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SAP S/4HANA Invest in yourpeople for businesstransformation success

SAP S/4HANA Invest in your people for business transformation successIntroductionWhat is SAPS/4HANA?SAP HANA is SAP’s brand ofin-memory computing, atechnology that handlesmassive data sets withoutbreaking a sweat. SAP built itslatest next-generationintelligent ERP (SAP S/4HANA)around this technology. SAPlaunched SAP S/4HANA in 2015and plans to stop supportingolder ERP versions end of 2027,with an optional extendedmaintenance offering runningto 2030.The move to SAP S/4HANA brings a lot of positivechanges – better user experience, improved systemperformance, reduction in total cost of ownershipand a more secure and an easier to maintainplatform that will enable your business to digitallytransform. With these benefits in mind manyorganisations are planning or are in the processof migrating to S/4HANA. In order to realise its fullpotential, and to minimise operational and financialimpact on your business, the move to S/4HANAshould be positioned as a business transformationrather than a technical implementation.In this article we explore the key business changeactivities that should be considered whenembarking on an S/4HANA implementation. Theseactivities can help ensure organisations truly realiseS/4HANA benefits and minimise any impact tobusiness operations.2

SAP S/4HANA Invest in your people for business transformation successA Deloitte technology survey1, completed inpartnership with Forbes Insights, asked seniorexecutives across industries to determinewhat differentiates successful technologyimplementations. This survey showed that someof the top challenges were people related andcan be addressed by embedding a structuredorganisational change management programme.This survey shows that organisations can implementthe technical solution, but as long as end users areunwilling or unable to use it as intended it will havean impact on the return on investment and businessoperations.The difference between a small and significantbenefit improvement to your organisation is oftenthe extent to which an organisation engageswith their people. It is important to build a casefor change and consider the culture within theorganisation. The level of change S/4HANA bringsto business processes, people’s ability to use thesystem, roles and responsibilities, the way data isrepresented, and the general look and feel of thenew technology should not be underestimated. Itis important that your people understand what thechange means for them and are supported throughthat change to the new ways of working.Top challenges in technology sNegative priorexperiencesDiscomfort tacticsDataLack ofperformancemanagementQualityIdentifyingthe rightresourcesSource: Starting Smart – how to launch your program with the right outcomes, team and plan3

SAP S/4HANA Invest in your people for business transformation successManaging changeThe most common change managementsupports offered for an S/4HANA transitionare communications and training. HoweverOrganisational Change Management (OCM) ismuch more than that. In order to manage thetransformational change across your business, itis important to consider a structured OCM plan aspart of your implementation. A plan that focuses onthe change to roles and responsibilities, processesand the benefits. We have identified six keyactivities to consider when developing an S/4HANAorganisational change management plan.01. VisionTo bring the people in your organisation along thatjourney of change, it is critical that they understandwhy the business has decided to implementS/4HANA. Defining a vision that has purpose andis aligned to an organisation’s business objectiveswill be key in gaining the buy in from users andmanagement - for example to streamline processesto become more agile and efficient in the way itdelivers products to customers.Focus on any pain points or challenges thatcurrently exist within each role or team across yourorganisation, then highlight the system benefits thatwill provide improvement – these will resonate withpeople more and will reduce levels of resistance.If people are aware of these benefits throughoutthe implementation they will adopt them when thesystem is launched - this will help ensure that thesebenefits are realised early.Typical benefits include: Spending less time on reconciliation and closingefforts Running accounting processes more quickly andaccurately Performing more detailed analysis onforecasted cash flows and daily closing balances Gaining better understanding of the drivers ofcost and the causes of under performanceIt is important to gain buy-in from leadership asearly as possible, across each impacted businessunit, as they will be key in advocating this visionthroughout the project, and championing the needfor the organisation to transform in line with yourbusiness strategy.4

SAP S/4HANA Invest in your people for business transformation success02. Change impactsAssessing impacts is a typical task that is deliveredduring the fit gap analysis workshops. Theseworkshops aim to analyse each existing processand determines if it will fit or match with a newS/4HANA process or it will become a gap that willrequire a decision to be made on how the newprocess will work. Follow-up throughout the projectis necessary, sometimes even up to go live, as a lotof decisions will not be fully understood in the earlydiscovery phases. While assessing these impacts itis important to understand what people’s roles aretoday and how they will fundamentally change withS/4HANA.Will transactional work reduce?Will time that is spent on peoplemanagement activities and decision supportwork increase?Will time spent on control activitiestransition to business strategy work?The level of impact across business lines can becomplex and extensive, so cconsideration shouldbe given to a tool, such as Deloitte’s ChangeScout.ChangeScout, enables an organisation to monitorand measure impacts, readiness, communications,and training so it can effectively track adoption.The reports and dashboards provide a single,comprehensive change view of data across multipleprograms. These proactive insights offer realtime ability for organisations to manage changeinterventions to mitigate risk and drive businessvalue.It also allows the business and project leadershipto segment the data by business functions, teams,physical locations and geographies. Having yourchange impacts represented in this way can alsoallow you to visualise the change management datain real-time tailored dashboards in order to enhancedecision making and minimise any risk to businessoperations.Deloitte ChangeScout Dashboard5

SAP S/4HANA Invest in your people for business transformation success03. PersonasA valuable exercise that helps to explain and realisethe S/4HANA benefits and changes to roles withincohort groups is a persona analysis. A personais used to represent a user type within yourorganisation. Understanding what is changing foreach persona group can enable you to define theright targeted messaging, training and supportingactivities for each cohort – for example a dispatcherin the delivery team or a customer servicerepresentative. It is important to understand whattheir pain points are today and how S/4HANA willimprove these in the future with the new benefitsand features.Why do we have to change?“What will this transformationbring to me?Will I still have my job?What will be different this time?Can I keep up with all thesedigital changes?’’Jane SmithFinancialPlanning& AnalysisManagerFuture of workWorkWorkforceWorkplace I check theexceptions/errorsrecognised by AI I am able to interpretdata and makedecisions based onfacts I adopt new operatingmodel changes thatcentralises some ofour services I collaborate with thebusiness and provideadvice I work increasinglymore virtual and withcontingent workers I have the ability torun my own reportsat any timeMy roleTodayFutureTransactional Work50% Time spent on transactionprocessingTransactional WorkActivities Gain better understanding of thedrivers of cost and the causes ofunderperformanceRoles and responsibilities Elevate decision support usingpredictive and prescriptive analytics Undertaking strategic analysis andassisting with strategic planning Carrying out business modelling andrisk assessmentsemployee relationshipsand team management Communicate and coach crossfunctional teams about the businessgoalsPeople ManagementStrategy & Innovation Perform more detailed analysis onforecasted cash flows and daily closingbalancesPeople Management40% Time spent on10% Time Spent on Control Spend less time on reconciliation andclosing efforts by running accountingprocesses more quickly and accuratelywhile also ensuring compliance Analyse economic drivers and partnerwith business to direct focus to mostimpactful drivers / KPIs20% Time spent on operations50% Time spent on buildingmanagement activities& decision supportBenefits of the systemStrategy & Innovation Provide executive management withclear insights into business growth,risks, and opportunities30% Time spent on buildingFinancial and BusinessStrategyA typical persona example6

SAP S/4HANA Invest in your people for business transformation success04. Change championsAnother way to minimise business operationalrisk is to build a strong change champion networkacross your business - one that can influencepeople by demonstrating advocacy for the benefitsof S/4HANA. Consider defining a specialisedchampion network for notable product benefits– such as business performance championswho can demonstrate the powerful analyticalreporting capabilities. There are different needsfrom a Financial Controller versus a COO – thereport may be similar but what each personawill do with the data will be different. Considerutilising the champions for target audiencereport demonstrations or change labs which willhelp gain buy in as well as early upskilling. Anupfront investment of time will be needed fromyour champion network but this will be a truedifferentiator in project success.05. CommunicationsEnsure that there is a bidirectional flow ofinformation between your employees and theproject team. One way to do this is by developing acentralised online portal that is focused on sharingcontent for each cohort, role or team. It is essentialnot to depend only on digital communication. Dr.Albert Mehrabian conducted various studies2 inthe 1960s to determine how the mind interpretsmeaning. He concluded that communication is 7%verbal, 38% vocal, and 55% percent facial allowingtime for people to ask questions to ensure clarity.As there is a growing trend for organisations toprovide employees with remote working capabilities,it helps to turn on cameras in video conferencecalls so as to embed clear messaging. Face to facecommunication will always embed key messagesclearer across the organisation while allowing timefor people to ask questions to ensure clarity.7