SAP’s 2027 deadline extension on S/4HANA migration has lit a hearth below many companies that had lengthy put it off. Now it’s a precedence.
Nevertheless, S/4HANA is barely pretty much as good as the worth you get out of it, and too usually companies are selecting to make the soar for a easy know-how improve with out pondering via how that improve might or might not really serve up new worth. It is a main drawback, as a result of for all the brand new advantages and improvements that S/4HANA brings to the desk, these merely can’t be attained by know-how updates alone. Worse nonetheless, an S/4HANA migration can really lead to a unfavorable ROI in case you haven’t accomplished the cautious upfront evaluation on what precisely you want and need to get out of it.
Enterprises can’t let the tail wag the canine. The top aim isn’t emigrate to S/4HANA merely for migration’s sake; the top aim is to unlock new enterprise worth. Which means the first step for this, and any digital transformation undertaking, is to establish the “why” – why you’re reworking. Figuring out the “why” informs each different resolution within the course of, however so many enterprises skip this step, focusing extra on the “how” or “what” of their digitalization undertaking, and arrive at a vacation spot the place it’s not clear to them what that transformation really delivered.
Uncertainty casts an extended shadow over transformation initiatives
So many enterprises battle with digital transformations as a result of their initiatives are plagued with uncertainty from the outset. That uncertainty largely stems from a lack of expertise and upfront evaluation going into the undertaking. Key choices that must be requested and answered – like whether or not to execute a mixed cloud migration, a simultaneous OS/DB modernization, and a Greenfield, Brownfield, or Bluefield implementation – aren’t given the due diligence they want.
With out that reflection and evaluation, many organizations find yourself defaulting to what they take into account the bottom threat and easiest-to-defend alternative. In different phrases, they might default to a Brownfield technical improve or a brand-new Greenfield implementation as a result of it looks like the trail of least resistance, not as a result of they did a radical self-evaluation of their wants and enterprise targets and got here to that conclusion. Because of this, they find yourself going via an extended digitalization course of and are available out the opposite finish confused about what profit, if any, they’ve to point out for it.
For instance, 9 occasions out of 10, at any time when we discuss to a enterprise about their No. 1 cause for desirous to migrate to S/4HANA, it’s as a result of they need to benefit from the platform’s superior analytics. That analytics functionality is a big draw for enterprises. Then we’ll hear these similar companies selected a Greenfield method for migrating to S/4HANA, as a result of that clean-slate implementation appeared like the simplest and lowest-risk path. However a Greenfield migration naturally means not carrying ahead any historic information – information you might want to absolutely reap the advantages of S/4HANA’s superior analytics performance. So in these situations, selecting the trail of least resistance was tantamount to picking the trail of least worth.
This is only one instance, however it’s emblematic of a deeper drawback: enterprises seeking to make the soar to S/4HANA, or embark on any digitalization undertaking, with out pondering via why. With out figuring out that “why” upfront, you inevitably find yourself making choices that undermine the ROI you have to be getting out of the undertaking. All too usually we hear from enterprises who commit themselves to a Greenfield or a Brownfield method for S/4HANA migration, after which solely afterward do they ask, “what space of my enterprise will probably be affected probably the most by this?” That’s an enormously vital consideration that ought to be handled as the first step, however ceaselessly it arises solely later within the course of.
Damaging ROI on one digitalization undertaking can undermine curiosity in all of them
In poor health-prepared digital transformation initiatives have ripple results. One digitalization effort that fails to provide worth doesn’t simply exist in a vacuum. If a technical improve, cloud migration, or ERP merge ends in a system that appears the identical as earlier than, with processes that aren’t delivering something new, then the choice makers will see that lack of ROI and lose curiosity in any additional digitalization as a result of they consider the worth simply isn’t there.
Think about an IT group chief saying they need fancy new dashboards and new digital boardroom options. However a digital transformation undertaking that ends with simply implementing new dashboards doesn’t change the underlying info about what sort of information could also be learn on these dashboards. And in case your fancy dashboards begin displaying incorrect information or gaps in information units, you haven’t simply undermined the efficacy and “cool issue” of these dashboards; you’ve additionally made it that a lot tougher to salvage the credibility of the undertaking and advocate for any new digitalization sooner or later. What’s the worth in new dashboards in case you haven’t mounted the info issues beneath?
On the flip aspect of that state of affairs, in case you tagged your worth and your “why” to not cool-looking dashboards, however as an alternative to lowering procurement spend by a sure proportion, then you’ve gotten one thing actual and measurable to point the success of the undertaking. Cool dashboards that don’t work doesn’t let you know something about digital transformation, however dashboards that clearly depict a discount in procurement spend, and ship actual price financial savings and actual worth with that achievement, make for a transparent case of why digital transformation works.
When athletes practice for a race, they accomplish that figuring out the gap they’re going to run on race day and the type of exercises and mileage they should get below their belts to hit that aim. Digital transformation ought to be handled the identical approach. Whenever you don’t have a concrete finish aim in thoughts, your digitalization efforts are going to flounder, and also you’ll don’t have anything measurable to point out for it. However whenever you begin the method by figuring out why you need to remodel, and need worth you need that transformation to yield for, precisely what to work towards, easy methods to work towards it and, most significantly, why you’re working towards it.
Digital transformation isn’t a magic wand that you just wave and immediately there’s the worth. It’s solely by breaking down what precisely you want in transformation – and figuring out the why that the transformation serves ultimately – that you just’ll reap that worth.
Copyright © 2021 IDG Communications, Inc.