In my previous blog post, I discussed how businesses can transform and derive business value through S/4HANA implementation. To derive business value, it is essential to understand the types of ERP transformation and define the right guiding principles.
The successful S/4HANA transformation programs require the setting up guiding principles from the very start to support both Business strategy and IT-driven transformation initiatives.
The actionable guiding principles encourage long-term thinking and make the decision-making process consistent and easier to guide the transformation path of the enterprise for everyone.
Types of Transformation Programs
Primarily, there could be four types of transformation programs as per the need of the industry:
- Technology-driven - The program will upgrade or extend change in technology support to improve performance for business benefits. This is mainly an IT supported project with limited business change to manage. For example, technology solutions have been rolled out recently, where the business processes are running efficiently as per business needs.
- Business-driven – The program will deliver new technology together with improved ways of working for efficient processes. Business and IT jointly support this. This will require a change in the way of working and adapting to new or simplified processes.
- Transformation Program - A significant change is expected involving new technology, data driven decision making, implementing new processes and changes in the current business strategy and operating model. This is driven by business but in alignment with best practice, enabled by IT. There is a significant business involvement in managing change and realizing benefits.
- Sustainability-driven Merger and Acquisition Structural Transformation Program - The organization must undergo large-scale restructuring in processes, people, technology, and realignment to the new business strategy and operating model. The board drives this to define the future of the organization. For example, based on industry, it is required to enable a sustainable low-carbon economy from various initiatives across the enterprise to embed into core business strategy.
Guiding Principles
The guiding principles reduce the time needed to take tough decisions and support choosing the right option in line with transformation goals and objectives.
The guiding principles apply to the business and enabling IT architecture layer to support business strategy, operating model, business processes, solution architecture and de-risk transformation.
Below is the proven list of guiding principles for de-risk S/4HANA sustainable business transformation.
Business Process Optimization
- Process design alignment - Follow industry leading operating practices driven standardization.
- Avoid process complexity - Exception to meet legal or group critical requirements.
- Process harmonization instead of lift and shift - Identify business value creation opportunities through the core modernization.
- Maximize out of the box capabilities – Adapt standard, avoid developments through process governance and use best of breed solutions for faster time to market.
Solution Architecture
- Solution components to ensure adequate coverage in current and future functional needs.
- Identify opportunities to optimize current application portfolio by eliminating duplications with similar functionality.
- Leveraging next gen technology to enhance human experience.
- Data Driven Organization - Harmonized data model and single source of truth.
De-Risk Transformation
- Alignment on implementation methodology, usages of tools and accelerator’s.
- Deploy API based integration for agile and cloud first approach.
- Connect S/4HANA to standard and future ready applications for seamless Integration.
- Apply change control mechanism for architecture and set-up design committees early.
Digitally Transform and Future-Proof Your Business
TechM's S/4HANA offerings span the entire value chain from advisory and consulting services, S/4HANA assessments, business process analysis, KPI benchmarking, qualifying the gap via custom code management framework (CCMF), digital transformation implementation to change management services.
Using our proprietary tools and framework, we assess the current ERP ecosystem to define target architecture, cloud, data, and reporting strategy.
SAP S/4HANA implementation is critical to support further transformation and innovation for the overall transformation journey. Our business-led and IT-enabled approach maps all the objectives, understands the impact of a new solution on your business operations, and aligns stakeholders with realizing a successful S/4HANA program.
Our NXT.NOWTM framework at Tech Mahindra enable customers to IMAGINE, BUILD, RUN revolutionary business models and align with the right set of guiding principles to future proof businesses according to the type of transformation and Rise beyond for a better, equal future.
About the Author
Avanish Kumar
SAP Practice Head, Tech Mahindra
Avanish has over 28 years of experience in the Industry and SAP domain. Avanish is passionate about working in sustainability to enable business value-driven S/4HANA sustainable transformation for clients. He has extensive experience developing sustainability solutions for different industries using SAP technologies and digital platforms.
He is a certified sustainable supply chain professional and a regular blogger on sustainability, supply chain, and SAP. Avanish has a bachelor’s in engineering from IIT, Roorkee, and a diploma in sustainable business strategy from Harvard Business School.
