Organizational Change Management- Preparing for a S/4HANA Migration

Published: June 16, 2022

One of the major aspects of a successful S/4HANA migration is an effective change management strategy that ensures adaptability in usage and alignment with business goals. Change Management is not limited to training end-users but is a comprehensive exercise that involves all functions, systems, and processes of a business, to ensure current sustenance and future growth. The lack of an effective change management strategy can cause the S/4HANA Migration to fail or deprive the intended benefit realization.

Amongst the most significant failures of SAP S/4HANA implementation was with Revlon1 in 2019, which resulted in the manufacturing plant having service level disruptions post the implementation. Revlon incurred a loss of $54 million to remediate the disruption, and $64 million of lost sales, apart from being subject to a host of lawsuits filed by various companies, along with investors who had purchased securities.

This failure was majorly due to not anticipating the change in operations that resulted from the S/4HANA implementation. An SAP S/4HANA implementation is not just an IT project but a technology shift that impacts all business operations.

We will cover the two common pitfalls in change management, along with proven best practices to be included in an effective strategy to ensure the success of a S/4HANA migration. This will help in going beyond the conventional change management exercise and making it more refined, customized, and aligned with business goals.

Common Pitfalls in Change Management

Making it an End-Stage Exercise: For many organizations, the focus on change management begins at the end stages of the migration lifecycle and is often limited in its scope. This makes the exercise inadequate, as change management needs to be factored in right from the beginning of the migration strategy. It’s not about when the change needs to be made but rather how the change should be made before embarking on a S/4HANA migration.

Solution: The SAP Activate Methodology does include a sequential Change Management exercise across its different phases and can be used as a starting point to strategize the migration. However, the focus on change management in the Activate Methodology is inadequate in its scope. This is where organizations need to have a comprehensive strategy to address the gaps and make the exercise more aligned with business goals.

Lack of Customized Training

S/4HANA comes with a vast collection of training resources, along with support from an active community of users. However, for S/4HANA migrations that involve major customizations and configurations, the utility of these training resources is more generic in nature. There is a need for a customized training approach specific to each business function and operational process to bridge the gap. The use of system integrators to resolve change management issues is not always a silver bullet to address the requirements.

Solution: SAP Enable Now is a solution for driving efficient user adoption by means of customized training resources. It includes contextual help and support to help end-users in real-time using a web assistant that provides step-by-step instructions on using the application. SAP Enable Now also simplifies content development and management, making it accessible whenever needed, by integrating with SAP Solution Manager.

Users can also consider third-party solutions that include real-time learning with automated virtual guides-such as with OnScreen.

We will now cover the critical aspects and best practices of defining and implementing an effective change management exercise for SAP S/4HANA Migration. The focus will be on the entire organization, people, culture, systems, processes, and the potential for automation.

Aligning Leadership

Aligning business leaders and key stakeholders for moving to an SAP S/4HANA migration is essential and must cover the changes in the complete environment. This helps in providing better visibility on what can be expected from the technology implementation and how it affects the business on a macro level. There is a need to understand that S/4HANA migration is just not replacing legacy systems but involves aspects of business standardization and allowing independent operations or bringing them together.

The strategy needs to be futuristic and progressive, in tune with emerging business requirements and must be designed to absorb potential changes. An example could be during the mergers and acquisitions that a business undergoes and the ease with which SAP S/4HANA can simplify the process and pave the way for smoother changes with an efficient change management strategy.

Structuring the Organization

This is one important aspect of S/4HANA change management and defines the current state of the business and the futuristic vision and goals. S/4HANA is a large ecosystem that can provide a common operating model, consolidate disparate operations, and integrate systems across global locations. There is a need for analyzing gaps, defining new roles and responsibilities, and bringing in transformations that optimize current operations.

With S/4HANA having RPA, AI, and ML capabilities, the potential for process automation, along with its benefits and displacing resources, is also a major factor that needs to be addressed in the change management strategy.

The Culture Shift

Organizations have a set culture, which evolves over time. With a wide technology shift, there needs to be a focus on how the culture has absorbed the impact and the way it has transformed with the new changes. An effective change management strategy must focus on progressively evolving the culture in tune with the way the business wants to be identified.

The Training Paradigm

With any new technology shift, there comes a focus on teaching employees to use the system with greater efficiency and productivity. The change management strategy also needs to include how the training can be customized to suit the specific needs, and not just limited to performing a series of actions. As covered in the earlier elaboration of the solution for lack of customized training, it’s imperative that user adoption be at its peak to ensure optimal usage and generate better ROI.

Equipping IT

There is a need for skilled resources who can support the migration exercise and provide support after its deployed. Having the right talent is a crucial factor that needs to be addressed right at the beginning of the migration process, rather than post-deployment. There are other factors that can be considered, such as outsourcing support and maintenance or using contract staffing models.

The above factors are crucial to a successful migration of SAP S/4HANA and are not limited to the actual migration process but to the entire scope of operations post the deployment. There is no “one size fits all” approach, bringing in a need for a custom change management strategy to reap the benefits of using SAP S/4HANA. There is a need for people, systems, leadership, business functions and the lifecycle of the entire operations to be addressed adequately and optimally in a change management exercise.

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