HANA migration - On the procrastination of getting your business involved

Dr. Russell Gomersall

While talking to customers preparing for their HANA journey, I often hear a commitment from the IT departments to involve the business. To a point, everyone agrees that it is inevitable. However, the question of when and how to involve the business is disputed. It is obvious that the business will have many questions, while the project management will not be ready to give answers, yet. Open points during the project inception will involve aspects such as brown vs. greenfield, budgets, duration, and approach. 

 

This often leads to procrastinating to involve the business. Sometimes, there is a 'shadow project' for preparation. This neglect of open communication frequently results in duplicate efforts with business and IT initiating parallel investigations that are hard to merge later on. 

 I suggest involving the business as early as possible. 

 Open communication is key, and identifying and involving key stakeholders from both sides will work better the earlier you join forces with them. 

 

It is advisable to set up your own 'business readiness' stream with clear objectives to gather relevant information on current strategic guidelines, operating models, and an inventory of related end-to-end scenarios and their business processes. 

 

As the basis for decisions on brown vs. greenfield, an analysis of pain points and key requirements is essential to effectively challenge the status quo and identify value drivers for the HANA initiative. 

 

Besides gathering crucial information as input for planning and early decisions, timely activation of the business will have a fundamental, positive impact on change management during your project. 

 

So, if you haven't involved your business yet, I suggest you start tomorrow and set up your first alignment. 

 

As bpExperts, this is what we focus on. Using Business Process Management as a true management methodology, we help introduce a process-centric approach, bridging the gap between business and IT, as well as between strategy and operations. 

 

We care, we act, we deliver. 

 

 

Dr. Russell Gomersall

Partner

E-Mail: russell.gomersall@bpexperts.de

Phone: +49 151 222 344 96

bpexperts.de

Why is it important to assess process maturity prior to S/4 HANA transformation?

Dr. Ikemefuna Allen

Building a good business case before embarking on an S/4 HANA transformation is crucial for several reasons. It helps ensure that the transformation aligns with the organization's broader strategic goals and objectives. It also allows you to clearly articulate how the S/4 HANA implementation will support and enhance these goals. A robust business case helps in estimating and justifying resource allocations, as well as assessing risks and quantifying expected improvements in efficiency, productivity, and customer satisfaction. 

 

In building a business case, knowing where your operations stand in terms of maturity will give you a clear baseline against which you can measure desired improvements made through the S/4 HANA transformation. The maturity assessment will help you identify gaps in your current processes that need to be addressed. These gaps could be in data quality, process efficiency, compliance, or technology usage. The maturity assessment will reveal how well current processes are integrated with existing technology, providing a roadmap for what needs to be updated or changed in the S/4 HANA transformation. 

 

A thorough assessment that shows gaps and areas for improvement in processes can help in securing stakeholder buy-in, a critical factor in the success of any transformation project. The insights from the assessment provide concrete data and context that justify the investment. Moreover, knowing the maturity level of your processes will help you better estimate the effort and cost involved in the transformation, as gaps are identified and prioritized to focus on areas that need the most attention. 

 

The maturity assessment can highlight dependencies between processes and other business functions. Understanding these can help mitigate risks during the HANA transformation. The assessment can reveal areas where additional training or change management efforts will be required, helping you prepare your team for the upcoming changes. 

In summary, assessing process maturity is a necessity for aligning goals, mitigating risks, optimizing resource allocation, and ensuring the success of your S/4 HANA transformation. It provides a strategic and operational roadmap aligning your processes with organizational objectives. 

 

We at bpExperts can guide you through all the steps for performing a process maturity assessment by providing: 

  1. A Process Maturity survey 

  2. Advisory and support for survey respondents 

  3. Evaluation of survey results and diagnosis of process maturity 

  4. Detailing of action items and the roadmap required to achieve desired process maturity 

For inquiries on the maturity survey and how to conduct an assessment for your organization, please feel free to contact me. 

 

Dr. Ikemefuna Allen

Senior Manager

E-Mail: ikemefuna.allen@bpexperts.de

Phone: +49 162 28705 38

bpexperts.de

Business Flows meets SAP's One Process Acceleration Layer

Russell Gomersall


After SAP acquired Signavio and announced the One Process Acceleration Layer for SAP solutions and the corresponding beta program, we were thrilled about the opportunities this may have in store for us.

The One Process Acceleration Layer is a practice for better and faster transformations and represents the collective knowledge from thousands of transformation projects SAP delivered over time. This knowledge is conveyed to organizations in the form of value accelerators such as reference business and solution architectures, solution best-practices, business metrics, and thought leadership papers.

At bpExperts our core competence is to support companies in building a process repository including all relevant artifacts and establishing a process driven approach including methodology, required roles, and governance to support the business transformation life cycle.

On its end, SAP’s One Process Acceleration Layer practice will also be driving more organizations to adopt a process driven transformation approach delivering value accelerators which can be explored and consumed centrally, via the SAP Signavio Process Explorer.

From a bpExperts perspective we were anxious about how our Business Flows fits into the equation and can work in conjunction with SAP’s One Process Acceleration Layer practices. Will Business Flows become obsolete with the provision of SAP’s reference content, will it be perceived as a competition or is there a clear added value to be addressed in using both?

After deeply diving into the content and meta-model, we are happy to announce that it is the latter:

We believe Business Flows adds considerable value to customers on their Business Transformation journey and especially in combination with SAP’s content.

Business Flows content has been mapped to One Process Acceleration Layer best-practices so that companies exploring both can find consistency, synergies and added value from a combined use.

Fig. 1 Mapping concept

Fig. 1 shows how we map Business Flows objects to SAP’s content. Let me explain which key elements our framework provides and how they link:

Strategy Framework and Capabilities

Our current strategic framework is based on the idea that companies should identify their core objectives based on SCOR performance metrics (Business Drivers) and link these to the relevant Business Capabilities, as well as their scoped E2E scenarios. Our framework supports this exercise because we have already mapped the Business Drivers to our E2E scenarios and a set of Business Capabilities.

SAP’s content that is now in beta offers insights into the various solution capabilities. We have therefore re-mapped SAP’s Business Capabilities to our Business Drivers and where possible directly to the E2E scenarios. This allows the users to identify which SAP capabilities and solutions best help them achieve their goals and create a high-level solution architecture. With the January 2023 release, SAP will also be delivering its own business drivers, connected to business capabilities, including metrics and best practice content to deliver top to bottom, strategy to execution.

E2E process reference architecture and content

Business Flows offers a comprehensive set of E2E scenarios based on a process library. The scope of the processes covers the typical use cases within industrial companies. All scenarios are organized according to their E2E - Domain (i.e., Order-to-Cash, Procure-to-Pay) as well as a scenario cluster which is a collection of scenarios of a specific topic (i.e., consignment, replenishment etc.). Each scenario consists of a value chain of business processes and interfaces to other scenarios. The whole content is consistent and can be used to scope and rapidly set up a company specific repository. The granularity of our business processes is aligned with SAP's libraries, therefore they fit very well to the value chains provided by SAP's industry content. The industry content is organized into collections such as 'AMG' for Automotive Manufacturing or 'OTC' for the Chemicals Order-to-Cash scenarios. We have created and included a scenario cluster for each of these groups and within the cluster we list each scenario with a link to the original content (see Fig. 2). This allows users to discover the industry specific content and include it in their scope, if suitable. Of course, taking an SAP scenario into scope requires transferring the relevant content into the customer repository and re-establishing the process repository’s consistency. Rebuilding a consistent Business Process library is anyhow a necessary task after scoping and a standard step within our approach.

Fig. 2 Plan to Produce End-to-End scenarios with reference to SAP HCO content

SAP Best Practices

As part of the content provided by the One Process Acceleration Layer, the scope of the solution (e.g., SAP S/4HANA) can be defined with so-called Best Practices (Scope Items). We believe that these Best Practices as defined by SAP have a great value during the process design phase. They help identify Best Practices which can be included into the solution. In Business Flows we have mapped the Best Practices to our repository. The nature of Best Practices, especially the variance on granularity, resulted in a mapping on various levels but mainly on Process Group or E2E scenario level.

Similar to the approach mentioned above, we only transfer the selected Best Practices into the customer repository and ensure a consistent repository. This consistency is especially important when the content is synchronized to the Solution Manager for the sake of solution documentation, test management or using focused build.

Process Driven SAP Cookbook

Walking the talk of SAP Activate and leveraging the content of SAP’s reference content in a Business Transformation initiative does not only require building up a process repository with the artifacts mentioned above. To ensure the 'process driven' approach, it requires coordinating many activities to refine and use the content in a consistent manner across the whole lifecycle.

To guide customers through this process we have created a Process Driven SAP “Cookbook”. In itself, this is a model in SAP Signavio (Fig. 3) which contains all work packages related to the SAP Activate Phase and Stream. They include descriptions of the key activities, involved roles, outcomes and especially guidance on which artifacts of the process repository are used or created.

Fig. 3 Business Flows Cookbook ‘Process driven SAP’

Conclusion

Our current investigation is based on the beta version, and we know that the general availability for SAP Signavio Process Explorer and the related One Process Acceleration Layer practices is actually planned for January 2023 with more content and value accelerators such as performance-driven scenarios being delivered. Nevertheless, even in its current beta state, the SAP’s approach with One Process Acceleration layer providing reference and best-practices content is a great step forward in fostering a process-driven transformation approach and it really lives up to its claim to ‘accelerate’ a business transformation. We also believe that our offering in Business Flows - a comprehensive business transformation framework with process repository and transformation cookbook – adds further value to it.

Call for Action

Please reach out if you want to have a demo on Business Flows in combination with SAP Signavio.

For questions regarding the SAP’s One Process Acceleration Layer visit the SAP Signavio website (https://www.signavio.com/one-process-acceleration-layer/).

Value Driven Business Transformation

How to foster seamless business steering through harmonisation of operating models, value flows and management reporting.

- Ikemefuna Allen & Sabrina Reitz

The situation

Business transformation, in essence, focuses on fundamentally changing processes, systems, roles and technologies across the entire organisation. Such initiatives are founded on the hopes of achieving measurable improvements in efficiency, effectiveness and stakeholder satisfaction. Naturally, the decision to enact business transformation must be based on a sound understanding of the required changes, how to implement them, and what the implications are once they are implemented. It is imperative to take an embracing approach involving and ensuring alignment between all the stakeholders impacted.

Experience shows that this is rarely the case, with disjunct and misaligned efforts from the two worlds of Operations, and Finance & Controlling. Typically, accounting departments are left in the dark about business operations during process design phases of major transformation initiatives, while professionals from purchasing, production planning, and sales & distribution often seem not aware how their business operations impact accounting.

What follows 

The far reaching consequences of misalignment between Operations and Finance & Controlling have been felt at all stages of major business transformation initiatives across many industries. Areas impacted range from process design and systems testing through to hyper-care and running the daily business. To demonstrate this, we present several examples from major business transformation projects, and show how things went wrong.  They demonstrate how an apparently isolated problem can have impacts far beyond the radar of those responsible for implementing and championing the change.

Case 1: Misalignment between procurement, logistics, and accounting impacts system testing

Because involvement of local tax and finance departments into the project happened too late, the entire procurement process for certain materials had to be redesigned during testing phase. While making up for this, realignment across all related streams resulted in extra effort and the risk of delays in  go-live dates.

Case 2: Misalignment between production, procurement, and accounting during process design phase impacts process execution during  hypercare

The weighting step that is executed by a subcontractor was part of a recipe. During the process design, the production team only focused on processes relevant for core business. Therefore, the weighting process was not designed and consequently not configured in the ERP system. There was no account assignment. This problem was noticed during hypercare when the process had to be executed. As a result, no sales order could be created. Compounding the problem was the fact that there was no process concept. The whole life cycle of the process had to be adjusted within a productive environment.

Case 3: Misalignment between logistics, procurement, and accounting during process design phase impacts process execution during daily business

Assignment of logistic expenses to the right positions are critical from an accounting point of view. These involve cost of distributors. Incorrect valuation of cost of sales, cost of production, and time of sales recognition poses a compliance risk involving tax authorities. This can also have COPA impacts (COGS vs Production Costs), causing dissatisfactions of responsible executives in case of variable salaries. During a business transformation project, there was a lack of knowledge on two sides. Logistics was unaware about the fact that such regulation exists, and  accounting unaware about different type of contracts SCM had with its business partners. This problem was noticed during daily business, i.e. after go-live and hypercare.

The way out

 In our Business Flows reference model we demonstrate the real-live integration of business and accounting aspects of enterprise processes. We have compiled relevant content from decades of project experience and modeled these based on established standards. First started as an internal toolbox and training facilitator, our model has reached a maturity we are confident to share externally and that is valued by numerous subscription customers.  Based on our industrial reference content and the profound insight of our partner SR Consulting Professionals in financial and management accounting and enterprise architectures, we have developed a concise and pragmatic methodology for representing both value adding activities and their finance & controlling impacts.

We are ready to help you implementing your transformation with a methodology that works. Consistently.

The solution approach

Value Driven Business Transformation ensures seamless process design and systems implementation through early alignment between operations and Finance & Controlling on key aspects of the business including financial steering, operating models, end to end scenarios and value flows. To accomplish this, we have developed an integrated approach that couples the separated views of operations and accounting. This integrated and aligned business transformation approach allows business steering through harmonization of operating models, value flows and management reporting.

Business strategy forms the basis for aligning the operating model with the business & financial steering model. At this early stage, stakeholder from both Operations & Finance & Controlling come together and detail the future enterprise set-up. Based on the defined E2E scenarios and processes, posting rules are derived for the allocation of value flows.

  • Process specifies the interaction of people and systems when executing business operations.

  • Value flow is the set (scope) of postings resulting from business operations

  • Posting rules are business requirements on how the system is to be configured in order to reflect the business & financial steering model in the context of a given enterprise structure

Deliverables

  • Business & Financial Steering  model

  • Enterprise structure

  • Value flows

  • Posting rules

In Summary 

An Integrated business transformation blueprint bridges the gap between finance, management reporting and operational streams during business transformation initiatives. In partnership with SR Consulting Professionals,  we have a comprehensive consulting offering including domain expertise, proven consulting approach and dedicated methodology. In addition, our reference content Business Flows provides accelerators which help kick-start your initiative. Get in contact now for a personal presentation on details of our offering.

Keep Calm the End of R/3 is Near! Free Webinar - 10.04.2018, 14:30 CEST

- Russell Gomersall

Or how Business Flows helps you from falling off the digital cliff

SAP's announcement to prolong mainstream maintenance until the end of 2025 will reassure SAP customers, that they receive adequate time to migrate to the new S/4 HANA digital platform. Taking into consideration the pressure on companies to ‘digitalize’, this seems like a fair amount of time. On the other hand, experience of past and current business transformation initiatives left many stakeholders uncertain about if or how to proceed with current deployments of SAP’s Business Suite and when best to change to the new technology. Considering this, 2025 seems nearer than you may think.

This will be the reason why many customers are currently evaluating S/4 HANA and rethinking their business transformation strategy.

During evaluations many questions relate to the major shift in technology such as

  • In memory technology

  • Fiori Apps (UI and mobile applications)

  • Cloud

  • Application architecture and integration

To answer this, SAP and implementation partners such as Steeb offer ‘value maps’ with pre-scoped solutions for various industries.

As a starting point we believe this approach is of great value. Nevertheless, one must consider that simplification as proposed by SAP and the shift to new technologies can result in companies neglecting the requirements of their existing organization and processes.

Taking the magnitude of the strategic shift into consideration, we believe the evaluation needs to go deeper in order to answer questions such as

  • What are the core business drivers we want to excel in and how can SAP’s digital platform help us achieve these targets?

  • How much simplification can the company afford and in which areas do we need to stay ‘complicated’?

  • Which deployment strategies fit to my companies setup?

  • How are organization and people impacted by the new technology?

 We recommend to focus on 3 elements in preparation of your S/4 HANA evaluations:

  1. Scope your core operating models by defining E2E scenarios

  2. Define strategic Business Drivers and map them to the scenarios

  3. Define your enterprise structures and deployment entities (regions/countries/sites) and create sub-scopes of your processes

In Business Flows we offer accelerators for this preparation. 

  • Comprehensive E2E business process reference model for industrial enterprises

  • Business/Value driver library

  • S/4 HANA Capabilities (mapped to Scenarios)

  • S/4 HANA Simplifications (mapped to Scenarios and Processes)

With this prepared, you can engage with business functions (experts) from your organisation and S/4 HANA experts (typically SAP or system integrator) to identify fits and gaps of the S/4 HANA solution, elaborate answers to the above mentioned questions as well as define a high level migration strategy. 

In our webinar we would like to present to you our approach to S/4 HANA evaluations based on Business Flows and show examples on how to define feasible scenarios for your migration and identify the key opportunities and threats.
On the bottom line, we believe in the context of 2025 the End of R/3 is Near but you can Keep Calm if you go about it the right way.