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.

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. 

2. Need for Action 

The need for action can be a need for change arising from market developments or technological disruptions, for example. However, it can also be an internal pressure to act, for example, the need for standardization following acquisitions or organizational growth. While organizational capabilities tend to be overestimated, the pressure to act is often underestimated - namely when companies focus too much on specialist or detailed technical requirements and fail to adapt business processes to market requirements. 

Business Redesign describes a holistic approach that can achieve a high degree of change and, accordingly, strong optimization, particularly in processes and organization. This requires very good organizational skills as well as external resources. Business Redesign involves a great deal of effort, but also a high level of benefit due to the significant change towards future-proof structures. 

Catch up the Core are projects that require less change in processes and organization. These are essentially IT-driven projects with business support. Here, a mainly IT-focused benefit is brought about with comparatively low effort. This approach brings little optimization and added value for the overall organization. However, also the risks are significantly lower here. 

Silent and Fast: Here, processes are only selectively changed to a greater extent, while at the same time internal resources and competencies are well equipped. This approach is characterized by pragmatic and rapid implementation with low risk. 

Decouple describes a project approach in which a high need for change meets limited (internal and external) resources. A project of this kind requires an equalization of time and/or content in order not to overburden the organization and thus jeopardize the success of the project. 
 

As our study shows, most companies tend to take the "Business Redesign" approach, which is the most challenging but also the most beneficial. Some companies succeed in achieving the goals they set themselves. 

Large organizations in particular tend to take the "Catch up the Core" approach and try to master the S/4HANA transformation with as little organizational and process-related impact as possible. Necessary optimizations and further developments must then take place afterward. 

However, there is also a trend towards more selective and specific approaches, such as the "Silent and Fast" approach, which is particularly popular with medium-sized companies. The  benefit of this approach is an easier handling of complexity which boosts the chances of a smooth and successful transformation. 

Decouple as an approach is currently rarely used in practice, but it has much more potential. 

In any case, the top management cannot overemphasize the importance of choosing the right approach, as it sets the foundation for a successful S/4HANA transformation in terms of time, budget, and quality. In our interview with Dr. Karlheinz Hörsting from the E.G.O. Group, you can read how the transformation approach was successfully adapted in the course of the project.