One of the toughest decisions in an SAP S/4HANA transformation must be made early on: which implementation approach to base the project on. It’s a decision where you can gain but also risk a lot. In our experience, the top management tends to underestimate the critical importance of this decision. The executive team has to decide by consensus to what extent the system changeover should also be a business transformation.
This is a balancing act. On the one hand, there are risks such as high costs, a high level of complexity, or a major strain on the organization. On the other hand, there are potential benefits and added value, such as future-proof structures, increased efficiency, or automation. It is important to find a balanced path between the two. We also strongly recommend to define the S/4HANA transformation as a business case to ensure that both qualitative and quantitative aspects are adequately considered.
Two Dimensions for Decision-Making
When choosing the right transformation approach, it is important to evaluate the following dimensions for the transformation:
1. Organizational Capabilities
These are internal competencies (skills) and capacities that are needed to initiate and implement the transformation, both organizationally and professionally. The acceptance, motivation, and agility of the teams involved also play a role here, as do the commitment of top management and the corporate culture. As our study shows, the required capacities are often underestimated, especially the involvement of IT. A lack of IT support is the most common problem during the system changeover. Almost half of the companies that have already transitioned would have preferred a longer project duration in retrospect, and a quarter would have planned for more external support.