Part 2 - On Your Roadmap to SAP S/4HANA: There Are Opportunities Too Big To Miss!
In Part 1 of this series of articles we highlighted the importance of not missing out on the valuable opportunities along the journey to S/4HANA that should not be missed. In Part 2 we will focus on the benefits of re-standardizing and minimizing custom code to ensure that the migration process is completed with minimal cost, duration and risk whilst ensuring the resulting HANA implementation is best positioned to deliver maximum value, through well aligned business processes and minimised ongoing support efforts and cost.
As most SAP landscape has evolved over a period of years, new releases have often been implemented as technical upgrades, with little or no implementation of updated SAP best practice business processes. Overtime these systems have deviated far from the latest standard software. West Trax analyses indicate that they are generally characterized by high levels of custom code that is rarely or never used, or could be readily replaced by additional standard functionality provided in later releases. Carrying unnecessary custom code forward to S/4HANA will increase migration and ongoing costs and risk, with the potential to impair the benefits of the business processes optimized for the new environment.
In order to reap the maximum benefit from the journey to HANA it is imperative to establish solid facts about the system’s current maturity and optimization levels and then quantify the costs and benefits associated with actions to optimally position the system along the journey.
Benchmark data from over 1,500 West Trax analyses highlight that many SAP systems recorded low levels of standardization and high levels of customization. Re-standardizing these key business processes as part of the roadmap to HANA and S/4HANA will result in significant savings and added value at each step of the journey - before, during and after migration. Gains may also be realized by reducing redundant customization and data. These opportunities exist in most SAP systems, regardless of whether the plan is to migrate to HANA in-house, in a private cloud, public cloud or SAP cloud. The following examples illustrate the scale of opportunities that exist to reduce customization as indicated by West Trax benchmark data.
Fig. 1 shows average levels of customization recorded by industry, typically in the range of 20 to 50%. The Measured Best Practice benchmark values confirm that within each sector some SAP systems have significantly reduced customization and increased the use of already installed standard functionality and improved the ROI from SAP investments.
Similarly, Fig. 2 shows the remarkably high levels of unused custom code in some systems in every sector, whilst in other systems the customers have managed to keep unused custom code to a minimum. Several of the Measured Best Practice values recorded above are the result of system optimization projects based on the results of West Trax analyses.
The levels of used and unused custom code shown in Figs. 1 and 2 indicate that in many systems substantial untapped opportunities exists to reduce operational and support costs, improved process efficiency, reduced risk and improved ROI. Importantly, systems with minimized custom code will be optimally positioned to fully benefit from projects such as HANA migrations, consolidations, mergers / acquisitions and re-sourcing. These valuable opportunities are often overlooked due to a lack of awareness and objective facts.
Additional benefits may be gained by analysing the number of document types in the system and their usage. Systems analyzed by West Trax often contain many versions of document types such as sales order or delivery types. But the analysis shows that in practice only a small percentage are ever actually used. Many are implemented in custom code and often could be replaced by standard document types provided by SAP in subsequent updates. Those that are unused can be removed to reduce ballast, complexity and cost.
The West Trax Maturity Model© (Fig.3) has been developed to provide a sound basis for decision making. The maturity level of an SAP system is determined in terms of its future readiness and the likely benefits of investments in new technologies and projects. West Trax uses its Maturity Model to show clients how they can gain optimum return on SAP investments in the future, based on independent, accurate and reliable facts.
The West Trax Maturity Assessment provides solid facts for all SAP Customer Executives and Service Providers when planning to prepare SAP landscapes for the introduction of advanced technologies and major lifecycle changes. These include in-memory, S/4HANA, Mobile Computing, Big Data, Cloud, Real Time Business, Internet of Things etc.
The Maturity Assessment provides an objective determination of the "As-Is” situation and defines clear client actions to be taken to achieve the desired goals and benefits. It provides complete system transparency and essential facts for all executives and service providers when planning to prepare SAP landscapes for the introduction of advanced technologies and major lifecycle changes. Resulting projects can be carried out with a reliable Business Case based on facts.
The West Trax methodology is unique in that it rapidly provides the client with the results of a risk free, automated, off-site analysis with minimal effort and disruption. No software is installed; no interviews or user questionnaires are required. Having performed over 1,500 SAP system analyses West Trax has a wealth of real use cases that cover a wide range of functions and industries.
Based on West Trax benchmark data the spread of maturity levels in SAP systems is truly pyramidal. Far more systems exhibit lower maturity levels, with markedly fewer positioned at the higher levels. Establishing a system’s maturity level provides an invaluable baseline for any business planning its HANA migration roadmap. It offers a valuable opportunity for a long overdue review of its business systems and reorientation of them with changing business goals. Perhaps it is time to closely scrutinize how well long-established processes fit with the organization’s needs in the era of digital transformation.
Please contact West Trax CTO, Diana Bohr, to find out more about how a West Trax Maturity Assessment could help you to position your SAP system(s) optimally for the future.
In Part 3 of this series of articles West Trax will explain in deeper detail how SAP customers can rapidly and economically acquire solid, facts that will help them to identify and fully exploit the untapped opportunities discussed above.