S/4HANA represents an opportunity for organizations to impose shape and direction on their business that will carry them into the future
By David Lumley and Alex Bennell
Generally speaking, organizations are constantly undergoing an evolution – gradually, and in response to circumstances – and their support systems accordingly reflect and accommodate these changes.
But every now and then, a significant event can threaten to interrupt this development. Organizations take stock – you may want to reconsider your entire course of action.
One such occasion is the forthcoming discontinuation of the current SAP ERP platform, and its replacement by SAP S/4HANA. Major businesses can’t continue as they are; but on the other hand, they can’t start with a clean sheet – especially if they are long-established multinational enterprises. So, what do they do?
The answer isn’t “improvise,” and nor is it “panic.” Instead, they should see it as an opportunity to reorganize – to simplify, standardize, and renew their current enterprise systems so as to make them comprehensively and renewably fit for purpose in a digital business world.
The way forward
Of course, there are challenges implicit in this opportunity. Finance teams need to shape the right roadmap. They need to determine what the rest of their business is doing about the transition so they can coordinate. They then must decide how to start, what to prioritize, how to engage the business in their approach, and how to create and sustain momentum.
I’d argue that the way to address these challenges and to make the most of the opportunity is to recognize that SAP S/4HANA doesn’t provide all the answers on its own. It can, or should, be part of something bigger.
Central to this effort is a core of mission-critical applications that run the business. It’s part of what we at Capgemini term the Renewable Enterprise, which aims to reduce that core to its essentials; to introduce intelligence; to integrate, standardize, and protect its key elements; and to link it to the cloud. In short, it aims to bring together the technology, the process, and the operating model to sustain digital transformation and enable rapid innovation.
It’s a real-world approach, because while organizations are implementing it, it doesn’t require things to stop, or for changes to be made offline. It increases productivity and revenue-earning potential while organizations are doing business, and while they are exploring new revenue streams – and it also builds momentum in the new levels of efficiency it brings.
Implementing a Renewable Enterprise can include architectural change, SaaS products, upgrades, team changes, and more. One means by which we deliver it at Capgemini – for line-of-business finance in particular – includes the application of our Digital Global Enterprise Model (D-GEM). With D-GEM, as organizations make the transition to SAP S/4HANA, they will be better able to:
- Identify the business value and IT benefits they seek
- Revert to standard application functionality
- Build the right application suite
- Facilitate the move by streamlining and improving processes and controls using our ESOAR (Eliminate, Standardize, Optimize, Automate, Robotize) approach
- Embed artificial intelligence (AI) in processes, and
- Increase efficiency at a lower cost
Potential applications for FAO
When things are considered in this way, the obligatory move to SAP S/4HANA becomes part of a bigger solution, with greater potential. In finance and administration operations (FAO), for example, organizations will be able to achieve a continuous “virtual close” – reporting faster, analyzing more deeply, acting more promptly, and predicting more accurately, to add immediacy and value to the business.
They will be able to streamline journals and also introduce robotic process automation (RPA) to key finance tasks, deriving more from their resources (human and otherwise). In addition, they’ll be able to integrate processes end-to-end so as to optimize financial performance by using machine learning and artificial intelligence to identify and address predicted late payments, for instance.
In the next post in this series, we’ll discuss practical considerations for CFOs and CIOs as they look to renew the enterprise.
(David Lumley is Global Head of FPIA Consulting, Capgemini’s Business Services; Alex Bennell is UK Head of SAP Corporate Finance and Procurement, Applications)