How to Avoid Losing Control of Your SAP S/4HANA Transformation

Written By: Eric Kimberling
Date: March 18, 2019

Over the last 20 years, I have seen plenty of organizations lose control of their SAP implementations. These projects tend to be bigger and more complex than many organizations can handle, which is why there are so many SAP failures like those at Lidl, National Grid, Haribo, and other publicized challenges in recent years.

Common problems with SAP S/4HANA transformations

There are two major problems with S/4HANA transformations, which often lead to losing control of the initiative. First, SAP software is very robust and complex, which requires a small army of consultants and system integrator resources to help implement. When your team is outnumbered by outside consultants, you will inevitably lose a certain amount of control and visibility into the project.

Second, the relative lack of functional maturity, complications integrating to SuccessFactors and Ariba, and other challenges with this new flagship product further exasperate the first problem. This requires more manpower and learning on your dime – which can lead to inflated system integrator implementation costs. These two challenges combined are very real forces that need to be reckoned with if you are going to retain control of your transformation.

The good news is that some of our more forward-thinking client organizations have found ways to effectively navigate these challenges. Instead of letting the SAP transformation just happen to them, they proactively take control and find deliberate ways to effectively manage and put guardrails around the transformation. They also understand the ways to get their system integrator under control.

Below are a few of the best practices and lessons from current SAP S/4HANA implementations:

Build internal SAP competencies so that you can be on equal footing with your SAP consultants

The first thing is to establish internal SAP competencies as part of your plan for a successful S4/HANA implementation. Ensure your IT staff becomes well trained on S/4HANA technology, your functional core team members are trained on S/4HANA functionality, and that you build documentation to memorialize this tribal knowledge. The more you can build your internal competencies, the smoother your transformation will go and the sooner you wean yourself off your system integrator.

Ensure that your strategy, operating model, and culture drive the SAP S/4HANA implementation – not the other way around

There is a common belief that S/4HANA’s software “best practices” will help determine your future state operating model and culture. Don’t fall into this trap. Your business, operating model, culture, values, strategy, core competencies, and other components of your business should drive the S4/HANA transformation – not the other way around. The most successful transformations take the time to define their future state, which drives down the time and cost required from your system integrator.

Don’t cede control to your SAP S/4HANA system integrator

One of the biggest mistakes is to hand complete control of the project over to your system integrator. Yes, they probably have a deeper competency in SAP than your team does, but you need to be the one to manage their resources, expectations, and deliverables. They should report to your project team rather than managing the overall project. And if things aren’t working out and can’t be remediated, don’t be afraid to fire your SAP system integrator.

Beef up your internal PMO to better manage your SAP S/4HANA transformation

Your overall transformation should be treated as an overall program with clear governance, project controls, and expectations for various resources. Your system integrator resources should be just one set of resources that report up to your internal PMO, and your system integrator should not be the one providing overall SAP implementation quality assurance. There are plenty of areas that system integrators aren’t good at, so you may need to augment these deficiencies with independent third parties such as those at Third Stage Consulting.

Bottom line: your team is the key to a successful SAP S/4HANA transformation

The good news is that the key to your transformation success is looking straight at you in the mirror: it’s your own team. The better you can manage the S4/HANA software and SAP system integrators, the more likely you are to experience a successful SAP S/4HANA implementation.

Eric Kimberling
Eric is known globally as a thought leader in the ERP consulting space. He has helped hundreds of high-profile enterprises worldwide with their technology initiatives, including Nucor Steel, Fisher and Paykel Healthcare, Kodak, Coors, Boeing, and Duke Energy. He has helped manage ERP implementations and reengineer global supply chains across the world.
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