ERP Transformation

To successfully implement your business vision, we recommend undertaking a thorough, yet efficient analysis of your existing system and IT landscape, using AI tools. In our S/4HANA pre-studies, we analyze existing functions and processes, understand the business’ strategy and derive requirements for the future ERP environment. The goal of a holistically thought-through transformation is ultimately to digitise current business processes, optimize them as part of the introduction of SAP S/4HANA, and automate them where useful.

This initial analysis allows for a deeper understanding of required system adjustments during the project. Aspects such as the interplay between different systems, the fundamental structure and architecture of your future ERP system and significant decisions on the hosting environment (private cloud, on-premise, public cloud) and data management are considered.

The selected approach is based on your vision and goals of the transformation. It reflects your corporate strategy and considers the starting point of your transformation.

The brownfield method involves a technical changeover to S/4HANA without any adjustments to the business processes. The bluefield approach allows for selective process harmonization, using proven best practices. A pure greenfield implementation assumes a complete redesign of processes and system solutions. The smart greenfield approach uses digital solutions to accelerate the implementation of industry-specific best practices, including selective process optimization.

Each approach brings particular advantages and disadvantages. The evaluation of risks and benefits is therefore of paramount importance for each transformation. The approach selection should consider time restraints, fit the defined budget, and have a view to long-term potential.

Our recommendation for many S/4HANA transformations is the smart greenfield approach. It offers an optimized cost/benefit relationship between long-term enhancement in value through targeted process optimization and a clearer duration, and clearer costs, for the transformation.

To produce a solid business case, it is critical to clearly identify and quantify the commercial benefit of a transformation. This may include a reduction in the Total Cost of Ownership (TCO), the Return on Investment (ROI), the risk profile, a potential increase in sales, cost savings or improved efficiency.

Our experts will carefully compile an assessment of the benefits, costs and risks that could arise through an S/4HANA transformation for your organisation.

Key factors of the S/4HANA transformation business case:

• A risk analysis looks at possible business interruptions, implementation problems and potential delays.
• The estimate of costs and resources for the project includes financial aspects, personnel resources and impacts on ongoing business activities.
• A consideration of the long-term benefits safeguards the scalability of the system as well as its flexibility for future adaptations and potential competitive advantages.
• Change management is used to plan and budget for measures to implement the transformation, for the acceptance of changes made, and for the training of employees.

Several decisive factors should be considered when planning an S/4HANA transformation project – from the project management structure and the inclusion of all relevant stakeholders through comprehensive cost estimates to risk management and the right communications strategy. A detailed timetable includes milestones, timeframes and resources and is based on an analysis of the current situation, the sought-for target state, and the transformation approach taken to get there.

At this point, it is already important to take fundamental key design decisions to provide a transparent basis for detailed and realistic project planning. One example for this is the targeted breakdown of company codes.

For a successful S/4HANA launch, we will prepare tailored roadmaps and support the entire system changeover. This can be done through taking over existing elements or implementing new, more efficient processes. Furthermore, we provide support for cloud-hosting and can even help with tax treatment of your SAP investments.

It is helpful to take a holistic view of an organization when designing future business processes. This necessitates a thorough understanding of existing processes, to provide the foundation for a successful transformation and truly adding value.

To create economically efficient, innovative and flexible processes, we recommend applying SAP standards whenever possible and beneficial. In the long term, this reduces operating costs and individual programming effort. To support this, we use fit-to-standard practices, clean ERP and clean code, and prudent extensibility governance, and design principles in ERP transformations.

A structured project management system supports adherence to important standards in the design process. Central governance is required to prioritize relevant optimizations in areas such as purchasing, procurement, production, warehouse, and finance.

In the technical implementation, conceptually developed changes to business processes are set up in the ERP system.

In this project phase, the active collaboration between business and IT is critical for a successful technical implementation of the business requirements. Open and ongoing communication during the project helps to create a common understanding of future processes. The digitalized processes are tested to safeguard the quality of the designed solution.

Additionally, this phase includes the complete integration of the process architecture in the system landscape and IT infrastructure. This ensures data consistency and the connection between the new ERP system and remaining satellite systems. Furthermore, cloud applications can be used to optimize costs and foster standardization.

Even in the early phases of an S/4HANA transformation, it is critically important that an organization’s leadership team defines the vision and goals of the new business or technology transformation. Additionally, these goals need to be communicated clearly, and the top management has to actively support the change, to ensure a successful transformation.

We recommend that the specific benefits of the S/4HANA transformation are clearly set out for each organizational unit, and that all affected leaders and employees are supported in terms of both communication and training measures.

A core element of the acceptance of new systems is confidence in their use and a recognition of their advantages. Both are ensured by involving the primary users in the process design at an early stage. In addition, training courses and support from employees help to ensure that change is accepted when the new SAP ERP system is being implemented.

Decisive factors for a successful go-live include precise cutover planning and a reliable hypercare phase.

The cutover plan defines and tests clear responsibilities and a logical sequence for the changeover to the new system. After the go-live, the stable operation of the new system is safeguarded by the hypercare phase. We support our customers with the sustainable application of new procedures and business processes. This is an important interim step from the implementation of a new S/4HANA solution to the transfer to your application management service provider.

For global rollouts, incremental localization for each country and each region is indispensable to meet local legal and fiscal requirements. We can support your successful SAP implementation with our global PwC network, our knowledge of local regulations and regional hubs with SAP experts.

Throughout the entire project, the project management and the steering committee must keep a close eye on the objectives of the S/4HANA transformation. The achievement rate, particularly with respect to TCO reduction and improved productivity, should be checked regularly.

Some goals can already be achieved in the pilot and introduction phase, while others are not realized until after the new solution has been fully implemented. This is particularly the case for procedural changes and for the digitization of business processes.

We support the management of the transformation to continuously monitor the implementation of your goals. We will also report on progress and flag any risks throughout the transformation.