A Business Case – The First Step for SAP S/4HANA Conversions.
Putting together a professional Business Case for SAP S/4HANA Conversion
SAP S/4HANA Conversion Architects help SAP ECC customers to determine the value of SAP S/4HANA for their business and create a business case. During this process, they also conduct readiness assessments to verify multiple aspects of their SAP ECC system to convert to SAP S/4HANA. This includes two areas:
- Analysis of current systems (Configuration and usage)
- Identifying Conversion Readiness
A Professional business case is the first step of any SAP S/4HANA Conversion. It is the best way an S/4HANA professional can prove to their client and stakeholders that the product they are pitching is a good investment.
A business case is a document that shows some important business benefits of an investment. This helps to justify the investment of the initiative. A strong business case shows how a new investment aligns with strategic goals of the company. SAP S/4HANA professionals, who have been helping SAP ECC customers to pave a way to S/4HANA, take some time to make a strong business case to justify time, investment and efforts to identify the business benefits out of moving to SAP S/4HANA. Stakeholders are very interested in knowing what these are.
As I have been working on different conversion/upgrade projects of SAP S/4HANA Conversion factory for The Hackett Group India Ltd (Formerly Answerthink), I would like to share my experience to help show the steps necessary in terms of writing a professional business case for SAP S/4HANA Conversion and SAP Tools and resources available to accelerate SAP S/4HANA adoption.
An S/4HANA professionalised business case will help to convince key decision-makers to move to SAP S/4HANA. It shows merits of movement to SAP S/4HANA. It is a key and first part of any S/4HANA conversion project. It explains the problem of existing systems and helps to identify all the possible options to address them as well as helping decision-makers to decide which course of action will be best for their company.
Before writing a business case, S/4HANA Conversion architects should do a lot of research into the problems of an existing ECC system. The Structure of the Business case must lead the reader through the problem of existing systems, solutions, and finally decide on which option is best for the organisation.
Decision makers will firstly read the executive summary of the business case. S/4HANA Consultants should make sure their executive summary is consistent with their recommendations. It helps in defining scope, time and benefits during planning or the discovery phase of the project. Below is a “Sample Executive summary” from SAP’s BSR report:
For selected lines-of business and business goals, this summary report provides you with insights and tailored SAP S/4HANA recommendations. Using the BSR, click one of the lines of business on the right to discover how you can benefit from using SAP S/4HANA today.
Example: Once you select a line of business, you can see FINDINGS & RECOMMENDATIONS
In this article, I would like to share my experience with different tools I have used to build a business case to move to SAP S/4HANA.
Today, IT departments are discovering how SAP S/4HANA supports new business needs. Many of them already joined the SAP S/4HANA movement to unlock the value of the age of intelligence and understood how SAP simplifies moves to SAP S/4HANA.
Many SAP ECC customers are interested to know how SAP S/4HANA can benefit their business. I would like to share my experience with some of the tools that are provided by SAP to gain confidence from ECC customers and also help Consultants deliver a strong business case and deployment plan for SAP S/4HANA.
S/4HANA Solution Architects build a business case with SAP Business Scenario Recommendations. Then, they can plan for their customers’ move to SAP S/4HANA with the SAP Readiness Check tool for SAP S/4HANA. This tool guides the customer through topics such as Simplification items custom code adaption, add-on compatibility, HANA Sising, recommended SAP Fiori app etc. Then customers can plan to move to SAP S/4HANA with the insights delivered through this.
Sample BSR report can be seen below:
During the planning phase of a Conversion project, ECC customers use SAP Business Scenario Recommendations to find out the most beneficial scenarios that would enable to improve their business processes.
For this, follow SAP Note 2745851 to implement the required notes according to your system status and also implement SAP Note 2758146. The most important point is, the BSR can only be generated for a productive SAP ERP 6.0 system (incl. all EHP versions). A system copy of the PRD system cannot be used, as not all the required data would be available.
Readiness checks and BSR are useful during Discovery and/or Planning phases to Plan S/4HANA projects and assess business & IT impacts. The SAP READINESS CHECK tool and Simplification, Maintenance Planner tools help during the Planning phase. SAP ECC customers can build their Future with other offerings from SAP and SAP Partners.
Once BSR and Readiness Check is completed you can plan to Build top-down business cases using:
1. Business process improvement suite on SAP Solution Manager
2. Next-generation benchmarking tool
Customers can also plan their move to SAP S/4HANA using:
- SAP Readiness Check for SAP S/4HANA
- SAP Transformation Navigator
- SAP Enterprise Support Value Map for SAP S/4HANA
- SAP Value Assurance Service Packages
- Maintenance Planner
- SAP Innovation and Optimisation Pathfinder
SAP Readiness Check for SAP S/4HANA:
SAP Readiness Check is a holistic system analysis. It is the foundation for further planning steps. It analyses software prerequisites, infrastructure requirements, SAP S/4HANA functional implications, necessary custom code adaptations, and application data migration requirements.
Please refer my earlier article on this at: https://eursap.eu/2019/07/10/sap-readiness-check-2-0-for-sap-s-4hana-conversion/
SAP Transformation Navigator
This tool helps to build your transformation road map and to shape future landscapes. So ECC customers can choose the right SAP products and solutions for their journey to the Intelligent Enterprise. You can get full information at https://go.support.sap.com/transformationnavigator/#/welcome
SAP Enterprise Support Value Map for SAP S/4HANA:
This is an empowerment and support program. This provides direct access to SAP experts, interactive social collaboration forums, designed to help in adopting intelligent technologies. You can get full information at https://support.sap.com/en/offerings-programs/enterprise-support/enterprise-support-academy/value-maps.html. This provides guided access to knowledge, skills and services needed to drive your business challenges.
SAP Value Assurance Service Packages
SAP is ready to help ECC customers to succeed whether they choose to lead their own deployment of SAP solutions or use the services of a system integrator. With SAP Value assurance, they get:
- Service packages that complement the services of your IT team or a system integrator
- An industrialised delivery approach supported by best-in-class tools, methodologies, and expertise
- Tailored services applied across all phases of your project
- Compatibility with SAP Model Company services to accelerate your deployment
More complete information can be found here https://www.sap.com/services/implementation/implementation-pkg.html?infl=85ac474f-3c74-4961-9971-e8b5c0d3d2f8
MAINTENANCE PLANNER. This is another supporting tool.
SAP Solution Manager’s cloud-based Maintenance Planner enables easy and efficient planning of all changes in your SAP system landscape. Access MAINTENANCE PLANNER using the following link: https://support.sap.com/en/alm/solution-manager/processes-72/maintenance-planner.html Maintenance Planner enables:
- Easy & efficient planning for changes in your SAP system landscape
- Offers integrated processes for SAP Fiori applications SAP S/4HANA
- Handling critical aspects of landscape maintenance in one tool.
You can get further information at https://wiki.scn.sap.com/wiki/display/SM/Maintenance+Tools%3A+Maintenance+Planner+and+Maintenance+Optimiser You have to use the Maintenance Planner to do the conversion to SAP S/4HANA 1909. The Maintenance Planner generates the download files (add-ons, packages, DBDs, and the stack configuration file) that the Software Update Manager (SUM) uses to do the conversion. In particular, the Maintenance Planner checks if the following items are supported for the conversion:
- Add-ons to your system
- Active business functions in your system
- Industry solutions
- If there is no valid conversion path for any of the items listed above (for example, an add-on is not released for the conversion yet), the Maintenance Planner prevents the conversion. After the check, the Maintenance Planner creates the stack configuration file (stack.xml).
In order to generate the stack.xml, you need to have an SAP S/4HANA license. You can do the above checks without a license, but you cannot create a stack.xml with the Maintenance Planner without a license.
SAP Innovation and Optimisation Pathfinder
This is a tool from SAP that helps to improve your business in relation to:
- Innovation recommendations
- Business improvement opportunities
- Optimise IT and accelerate innovation
- Customer-specific improvements and innovations
- Opportunities based on the customer’s current core SAP ERP system usage, business & IT performance
You get complete information here https://msmproda7afccce3.hana.ondemand.com/Request/PAF/ Sample:
- Where are the business process improvements for my system, and how am I positioned compared to my peers?
- Out of SAP’s vast offering of SAP Fiori applications, Business Suite enhancements, SAP S/4HANA scenarios, which are the most relevant ones, based on my today’s ERP system usage?
- If you have an older SAP S/4HANA release, what are most relevant innovations in SAP S/4HANA 1909?
- Where are potential points where you can do IT optimisation?
You can request your own report
- SAP Customers can request their own, personalised Pathfinder-report. SAP just need two inputs from you:
- Last month’s transactions workload data (ST03N) from productive SAP ERP; or
- SAP S/4HANA system, and your latest enhanced SAP Early Watch Alert with business key figures.
How to request your own report?
Please follow https://d.dam.sap.com/a/JAxPy6/Pathfinder%20Manual%20-%20V71a.pdf Y
ou will get your report by email within 5 business days.
What are the Key prerequisites?
- SAP Solution Manager 7.1 – SP 12 or higher Or SAP Solution Manager 7.2
Customers can also plan their move to SAP S/4HANA with the assistance and guidance provided through engagement offerings. Customers can also engage in an adoption starter engagement then decide to add a discovery engagement to further refine their business case, road map, and Conversion plan.
- SAP S/4HANA Adoption Starter Engagement
- Join the SAP S/4HANA Movement (sap.com/jointhemovement)
- SAP S/4HANA Value Discovery Engagement
- Intelligent Enterprise Value Discovery Engagement
SAP S/4HANA Adoption Starter Engagement helps customers to address common planning challenges and help to expedite decision making. This engagement provides access to valuable decision-making tools.
SAP S/4HANA Adoption Starter Engagement:
The guided, self-service engagement helps create initial implementation plan for SAP S/4HANA. Deliverables include benchmarking, value assessment, and migration strategy. It helps to Plan to move to SAP S/4HANA with prescriptive and clear guidance that empowers ECC customers to make decisions. The SAP S/4HANA Adoption Starter Engagement provides guided experience for structuring, organising and building their plan for moving from SAP ERP to an SAP S/4HANA in a few weeks. The engagement provides access to valuable decision-making tools, peer-to-peer knowledge sharing and networking to help them to optimise their decisions.
The SAP S/4HANA Adoption Starter Engagement helps ECC customers to address common planning challenges that help them to expedite decision making. You can get more information on the matter here https://webinars.sap.com/s4-hana-adoption-starter-reg-platform/en/home
SAP S/4HANA Value Discovery Engagement
The SAP-led service offers an in-depth conversion plan for SAP S/4HANA, based on your business needs and expectations in outcomes, potential costs, time frame and ROI.
Intelligent Enterprise Value Discovery Engagement
The SAP and partner-led engagement showcases the role of SAP S/4HANA within the Intelligent Enterprise, such as user experience and machine learning, and defines key opportunities for industry transformation.
How to Write an SAP S/4HANA Business Case?
Many of you might be highly skilled in building business case for SAP S/4HANA. Rather, there may be different writing styles for different consultants. In this article I am specifying the way I have followed to build a Business case for SAP S/4HANA.
SAP S/4HANA consultants conduct workshop sessions with each line-of-business Head to uncover problem areas and explain opportunities for improvement. The result is a business case. This will be articulated to show the value that SAP S/4HANA can bring to their organisation. The below steps lay a foundation for a business case assessing the value of SAP S/4HANA for your company:
Step 1: Identify current System Challenges & provide Value Drivers for SAP S/4HANA
Step 2: Identify Potential Improvements out of SAP S/4HANA
Step 3: Cost / Benefit Analysis
Step 4: Describe the Implementation Approach
Step 5: Build a Business case
S/4HANA Architects highlight how SAP S/4HANA can address the pain points and challenges with current systems and specify the goals customers are trying to achieve out of a Conversion. Consultants must relate the pain points Clients are facing and this must align with objectives of the business and create a sense of urgency explaining the implications of not addressing problem areas. The topics to be covered should be:
- List of pain points and problems
- Issues with current situations
- Why is it critical to address the these points now?
Presenting a business case is an art. Top Management interests are to be aligned properly in business cases. Executives must be able to see the benefits of investing in S/4HANA. They must understand the new product and how it can help their team to achieve goals and their organisation’s business objectives. S/4HANA Consultants must fully address how SAP S/4HANA will deal with problem areas (Speed, Performance Analytics, Reconciliations period end closing, Group reporting, etc…) and clearly state how investment in S/4HANA is important to overcome issue with their current ECC system.
During the Cost / Benefit analysis, consultants also must specify the cost of the license as well as implementation costs. When listing benefits, tangible and intangible, direct and indirect benefits are to be shown as a part of Return on Investment. Usually, timelines are clearly provided for system evaluation, Readiness Check, BSR etc. It also needs to provide how much time it takes to convert the current ECC system to SAP S/4HANA to make sure every stakeholder is aligned and understands the timelines of each activity to see how long it takes to get a return on their investment. Finally, specify a clear plan for Conversion / Implementation.
About Author: Dr. Ravi Surya Subrahmanyam is a technical and Financials writer with a background in SAP Financial Accounting, Funds Management, Financial Supply Chain Management, Cash Management & in-house cash, SAP S/4HANA Finance, RAR etc. He has been working as a Director for the SAP Practice for The Hackett group India Ltd, GDC- India. He completed his Master’s degree in Finance from Central University, Master of Commerce from Osmania University, Master of Commerce from Andhra University, and Ph.D.in Finance from one of the best universities in India. His research Papers have been published in National and International magazines. He has been a Visiting Instructor for SAP India Education and SAP Indonesia – Education. He has been working on Conversion and Upgrade projects. He is a Certified Solution Architect for SAP S/4HANA and an SAP S/4HANA Certified Professional. He can be reached at email@example.com or firstname.lastname@example.org
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