What Can the Program Management Office Do to Remove Risk from an SAP S/4HANA Implementation?

A traditional SAP S/4HANA transformation project has many decision points including strategic ones, such as choosing between a system conversion (brownfield), a new implementation (greenfield) or a hybrid approach and whether to move to the cloud or stay on-premise. There are key decisions related to handling custom developments, business process changes and reporting and analytics needs. These decisions and discussions usually take center stage during the initial stages of a project, but the program management office (PMO) should also consider some key workstreams and high-risk areas across projects that can have a major impact on the success of the overall program. The PMO can typically have a positive impact on these key areas, and we will discuss how these can reduce the overall risk of an SAP S/4HANA project in more detail below. The key areas we will focus on in this discussion include:

• Resourcing – Ensure that the right people are in the right roles at the right time
• Program governance structures – Establish the program governance model and change control process structures to help remove obstacles, drive quick decisions and issue resolution and to manage scope effectively, so the project team can focus on execution
• Business involvement – Engage the business early, the sooner the business is involved, the better
• Security and controls – Ensure data is secure and only accessible by those that should be accessing it by using a robust set of best practices and applications
• Data migration and reconciliation – Start early, then get the team in place and committed to the project ahead of the project start.

Resourcing

Resourcing is one of the top risks the PMO should address when starting the S/4HANA transformation journey. This ensures the right people are in the right roles and a backfill is assigned to perform their day-to-day jobs. The key is to free them up to support the engagement at/or near full-time. Having the correct resources in place allows the project team to build the proper foundation and helps ensure successful outcomes for the business transformation.

Committing the right resources in the initial phase reduces the risk of making poor design decisions or missing key requirements. Ideally, these resources have a strong understanding of the system, not only as it is today but where improvements can be made and where processes can be optimized. The benefits continue through the build phase as all these decisions and key requirements map to the testing plan and lead to proper testing of the system. Quality resources understand exactly what they are looking for when testing the system and can quickly identify when something is not as expected.

Resources are a critical building block to any project, and if the right resources are not in place a project can quickly flounder. It is up to the PMO to identify resourcing issues early and move swiftly with changes if necessary to help keep the program on track. Be judicial in selecting the resources that will contribute the most to the desired outcome. If it does not hurt to commit someone to the project for an extended period, he or she is probably not the right resource. Remember, the organization is building a system to support the business well into the future and should commit its best and brightest people to this process.

Program governance structures

Ensuring critical program structures are in place throughout an S/4HANA project is a necessity. If the PMO does not have a solid program governance model in place, it will impact the rest of the program and the team’s ability to execute and achieve desired business goals. A well-designed governance model reduces the risk of lingering issues, decisions and action items. A lack of attention to driving these items to closure and managing risk often causes programs to go off-track and, as items stack up, often leads to delays and cost overruns. The PMO understands the business transformation goals and knows that implementing the right governance model can help keep the team’s focus on ensuring that goals are front and center throughout the project.

Having a solid program governance model in place will also reduce the risk of scope creep. Scope creep is one of the biggest challenges the PMO will face throughout the program. The possibilities for scope creep are endless and this risk can arise in any meeting. Not only does this increase costs, but it can cause huge project delays if it is not mitigated early on. Manage this challenge by having a proper change control process in place that allows project leaders to understand any new proposed scope changes and the impact those changes would have on the project timeline, resources and budget. Establishing a solid governance model and effective change control process are key in reducing overall program risk and will help to drive a successful program.

Business involvement

The sooner the business gets involved in this S/4HANA transformation journey, the better. It is always a good idea to pull key activities forward, where possible. In typical waterfall projects, business users do not get heavily involved and really do not see the S/4HANA system until the testing phase. At this point, it is frequently too late to make any changes without a significant impact on the project timeline, cost, resources and budget. We prefer an agile-like sprint-based approach and we look to bring the business into the mix during the build phase.

Working in a sprint-like fashion allows small increments of the system to be built and played back to the business in three to four-week increments. This allows the business to see design decisions and key requirements much earlier in the life of a project, which can lead to early defect detection and allows time for changes if required. This early detection and remediation significantly reduce the risk of impacting the timeline or budget of a project. This not only gets the business comfortable with the system and design they helped with but also helps provide a baseline understanding of the system before the test phase. Assuming adequate business involvement during the build phase, the business users are better equipped to execute an effective testing process. They are generally more aware of the system and the basic flows, having walked through them before, and know what to look for as they execute the test scripts. The early involvement of the business reduces the risk of missed requirements, ineffective testing and poor end-user adoption and sets the project up for success.

Security and controls

Common oversights in many S/4HANA implementations involve system security and internal control requirements. Functional readiness always seems to take top priority, leaving the technical security and compliance workstreams crunched for time as they look to build out and test deliverables prior to go-live. Oversights made during the rush to go live can cause compliance gaps which will be discovered during post-implementation audits, and it can create the need for redesigns to remediate risk exposure which can be costly. Management involvement early and often is the best way to de-risk this item by making sure the proper resources are in place. Checkpoints at key milestones throughout the project timeline can ensure that this stream is on track as well. Developing a strong relationship and collaboration between the functional workstreams, financial compliance and internal audit teams can create that shared responsibility as they work successfully towards completion of the security and controls deliverables.

Data migration and reconciliation

One workstream that is almost always on a project’s critical path is data migration and reconciliation. Insufficient data knowledge and planning is one of the most common reasons for additional project costs and delays. Companies who are on their S/4HANA transformation journey often have data coming from multiple sources and the amount of data that needs to be cleansed and migrated can be underestimated and become a huge challenge for the project team. Data migration is a daunting task but getting in front of it early with dedicated data owners for each object, dedicated IT resources for extraction, cleansing and transformation, and a clear migration strategy, helps to reduce the risk associated with this workstream. Keeping the data migration workstream on track allows for proper testing during integration and UAT test cycles where actual data can be used to help validate data quality and system functionality. Well-executed mock cutovers ensure the cutover plan is well-defined and helps to minimize the cutover window where systems are frozen and locked out. Proper planning and execution of the data workstream allow a team to thrive and helps to ensure a successful go-live.

The program management office (PMO) can significantly reduce program risks and set itself up for success by focusing on and acting on the highlighted areas above. Understanding these early project risks is one of the first steps in proactively identifying ways to manage this S/4HANA transformation journey and achieve – or accelerate – business objectives.

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