Kathy Gibson is at Saphila Transcend in Sun City – Navigating the SAP S/4 HANA journey is different for every company, and requires a customised approach to succeed.
This is especially true when it comes to implementing the solution in Africa.
Colin Banks, solution adviser: cloud ERP at SAP, believes African organisations are hesitant to make the move because of a number of factors.
Although financial constraints loom large, companies are also adopting a wait-and-see approach as the technology and business environments mature.
There is an element of “if If it ain’t broke don’t fix it” towards on-premise systems that are working well, and a degree of what Banks calls “strategic procrastinating” as customers wait out licence or data centre terms.
The complexity of a migration, along with customisation that’s been done to existing systems, also acts as a brake on new investments.
“We don’t see this in Europe and the US,” Banks says. “In Africa we tend to sweat assets a lot more.”
However, companies should take a few things into consideration, starting with the cost of standing still as opportunities are lost and competitors race ahead.
Banks urges organisations to adopt an innovation mindset, but to innovate where it matters.
“Don’t be left stranded,” he says.
Gerhard Greyling, CIO and digital protagonist at CEDA in Botswana, says the first step is to convince the board to invest.
“There is a perception that IT projects just consume funds without yielding business value,” he says. “So you can’t sell SAP to the board as a grudge purchase – they have heard all that before.
“You need to convince them there is a business case and show that the value of the migration will outperform the cost of the implementation.”
This is easier said than done, Greyling adds, so he offers some advice on how to realise value.
“I say, look at the big bucket items, the ones very close to the essence of the organisation, that are a big item on the income statement. You need to show where the business value is.”
This would vary depending on the company. For instance, for a bank it could be non-performing loans; for a retailer it could be inventory churn; for a miner it could be the cost of capital.
“Even then, just implementing SAP is not going to do the trick: you still need to equip the front office people,” Greyling adds. “But SAP is the receptacle that pulls it all together and gives it the value.”
Having identified the project, the next step would be to identify the value of the transformation, and Greyling recommends using a tool like SAP Value Lifecycle Manager to do this.
African companies face a particular set of challenges, says Lisa Bird, SAP product manager: finance at Liberty Life Group.
“Do not assume that if something worked in South Africa or the core entities, it will work in Africa,” she warns.
“You need to ensure that the implementation team gets a clear understanding of each African entities’ business before embarking on an implementation.”
She recommends that the IT organisation obtains clear availability of in-country Africa finance teams members, bearing in mind that the teams could be smaller, with each member handling many different tasks – and working to different holidays and schedules.
“Don’t underestimate the co-ordination and pre-planning required,” Bird urges.
During the transformation, she stresses that the SAP S/4 HANA implementation should be prioritised – particularly if vendor partners are involved. “So make sure you solve for source system challenges rather than integration issues.”
Data quality and uniformity to core entities requires substantial validation, checks, and controls which can be time-consuming even for small entities, so teams must plan for this accordingly.
It’s also important to ensure there is a comprehensive understanding of the group finance ledger and chart of accounts to ensure uniformity and minimal customisation, Bird adds.
“And ensure that African entities are heard, and the project isn’t just one-directional.”
Koosh Panday, project director at Deloitte, believes one of the biggest decisions to be made in a SAP S/4 HANA transformation is whether to go for a greenfield or brownfield transition of selective data – or whether a combination of the two is more relevant.
A number of issues need to be considered when making these decisions.
Companies must ask if they want to keep their existing solution enhancements and transaction history, start with a clean slate, or keep some while doing others from scratch.
Before making those choices, they need to check if the system fulfils all the conversion prerequisites.
Does the company need a phased business rollout? And does it need a renewal of its complete ERP solution?
“How do you perceive your current system?” Panday asks. “Is it an innovation enabler or key asset?”
Marco Bronze, enterprise architect at PwC, adds that there are a number of data elements that need to be considered when deciding on a greenfield or brownfield implementation.
For instance, the company needs to decide if it can change its data structures, which is hard to do in a brownfield transformation. Do they want all data to be archived, or converted?
Consider the impact of downtime as well, because this will help to inform how data is handled.
Data cleansing is an issue that can’t be ignored. “If you’re doing a brownfield transformation, you don’t want to bring bad data across so you need to cleanse it first. For a greenfield implementation, you don’t need to do that.”
Other decisions include what to do with the data history, and how to analyse current versus historical data.
“There’s a lot to consider,” Bronze says. “And there are many options. But we see that a lot of customers haven’t gone into this deep analysis, although they need to base key design decisions on the right information.
“It is critical that all these elements are considered.”
Felix Chabeli, MD of Stratfore Tech, says upfront planning is key to the data transition.
“We have seen situations where data is corrupted or fixed in production; and we’ve seen situations where people start changing the transport sequence right before the finish line.
“To understand why this is happening, you need to look at the release strategy, and how did you do your testing? How did you organise the building of the solution and link that back to the requirement?”
Because different companies have different needs, he says different tools are going to be relevant – or an integration of various tools.
“But processes are the backbone of the implementation,” Chabeli says. “Documentation needs to be in the context of the business processes; and transports need to be logically linked to the processes.”
At the same time, testing must include migrated data, he adds.