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As more and more companies complete the initial move to SAP S/4HANA, we are starting to see some common challenges. Many have been focused on getting to the S/4HANA platform quickly. either through rapidly deployed greenfield implementations with limited enhancements, or brownfield migrations to minimize risk. In both approaches, much of the anticipated benefits were either pushed, or planned into future phases. In other words, the focus was to get on the platform and stabilize, and then optimize from there. The challenge is where to start that optimization. Based on our interactions with our clients, prospects, and partners, we recommend considering the following as a next step in the transformation journey:
- Process optimization – Enabling new functionality available in S/4HANA, Automation (RPA, ML, AI)
- Centralization – Revisiting operating model for more efficiency
- User Experience – Fiori
Post go-live in your new S/4HANA environment, one of the quickest ways to generate more value from the investment is to look for opportunities to enable new features/functionality and automate or streamline and harmonize existing processes. SAP S/4HANA provides a platform to rapidly execute on the above approaches through rapid sprint-based projects that help to accelerate time to value and reduce overall program risks.
Often extending the solution to add new features and functionality can help to quickly achieve tremendous value. These targeted engagements focus on adding incremental benefit through leveraging functionality that was previously done manually or in other third-party applications. Where appropriate, consolidation into the S/4HANA environment can help to reduce processing time and system architecture complexity and ongoing support costs. We have seen this to be as simple as adding workflow to a process that requires approval, to enabling full modules within the S/4 environment. On a recent engagement, we were able to spin up basic procurement functionality to help improve visibility into spend and establish a foundation for a global corporate standard and eventual shared services capability. This can also extend into tools such as advanced analytics, artificial intelligence, and machine learning to improve supply chain, finance, and other critical business operations.
Next, look for opportunities to automate and streamline processes. This can be done in several ways, and again, can be as simple as automating bank interfaces and reconciliations to building out RPA tools for cash applications, journal entries, and other repetitive functions.
Leveraging SAP S/4HANA’s digital core provides several methods for automation as shown below.
We recommend utilizing narrow and well-defined scope when automating processes so that a proof of concept (POC) can be quickly built and tested. This POC can then be further enhanced and extended in future sprints.
When trying to derive more value out of the SAP S/4HANA environment, it is important to look at the operating model. Many of our clients have been able to leverage the SAP S/4HANA system to centralize processes and enable shared services models that have helped reduce cost and improve service levels across the organization. By centralizing key process areas, we can more easily standardize processes and reduce complexity. We have seen clients derive a tremendous amount of value from centralizing procurement processes to improve visibility into actual spend, improving spend management and improving pricing by consolidating to fewer vendors to source higher volumes at steeper discounts. Similar benefits can be achieved across finance by centralizing accounts payable, accounts receivable and general accounting functions, and within human resources and other business support functions.
Another key area to identify and drive value from an S/4HANA investment is to consider improving the user experience.
With SAP Fiori, businesses can realize a harmonious experience across all devices within the SAP Fiori application suite. SAP Fiori not only enhances the user experience but also increases efficiency.
At its core, SAP Fiori is based on five principles: to provide a role-based, adaptive, simple, coherent and delightful user experience. With these core principles in mind, it is possible to begin to explore areas where Fiori might improve the user experience.
With Fiori, benefits can be seen by simply enabling standard Fiori screens to streamline data entry or data analysis or to build custom applications to simplify processes that may require multiple systems or screens to retrieve information. Fiori also lends itself to quick wins by identifying clear and narrow scope that can be executed quickly. We have helped our clients derive benefit by consolidating several backend systems into one Fiori screen to help quickly enter order information or check on order statuses, allowing for improved customer service and faster processing. We have also helped our clients build Fiori applications that have improved collaboration, simplified data entry and improved access to KPI’s and critical reports.
The key to realizing more value is to review the areas described above and develop a list of optimization opportunities. Once identified, this list can then be further refined by determining the anticipated benefits and costs for each opportunity, looking for options to consolidate similar opportunities and then prioritizing the list of initiatives based on impact to the business. Once that is complete, the organization can develop a roadmap to begin executing in rapid sprints quickly showing results and improvements.
We recently went through this process with a client in the consumer products industry and are now working with them on a prioritized list that includes initiatives for process optimization, centralization and improved user experience, etc. We are helping them to derive more value from their system by:
- Quickly spinning up new functionality in finance and procurement by leveraging SAP S/4HANA best practice processes
- Automating processes and streamlining repetitive tasks including bank interfaces and integrations with other core systems
- Establishing a platform and standard process to centralize procurement functions
- Improving user experience by implementing Fiori applications to streamline data entry and workflow approval processes
- Implementing SAP Analytics Cloud (SAC) and other reporting to increase transparency and support business functions and decision making.
The client is already seeing benefits, due to the sprint-based nature of the work and we are already discussing additional areas where more value can be tapped.
Remember, the move to SAP S/4HANA is a journey and not a destination. With relatively small incremental investments, organizations can continue to get more value from the SAP S/4HANA environment. In many cases, these improvements can be self-funding and help to improve service levels, agility and the customer and user experience.