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Case Study: Lessons Learned From A Tough SAP S/4HANA Implementation

Three years ago, in advance of commencing a large-scale SAP S/4HANA transformation project, I talked to thirty CIOs to get their best practice advice.

The exercise was invaluable, and full of critical insight and tips often presented by SAP and other expert partners. But the incredible experience of leading a project from inception through go-live has taught me so much more about end-to-end process improvement, organizational change management, operating models, competitive advantage, and real enterprise transformation. The opportunity for a company to digitally transform finance, HR, and operations with the SAP S/4HANA suite is a fundamental value-shift that can easily be squandered if not managed well. And so, there is much to learn from others who have undertaken this journey… and arguably more from the tougher projects.

This post is a quick survey of the more interesting (and often controversial things) I learned along the way; lessons that I know can make SAP S/4HANA projects more successful. All are based on real-life, hard-knock moments, mistakes, surprises, and successes. May these be a great conversation starter for those about to commence their SAP S/4HANA transformation.

Future State Vision and Benefits

First and foremost, the project founders must define and broadly communicate a simple and compelling statement: How will this SAP transformation enable capabilities vital to the enterprise's future survival ? This visioning effort is an important test if the executive suite is aligned. The tighter the vision is tied to strategic survival, the better. Will key leaders trade their current jobs for one in the future state? Will they put their bonuses on the line? This vision will be a north star that will be referred to often in times of trouble and change. Write it down and proudly put it on the wall, on t-shirts, and compensation plans.

Ritualize Reconfirming Cross-Functional Teams on the Vision

Everyone must be aligned and incentivized, including controller, FP&A, revenue, billing, commercial, product, operations, HR, and the C-suite. The goal should be zero detractors from day one. Extra points if all agree on how to mutually manage the inevitable cutover challenges ahead. Alignment means no finger pointing. No one should assume this is going to be easy, or someone else’s problem. Any lingering doubts or reservations will continue to resurface unless leadership demonstrates that alignment is mandatory. Do surveys regularly and confirm all stakeholder commitment often, both in public and private settings.

Build an Enterprise-Shared Vision and a Crisp and Bottoms-Up Business Case

Focus on avoiding benchmarks and top-down index estimates, which will not stand the test of time. All executives must be aligned on the numbers, and signed up personally to deliver. A PE exec once challenged me that a true ERP business case must have a list of employee numbers with exit dates, or it will likely never happen. That’s the detail rigor most organizations will need, as most will find that eventually, they will not have a choice.

Be Resilient Over Time

It is so easy for these epic projects to be waylaid by questions and challenges along the way. It is important to build resilience into your vision, budget, and governance to steer you through tough waters. What if key leaders or executive sponsors go? Can/should it live through organizational and strategy changes? Ownership changes? PE vs. public? Your transformation will undoubtedly need to remain relevant and supported through multiple years of operating plan cycles. It needs to be important and big enough in vision to last five years or more. The strength of your future state vision and the rigor of your business case are the key drivers of the project’s resilience.

Build a Senior Project Management Office

This office should be multi-disciplinary, focused on verifiably changed processes/data, customizations proposed/confirmed/rejected, unanimous approval gates, testing gates, training confirmed, capacity effectiveness, budget and business-case progress. Signal that attendance is mandatory. Document all decisions and votes, especially for customizations. Any software customizations must be publicly PMO-approved with a finance-approved business case, ideally unanimously. Make sure to have measurable KPIs.

The PMO Should Report up to a Steering Committee

Optimally, this committee should be made of those in the C-suite (and ideally, include the CEO, CFO, and COO), a top SAP leader (a key designate from the SAP product; I recommend the President of SAP North America, Lloyd Adams), and a top five systems integrator (SI) executive (ideally a chair/division lead superior to the project team). Compel monthly attendance for these steering committee leaders.

Press for Co-Located IT/Finance/System Integrator Teamwork

It’s important to have everyone work together in person when possible, especially during the design phase. It is too easy for folks to be cheerleaders for transformation that may be quarters and years away… and even more when working remotely and in less-engaged video calls. Insist on in-person, dedicated sessions where participants clearly and publicly articulate how processes and roles will change in the future state.

Document the End-to-End Lead-to-Cash Process

Include sales force automation tool processes, pricing proposals, contracting, and all the relevant boundary systems for provisioning/fulfillment/delivery. Where are there manual processes today? Can they be automated/eliminated in the future? Create a manual work heat map where “human middleware” connects disparate systems and build automation into your transformation business case.

Focus on Finance

Arguably, the most important battleground of a finance transformation is an exhaustive line-by-line revenue/contract operating model review, considering all customers, contracts, products, proposals, and pricing processes. What are the revenue models that will exist in your future state? Don’t lift and shift bad processes here. Do this before you start your project as this may be the hardest and most controversial part. Can you consolidate products and revenue models? Can you reduce variation in contracting, pricing, milestone, and revenue recognition scenarios? Are your largest client revenue models different than longtail smaller clients? Identify your long-term strategic vision for revenue, and design SAP S/4HANA accordingly.

Next, consider whether your revenue recognition accounting is ready to be automated in SAP S/4HANA. You may have overly flexible or manual practices that have been accommodated in your legacy systems that are best not enabled/customized in new technology. Are your teams and executives ready for this discipline? SAP S/4HANA is designed to automate revenue in a lights-out process. It will be controversial to remove ad hoc human intervention in these processes. Engage your auditor/internal audit teams to help identify these scenarios.

It is also important to consider how your new SAP S/4HANA Finance cost planning and reporting ties to your Human Relations Information System (HRIS) or headcount control processes. Are you planning to optimize your current methods? Are finance and HR aligned on how systems should be integrated and normalized? This is not to be taken for granted, in particular, if HRIS and ERP transformations are not happening at the same time.

Experts will recommend that you should “stay standard” and “keep the core clean” by avoiding the customizations of SAP functionality out of the box. Your teams may agree to this in principle , but then be conflicted when it becomes time to actually change current legacy processes. Incentivize and applaud public commitments to legacy processes change during early project stages. Encourage your teams and partners to not just give in to the status quo in what I’ve come to call the “quiet lift and shift.” Insist that your SI push you to best practice, and not customization. It will be much harder to undo later.

Change Management > Technology

If stakeholders do not buy into new system processes, even if the software is perfectly implemented, your project will be challenged with defects and quality problems at cutover. Incentivize key user leaders and train teams early; make sure they are convinced and looking forward to the change. Create detailed bottoms-up procedures for how all finance jobs change. Consider ancillary functions like HR and commercial functions. What must change in commercial contracting? Client expectations? What jobs go away and when? What expertise must be imported? Specific job change management documentation cannot be detailed enough.

Tie SI Compensation to Real Outcome Success Measures

These post-cutover measures are things such as monthly close financial timeliness, billing accuracy and speed, well-trained associates, and defect/manual work elimination targets in the first six months after go-live. This will change the dynamic about readiness to go live and hypercare. Talk to your integrator about other cutovers they have managed, and what their expectations are for yours. Insist that they call your team out if they have concerns about readiness. Experienced SIs have seen it all before, so listen to their stories and insist they bring veterans to your project.

SAP Must Have Skin in the Project

Budget accordingly to afford additional cost here. Even the biggest system integrator firms rarely have all the expertise needed, and multiple perspectives are often useful for complex problems. A best practice is to have your integrator and SAP Services create a mutual RACI for the project, with all designs approved by SAP. Things will go wrong, and you will not want to hear that the design is not standard SAP practice.

Understand the Monthly/Quarterly Close Processes

This is where your stakeholders will first feel the impact of your transformation, and in most cases the first impression will raise questions and concerns. It is vital that key financial report stakeholders understand how information flow may be disrupted and delayed for some time after cutover as defects are ironed out. It is also important that controllership and FP&A teams are fully ready for the new close process. Do all actors in the close process know exactly how their jobs must change on day one? Are they really well trained and comfortable from hands-on testing? Do they all believe and want a successful transformation? Steve Jobs once said this about love, “The one who loves you will never leave you for another because even if there are 100 reasons to give up, he or she will find one reason to hold on.” You need a preponderance of transformation lovers and a few reason-finders for the first few months and quarters.

Highlight Reporting

The SAP Analytics Cloud concept of XPA ( distributed planning and analysis) versus traditional FP&A is compelling. Are executives across your company, and especially your finance colleagues, ready for automated real-time dashboards instead of pivot tables and PowerPoints? How will your finance team operating model change with a well-implemented SAP S/4HANA, SAP Analytics Cloud, and group reporting system? Effective and accurate reporting is a key scorecard item for SAP S/4HANA project success. Like your initial financial close efforts, reporting effectiveness is a key first impression opportunity on your project’s success.

Identify a Data Quality Owner Executive

This executive should be on the steering committee or PMO, with compensation tied to system data quality and availability. Measure data quality success with regular KPIs/validations for transforming the value of your data. Do not accept bad data or the technology (and more importantly, the user experience and change management) does not have a chance. It will be tempting to “fix data later.” Start with where data problems are in your current state legacy system. What workarounds must your teams endure today to fix data? Do folks download extracts and create “the real financials” in pivot tables outside the system? Your vision should correct data in the system automatically and make it available “on the glass.” Your future state vision should highlight how much better you could run the company if you had accurate, real-time, highly available data.

Plan for the Worst-Case Scenario

Be transparent with key leaders to set their expectations. Reporting could be hampered, revenue reconciliation discrepancies could need significant incremental manual work. Monthly close could be awkward and manual for a while, typically months. Communicate clearly and well in advance, and remind everyone about future state benefits. Again, understand your integrator’s experience and best practices for cutover effectiveness, and how they will bring their best efforts to assure your success. Again, engage your auditor, board, and entire C-suite in cutover scenario planning.

Plan for Continuous Improvement

Support, plan, and budget for continuous improvement post cutover, as enhancements and automation opportunities will always be available to make the solution better, faster, and less manual. Invariably, a minimum viable product (MVP) process will limit the full capabilities of the system at launch and require rapid releases in the first few months. Ideally, your team will have developed a depth of new SAP S/4HANA suite architecture skills and the capacity to run and build on your new environment (and enable you to migrate to business as usual and away from your SI sooner). Note that in a competitive environment for SAP expertise, this may take quarters, if not years. Planning well ahead of cutover is important here.

These are but a few of the more interesting lessons that I learned on my SAP S/4HANA journey—and many of these were learned by not getting it right at first, or believing we got it right, only to learn we had more work to do. Growth mindset, metrics-driven leadership, and feedback loops are essential along the path. Leadership’s future state visioning work early on is critical across all of these change management considerations. An SAP S/4HANA migration should be a foundationally transformational opportunity for any company, providing a clean digital core for decades to come. Executive leadership dedication to truly change is essential for this enterprise generational investment to pay dividends.

Recommendation

It’s time to start your migration to SAP S/4HANA, using this all-in-one resource! Get to know the migration paths, processes, and tools. First, explore on-premise, cloud, and hybrid deployment scenarios. Then, understand the steps involved in new implementations and system conversions. Finally, get step-by-step instructions for all the relevant migration tools. From basic concepts to implementation processes, you’ll find everything you need to plan, prepare, and kickstart your SAP S/4HANA migration!

Patrick Dineen is the Corporate CIO and Transformation Office Leader at the Nielsen Company. Patrick's extensive experience in sales management, products, M&A, and corporate finance transformation prepared him perfectly to lead Nielsen’s recent SAP S/4HANA journey. Before Nielsen, Pat held senior sales and marketing leadership roles at Quaero, CSG, USADATA, Claritas, and Equifax. A NYC native, Pat holds a Masters in Business Administration degree in Finance from NYU Stern School of Business and a Bachelor of Science degree in Industrial Engineering from Columbia University.

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Real-World Success Stories: SAP Transformations That Made a Difference

Thomas Carter is a seasoned SAP enthusiast and thought leader with a profound understanding of the intricate SAP landscape.

Are you skeptical about the effectiveness of SAP transformations? Well, get ready to be proven wrong. In this article, we will delve into real-world success stories that showcase how companies like Company X and Company Y completely transformed their businesses with SAP. From improving efficiency and streamlining operations to achieving remarkable results in financial processes, these case studies demonstrate the tangible impact of SAP on growth and innovation. Get ready to be inspired by these detailed, knowledgeable, and analytical success stories that will change your perspective on SAP transformations.

Case Study 1: How Company X Transformed Their Business With SAP

Company X successfully transformed their business with SAP, achieving significant growth and improved efficiency. By implementing SAP solutions, Company X was able to streamline their operations and enhance their overall performance. The integration of SAP’s advanced technologies allowed them to optimize processes across different departments, resulting in better collaboration and communication within the organization.

One key area where the SAP transformation made a noticeable difference was in supply chain management. With SAP’s comprehensive suite of tools, Company X gained real-time visibility into their inventory levels, production schedules, and delivery timelines. This enabled them to make informed decisions regarding procurement, production planning, and order fulfillment. As a result, they were able to reduce lead times, minimize stockouts, and improve customer satisfaction.

Furthermore, the implementation of SAP also had a positive impact on financial management. Company X now had access to accurate and up-to-date financial data at their fingertips. This allowed them to perform more accurate financial analysis and forecasting which helped in making strategic business decisions. Additionally, automated workflows and streamlined processes reduced manual errors and improved overall efficiency in accounting functions.

Success Story 1: Improving Efficiency and Streamlining Operations With SAP

By implementing SAP, you’ve improved efficiency and streamlined operations. The transformation has had a significant impact on your productivity, enhancing your operational performance in various ways.

One of the key benefits of implementing SAP is the automation of manual tasks. With the system in place, time-consuming processes such as data entry and report generation are now automated. This not only saves you valuable time but also reduces the likelihood of errors that can occur with manual input.

Moreover, SAP provides real-time visibility into your business operations. You can easily track inventory levels, monitor sales trends, and analyze customer behavior to make informed decisions. This level of insight enables you to optimize your supply chain management, identify areas for improvement, and quickly respond to market demands.

Additionally, SAP’s integration capabilities have helped streamline communication across different departments within your organization. By centralizing data and enabling seamless collaboration between teams, you’ve eliminated silos and improved cross-functional coordination. This has resulted in faster decision-making processes and enhanced overall operational efficiency.

Transformation Journey: How Company Y Achieved Remarkable Results With SAP

During your transformation journey, you achieved remarkable results with the help of SAP. Company Y’s journey was one marked by significant improvements and positive changes across various areas of their operations. Here are four key highlights that demonstrate the remarkable results achieved:

Increased Efficiency: By implementing SAP solutions, Company Y witnessed a substantial improvement in their overall efficiency. Streamlined processes, automated workflows, and real-time data access allowed for quicker decision-making and reduced manual errors.

Enhanced Collaboration: SAP’s collaboration tools played a crucial role in fostering better communication and teamwork within the organization. Employees were able to seamlessly share information, collaborate on projects, and make informed decisions together.

Improved Customer Satisfaction: With SAP’s customer-centric approach, Company Y was able to enhance their customer satisfaction levels significantly. Integrated systems enabled faster response times, personalized experiences, and improved service quality.

Cost Savings: Through optimization of resources and elimination of redundant processes, Company Y achieved notable cost savings throughout their operations. SAP’s analytics capabilities provided valuable insights into cost-saving opportunities and helped identify areas for improvement.

The remarkable results achieved by Company Y showcase the transformative power of SAP in driving positive change within organizations. Through increased efficiency, enhanced collaboration, improved customer satisfaction, and significant cost savings; they have successfully positioned themselves as leaders in their industry.

Real-Life Example: How SAP Transformed Company Z’s Financial Processes

As a result of SAP’s implementation, Company Z experienced significant improvements in their financial processes. The financial transformation brought about by SAP had a profound impact on the way Company Z managed its finances, resulting in increased efficiency and accuracy.

One of the key areas where SAP made a difference was in streamlining the company’s financial operations. By automating manual tasks such as data entry and reconciliation, SAP eliminated redundant processes and reduced the risk of errors. This not only saved time but also improved the overall accuracy of financial information.

SAP also provided Company Z with better visibility into its financial data. With real-time reporting and analytics capabilities, management gained access to timely insights that enabled them to make informed decisions faster. This enhanced visibility allowed for more accurate forecasting and budgeting, leading to improved financial planning and control.

Furthermore, SAP facilitated seamless integration between different departments within Company Z. Finance, procurement, sales, and other teams were able to collaborate more effectively through shared data and streamlined workflows. This integration not only improved communication but also eliminated silos and duplication of efforts across the organization.

Achieving Growth and Innovation: SAP Success Stories That Inspire

Achieving growth and innovation is a common theme in inspiring SAP success stories. These stories highlight the transformative power of SAP solutions and how they have helped organizations drive innovation and growth. Here are four examples that showcase the impact of SAP in driving inspiring transformations:

Company X : By implementing SAP’s intelligent enterprise suite, Company X was able to streamline its business processes, leading to increased operational efficiency and cost savings. The organization experienced significant growth by leveraging real-time data analytics and predictive insights provided by SAP.

Organization Y : With the help of SAP’s cloud-based solutions, Organization Y successfully launched new products faster than ever before. The agile capabilities of SAP allowed them to respond quickly to market demands, resulting in increased revenue and market share.

Enterprise Z : Through a comprehensive digital transformation journey with SAP, Enterprise Z completely revolutionized its customer experience. By integrating various touchpoints into a seamless omni-channel experience, they were able to enhance customer satisfaction and loyalty.

Start-up A : Start-up A leveraged SAP’s innovative technologies like artificial intelligence (AI) and machine learning (ML) to disrupt their industry. They developed cutting-edge solutions that set them apart from competitors, attracting investors and fueling rapid expansion.

These success stories demonstrate how SAP has been instrumental in driving innovation and growth for businesses across industries. By harnessing the power of technology, organizations can transform their operations, achieve impressive results, and inspire others along the way.

Congratulations on reaching the end of this insightful article! Through these real-world success stories, you have witnessed firsthand how SAP has revolutionized businesses and brought about remarkable transformations. From improving efficiency and streamlining operations to transforming financial processes, these companies have experienced growth and innovation thanks to SAP. As you reflect on these stories, imagine the possibilities that lie ahead for your own business. Let these inspiring examples paint a vivid picture of the potential outcomes that await you when embarking on a SAP journey.

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Digital transformation in a nutshell

Cracking the supply chain strategy in the cloud.

3-MINUTE READ

Call for change

A smarter solution for growth

Blue Diamond Growers is the world’s largest almond supplier and processing company. The co-operative represents more than 3,000 California almond growers, helping them realize the best return on investments while delivering a quality product. It achieves this by innovating to open new markets—a mission that saw it shift from purely supplying raw materials for integration into other products, to packaging products directly for the consumer market. Blue Diamond Growers’ supply chain became incredibly complex as a result, with disjointed spreadsheet systems that made it a challenge to forecast supply and demand. The company realized its growth depended on a smarter, customer-focused supply chain management solution and set about creating one with Accenture.

When tech meets human ingenuity

Pivoting in a pandemic

Accenture collaborated with Blue Diamond Growers to design, build and launch a globally scalable, customer-centric, flexible supply chain planning solution based on SAP® Integrated Business Planning (IBP). Accenture’s virtual training ensured the entire Blue Diamond Growers team was proficient in the solution well ahead of launch. The solution, integrated with the on-premises SAP system, enabled real-time consolidation, validation and analysis of supply chain data, providing greater transparency for planning purposes.

When the pandemic struck, the company switched to a daily planning cycle with a joint SAP IBP and Accenture solution, Supply Chain Scenario Planning-as-a-Service. Simulation scenarios harnessed Accenture templates to quickly extract data and help in the reallocation of Blue Diamond Growers’ nut supply to satisfy shifting demands.

A valuable difference

Forecasting to future-proof

Blue Diamond Growers has transitioned from a disjointed, multi-system spreadsheet supply chain approach to a fully integrated, cloud-based solution that provides a single source of truth for demand and supply planning.

A single dashboard view helped improve forecast accuracy by 10% within the first six months of launch, enabling teams to optimize inventory. Teams spend less time manually sifting through data and can focus on higher value strategic activities. Supply Chain Scenario Planning-as-a-Service helped the company switch to a daily planning cycle to meet increased demand and manage warehouse capacity when local lockdowns hit. SAP S/4HANA® in the cloud is also now live, enhancing Blue Diamond Growers’ analytics and predictive capabilities. Accenture is supporting further projects, including the use of artificial intelligence to predict harvests.