Putting the Pieces Together

By Fred Donovan, Senior Editor, SAPinsider and Rizal Ahmed, Chief Research Officer, SAPinsider

Key Takeaways

• The company should understand its overall strategy and IT pain points before choosing an SAP S/4HANA migration method.
• Most customers often underestimate the complexity, time, and effort that goes into an SAP S/4HANA migration.
• Once the migration is complete, firms should test the functionalities and training employees on their use.

While the deadline for organizations to migrate to SAP S/4HANA is not until 2027, many SAP customers have already migrated or plan to migrate in the coming years.

According to SAPinsider research, the uptick in activity is driven by several factors including the need to reengineer business processes and address poor configurations as well as the increasing business demand for more innovative technology solutions. Rapid organizational change including a rise in mergers and acquisition activity is also forcing companies to consolidate and harmonize existing IT landscapes.

Recently SAPinsider sat down with Lorenz Praefcke, CEO of CBS Corporate Business Solutions America, a service provider who specializes in helping SAP customers navigate the transition to SAP S/4HANA

Find and Reconcile Your IT and Business Pain Points

Praefcke explains that his firm begins its consulting work by discussing the strategic objectives of the SAP S/4HANA migration with the senior management of the customer. CBS wants to understand what the customer requires and what their IT and business pain points are before there are technical discussions.

“We help customers figure out the value of SAP S/4HANA migration, not from a technical standpoint only, it’s more about business value,” he says.

CBS follows a unique methodology for helping customers understand and create a business case for change. It starts with intimate workshops with the highest decision-makers as well as representatives from both the business and IT teams at the outset of the project. CBS leverages what it learns in these conversations and applies technical tools to help analyze transaction usage, existing processes, and data.

This detailed and comprehensive analysis is necessary not just to build the business case for SAP S/4HANA but also to select the right migration method.

There are three primary methods to transition to SAP S/4HANA: new implementation (Greenfield), system conversion (Brownfield), and selective data transition. According to a recent research report by SAPinsider,  there’s no one method that’s winning over a majority of customers. In our study published in June of 2021 42% of SAPinsider members are choosing Brownfield, 38% plan to go Greenfield, and 16% are gravitating toward selective data transition.

“It is really key that you understand the business pain points before you select a migration method,” he stresses. This is important because SAP offers several deployment options.

“Before you decide on when and how to move to SAP S/4HANA, you need to understand your deployment options because this has a deep impact on how you would transition,” he explains.

CBS offers customers predefined deployment packages that can be used as building blocks to suit their specific requirements. “Every customer is unique. There is not a single solution that fits everybody,” Praefcke says.

While CBS can help customers with all the above deployment options, one of their specialties is supporting the selective data transition where they have honed both their expertise and developed unique tools and services.

What You Need to Understand about Selective Data Transition

Praefcke explains that the selective data transition represents a mixture of implementing from scratch new functionalities while migrating the rest of the systems with only minor modifications. The approach requires highly sophisticated technology to accomplish.

Only four consulting firms in the world have the technology to carry out selective data transition, and CBS is the only one that can complement this with management, functional, and business process consulting, to deliver full-scope SAP S/4HANA projects out of one hand, Praefcke says. Customers underestimate the complexity of S/4HANA migration and the time and effort for testing and change management, he says.

“There are a number of things that come with SAP S/4HANA that are mandatory. These things can be done upfront. You don’t have to wait to tackle those mandatory things before you go into a project. You will have a much easier move to S/4HANA later,” he notes.

Unfortunately, some customers want everything in one project. They want all the new functionality coming up right away. “This introduces a lot of complexity into the process,” he adds.

Praefcke favors figuring out “what is helping out the most right now and bringing the biggest value. Bring these functionalities online first with the SAP S/4HANA move and leverage the additional S/4HANA functionality later.”

Testing the new SAP S/4HANA capabilities is also needed. The migration brings a lot of new functionalities, processes, and organizational changes. Testing must be done by the company, not the consulting firm.

“If you’ve used an old transaction process in SAP ECC and now you are using SAP Fiori and you go from a traditional material requirement planning (MRP) run to MRP Live, which is Fiori based. This means that the roles and responsibilities of people working with MRP Live will be different. This is a big thing in terms of change management, which involves employee training and a change of mindset,” he says.

Praefcke recommends doing the training along with the implementation project.

CBS provides its customers a “playground” to see what the new functionalities might look like in the future. It uploads data from the company into a standard SAP S/4HANA system, and they can work with their data inside of the SAP S/4HANA system. “This helps the customer understand where they need to do change management and training,” he adds.

In terms of the benefits of SAP S/4HANA, one of CBS’s customers, a large German manufacturer, gained millions in additional cash flow, reduced time for material requirement planning runs significantly, reduced their z-codes by 60%, and gained speed in processes by renovating its customer relationship management and sales and distribution tools.

What Does This Mean for SAPinsiders

• Drive your SAP S/4HANA Business Case from Both Sides: IT and Business. Pain points are a great place to start, but make sure you are focusing on pains that are linked to the strategic priorities of the business. Once you have a clear understanding of your strategic goal and pain points, then you are better able to make decisions on SAP S/4HANA deployment.
• A phased SAP S/4HANA implementation can reduce complexity and make the migration more manageable. Go where the value is to set your priorities. You should figure out what functions are bringing the most value to your company and migrate those first. Then, you can level other functions later.
• Double down on our investment in SAP S/4HANA testing. The migration brings many new functionality, processes, and organizational changes. Testing needs to be done by the company migrating to the new system, not by the consultants.
• Train your employees on the new functionalities during the implementation project. This enables your employees to get familiar with them early on, reducing the disruption caused by the new processes and improving change management.

About CBS Corporate Business Solutions America:

• Headquarters: Devon, Pennsylvania (parent company is headquartered in Heidelberg, Germany)
• Revenue: 123 million US dollars (parent company)
• Employees: 700 employees (parent company)
• Company details: CBS Corporate Business Solutions America is a systems integrator, providing transition programs consisting of IT strategy consulting, business process, and SAP functional consulting services.