversion. Important components such as Change Communication, Training & Enabling, Commitment, Change Leadership and Change Controlling are initially planned and coordinated here. In combination, this provides a systematic summary of the various ways in which all relevant stakeholder groups are supported during the conversion. But beware! Change management is systematic, but not always calculable. In order to be able to act in a demand-driven and target group-oriented manner, the derived change measures must therefore be continuously reviewed and, if necessary, adjusted.
Typically for the Prepare Phase, the following activities are exemplary from a change perspective:
- Planning of effective engagement measures for the project team to reach the necessary commitment level (e.g. through employee events)
- Initial communication of the project throughout the organization with the help of the Change Story to increase acceptance
- Empowerment of sponsors in the area of Change Leadership (“How do I lead employees through major changes?”)
- Identification of possible ” pre-existing burdens “ caused by earlier failed change projects (e.g. negative image of change among employees “This will surely not work anyway!”)
- Analysis of the results of the S/4HANA Readiness Assessment in order to identify the actual impacts at the end user level (e.g. with CPC.fit).
The milestones and activities within the context of professional change management vary greatly in scope and form depending on the organization. As individual as the company is, so are the solutions needed to prevent both management from productivity losses and employees from frustration. A professionally coordinated change management is therefore critical to success in order to adequately involve all participants. A dedicated Transformation or Change Management Office (CMO) can cover this area very well and is therefore an important steering mechanism for this mega-project.
As you can see, important foundations for the success of the S/4HANA conversion project are already being laid in the Prepare Phase. “In a nutshell” we have summarized our most important tips for the phase:
- The S/4HANA conversion is more complex than you think – take this into account in the project setup through regional and functional sub-projects!
- You know your organization best – work together with the system integrator instead of becoming dependent on their know-how!
- Even only technical- and process-related transitions can mean changes for people – analyse the impact for the end user!
- A systematic change architecture is valuable – don’t leave anyone behind!
- A dedicated CMO acts as an important steering element – put together a qualified team as a central contact for the change and implementation!
After extensive preparation measures in the Discover and Prepare phases, the next step will be to implement the S/4HANA Conversion. In our next article, we will also present important insights and give tips on what needs to be considered in the Explore Phase from a change perspective in order to maximize the chances of project success.