10 Critical Success Factors for Business Transformation
Key Takeaways
⇨ Having a roadmap is essential for a business transformation.
⇨ Users must leave room for customization, as all transformation journeys will be different.
⇨ Just as important as adopting the right technology solutions is ensuring that workers are trained to use them.
Business transformation is a complex process requiring all facets of an organization to pitch in to move to adopt SAP S/4HANA. It’s difficult to know what steps to take throughout the process. SAPinsider spoke with Ranjeet Panicker, Vice President of Cloud Success Services for SAP America, to find out the 10 critical factors that are needed to make a move to SAP S/4HANA successful.
- Project Strategy and Business Alignment
The strategy must align with the broader business goals. Companies may be inclined to move to SAP S/4HANA due to the impending 2027 deadline when legacy systems will no longer be supported or simply to remain current with a contemporary setup.
All departments involved in the digital transformation should familiarize themselves with the larger business initiatives and ensure that their path to SAP S/4HANA aligns with those goals.
- Governance
Clearly defining governance of roles and projects is another early step that companies should take in a digital transformation, both at the project level and companywide. It is essential to have a highly disciplined project governance model as it facilitates decisions, communication and timely escalations when necessary.
SAP offers guidance on how to establish a governance model as part of SAP Activate with content around roles and responsibilities, communication plans, project team setup, design principles, agile methodology and more. This is also the perfect time to put in place good habits by ratifying how the overall corporate governance is structured.
- Resources to Win
Assembling the right resources goes a long way toward ensuring that your transformation is a win for your business. Organizations must leverage internal and external resources in order to make the most out of their transitions.
Digital transitions should involve the customer, SAP and a third-party system integrator all working together.
- Organization Change Management
Organizations need to prepare for OCM within the scope of the transformation outcomes and transition paths. For instance, a Brownfield approach may only require champions within specific functional areas that have the most change to drive OCM topics to end users.
Businesses with larger changes in a Greenfield scenario will have a greater need for an organizational change management program to oversee the change and communication strategy, address how the project will impact existing roles and ensure that all teams are trained to best utilize the new capabilities.
SAP programs such as Embark and Learning Hub can help with enablement topics, but it is worth evaluating whether your business needs an external party if you lack a strong internal OCM setup.
- Program Management Office
A program management office should keep the digital transformation on track by setting a project methodology and ensuring it is adhered to throughout the process. The office should also evaluate the skills of the various teams to make sure they are fully trained and ready to implement the methodology.
“A lot of customers skip this piece. They assume the partner is going to manage the project methodology, and they don’t go through a training process where everybody’s on the same page about how the project’s going to be run and who does what,” Panicker said.
- Data
The data management strategy you adopt, like many other aspects of a business transformation, is highly individualized. A Brownfield approach is simpler, as you need to identify the opportunities for data remediation or correction, correct the data in the ECC system and then convert it.
For a Greenfield approach, the IT department should be prepared to reimplement or consolidate the data to reformat it into the S/4HANA system. For these scenarios, SAP offers templates to map the data from source to target.
- Solution Design and Build
The goal of any solution design and build should be to bring commodity process to standard that avoids customizations, and for differentiating processes to evaluate how to best build enhancements and leverage the Business Technology Platform to deploy extensions. Some customers may be tempted to bring assets that were custom-created in ECC into S/4HANA due to time or budget constraints, but they should avoid that approach.
SAP provides industry-specific best practices in easy-to-consume system landscapes, which might be the easiest way to evaluate adopt versus build. It is also recommended that you have a strong governance over any deviations from standard, and that it goes through a formal vetting process before any approvals.
- Solution Readiness
Solution readiness is all about testing to make sure the system will provide the desired results for your business. There is an opportunity to modernize testing approaches and focus on process-based testing for a macro process such as order to cash as opposed to manual, siloed transaction-based testing. SAP offers the Best Practices Explorer, where you have access to testing scripts that are available for each specific best practice area.
- Tools and Technology
Selecting the best options for your specific needs and goals is important. SAP offers a variety of options to help customers zero in on the right tools based on your project phases. To experience a simulation of an S/4HANA environment, you can play the ERPsim game. To build a business case, you can leverage Signavio Process Intelligence or to demystify the changes from ECC to S/4HANA, you can use the SAP readiness check and custom code toolsets. You can also learn about customer stories and new innovations in the What’s New viewer.
- Run Strategy
Providing a predictable and stable platform for your business is a key indicator of the success of your platform. Customers must ensure that their organization can manage and maintain these systems. Amid this change, businesses must know if they have the talent to troubleshoot new issues that may arise before they occur.
The run phase of the project is also a time to look back to track whether you are delivering on the key KPIs that provide the outcomes that were part of your business case.
As part of premium engagement services, SAP can assess an organization’s operational readiness for transition and determine if it can run the new system in the new environment based on the changes it has implemented.
