It’s no secret that organizations that don’t embrace the digital enterprise will fall behind their competitors. SAP S/4HANA is designed to help SAP customers down the digital transformation path, but how can companies best navigate that road for a successful migration? Mateen Chishti of Hewlett Packard Enterprise and SAP’s Jay Foard recently answered readers' questions on how to effectively evaluate your SAP environment and execute and manage the journey to SAP S/4HANA.
You can check out the chat replay below or read through the full, edited transcript.
Meet the panelists:
Mateen Chishti, Global SAP Offering Leader, Hewlett Packard Enterprise Transformation Services for SAP S/4HANA
Mat is an accomplished SAP professional with more than 15 years of account management and ERP experience. Mat has developed and managed ERP product strategies aligning clients to develop and implement business cases through measurable outcomes and value engineering techniques. Mat has a BA from The Manchester Metropolitan University..
Jay Foard, SAP VP for Strategic Accounts, SAP HANA Enterprise Cloud Team
Jay has been with SAP for 10 years. He started his career as a solution architecture with a focus on business intelligence in the retail vertical. He continued his work as a practice lead for the regional HANA COE based in Asia-Pacific and was more recently a practice lead for the Global HANA COE. Jay has a background in technology with a Masters in Business from Duke University.
Natalie Miller, SAPinsider: Hi everyone! Welcome to today’s Q&A on best practices for effectively evaluating your SAP environment, and executing and managing the journey to SAP Business Suite 4 SAP HANA (SAP S/4HANA). I’m Natalie Miller, features editor of SAPinsider and insiderPROFILES, and I’m thrilled to introduce today’s panelists, Mateen Chishti of Hewlett Packard Enterprise and SAP’s Jay Foard.
Mat is a Global SAP Offering Leader at Hewlett Packard Enterprise Transformation Services for SAP S/4HANA and is an accomplished SAP professional with more than 15 years of account management and ERP experience.
Jay is Vice President of Strategic Accounts for the SAP HANA Enterprise Cloud Team and has been with SAP for 10 years. He started his career as a solution architecture with a focus on business intelligence in the retail vertical, and continued his work as a practice lead for the regional SAP HANA center of excellence (CoE) based in Asia-Pacific before becoming the Global SAP HANA CoE. Jay has a background in technology with a Master’s Degree in Business from Duke University.
Welcome, Mat and Jay!
Jay Foard, SAP: Hello, everyone!
Mat Chishti, Hewlett Packard Enterprise: Hello folks, it’s a pleasure to be here with you all. I’m looking forward to an active discussion over the next hour.
Comment from Anil: How do you convince an existing customer who is on an SAP ERP system to quickly move to S/4HANA?
Jay Foard: Hi, Anil. A great way to start is by doing a business case to help understand the ROI/TCO considerations. Most customers are considering S/4HANA because of cost improvements and/or simplification of their environments, so once we can start having those discussions, we can drill into what the opportunities are. For instance, depending on the customer’s industry, there will be impacts to supply chain or other functional areas that we can quantify through a thorough business case analysis. We need to look across IT and the business because S/4HANA and moving to cloud can have great advantages for both.
In regards, to moving quickly, we need to set an expectation that there are technical and functional considerations across the business and IT. Some of those work streams can be expedited. How quickly depends on how we want to structure the customer’s transformation. We can do the technical transformation first and follow with the business process optimization. We just need to set the right expectations on what we want to accomplish first and how that aligns with the larger roadmap.
Comment from AP: What are the typical value drivers to migrate from ECC to S/4HANA? Obviously different industries or different businesses within the same industry might be trying to solve various unique business problems, but looking at it from pure system functionality, what are the typical drivers to migrate from ECC to S/4HANA?
Mat Chishti: As you noted, AP, different industries will have different drivers, although there are common drivers that accelerate business value with S/4HANA. There are three core drivers to migrate to S/4HANA:
- Enterprises can now easily connect to people, devices, and business networks to deliver new value to their customers on any channel — the Internet of Things and big data become accessible to any business.
- Enterprises can dramatically simplify their processes, drive them in real time, and change them as needed to gain new efficiencies — no more batch processing is required.
- Business users can now get any insight on any data from anywhere in real time: planning, execution, prediction, and simulation. Decisions may be made on the fly with a high level of granularity for faster business impact.
Comment from Anil: As a follow-up to that, customers think of many aspects before deciding to upgrade and then migrate: What is the ROI? What is the risk? What is the total cost of ownership? Is the new landscape (S/4HANA) stable?
Jay Foard: Hi, Anil. These are all important points that need to be flushed out during initial planning, as the ROI and risk can vary across customers depending on what they are trying to accomplish. One risk we see a lot is when the IT planning is not closely aligned with the business transformation planning, and we end up with new technology that is still supporting old business processes or functionality. This impacts the ROI because most ROI is measured based on business improvements. We want to ensure that we align the technical and business transformation into one overall journey for the customer.
Comment from Muhammad Farhan: What is the implementation methodology of S/4HANA?
Mat Chishti: Traditionally, SAP implementations followed the SAP ASAP methodology. With S/4HANA, SAP has developed an agile-based method called SAP Activate. SAP Best Practices packages provide ready-to-run digitized business and technology processes optimized for S/4HANA. Leveraging SAP’s expertise and experience for standard processes helps deliver predictable results and saves time so you can focus your efforts on innovation.
Our best practices include business processes such as finance and logistics. They are designed to guide you through the optimal integration and migration scenario, whether you are moving from a legacy SAP software system or from a third-party database. S/4HANA includes a reference solution for running in the cloud or on premise in addition to details for enhancing processes to fit your needs and integrate with line-of-business cloud solutions.
Guided configuration is the content lifecycle management tool that helps you configure and test chosen SAP Best Practices. Now you can configure, test, and receive support in data migration processes that are needed for your selected best practices. You also have the option to add or update your preferred best practices at a later time. Automated updates and intuitive configuration changes support the initial implementation and help you adopt ongoing innovation more quickly, with minimal disruption, while tracking your configuration history.
The result? Your business users can customize preconfigured business processes — from charts of accounts to approval thresholds — without IT involvement.
SAP Activate methodology is SAP’s new software implementation methodology that builds on proven approaches and SAP’s experience to offer a consistent, agile method for any deployment type — cloud, on premise, hybrid, or mobile. It offers support for initial implementation and continuous innovation with S/4HANA. The implementation best practices walk project teams through planning, build, and deployment of their SAP solution.
SAP Activate methodology caters to customer-specific configuration and extension requirements to reflect each customer’s own business practices while remaining extremely scalable — nimble enough for smaller engagements and robust enough for larger projects.
SAP Activate gives you the comfort to advance quickly and to achieve fast outcomes with S/4HANA, whatever your current configuration. For more information, visit the SAP Activate landing page.
In terms of how HPE’s SHAPE method leverages SAP Activate, we have encompassed a transformation delivery methodology alongside SAP Activate that drives the building of the business case and roadmap with realization metrics to track progress. This helps the business adopt S/4HANA in an accelerated fashion. We cater for the end-to-end integration, data governance, business change impacts, custom code analysis, and the re-engineering of processes wrapped into the SAP Activate method. HPE brings its own tools and accelerators to help drive better adoption in the business. For more information, email us at SHAPE@hpe.com.
Comment from Bidwan: There is no clear information on compatibility issues if we move to S/4HANA now. For example, we have SAP ECC 6 EHP6, BW 7.31, and SCM 7.0. If we decide to move to S/4HANA 1511, to what release and EHP would we need to upgrade SCM 7.0? I ask because not all SCM systems are available in S/4HANA as of 1511. I know we choose how much we can re-integrate, but do we need to upgrade the SCM system for the remaining functionality?
Jay Foard: Hi, Bidwan. The compatibility for S/4HANA is documented and available from SAP at the portal. It defines which EHP and SPS versions are required for different systems and technical scenarios. If you have trouble finding this document, please let me know at email@example.com, and I’ll be sure to send it to you.
Comment from Muhammad Farhan: What are the modules covered in S4/HANA?
Jay Foard: Hi, Muhammad. When we run ECC on HANA, all of the modules within ECC are covered. HANA becomes the underlying database for the ECC application, so anything within leverages the HANA database.
Another good question is what modules are optimized to take advantage of the HANA capabilities in ECC? This has to do with S/4HANA, and I’m sure we can help you understand this more clearly if you want to contact me or plan a workshop.
Comment from Pedro: We are considering the migration to S/4HANA, and we are running now in an IBM Power 7 machine (795) on premise. Could we run S/4HANA in this machine? (As far as we know, it is possible to run S/4HANA in Power 8, but we don’t have precise information about Power 7.)
Mat Chishti: Hi, Pedro. Being from HPE, we unfortunately would not have insight into IBM hardware capability or compatibility. I’m happy to discuss how HPE hardware can support you, though. Just email us at SHAPE@hpe.com.
Comment from Guest: What area of our SAP landscape should we evaluate first and why?
Mat Chishti: The level of prioritization within your landscape is exactly what we help you identify in the joint HPE and SAP Phase 1a/L1 working session. All customers are different in terms of what they consider a business priority and what is driving the most pain within their business, which translates to their processes and thus ERP system. Based on discussion with various clients, the common themes are to reduce TCO, develop a non-disruptive, accelerated implementation plan (no more lengthy and costly projects), and enable the right level of integration with non-SAP systems.
This level of detail is what we strive to help you accomplish in the complimentary, two-day working session. Email us at SHAPE@hpe.com for more information to help you determine the best approach for your business. Both SAP and HPE will help you work through priorities.
Comment from Harris: For a customer who has a very large SAP landscape footprint — say, 18 different SAP production instances including ECC, CRM, GRC, and a half dozen or more industry solutions — and a very distributed ERP installation that is spread across multiple different systems (dependent on 100s of ALE and BAPI/RFC, and PI interfaces), what would be the best strategic approach to determine if we should begin our transformation journey to S/4HANA or hold off? How should we assess the value drivers to start building a strong business case?
Jay Foard: Hi, Harris. This is a great question and part of the answer is clearly defining your starting point and then defining a vision as it aligns across IT and the business. For complex environments, it is best to coordinate a workshop that gets all of the key sponsors together to start understanding how the functionality of S/4HANA changes, how they are currently doing business, and the costs associated with their IT organization.
Often, complexity can be reduced depending on how the legacy systems are structured and the functionality they are providing. One specific example is around custom code. We see a lot of customization that helps work around limitations from previous versions of applications. Some of this customization may not be relevant to S/4HANA, which is an immediate simplification. There are many examples like this that can be discussed in a formal workshop in the context of the customer and the problems we are working to solve.
Mat Chishti: To add to Jay’s comments, Harris, we at HPE are implementing S/4HANA within our landscape but also are looking at it as opportunity to transform our global business. We just completed our workshops and highlighted over 70 regions and business impacts on over 40 SAP environments such as the ones you denoted. There is also a significant amount of custom code and offline solutions that needed to be taken into account. By running HPE through our assessment process to help us clearly define the starting point as Jay touched upon, we were able to get a preliminary roadmap after only a few days. The value driver identification was done leveraging SAP VLM tools that help benchmark value areas by capability whilst system assessment helped identify how much custom code we had and then we could look at how much will go away, be recoded, and so on. All this helps drive the prioritization framework that is offered in the phase 1a workshops. Email us SHAPE@hpe.com to get further information or clarification.
Comment from Guest: What happens to existing modifications when moving to S/4HANA?
Jay Foard: Hi, this is a good question, but difficult to answer because “modifications” can take on different meanings for different types of customer scenarios. Some modifications may be fully supported (such as custom code) and other modifications may not. To specifically answer the question, it would be great to sit down with SAP and HPE and talk about what was modified and why. Then we can put together a roadmap that moves from existing scenarios into scenarios that may have less need for modifications.
Comment from Bidwan: There is no clarity on how other systems can coexist with S/4HANA. Even if we implement S/4HANA 1511, we would still need our current SCM system because all functionalities/capabilities of SCM are not yet in S/4HANA 1511. Now, information like what is the minimum version of SCM that is required with S/4HANA is still not available in PAM and Upgrade Dependency Analyzer (UDA). How does a customer move ahead with S/4HANA plans without these critical pieces of missing information?
Jay Foard: Hi, Bidwan. This is a good point, and I understand the challenge. As S/4HANA transforms how companies do business, we are continuing to couple the application layer to the DB layer to leverage more and more functionality and capabilities. It is possible to get more details on the S/4HANA roadmap and how we will integrate with other systems from SAP. Again, I think all of this comes back to organizing a workshop to get the right expertise looking at your current systems and aligning the current state, not only with the vision of your organization, but also with the product roadmap. This can be accomplished with the L1 workshop construct that Mat has referred to in some of the other posts.
Comment from Guest: What is the business case for working an S/4HANA transformation into my roadmap now?
Mat Chishti: Great question. We found the business case varies by client based on their business priorities and what they currently have in flight on their roadmap. In SHAPE, SAP and HPE have identified four core entry points for various clients. Based on this, we adapt our business case, roadmap, and prioritization framework around where the client is taking its business. These four areas are:
- Digital novice: A customer is looking simply to do a greenfield implementation and adopt SAP best practices.
- TCO: A customer is looking to simply reduce TCO by leveraging cloud-based deployments and commercial models.
- Starting the journey: A customer is looking for general advice on how to get buy-in from management to spend scarce funds on adopting a solution to enable innovation.
- A full end-to-end transformation: A customer wants to set up the business for success to adopt SAP innovations down the road to enable increased market share through various digital platforms.
Comment from Guest: How will this transformation to S/4HANA disrupt day-to-day business?
Jay Foard: Another great question. The important part of a transformation roadmap is to take into consideration short- and long-term goals and objectives. In the short term, we can deliver solutions that have less impact to the business, but start to show the value of transforming their organization. Then we can build on top of that success by looking at long-term programs that have a higher ROI to the business, but may have more consideration impacts to the day-to-day business. I think the primary consideration is to understand what impacts the business and how we can minimize that impact by smart planning and setting the right expectations.
Comment from Guest: In your approach, how can you work with our incumbents to help us move to S/4HANA?
Jay Foard: We provide a joint SAP/HPE visioning session that gives us an opportunity to work closely with your sponsors across IT and the business to come up with the right business case, roadmap, and overall delivery plan for transforming your organization. This ensures that we understand your business and requirements and take all aspects into consideration for planning. We can expedite the delivery planning by using tools/resources from within SAP and HPE once we have outlined the vision and roadmap correctly. If there are additional stakeholders or incumbents, we can align to ensure we have a holistic approach.
Comment from Harris: As a follow-up to my earlier question on the topic of custom code that has been deployed across our highly distributed SAP landscape: We are very heavy in customized ABAP code. What would be the best starting point from a technical perspective to assess technical impact/risks when considering the feasibility of moving from our current SAP landscape to S/4HANA? What is the best way to begin this technical assessment strategically and from a technology and tooling perspective?
Mat Chishti: We have two tools we use to scan your systems. An SAP custom code analyzer that determines how often code is used, how many incidents it generates, for example, and an initial view of custom code that will be impacted by S/4HANA, thereby giving us an initial perspective of impact on your solution. This can be done remotely, so there is no interference to your business.
We also leverage a HPE tool called HANA Innovation Assessment. This will look at custom code and wider impacts to your technical landscape from an integration, data, and business process benchmark perspective. These two tools within SHAPE will help drive you to make the right decisions with relation to complexity on your roadmap and which applications you should move and when. I am happy to provide more content on this for your review. Email me at SHAPE@hpe.com.
Natalie Miller: As we close the hour today, I want to again thank everyone for joining today’s chat. And a big thanks to Mat and Jay for these insightful answers!
Mat Chishti: Thank you for all your questions and engagement. It’s much appreciated. Email us at SHAPE@hpe.com or directly at firstname.lastname@example.org.
Jay Foard: Thank you everyone for your time and questions! Please feel free to reach out to me directly at email@example.com.