By Liam O’Neill, Director, bpmd
Organisations face an exciting, yet challenging, opportunity as they move to SAP’s S/4HANA system. The software offers a robust platform for transformation. Customers can work with larger data sets, deploy in different environments, and simplify their processes. Migration is complex though, and most customers need help fitting their way of working into the new system.
The role of Operational Excellence in enabling S/4HANA transformation
SAP offers Activate, an implementation framework for S/4HANA customers. It includes a methodology, best practices, guided configuration tools, and a reference solution. Our Business Process Management (BPM)-driven system implementation approach at bpmd combines our vast experience supporting ERP system implementations with the latest BPM practices and technologies.
It aligns well with SAP Activate, with the role of BPM/operational excellence professionals across each of the 6 Activate steps (Discover, Prepare, Explore, Realise, Deploy, and Run) explained below:
Discover – Targeting Value
The first stage of Activate is Discover, which we formerly called Target Value. This sets in place a strategic foundation for the coming transformation.
There are two parts to this; the first is identifying those areas of the business which are most strategically critical and set you apart from your competition. Process, and the visibility it generates, affords you the visibility required to identify these critical areas.
The second part is assessing which of your current processes are most (im)mature relative to both other internal processes and external industry benchmarks. There are a number of methods which can support the bottom-up, maturity based evaluation. The first, most-traditional approach is to use your engrained organisational wisdom by engaging SMEs to evaluate maturity across your process taxonomy. This should be supported by quantitative methods. The currently most effective means to do this is by using process mining to identify performance across your critical end-to-end processes and then comparing this to best practice industry, and software, benchmarks. This highlights where your biggest current performance/maturity gaps lie. This will increasingly be further supported by emerging Business Intelligence technologies, including the SAP BPI Insights module.
Those processes which are both strategically critical and relatively immature represent the biggest potential wins in a migration. By focusing on these, you can build a compelling case for change through S/4HANA and ensure the implementation will bring a return on investment sooner rather than later.
Prepare
Once the value is clear and the decision made to deploy S/4HANA, the Prepare phase begins. Process plays a critical role in enabling successful migrations. To do this, both the current, legacy system-based and the S/4HANA best practice processes must be visible. Therefore, the processes must be modelled.
Also, a change control framework should be established at this point to control when deviations from standard functionality are allowable. This must be driven by strategy with variations only where it is strategically or operationally critical; for non-strategic areas, the adoption of industry best practices should be enforced. By defining this early during the transformation, you mitigate the risk of organisational politics downstream when defining the new way of working.
Explore
The next phase involves a fit-to-standard analysis, in which we identify the differences between the current state and the best practices under S/4HANA by comparing the process models together with SMEs.
There are 3 ways to address these differences. The change control framework should be used to define which approach should be taken.
The first is to adopt S/4HANA standard practices, adapting existing processes to fit the new system. Generally the standard approach should be adopted unless there is a significant strategic or operational reason not to.
Alternatively, you can customise the new system, potentially integrating it with other systems which support processes that fall outside S/4HANA best practices. System customisations can be expensive and elongate the implementation. If they are required, process models should be created for the desired future state process to direct system development.
Finally, you can find manual workarounds to circumnavigate a lack of system capability. Manual workarounds can reduce the efficiency gains the implementation should have generated, pose data integrity and scalability challenges and therefore should be avoided wherever possible.
Realise
The detailed process information now in the BPM repository forms the basis for pre-deployment testing. Reuse this data to create test model containing the documented customisations and workarounds. This is the basis for detailed scripts that underpin UAT and test processes in extreme detail, highlighting potential pre-deployment problems.
With the new way of working finalised, the process assets will be adapted to support team training. The models should be updated to include all information required for S/4HANA users to effectively execute their processes using the new system; this can include more detailed descriptions, RACI information, key documents/data objects, document management system links, etc. If you are using a typical process hierarchy model, you will create Standard Operating Procedures (SOPs) for level 3 processes and detailed Work Instructions for any sub-processes (level 4 and lower).
The medium through which the process information should also be configured prior to deployment to ensure the data is accessible from the offset. This could be SAP Solman, but other collaboration portals on BPM suites can also serve this purpose. You may also choose to use reports to extarct and communicate the new processes.
Once the process information is finalised, the end-users should be trained in advance of going live. This will ensure that the teams are up to speed with the new way of working.
Deploy
By this stage, the processes are ready for use in the S/4HANA deployment. Your processes represent a single source of truth, ensuring consistency throughout the deployment. We strongly recommend using a cloud-based collaboration portal because this enables people to comment on models and suggest improvements. This feedback allows for an adaptable system that evolves with changing business conditions.
Run
To maximise returns on investment from a S/4HANA implementation, you must track the post-transformation performance. Use process mining to monitor how the process is being executed. Compare the current performance to the business case and legacy system performance to quantify the improvement. You can also use BPI Insights to evaluate how your maturity has progressed. Celebrate the successful implementation across the organisation, showing the tangible results, to build internal buy-in and further progression of both BPM and S/4HANA.
Also, use this monitoring to identify further improvement opportunities. Process mining is ideal for identifying bottlenecks, failure points, and compliance risks which (when addressed) can release even more value from your processes.
Make your S/4HANA migration run smoothly
BPM gives SAP customers the structure and functions they need for an efficient migration. It helps to identify the most critical processes to target early on in the migration project. It also makes it easier for project managers to conduct gap analyses, highlighting the areas they must work on to align their existing processes with an S/4HANA environment. Functions like these help to remove risk from complex SAP migration projects.
Process repository and central object management tools also drive efficiencies into migration projects. They enable business analysts and process modellers to create process and business assets as well as data stored in a single place. The ability to reuse these components creates consistency and efficiencies. The same process model may have a slightly altered view depending on the end-user (ranging from the Development Team running the test scripts to Operational staff being trained on the new system).
Our team has years of experience helping clients to gather and analyse process data to help lay solid foundations for S/4HANA migrations. Talk to us today about how we can help you to reduce the risk during this complex operation and maximise your SAP success.