SAP S/4HANA: A roadmap for CFOs and CIOs towards the renewable enterprise

Practical considerations for CFOs and CIOs as they look to renew the enterprise and move to SAP S/4HANA

By David Lumley and Alex Bennell

In the previous post in this series, we looked at the opportunity that the transition to SAP S/4HANA represents. It’s an opportunity to move beyond a simple migration, and entirely reshape key areas of the enterprise to ensure they can take full advantage of the new world of digital.

In this post, we’re going to present a few points that are worth bearing in mind when embarking on this significant shift:

• First, take stock of what you already have, and of what needs to be part of your protected core (see previous post)
• This process is partly about achieving long-term agility – and that, in turn, should be driven by the needs of the individual organization, and informed by the market or markets in which it operates
• The best approach isn’t always the best-in-class option. All organizations have their own characters, their own expectations and their own drivers. For some, early and incremental results will be more important than price, for example. For others, the long-term benefits may justify the up-front investment. What’s important is what’s fit for purpose in individual circumstances – which is why, in addition…
• … it’s also important to establish common KPIs, for instance on revenues and on margins. Metrics need not only to be consistent across the enterprise, but to be appropriate to the requirements of that enterprise
• Data, and data quality, are critical. It ought to be a given to say so, but it’s the bedrock on which the enterprise is built – and the digital enterprise, in particular. Its proper governance is essential, for without it, operations such as predictive analytics in a SAP S/4HANA context will lose value.

For CFOs, in particular, considerations include:

• The need to establish a business case with clear outcomes that goes beyond the mere imperative to migrate
• Optimization and efficiency: the need to make best use of assets (SSC), people and knowledge as the basis for creating a new culture in finance that increases professional curiosity, agility and dynamism
• The need for real-time information, from which to make better, faster predictions and decisions

For CIOs:

• The disentangling of IT support teams from business-as-usual. All too often, they are drawn in, and effectively become an extension of financial services. This is not what they should be doing. Their expertise can and should be put to better use from the center – for instance, in managing data, in regression testing, and in handling upgrades across the enterprise
• A reduced cost of ownership
• A better relationship with the business, and a deeper understanding of how to meet its requirements and resolve issues, including avoiding the potential scattergun procurement by finance of “sticking plaster” tooling in analytics, data transformation and automation.

Cost and control
For both financial services and IT, there are two further considerations, and they are among the most important of all.

The first is the need to improve the total cost-to-serve. Yes, it’s an obvious yardstick; but in the midst of the upheaval of enterprise-wide change, it’s good to maintain a simple focus. The second is control. Isn’t that, really, absolutely fundamental to the renewal of the enterprise? Without it, the other benefits – of increased efficiency, of manageability, of cost-effectiveness, of agility, of insight, and more – all these will be uncertain.

In summary, a judicious and comprehensive approach to the opportunity afforded by the SAP S/4HANA transition can help finance teams assess where they are and focus on priority areas – understanding that there are different levels of maturity. These can be reviewed in detail against criteria that include:

• Establishing the right team structure
• Optimizing the geographical configuration of the business
• Achieving the right mix of skills
• Aiming for best-in-class processes
• Focusing on areas in which automation can deliver substantial productivity improvements
• Orchestrating pricing to affect customer behavior and streamline transformation
• Managing governance to meet external expectations, increase value and create new opportunities.

The transition to SAP S/4HANA is not so much an obligation as a chance for organizations to do something bigger – to impose a shape and a direction on their business that will carry them into the future. If they decide this uncharted territory is too daunting a challenge to face alone, they may wish to work with an experienced external services provider that can help them articulate the business case, and then shape and execute the roadmap – and thereby transform the prospects of the enterprise.

It’s a roadmap that can take them all the way to the Renewable 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)