On Your Roadmap to SAP S/4HANA: There Are Opportunities Too Big To Miss!

2016-11-15 10:37am

The Challenge
Today SAP customers are constantly being reminded of the benefits to be enjoyed when their ERP systems migrate to the brave new world of S/4HANA. The benefits offered by the new technology are not in doubt, but valuable opportunities along the journey should not be missed. The migration process should be 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.

In some organizations the SAP landscape has evolved over a period of many years. During this time new releases have often been implemented as technical upgrades with little or no implementation of updated SAP best practice business processes. As a result the systems have deviated far from the original standard software. Experience shows that such SAP systems are generally characterized by outdated processes, high levels of customization, low automation levels, redundant data storage, an incompatible infrastructure and insufficient monitoring and servicing of processes.

Systems with such low maturity levels may not meet with the preconditions for a beneficial HANA implementation. The potential costs, time and risks may not yet have been recognized and quantified, a critical issue to understand fully before preparing a HANA migration business case and project plan. In order to reap the maximum benefit from the roadmap to HANA it is imperative to get the facts about the system’s current maturity level and the costs and benefits associated with opportunities to optimally position the system along the journey.

The Evidence
Benchmark data from analyses by independent analyst, West Trax, indicate that many SAP systems recorded low levels of standardization and high levels of customization. Even in Enterprise Areas which have been heavily supported by standard SAP functionality, the percentage of SAP code already available in the system is often far from optimally deployed. Re-standardizing these key business processes as part of the roadmap to HANA and S/4HANA will result in significant savings and added value before, during and after migration. Similar gains may be derived from improving process efficiency, reducing redundant customization, objects, documents and data. These opportunities exist in most SAP systems, regardless of whether the plan is to migrate in-house, in a private cloud, public cloud or SAP cloud and even if a HANA migration is not planned. The following examples illustrate these possibilities.

Fig. 1

Fig. 1 shows average levels of standardization recorded by industry, typically in the range of 50 to 60%. The wide variation in benchmark values confirms that many SAP systems contain untapped potential to significantly increase the use of already installed standard functionality and improve the ROI from SAP investments.

Similarly Fig. 2 shows, by Enterprise Area, examples of the remarkably low levels of used standard functionality compared to that available already in a system.

Fig. 2

The percentages shown in Fig.2 are not a benchmark value. They are an example of actual figures recorded for one client. In many cases we have seen considerably lower deployment levels.

The levels of standardization and deployment shown in Figs. 1 and 2 indicate that in many systems business processes are being supported by custom code, legacy systems, third party software or manual processes. With the latest releases of SAP many of these non-standard solutions could be re-standardized with substantial reduction in operational and support costs,
improved process efficiency, reduced risk and improved ROI. Importantly, re-standardized systems will be optimally positioned for future projects such as HANA migrations, consolidations, mergers / acquisitions and re-sourcing. These and other high value opportunities are often overlooked.

Additional benefits may be gained by analysing the number of document types in the system and their usage. Often systems contain many versions of document types such as sales order types or delivery types. But analysis may show that in practice only a small percentage are ever actually used and many of those are implemented in custom code. Often these could be replaced by standard document types provided by SAP in subsequent updates.  Another opportunity to reduce costs and complexity may be found in the area of redundant data. Some systems contain large amounts of historical data that are no longer accessed. Archiving these could again help reduce costs and complexity and contribute to the goal of a lean and efficient system with minimised costs, improved transparency and increased reliability. Migration costs to HANA / S/4HANA will be minimized, time scales, effort and risk reduced and business value maximised.

The Solution
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 investment in the future, based on independent, accurate and reliable facts.

The West Trax Maturity Assessment is aimed at all Executives or their Service Providers 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 / or their 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.

Fig. 3

Based on West Trax benchmark data the spread of maturity levels 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 long-established processes fit with the organization’s needs in the era of digital transformation.

In Part 2 of this series of articles West Trax will demonstrate in more detail how SAP customers can rapidly and economically acquire solid, facts that will help them to identify and fully exploit
these untapped opportunities. Click here to receive Part 2 TOO BIG TO MISS.

Alternatively 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.

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