Organizational change is a key component of any SAP S/4HANA transformation or implementation of any of the top ERP systems. But too often, organizations limit their scope of change to myopically focus on end-user training.
When we are close to the day-to-day details of a digital transformation, we assume that we just need to train people once we figure out the new processes and technologies. But while we spend months or years working through these details as part of a transformation team, other employees are left in the dark. They need much more than a few days of training before go-live.
There are a number of problems with this flawed traditional approach to SAP S/4HANA change management. First, it neglects the many dimensions of change required to move employees through their transition. This is a key reason for the SAP failure at Lidl, the SAP disaster at Revlon, and other recent ERP failures – many of which engaged our team to provide SAP expert witness testimony during their lawsuits.
The second problem is that many change management efforts are outsourced to SAP systems integrators who don’t necessarily understand the software. It’s a relatively new software that has only been on the market for a few years, so relatively few consultants have full lifecycle experience on multiple projects. Worse yet, these same SAP consultants can’t effectively manage change if they do not effectively understand the impact or nature of the changes.
Finally, SAP’s Activate methodology doesn’t adequately address organizational change management, either. Not that it necessarily should, as it is a software deployment methodology rather than a transformation toolset. But this puts the onus on SAP customers to manage the organizational change components of their projects.
So how does a project team address the complex change management needs of any SAP S/4HANA transformation? Here are a few suggestions and things to keep in mind:
The first step is to recognize that SAP organizational change management will be most important key to your success. If you are too focused on the HANA database structure or how to piece together the various modules and systems in the SAP ecosystem, then you are missing the most important thing.
Addressing the technical deficiencies and relatively immaturity of S/4HANA may be important, but not nearly as important to success as managing the human component of your project. SAP change management will be the #1 key to your project’s success, so invest in and focus on it accordingly.
Too many companies fail to recognize that their SAP systems integrator is not a silver bullet to address all of their needs, including organizational change management. Remember that systems integrators and SAP consultants are good at configuring and building S/4HANA – not on managing SAP change. And, these firms are incentivized to force adoption of as much SAP software as quickly as possible – but not in a good way – so this bias is not an effective way to manage change.
The problem is that many organizations get “Accentured” (or Deloitted, Capped, etc.) into thinking that the system integrator can (or should) handle organizational change when they shouldn’t. They have enough trouble figuring out how to effectively deploy S/4HANA, so let them focus on that. Independent SAP change management experts such as our team at Third Stage is one good alternative.
With all of the moving parts and priorities of an S/4HANA transformation, it is easy to defer SAP change management activities until you get to the training phase of the project. This is a big mistake that is setting up your team for failure. Below is a summary of some of the SAP change management workstreams that should be addressed in your SAP change management plan.
Training is just one of several critical SAP change management work streams. Training should almost seem like a formality – one where employees have already worked through the “freak out” moments of understanding how their jobs will be impacted but are just learning the details of how the new world will look. If they are hearing any of these changes for the first time, you are in for a rough go-live.
Too many companies undertake S/4HANA transformations before they are ready or have bigger fish to fry. Many clients we work with are still trying to figure out how to adapt shared services models or enhance customer experiences. To overlay any technology over this shaky organizational foundation is a recipe for disaster, so a trojan horse approach to change management can be an effective way to affect change along the way.
Don’t be fooled into thinking that technology will fix those problems, either. This is why organizational design and other more strategic, non-technology components of change management are so important to success. Sure, you can address the S/4HANA technology in parallel, but don’t wait too long to address the strategic details that need to be defined.
You probably aren’t going to implement S/4HANA without digital core modules such as finance or master data. Most would agree that this is a ridiculous idea. So why would we leave out an even more important “human digital core” component such as SAP change management?
We shouldn’t and we wouldn’t. At least not if we want to be successful.
Please contact me if you would like to brainstorm ideas of how to embed SAP change management into your S/4HANA transformation plan. I am happy to be a sounding board as you continue your S/4HANA transformation or other digital transformation journey!