TRIPLE E

FORMULA
HANDBOOK
A guide to your S/4HANA
Transformation Journey

www.afsug.com
INDEX
INTELLIGENT ENTERPRISE SAP S/4HANA
BUSINESS CASE 03
Contributed by: MK Kwatala, Deloitte

IMPLEMENTATION APPROACH AND

IMPLICATIONS 05
Contributed by: Roger Loe, SAP Business Technology Platform Specialist

BEST PRACTICE AND ACCELERATORS 22

Contributed by: Lynnette Shaw, SAP South Africa
and Felix Chabeli, Stratfore Tech

VALUE MANAGEMENT 28
Contributed by: Koosh Panday, Sappi

SECURITY 43
Contributed by: Janeen Duckitt and Garith Peck, Vodacom Business

QUALITY MANAGEMENT 45
Contributed by: Sharmila Jasmath, SAP

PROJECT SUCCESS 57
Contributed by: Shamit Maharaj, Ernst & Young
INTELLIGENT ENTERPRISE SAP S/4HANA
BUSINESS CASE
Introduction Business Need

Many organisations who are currently on 3rd generation Most organisations want to transform their businesses
SAP solutions (ECC), are considering a move to SAP’s by leveraging innovative technology like S/4HANA and
next generation S4/HANA ERP but are grappling with the integrated systems, but their current architecture and
question of why I should move to S4HANA now and what ERP landscape does not support the ability to generate
value will I gain from doing so. this value. Another simple fact is that most people do
not know or understand how to qualify the value of
S/4HANA. They are currently stuck with a customized
ECC environment. Those looking with a technical lens
would like to replace the old ERP systems because they
understand the limited value that these systems provide
compared to newer technologies. However, they are not
able to justify to rest of the organisation the investment
nor the possible value that comes with S/4HANA.

Challenges left behind 3rd Generation ERPs that were built to last.

03
 Proposed Solution

A business case is a first step to monitor value creation and to build a roadmap that provides visibility to the investment.
A well-defined business case enables objective assessment of costs and benefits of an S/4HANA opportunity to make a
rational investment decision. There are 4 phases to a business case and these are outlined below:

The framework for developing a business case involves Minimizes Risk. Identifies the financial impact of the
first collecting the organization’s standard process project (i.e. IRR) and assesses the impact of the risks and
model and other inputs from business and technology rewards associated with the project.
teams then aligning that model with the Enterprise Value
Map aligned to S/4HANA. The enterprise value map for Direction. Provides management with an outline of the
S4HANA qualifies and quantifies the possible value key steps necessary to complete the project(s) and gives
associated with a business process based on history stakeholders a sense of where things are headed if
and industry best practices. projects are implemented.

Aside from helping the business leadership make Conclusion

informed decisions on investments, a comprehensive
business case has multiple advantages. Various key Defining your S/4HANA strategy is about focusing on the
outcomes from a successful business case prove great realization of value through S/4HANA given the context of
reasons to develop the business case. your own business and IT environment. This means that
you do not simply start with the actual migration and
Roadmap. Sets baseline expectations for returns to be deployment and see what happens. It means that you
realized through the implementation of the project and take time to understand the current situation, set a clear
aids in creation of a detailed plan to track and ensure vision how S/4HANA and related business improvements
realization of benefits and accountability. can add value and clearly define what activities need
to be done related to design and preparation before
Discipline. Creates a climate for rigorous analysis you start with your S/4HANA migration. One of the key
of new ideas and the ability to quantify expected instruments to this is a business case.
outcomes. Identifies financial and business owners of a
project, establishing accountability for results.

Control. Establishes a benchmark against which the

performance of the project can be tracked and allows
for identification of problems and tracking of expected
Contributed by:
costs or benefits.
MK Kwatala, Deloitte

04
IMPLEMENTATION APPROACH
AND IMPLICATIONS
Transition Options

What is SAP HANA? SAP HANA common use cases

SAP HANA is the worlds first full in-memory Optimising Business Operations
database platform. Get instant insights into real-time
transactions to optimize business
First introduced by SAP in 2010 and provides the o p e ra t i o n s
following benefits:

» Significantly faster than traditional disk database

Operational Reports, Dashboards
systems.
and Analytics
» By default all data is compressed and therefore Analyse and visualize operational
easier to work with. details to support your day-to-day
» Unique technical capabilities allow the SAP software activities
to be simplified – reducing development efforts.
» Allows the consolidation of multiple SAP systems into
single SAP system – reducing operation overhead Real-time Operational Intelligence
and complexity. Run queries against operational data,
» Allows for the embedding of BI (Business streams and events to deliver real-time
Intelligence) into the core transactional system insights
providing end-to-end analytics support on a single
unified platform.
» By design promotes and allows the creation of the
“Single view of the truth”. Data Warehouse and Data Mart
Deliver actionable insights on
» Provides Real-Time access to transactional data.
enterprise-wide or departmental data
» Runs SAP applications and non-SAP applications as
an Open platform.
» Results in a lower TCO and higher ROI.

The above has allowed SAP to introduce the next Big Data
generation of SAP software like S/4HANA. Uncover the value in large, complex
and rapidly growing data sets

Decision Support, Simulation

and Automation
Streamline and automate business
processes with advanced analytics

05
 Deeper into SAP HANA

Deeper
SAP HANA isinto
uniqueSAP
in thatHANA
it combines multiple high performance processing engines into a single platform that would
have otherwise needed multiple separate systems with complex (costly) data flows between them.
SAP HANA is unique in that it combines multiple high performance processing engines into a single platform that would
have otherwise
Examples needed multiple
of processing engines separate systems with
are Geospatial, complex
Machine (costly)Graph
Learning, data flows
and between them.
Text processing.
Examples of processing engines are Geospatial, Machine Learning, Graph and Text processing

SAP HANA PLATFORM

APPLICATION SERVICES PROCESSING ENGINES INTEGRATION & QUALITY SERVICES

</>
Web Server JavaScript Spatial Graph Predictive Search Data Virtualization ETL & Replication
ALM
Fiori UX Graphic Application Lifecycle Text Streaming Series Business Data Hadoop & Remote
Modeler Management Analytics Analytics Data Functions Quality Big Data Integration Data Sync

DATABASE SERVICES

Columnar Multi-Core & Advanced Multi-tenancy Multi-Tier Storage Data Openness Admin & High Availability &
OLTP+OLAP Parallelization Compression Modeling Security Disaster Recovery

ONE Open Platform ONE Copy of the Data

SAP, Partner and Custom Applications

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Purchasing Options: SAP HANA Runtime & Full-Use License

SAP HANA can be purchased for on-premise or cloud deployment as a “runtime” database to be used for SAP Applications
(like S/4HANA or ECC) or it can be purchased outright for any usage under a “full-use or Enterprise” licence model.

Any Premise (including IaaS) Cloud (SaaS, PaaS, DBaaS)

Runtime Full Use Runtime Full Use

Pay a fee to run SAP Purchase the SAP HANA Pay a fee to run SAP Purchase the SAP HANA
Application on SAP Platform Application on SAP Cloud Platform (DWC*)
HANA HANA and Data Lake services

Metric – HANA SAP Metric – Gigabytes of Metric – Subscription Metric – HANA

Application Value Memory (64GB Blocks) Capacity Unit (CU)
(HSAV)
Offers a limited Provides an
Offers a limited Provides an platform exclusively for unrestricted platform
platform exclusively for unrestricted SAP Applications, with for all custom and
SAP Applications, with platform for all SAP, SAP HANA capabilities 3rd party application
SAP HANA capabilities custom and 3rd party restricted to the systems and
restricted to the application systems application layer. distributed data
application layer. and distributed data in modem hybrid
in modem hybrid environments.
environments.

06
 The Journey to SAP HANA
The journey to SAP HANA
There are many paths to SAP HANA depending on customer needs – some example as below:
There are many paths to SAP HANA depending on customer needs – some example as below:

SAP or SAP SAP S/4

SAP SAP ECC HANA
Non SAP BI System Application
System System
System System System

Traditional SAP Traditional Traditional

SAP SAP
Disk HANA Disk Disk SAP HANA
HANA HANA
Database Sidecar Database Database

Customers have used SAP HANA Customers have migrated existing Customers have migrated existing Customers have built standalone
simply as a high performance SAP systems to SAP HANA to SAP systems to the latest SAP applications on SAP HANA to use
computing platform linked to an simply enable a more performant versions on SAP HANA to enable the unique high performance
existing system to provide and feature rich SAP system. a more performant and feature rich processing engines it provides.
performant BI. SAP system.

SAP SAP S/4

SAP 3rd Party SAP ECC HANA
BI System
Application Application System
System System

SAP Traditional SAP

SAP Disk HANA
SAP HANA SAP HANA HANA
HANA
Cloud Database Cloud

Customers have deployed brand Customers have deployed SAP Customers have extended existing Customers have migrated existing
new SAP applications directly on HANA as a specialised high on-premise SAP systems to the SAP systems to the latest cloud
SAP HANA as a starting point. performance computing platform cloud in various configurations. based SAP versions running on
for 3rd party applications (example SAP HANA to enable a more
is SAP HANA as a Geodatabase performant and feature rich SAP
for leading geospatial provider system.
ESRI).
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Common SAP HANA Deployment Questions

What hardware do I need for SAP HANA? Is SAP HANA an “open” system?
SAP HANA can run on specialized SAP HANA appliances, Yes - SAP HANA is a highly “open” platform, supporting
appropriate on-premise server hardware, virtualised many open standards, general interfaces and tooling.
or non-virtualised or in Cloud Hyperscalers on certified
configurations. Do I have to migrate all my SAP system to SAP HANA
together?
How much SAP HANA RAM will I need? No - customers can migrate their SAP systems at their
Each and every SAP HANA sizing is different – please own pace depending on licence purchased.
contact SAP for further information.
Can SAP systems operating on non-SAP HANA and SAP
Do I pay for non-production SAP HANA licences? systems on SAP HANA operate together?
No – only production usage of SAP HANA requires a Yes – For example many SAP customers choose to
licence – either SAP HANA Runtime or Enterprise licence. migrate their SAP BW systems to SAP HANA before they
migrate their core SAP systems to SAP HANA.
Can I deploy SAP HANA to the cloud as Software as a
Service? Can I run SAP ECC on HANA?
Yes – there are multiple ways to consume SAP HANA in Yes – as long as the ECC is on EHP8 version.
the cloud.

Do I need special skills to operate and manage SAP

HANA?
SAP HANA operates like a traditional database – existing
DBA’s should be able to acquire SAP HANA skills in a short
period.

07
 What considerations are needed for a SAP HANA journey?

What is SAP HANA? What do I do about any existing custom code?

Fast database? Game Changer? Convert? Extend in cloud? Revert back to standard?

What am I going to run on SAP HANA? Where do I want to deploy the new SAP HANA system?
One system? All my SAP systems? What is my SAP On-premise / Cloud – What cloud?
Landscape? Versions? Sizing?
Will this changed system work seamlessly in my wider
Will this require a migration or an upgrade? SAP & non-SAP environment?
Immediate benefit? Change / Business transformation? Cloud to on-premise? System to System? Integration
Align with future roadmap? considerations?

What type of migration will this be? How much will this change cost?
Greenfields / Brownfields / Guided / Model Company? SAP Licence? Services? Hardware? Business Cost?

Who will help me with the move? What is the business benefit of doing this?
SAP Services? Solution Integrator? In-house? Value add? Risk Avoidance? Project alignment?

SAP S/4HANA Next-Generation Business Suite

S/4HANA Enterprise Management is SAP’s next-generation Digital Core:

» Innovative in-memory Database

» New architecture and data models
» Renewed applications
» New UI technology
» Cloud & on-premise deployment models
» Natively integrated

SAP S/4HANA is a new product line.

The classical SAP Business Suite & SAP ERP is a separate product line and will still be available.

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 Main Innovation Pillars of S/4HANA

SAP FIORI AS THE USER EXPERIENCE PARADIGM

» Role-based, web-based, all devices

New User Experience » Smart Business Cockpits (from KPIs to guided transactions)
(SAP Fiori) » Operational Reporting
REAL-TIME DECISION-SUPPORT, EFFICIENCY

SIMPLIFICATION OF APPLICATIONS AND UNDERLYING DATA MODEL

» Principle of One: elimination of redundancy on application level

Simplified Data Model » Single source of truth: new data model without redundancies
and Application Innovation » Application optimizations
HIGHER FLEXIBILITY & THROUGHPUT, INNOVATIONS

SAP HANA AS THE UNDERLYING PLATFORM

» OLAP & OLTP Merge
» Data Compression
SAP HANA
» Various engines for planning, predictive, text mining…
SPEED, SIMPLIFICATION, INNOVATIONS

DEPLOYMENT MODEL OF CHOICE:

On-premise OR Public Cloud

BUILT-IN CLOUD QUALITIES for all deployment options available (e.g. guided configuration)

Simplifying
Simplifyingdatabase & table
database structures
& table for simplicity
structures moving
for simplicity forwardforward
moving

SALES FINANCE
Document Document Totals Indices
Header Item Header Item

Sales Order VBAK VBAP VAKPA VAPMA GL, AR, AP BKPF BSEG GLT0 KNC1 KNC3 BSIS BSAS BSIK

Delivery LIKP KIPS

LIPS VLKPA LKPMA LFC1 LFC3 BSID BSAD BSAK

FAGLF FAGLF FAGL FAGL

Billing Document VBRK VBRP VRKPA VRPMA New GL ACDOCA
LEXA* LEXT* BSIS BSAS

FAAT_
Status Info VBUK VBUP CO COBK COEP
DOC_IT COSS COSP

PRCD_
FAAT_
Conditions KONV
Elements VBOX AA ANEK ANEP
YODA ANEA ANLC ANLP
(new)
FAAT_
VBFA
Document Flow VBFA
(Simplified) ML MLHD… MLIT…
PLAN_
VALUES
MLCD… MCLR… BSIM* CKMI1*

MATERIAL VALUES
SAP ERP MATERIAL QUANTITIES
Valuation in MM or Valuation ML Aggregates
Aggregates Stock Aggregates History
Used for
Hybrid: Master Data Master ML
History Valuation Material Document
with Valuated Stock Data only MSSA MSSL MSSQ MSSAH MSTBH MSSQH

MATDOC_
MBEW MBEWH
MBEW CKMLCR MLPP CKMLPP MLDOC
CKMLPPWIP MKPF
MATDOC MSEG
EXTRACT MSTE MSTQ MSTB MSTEH MSTQH

EBEW EBEWH
EBEW CKMLPP MLCR CKMLCR CKMLKEPH
MLDOCCCS Inventory Movements Hybrid: Master
Used Data with
for Master DataStock
only Aggregates MARCH MARDH MKOLH

QBEW QBEWH
QBEW MLHD MLCRF MLCD CKMLMV004 MCHB MARC MARD MSKU MSLBH MCHBH MSKUH

OBEW OBEWH
OBEW MLIT MLKEPH CKLMMV004 MSKA MKOL MSPR MSLB MSKAH MSKAH

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09
 Simplifying database & table structures for simplicity moving forward

SALES FINANCE
Document Document Totals Indices
Header Item Header Item

Sales Order VBAK VBAP GL, AR, AP BKPF BSEG

Delivery LIKP KIPS

Billing Document VBRK VBRP New GL ACDOCA

FAAT_
Status Info CO DOC_IT

PRCD_
FAAT_
Conditions Elements AA YODA
(new)
FAAT_
VBFA
Document Flow (Simplified) ML PLAN_
VALUES

MATERIAL VALUES MATERIAL QUANTITIES

Valuation in MM or Valuation ML Aggregates
Aggregates Stock Aggregates History
Used for
Hybrid: Master Data Master ML
History Valuation Material Document
with Valuated Stock Data only

MATDOC_
MBEW MBEW MLDOC MATDOC EXTRACT

EBEW EBEW MLDOCCCS Inventory Movements Hybrid: Master

Used Data with
for Master DataStock
only Aggregates MKOLH

QBEW MCHB MARC MARD MSKU

OBEW MSKA MKOL MSPR MSLB

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The Intelligent Enterprise

SAP Strategy – Deliver the Intelligent Enterprise

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SAP Enables Industry to Become Intelligent Enterprises

SAP helps Industry transform into intelligent enterprises through integrated business applications that use intelligent
technologies and can be extended on SAP® Cloud Platform. This enables next-generation business processes to deliver
breakthrough business value on our customers’ journeys to becoming intelligent enterprises.

10
 Intelligent Suite

The set of applications provides the business capabilities that chemical companies need to run their business.
End-to-end business processes span multiple applications, so processes and data must be integrated for automation,
a seamless user experience, fast adoption, and ease of operations.

Intelligent Technologies

Several innovative technologies have matured to practical use:

» The Internet of Things makes business applications interact with the physical world.
» Big Data makes large data sets accessible for advanced analytics and intelligence.
» Machine learning and artificial intelligence automate repetitive processes and learn from human exception
handling and decision-making.
» Advanced analytics find data patterns to support decisions and predict the future.
» Blockchain distributes collaborative processes across the entire value network.
» Data intelligence finds new value in data assets for new business models.

Digital Platform

The digital platform, which is powered by SAP HANA®, extends intelligent end-to-end processes and connects to data
sources:

» Cloud platform that allows customers and partners to extend their intelligent suite to run additional business
processes
» Data management to handle and organize data, a key asset of the intelligent enterprise.

Our Point of View: To Achieve These Strategic Priorities, Leading Companies Are
Becoming Intelligent Enterprises

Our Point of View:

The intelligent To Achieve
enterprise enablesThese Strategic
employees to focus onPriorities, Leadingand
higher-value outcomes Companies
to invent new Are Becoming
business models

Intelligent Enterprises
and revenue streams.

By applying intelligent technologies such as the Internet of Things (IoT), artificial intelligence (AI), machine learning, and
The intelligent enterprise enables employees to focus on higher-value outcomes and to invent new business models and revenue
advanced analytics, leading chemical companies transform into event-driven businesses. Event-driven businesses
streams.
automate repetitive tasks, enable employees to focus on higher-value tasks, and allow the invention of new business
By applying intelligent technologies such as the Internet of Things (IoT), artificial intelligence (AI), machine learning, and advanced analytics, leading chemical companies
models
transform into and revenue
event-driven businesses.streams by monetizing
Event-driven data-driven
businesses automate repetitivecapabilities and applying
tasks, enable employees to focuscore competencies
on higher-value in new
tasks, and allow ways.
the invention
of new business models and revenue streams by monetizing data-driven capabilities and applying core competencies in new ways.

Optimize and extend the value of current processes Transform with next-generation business processes
Business Digital
Industrial process Intelligent
automation automation transformation enterprises

High-value tasks
Productivity

Repetitive tasks

Automation
Time

Optimize existing Extend current business processes Transform the company’s value
processes for more beyond efficiency gains to capture chain or business model to
Optimize efficiency or reliability Extend new sources of value Transform
capture new revenue streams.

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11
 SAP S/4HANA will run your business different than before
SAP S/4HANA will run your business different than before

On any device, use Embedded analytics for Machine learning for

role based cockpits simulation, prediction & automated processing &
with digital assistant insight-to-action decision support

Sales Order Fulfillment Issues Overdue Materials - Stock in Transit

Monitor GR/IR Account Reconciliation

Capacity Plan Simulation Slow or Non-Moving Materials

SAP Fiori 20

SAP Fiori
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Role-based Delightful Coherent Simple Adaptive

SAP Fiori Launchpad as Domain-specific Enter details and

single point of entry information and actions explore in depth

SAP Fiori Launchpad Procurement Overview

Purchase Contract

Start from an individual home page: Investigate and drill-down from: Carry out transactions:
• Role-based spaces and pages NEW 2020 • Overview pages (graphical) • Combined in reimaged native SAP Fiori apps
• Customization via dedicated apps NEW 2020 • Analytical list pages (hybrid) • Based on insights from embedded analytics
• First insights with KPI tiles • List report/worklist (list) • With the SAP Fiori visual theme

SAP Fiori Elements: https://sapui5.hana.ondemand.com/sdk/#/topic/645e27ae85d54c8cbc3f6722184a24a1

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SAP S/ 4HANA in the Intelligent Enterprise: Big Picture

12
 Discover Your Path to SAP S/4HANA

Deployment Strategy
Deployment
Hybrid Scenarios Strategy
Hybrid Scenarios

As a Service As a Product

SAP S/4HANA Cloud SAP S/4HANA AnyPremise

Hybrid Scenarios

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SAP S/4HANA Choice

SAP S/4HANA Choice

Consider three dimensions: Scope, Governance, Standardization

Core ERP scope, rapid innovation Extended ERP scope, controlled innovation

SAP-led governance Customer-influenced governance Customer-led governance

Standardization Recommended to Standardize Open to Modifications

SAP S/4HANA Cloud, Essentials SAP S/4HANA Cloud, Extended SAP S/4HANA Any-Premise

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13
 SAP S/4HANA: The right solution for each customer journey
SAP S/4HANA: the right solution for each customer journey
*according to Gartner Cloud (SaaS) Definition Cloud ERP * ERP in Cloud / On Premise

SAP S/4HANA Cloud SAP S/4HANA Cloud, single

**SAP S/4HANA
tenant edition
SAP Product SAP S/4HANA Cloud SAP S/4HANA
Highly standardized processes for finance, HR,
Business Scope Full On-Premise functionality
procurement and sales
Professional services and component
Industry Scope All industries supported
manufacturing with more industries on roadmap
Country Scope Currently 38 Currently 63
Language Scope Currently 22 Currently 39
S/4HANA Extensibility Framework and
Extensibility S/4HANA Extensibility Framework and extensions via SCP, with full extensibility option
extensions via SCP, using whitelisted APIs
Custom Code No Optional
Configuration Options Self-Service and Expert Configuration Implementation Guide (IMG)
UX Fiori Fiori and SAP GUI
Innovation Cycles Quarterly Annually, plus quarterly Feature/Support Packs
Modification of SAP code No Optional
Licensing Subscription Perpetual (or HEC Based Subscription)
Deployment Types New Implementation New Implementation or System Conversion
Upgrades Quarterly One to two per year Flexible as per customers' schedule
Dedicated system landscape, SAP, hyper-
System Gov. / Infrastructure SAP Public cloud Customer preferred infrastructure
scaler, dedicated cloud infrastructure
SAP Best Practices Yes Optional Optional (for New Implementation)
SAP Model Company No Optional Optional (for New Implementation)

**SAP S/4HANA discovery on premise 26

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SAP S/4HANA Deployment Options

SAP S/4HANA Deployment Options

SAP S/4HANA Cloud, SAP S/4HANA Cloud, SAP S/4HANA Any-

Essentials Extended Premise*
Business Process Standardized, core ERP Flexible, ext. ERP Customizable, ext. ERP

Innovation Lifecycle Quarterly Semi-annual Annual, customer-led

TCO Lowest Lower Higher

System Governance SAP-led Customer-influenced Customer-led

IT Infrastructure SAP, public SAP, dedicated Customer-managed

Customization Within Standards Within standards Open to modifications

Extension PaaS, SCP PaaS, SCP Open, SCP

System Delivery New implementation New implementation New or ECC conversion

*Private cloud managed by SAP & On-premise managed by cloud providers or customers

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14
 Journey to SAP S/4HANA
Journey to SAP S/4HANA
Different approaches to move to SAP S/4HANA
Different approaches to move to SAP S/4HANA

Type Approach Available for Purpose

Bringing your business processes to the new

conversion
by in-place
Reusing

System platform
§ A complete technical in-place conversion of an existing ERP
conversion software system in SAP Business Suite to SAP S/4HANA
(Tool: Software Update Manager) SAP ERP SAP S/4HANA
§ Adoption of new innovations at your speed
system

New implementation/reimplementation
New SAP S/4HANA
§ Reengineering and process simplification based on latest innovations
§ Implementing innovative business processes with preconfigured
with data migration

implementation
Reengineering

Standardized content on a new platform

(Tool: SAP S/4HANA migration SAP ERP or
§ Performing initial data load
cockpit) third-party
system(s) § Retiring old landscape
SAP S/4HANA
Cloud

Value-driven data migration to the new platform

Selective Data § You need more than master data and open items, i.e. transactional
data, complete or selected,
Transition § migrate a selection of data (i.e. by organizational units),
Customer (Customer-tailored
tailored SAP ERP or SAP S/4HANA § migrate data from more than one system, or
service/consulting offering) third-party § migrate application related data into a S/4HANA based solution
system(s)
landscape

SAP Community blog: How to find my path to SAP S/4HANA

Implementation Approach 28
Implementation Approach
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System Conversion New Implementation Selective data Transition

<50%

<5%

<50%
Implementation Approach

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System Conversion New Implementation Selective Data Transition

FROM

SAP ECC SAP ECC Legacy SAP ECC Legacy SAP ECC
TO

SAP SAP Clean System SAP

S/4HANA S/4HANA S/4HANA

• Copy complete system + data • New install / deploy new practices • Large, multi-national corporation
• Reuse of existing implementation • Data migration (harder for old data) • Multi-SAP ERP instance environment
• Add innovation later • Full innovation from day one • Business requirement to harmonize or to
(LOB / Fiori / ML) • Change deployment if wanted do a partial redesign
• Necessity to retain historic data in
productive system

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15
 Building S/4HANA Target Template
Building S/4H Target Template
Reuse Redesign
Pure Brownfield Pure Greenfield

Significantly Less than No/limited

Pre-dominantly brown
Full Reuse 50%
(At least 50%)
Pre-dominantly green Full Redesign
Significantly Less than (at least 50%)
No/limited 50%
S4H Simplification/ S4H Simplification/ S4H Simplification/ S4H Simplification/
Mandatory Items Mandatory Items Mandatory Items Mandatory Items

Shell-Creation Mix & Match

System Model Company +
Reuse whole existing ERP customizing as Reuse partially existing ERP customizing and
Conversion baseline & build new customizing on top mix/match with new customizing *manual + Best Practice
*automated automated

System New Implementation

Conversion

Hybrid / Landscape
Transformation
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Which approach? What questions do customers typically answer?

Which approach? What questions do customers typically answer?
SAP S/4HANA: Different paths, same positive business outcomes
SAP S/4HANA: Different paths, same positive business outcomes

Current processes enable Current SAP version?

long-term strategy? Reimaged processes? “SAP S/4HANA First”

Brownfield
Yes Few Yes
(system
conversion)

No Many No

Historical data? New business models? Incremental value to upgrade current

SAP ERP?

Yes Few Yes

No Many No

Greenfield (new Selective Data

implementation) Migration

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16
 Typical duration of SAP S/4HANA implementation to date: 9 months
Typical duration of SAP S/4HANA implementation to date: 9 months

Vast majority of SAP S/4HANA Duration of projects is largely determined by customer complexity (degree
customers went live in 6-12 months* of change) and implementing partner preferences / tools / methodologies

As short as As long as Average

Simple S/4HANA Finance

implementations 3 months 11 months 7 months

6 14 11
Typical S/4HANA (full suite)
implementations months months months

10 36 18
Complex S/4HANA (full
suite) implementations at months months months
the largest customers
3 6 9 12 >20

Months to implement SAP S/4HANA *Based on SAP´s experience with 2000 customers

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Implementation Approach
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Implementation approach
Multiple
Multiple factors
factors influence
influence a customer’s
a customer’s SAPSAP S/4HANA
S/4HANA implementation
implementation decision
decision

Up to 13 observed factors . . . can be grouped into 3 areas

Greenfield Brownfield Business considerations

│ strategy │ costs │ degree of change │
Simplifications of
Organization change SAP S/4HANA

Technical factors
Business
transformation scope Customer code

│ current versus future landscape │ data │ tools │

Business value Historical data

Downtime
Executive sponsor requirements

Organizational readiness
│ expertise │ appetite for change │ training │

34
© 2021 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC

Transition to SAP S/4HANA

Transition to SAP S/4HANA
Three different approaches to move to SAP S/4HANA
Three different approaches to move to SAP S/4HANA

Bring your business processes to the new

platform
System SAP ERP § A complete technical in-place conversion of an
On-Premise
Conversion System existing SAP Business Suite ERP system to SAP
SAP S/4HANA S/4HANA
§ Adopt new innovations at your speed

New implementation / re-implementation

SAP ERP Reengineering and process simplification based on
On-Premise
New or latest innovations
Implementation 3rd -party § Implement innovative business processes with SAP
System best-practice content on a new platform
S/4HANA Cloud
§ Perform initial data load
§ Retire old landscape

SAP ERP System Value driven data migration to the new platform
Region A
e.g. consolidation of current SAP Business Suite
Selective Data SAP ERP System On-Premise landscape into one global SAP S/4HANA system or
Transition Region B
selective data migration based on legal entities
SAP ERP System SAP S/4HANA
Region C
SCN Blog: How to find my path to SAP S/4HANA

36
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17
 Transition to SAP S/4HANA

Transition
System Conversionto SAP S/4HANA
System Conversion

Scenario description Software Update

Manager (SUM)
with Database
A complete technical in-place conversion of an Migration Option
existing SAP Business Suite ERP system to SAP GUI
(DMO)
(SAP GUI) / SAP Fiori
SAP S/4HANA (Database, SAP NetWeaver and
Application transition in one step).
SAP ERP Core * SAP S/4HANA Core

Why would you Chose this Option? AnyDB or SAP HANA SAP HANA
§ Bring your existing business processes to
the new platform.
SAP ERP 6.0 (any EHP level)
§ Keep your investment in custom code
§ Mitigate the risk and investment of a big What How
bang conversion project by reducing the tool-based technical conversion process of a SAP Business Suite
scope of the transition project to a pure ERP system to SAP S/4 HANA using SAP Software Update

*
In-place technical
technical conversion project, and adopt new manager (SUM);
conversion
Downtime minimizing options available
innovations at your speed at a later point of
time and in a phased approach.
§ SAP S/4HANA 1909: Release Information Note
How To
§ SAP S/4HANA Conversion Blog – 1909

Note 1: For older SAP Business Suite releases or systems on Non- Note 2: System has to be an AS ABAP-only system. Dual-stack systems (AS ABAP and Note 3: SAP Suite on HANA customers who are planning a system conversion to SAP
Unicode an additional step to SAP ERP 6.0 EHPxx is required. AS Java combined in one system) are not supported for the conversion. If your system is S/4HANA 1809 should first update the database from SAP HANA 1 to SAP HANA 2
as dual-stack system, you have to split it before doing the conversion. and then do the system conversion (either in the same or a separate downtime).

37
© 2021 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC

SAP S/4HANA

System Conversion – Transition Paths Overview

18
 Transition to SAP S/4HANA
Transition to SAP S/4HANA
New Implementation
New Implementation

Scenario description
New implementation of SAP S/4HANA, e.g. for
customers migrating a legacy system, also known
as “greenfield” approach.

Why would you choose this Option?

Customers planning to migrate
§ a non-SAP / 3rd-part legacy system,
§ an good option for a SAP System, which may
be
§ of an older release and/or
§ is highly customized/modified and/or Steps How
§ does not meet the system requirements for Install SAP S/4HANA Software Provisioning Manager
a technical system conversion
Benefits for the customer are
§ SAP S/4HANA Migration Cockpit
§ Reengineering and process simplification Initial data load from § SAP Data Services (SAP DS) both with Best Practice
based on pre-configured business processes source system
Migration content
§ Rapid adoption of new innovations in a
standardized manner

39
© 2021 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC

Transition to SAP S/4HANA

Transition to SAP S/4HANA
Selective Data Transition
Selective Data Transition

Scenario Description

A selective transition approach for complex, multi-national’s. Selective Data

Transition to SAP S/4HANA goes beyond a standard new implementation or
conversion. It includes a host of options, related to the handling of software
& data provisioning, requiring additional expert services and tools to
accomplish.

Why would you Chose this Option?

§ Large, multi-national corporation
§ Multi-SAP ERP instance environment
§ Business requirement to harmonize or to do just a partial redesign /
leverage partly today’s ECC installation
§ Necessity to retain historic data in productive system
§ Often effort intense & complex to load historical data
§ Increased risk vs. other options

SAP strongly advises you to engage SAP Digital Business Services or specialized SAP
Partners equipped with the necessary tools and experience with such an approach.

40
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19
 SAP
SAP S/4HANA
S/4HANA Adoption
Adoption Challenges
Challenges

Benefits of SAP S/4HANA Solution Challenges for Customers

Higher business agility and flexibility § align existing processes to SAP S/4HANA solution
for organizational adaptation

§ adapt organization / stakeholder collaboration

Automation of business processes, § build new skills / implement new roles

easy adoption and use of analytic
functions
§ define new ways of working between business and IT

§ support developing an innovation culture

Focus shift from operation to innovation
based on SAP’s platform for digitalization

Focus On Change Management Including Communication and Enablement

41
© 2021 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC

S/4HANA Cloud supports multi-cloud scenarios

S/4HANA
based Cloud supports
on customer‘s point ofmulti-cloud
departure scenarios based on customer‘s
point of departure

SAP offering…
SAP S/4HANA Cloud SAP offering…
• A complete, modern, SaaS ERP • A rapid conversion of existing
solution with full public cloud benefits customer SAP ERP/ECC environments
to a modern, Cloud-based architecture
• The fastest path to innovation and
the lowest TCO • Full Enterprise Management scope as
subscription and low TCO from cloud
• A clean Cloud ERP solution without
economics
converting old/legacy ERP processes
and configurations PUBLIC • Perpetual license purchase option

• To reimagine business processes and • SaaS landscape at your own pace

take advantage of standardized best
• Full, extensive, ERP functionality
practices
including partner add-ons with the
ability to extend and enhance

PRIVATE

45
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20
SAP Tools and Services

Recommended Products S/4HANA Compatibility Improvement & Innovation

All SAP SAP ERP & SAP ERP
products S/4HANA
SAP BW &
BW/4HANA

SAP Transformation Navigator SAP Readiness Check / SIC Pathfinder URL

How do I create my detailed

Today How can I identify benefits
execution plan? Tomorrow
and track them in the
future?

What product How can I best prepare How can I generate

map does SAP my transformation? immediate value in the
Adoption Starter recommend for me and meantime? URL’s
how to I identify the value
SAP Methodology
Business Value Business Process Improvement Planning the Digital Transformation
SAP Best Practices
All SAP All SAP
SAP
products products
Business Innovation Discovery
Suite |
SAP
S/4HANA

Quality Value Assessment BSR Report SAP Roadmaps – Interactive

SAP Product Roadmaps

3
© 2021 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC

Contributed by:
Roger Loe, SAP Business
Technology Platform Specialist

21
 BEST PRACTICE AND ACCELERATORS
Introduction

This handbook provides you with insights related to enablers for your digital transformation with a specific emphasis on
information for SAP Best Practices, where to find it, links of how to use it, and where you can find additional information
to accelerate your SAP S/4HANA project, increase efficiency and ensure Customer Value.

Business Need

Typically, in the past when implementation projects took place, they took far too long, they were purely based on waterfall
methodology, the customer ended up with a lot of custom developments and a hefty bill at the end. Once the project
had been deployed to production and the solution was in an operational mode, it further took an extended period of
time for the customer to realise the return on investment as well as business benefits.

These challenges can be attributed to the organisation starting their implementation project from a zero-base, using
outdated process documentation to execute a “business blueprint phase” and using traditional delivery methods that
didn’t cater for continuous business engagement during the realisation phase.

Proposed Solution

With rapidly changing IT Operating models and project engagement or delivery methodologies for customers to cope
with increased innovation requirements, ensuring delivery on faster deployment schedules and faster time to value,
below is a list of recommended enablers for your digital transformation journey:

» SAP Activate Methodology: Click here to engage with SAP Activate Experts
» SAP Roadmap viewer: Browse here for implementation guidance for your digital transformation
» SAP Best Practices Explorer: Browse here for the accelerators
» SAP Solution Manager ((with or without Focused Build) for on premise centric customers or Cloud ALM for cloud
centric customers): Click here for more information regarding the management of your SAP Solution

22
SAP Activate is the consumption experience first introduced for SAP S/4HANA. It combines SAP Best Practices, methodology,
and guided configuration delivered with a reference landscape. It enables customers to start fast, build smart, and run
simple, while continuously innovating with SAP S/4HANA in the cloud and all other environments.

So, what exactly are the SAP Best Practices included as part of SAP Activate?

These are the ready-to-run business processes optimized for S/4HANA that also cover the integration and migration
fundamentals. These are based on the same comprehensive and flexible model that the SAP Best Practices team has
cultivated from implementations in more than 50 countries with well over 10,000 customers.

In short, SAP Activate starts with SAP Best Practices for any implementation and uses one methodology for any deployment
mode – cloud, hybrid or on premise. The goal, and the goal of SAP Activate, is help you take advantage of all the power
and potential available via S/4HANA but tailored to your circumstances and business needs.

How do I find more information on what content is provided with SAP Best Practices?

Best Practices can be found via the SAP Best Practices Explorer. This provides a standardized set of assets which provides
information on the business processes. Here you will find links to the individual assets, which are categorized under
general documents, delivery and positioning, and implementation. The SAP Best Practice Explorer can be found via this
link https://rapid.sap.com/bp/.

23
 Once you are on the SAP Best Practices Explorer landing Result: The user is presented with 12 options for SAP
page, choose a particular Solution Package. In this S/4HANA which include:
example, we chose SAP S/4HANA.
» On-Premise
» Cloud
» Automation
» Industries

In this example we chose: SAP Best Practices for SAP S/4HANA (on premise). Under version, we further chose: South Africa,
SAP S/4HANA 2020.

Result: The details of the best practices are displayed which include:

» Overview: This section contains the solution information, Business Benefits, Key Process Flows, Explanatory diagram
and software requirements
» Solution Scope: This section contains scope item groups e.g. Finance, Human Resources, Sourcing and Procurement
etc. Each group will have sub-sections and scope items e.g. Finance > Accounting and Financial Close > Accounting
and Financial Close (J58)
» Accelerators: This section contains General documents e.g. SAP Notes and Implementation documents e.g. SAP Best
Practice content library
» Find out More: This section contains related solutions

24
Once a specific scope item has been selected e.g. Accounting and Financial Close (J58), additional information becomes
available.

Result: Detailed information regarding this particular scope item is displayed, which includes:

» Overview: This section contains the scope item information, Business Benefits and Key Process Flows
» Country/Region Relevance: The countries / regions where the scope item is relevant are listed
» Details: This section contains the Process Flow, Test Script and BPMN2 Process Flow for displaying and editing in
process modelling applications
» Used In: This section contains the packages in which the scope item is used

How are the SAP Best Practices used in conjunction with SAP Solution Manager?

SAP Solution Manager 7.2 is designed to support the SAP S/4HANA implementation and the complete solution lifecycle.
SAP Solution Manager 7.2 is an environment with tools for project management, process modelling, change management,
test management and much more to implement, to run and optimize your SAP software.

With SAP Solution Manager 7.2 being the ALM tool of choice for the Management of on premise centric customer SAP
Solutions, the SAP Best Practices can be downloaded directly into SAP Solution Manager if all the technical pre-requisites
have been fulfilled.

25
 Once the SAP Best Practices have been imported into SAP Solution Manager, navigate to the Import Branch in SAP
Solution Documentation.

Result: The Best Practices that have been imported will be displayed as per the below diagram.

Once the imported SAP Best Practices have been displayed, navigate to the scope item: J58 – Accounting and Financial
Close.

Result: All the elements related to the scope item are displayed which include: Process Flow, Test Script, Scope Item Fact
Sheet, Collaboration Diagram and Building Block(s).

26
If the User clicks on the Collaboration diagram hyperlink, the below process flow diagram is displayed.

SAP S/4HANA Partner Solutions Recommendations

SAP Best Practices are used by SAP Implementation Information and video to help you getting started with
Partners, Solution Integrators and SAP Digital Services SAP Best practices
as a key part of their implementation strategy especially https://help.sap.com/viewer/product/SAP_Best_
for industry specific content. The link above also P ra c t i c e s / P R O D /e n - U S
provides information on “How to Qualify SAP S/4HANA
Partner Solutions for SAP Best Practice Explorer via
the SAP Partner Portal. Please note that SAP’s own
implementation project accelerator which was
previously called SAP Model Company has now been re-
branded as SAP Standard Content. The link above also
provides information on “How to Qualify SAP S/4HANA
Partner Solutions for SAP Best Practice Explorer via the
SAP Partner Portal”.

The link below provides you with a link of existing partner

certified packages for S/4HANA.
https://www.sap.com/partner/find/qualified-
packaged-solutions/finder.html?sort=title_
asc&tag=software-product:enterprise-management/
sap-s-4hana

Contributed by: Contributed by:

Lynnette Shaw, Felix Chabeli,
SAP South Africa Stratfore Tech

27
 VALUE MANAGEMENT
Introduction 3. External Expenditure:
Includes cost of all external providers for services which
Value Management is concerned with the creation of could be provided in-house, for example, if customer
sustainable value, either at project, product, process, billing is outsourced, external spend should include cost
organisational or social level. It is concerned with of printing bills and answering customer inquiries about
improving and sustaining a desirable balance between the bills.
the needs and wants of stakeholders and the resources
needed to satisfy them. For more detailed listing on what should be included in
External Spend please refer to section External Spend by
Business Need function.

Heard the question from the boss: “What value are you 4. Technology Costs:
creating?” This extract is all about that. Should reflect any technology cost associated with
the Finance budget, for example charge backs from
Finance Value Management Measure the IT department, if available. Do not include costs
for dedicated IT headcount if this has already been
Glossary captured in the Finance Staffing section, but include
Finance technology cost even if it is not part of the
Please provide all company information for the Finance budget (for example, if it is part of the IT budget).
geographies or divisions you included in the scope of
the survey only. 5. Other Costs:
Includes any other costs associated with the
Example: Finance function, such as travel, facilities, utilities,
» You are completing the survey for a South African communication, charge backs to other departments.
subsidiary of a global company
FTE (Full Time Equivalent)
» The global company has revenues of R30 billion,
whereas the South African subsidiary has revenues
A measurement equal to one staff person working a
of R13 billion
full-time work schedule for one year. For example, if a
» In the revenue field, R13 billion should be entered Finance function is delivered by Finance employees who
spend 20% of their time (or one day per week) working
Costs on this function, the headcount for this function would
be 0.2 FTEs.
1. Finance Costs:
Includes all Finance function related costs such as cost Another example would be a Finance function performed
of Finance staff (headcount costs), external spend, by four employees - two of them full time, and two of
technology spend, and all other Finance function related them working 50% on this function. In that case, the
spend. headcount for this function would be 3.0 FTEs.

2. Headcount Costs:
Total headcount costs for the Finance function, that is,
salaries, bonus, and benefits for all Finance employees.
If you do not know the exact benefits, please use an
estimate. Most companies have benefits in the range of
20% and 30% of the base salary.

28
1. Finance Strategy and Leadership: and accruals)
» Overall Finance Strategy » Post and reconcile inter-company transactions
» Management activities » Reconcile general ledger accounts
» Negotiate service level agreements » Perform consolidations (process eliminations)
» Establish accounting policies » Prepare trial balance
» Publish accounting policies » Prepare and post management adjustments
» Set up and enforce approval limits » Prepare business unit financial statements
» Establish common financial systems » Prepare consolidated financial statements
» Perform business unit reporting/ review
2. Compliance and Risk Management: management reports
» Regulatory and Compliance:
» Perform consolidated reporting/ review of cost
- Operate compliance function management reports
- Manage activities of compliance function » Prepare statements for board
- Manage organizational model and reporting » Produce quarterly/ annual shareholder financial
relationships for compliance function report
- Manage key capabilities of compliance
function, implement, and maintain controls- 6. Treasury and Cash Management:
related enabling technologies and tools » Treasury
- Report compliance related issues to external - Management of an enterprise’ holdings in
auditors, regulators, share/ debt holders, and trading in government and corporate
securities exchanges, and internal management bonds, currencies, financial futures, options
etc. and derivatives, payment systems and the
» Internal Auditing: associated financial risk management
- Prepare internal audits of business units and » Cash Management:
corporate as well as operations - Management of Working Capital/ Liquidity
» Risk Management - Performing netting operations
- Chief Risk Officer (CRO) - Applying cash to receivables
- Consolidation of reported risks from operations
and business units 7. Accounts Payable and Expense:
- Analysis of risks and definition of measures » Accounts Payable:
against risks - Maintain AP/ PO vendor master file
- Maintain/ manage electronic commerce
3. Budgeting and Forecasting:
- Audit invoices/ key data into AP system
» Develop and maintain budget policies and
procedures - Process financial accruals and reversals

» Prepare periodic budgets and plans - Research/ resolve exceptions process payments

» Prepare periodic forecasts - Respond to inquiries

- Retain records
4. Business and Operations Analysis and Reporting: - Adjust accounting records
» Assess customer and product profitability » Expense:
» Evaluate new products - Establish expense reimbursement policies and
» Perform life cycle costing approval limits
» Optimize customer and product mix - Capture and report relevant tax data
» Track performance of new customer and product - Approve reimbursements and advances
strategies - Process reimbursements and advances
» Prepare activity-based performance measures - Manage personnel accounts
» Manage continuous cost improvement
8. Payroll Administration:
5. G/L and Financial Closing: » Garnishments
» Maintain chart of accounts » Checks and EFT
» Process journal entries » Reconciliation
» Process allocations » Third-party Payments
» Process period end adjustments (tax, currencies,

29
 9. Accounts Receivable: External Spend Per Function
» Establish accounts receivable policies
» Receive/ Deposit customer payments The following provides a set of examples on what should
and should not be included in external spend on the
» Apply cash remittances
functional level. These are examples only, not a complete
» Prepare accounts receivable reports list of cost items. Cost for temporary Finance labour,
» Post accounts receivable activity to the general if applicable, should be included as well.
ledger
1. Finance Strategy and Leadership: Consulting
10. Customer Billing, Collections and Credit: expenses related to Finance Strategy
» Customer Billing 2. Compliance and Risk Management: External
accountants or consultants supporting Sarbanes-
- Maintain customer/ product master files
Oxley requirements or Risk Management, not
- Generate customer billing data
included external audit fees
- Transmit billing data to customers 3. Budgeting and Forecasting: Consulting expenses
- Post accounts receivable entries related to Budgeting and Forecasting
4. Business and Operations Analysis and Reporting:
- Resolve customer billing entries
Consulting expenses related to Business and
» Collections
Operations Analysis
- Establish policies/ procedures for delinquent 5. G/L and Financial Closing: Cost for external
accounts accountants
- Analyse delinquent account balances 6. Treasury and Cash Management: Consulting
- Correspond/ Negotiate with delinquent expenses related to Treasury, Cost of external
accounts service provider if outsourced
7. Accounts Payable and Expense: Cost of external
- Discuss account resolution with internal parties
service provider if outsourced
- Process adjustments/ write off non-collectable 8. Payroll: Cost of external service provider if
balances outsourced
» Credit 9. Accounts Receivable: Cost of external service
- Establish credit policies provider if outsourced
10. Customer Billing, Collections and Credit: Cost of
- Analyse/ Approve new account applications
external service provider if outsourced
- Review existing accounts
- Produce credit/ collection reports KPI

11. Other, e.g.: Days to close annual books: Number of days required
» Cost Accounting and Analysis by a company to reconcile and consolidate accounts
and close books for the purpose of generating financial
» Project Accounting
reports to meet regulatory requirements and internal
» Tax Accounting and Reporting information needs. Activities include ensuring validity
» Fixed Assets and consistency in the company’s chart of accounts,
» Inventory Accounting completing journal entries, closure of ledgers, completion
of reconciliations, running trial balances, correcting
» IT staff dedicated to Finance
errors, etc. This is estimated as the actual amount of
time spent in days for completing these activities.

Cycle time for creation of forecasts: Number of days

required to create annual forecasts, which involves
target and goal settings, analysis of budgets and getting
approvals from the board. This is estimated as the actual
amount of time spent in days to create forecasts.

Time to create new reports: Number of days required

to create a new report for which there is no previously
defined report template. This is estimated as the actual
amount of time spent in days to create a new report.

30
Days Sale Outstanding: A measure of the average Key Performance Indicators
number of days that a company takes to collect revenue
after a sale has been made. Employee Engagement

Percent Discount Lost: Cash discount not taken because Companies typically measure Employee Engagement
of the buyer’s failure to pay within the specified time through an Employee Engagement survey. If Employee
period. Engagement is measured in %, please translate to a 1 - 10
scale (Example: Employee Engagement of 62% should be
Percent of Payroll Error: A measure for the errors translated into a 6.2 score). Please answer this question
occurred in processing pay cheques. This is calculated only if your company formally measures Employee
as total number of pay cheques having errors divided by Engagement, and if your survey covers dimensions such
total number of pay cheques processed. as:

Percent of Error Rate in Bills Sent Out: A measure for the » Trust and integrity of management
errors occurred in processing bills. This is calculated » Nature of the job
as total number of bills having errors divided by total
» Line of sight between employee performance and
number of bills processed.
Company performance
» Career Growth opportunities
HR Value Management Measure
» Pride about the Company
» Co-workers/team members
Company Background » Employee development

Please provide all company information for the

Employee Referral Rate
geographies or divisions you included in the scope of the
survey only. Example:
Refers to the percentage of new hires which were
» You are completing the survey for a South African
acquired through employee referral programs.
subsidiary of a global company
Employee Referral programs encourage employees,
» The global company has 50,000 employees with usually through cash incentives (“referral bonus”), to
revenues of R30 billion, whereas the South African nominate potential candidates for a position as part of
subsidiary has 10,000 employees with revenues of the recruiting process.
R13 billion
» In the revenue and employee fields, R13 billion Time to Hire
revenues and 10,000 employees should be entered
The time between the day the requisition is approved to
Annual Revenue the day the candidate accepts the offer.

For non-profit organizations, please enter annual Cost Per Hire

budget.
Includes:
Manager » Advertising
» Agency and search firm fees
A Manager is an employee responsible for planning and » Referral bonuses paid to employees
directing the work of a group of individuals, supervising
» Travel costs incurred by both recruiters and
their work, and taking corrective action when necessary.
applicants
» Relocation costs
» Company recruiter costs (including salary and
benefits prorated if the recruiter performs duties
other than staffing)

Number of Payments with Errors During Last Year

This correspondents to the number of pay checks with

errors in the United States/Canada

Annual Total Number of Payments

Number of pay checks in the United States/Canada,

number of payments/remuneration receipts in Australia

31
 FTE (full time equivalent) Technology Spend

» A measurement equal to one staff person working a » Includes the chargeback from IT department for
full-time work schedule for one year providing IT services to the HR personnel (computer
» For example, if an HR function is delivered by HR processing, software, hardware, and management
employees who spend 20% of their time (or one day Information systems).
per week) working on this function, the headcount » One-time investments in computers, hardware and
for this function would be 0.2 FTEs software licenses should be excluded from this.
» Another example would be an HR function » Computer processing includes charges for running
performed by four employees, two of them full time, specific applications (usually chargebacks by
and two of them working 50% on this function. In management information systems departments).
that case, the headcount for this function would be » Hardware & software includes charges for software
3.0 FTEs licenses used by HR department, lease charges for
computers and other hardware, rentals, etc.
HR Generalists » Management Information systems include charges
associated with development and maintenance
» HR FTEs performing more than one specific task of software application usually termed as charge
(associated with more than one sub processes) fall backs from the management Information systems
in this category. Please make sure than the total department.
generalists and non-generalists (specialists) adds
up to total HR FTEs.
Other Costs

HR Costs Includes any other costs associated with the HR Function,

such as facilities, utilities, communication, charge backs
» Includes all human resource function related cost to other departments.
such as cost of HR staff (headcount costs), external
spend, technology spend, and all other HR function Activities Included in HR Function
related spend.
Function Activities/ Staff to Be Included in Scope
Headcount Costs
1. HR Strategy and Leadership
» Total headcount cost for the HR Function, that is, » Leadership and management of the HR Function
compensation and fringe benefits costs for all overall
individuals performing HR related activities. » Development of HR Function and its capabilities
» Compensation includes wages, overtime, leaves, » Collaboration with executive management to
bonus. align HR with business strategies
» Fringe benefits include health benefits, life » Development of HR strategies to achieve business
insurance, savings plans, disability, vehicles etc. success
» Corporate governance, HR policies and decision
External Spend making

» Includes cost of all external providers for services

2. Compensation and Benefits Planning
which could be provided in-house as well.
» Compensation Planning:
» For example, if benefits administration is
» Planning and Design of Compensation Systems
outsourced, external spend should include cost
(e.g., executive, sales) to link Pay and business
of the provider managing benefits administration
Strategy
but should not include the cost of the benefits (e.g.,
medical, dental). » Salary surveys

» For example, if HR manages the contracts with any » Cash and non-Cash Compensation Plans
temporary labour agencies, external spend should » Modelling/ what if analysis
include any cost for temporary labour in HR (e.g., » Benefits planning:
temporary labour for resume scanning in recruiting),
» Planning, Design and development of employee
but not outside of HR.
Health and Welfare, savings, and pension benefits
» For more detailed listing on what should be included Plans
in external spend please refer to Help for next
» Planning, Design, and development of additional
question
employee benefits (e.g. Life Insurance, Personal
Accident Insurance, STD, LTD)

32
 » Monitoring and Identification of benefits trends » Commissions/Draws
and practices across comparable industries » Compensation Statement
» Analysis of current benefits programs to identify
cost improvement opportunities 7. Benefits Administration
» Modelling/ what if analysis » Administration of Health Insurance & Welfare
Plans, Worker’s Compensation, LTD, STD, LOA,
3. Recruitment and Staffing FMLA, Employee Assistance or Employee Share
» Recruiting Strategy Plans

» Sourcing » Plan enrolment and update

» Applicant Tracking » Eligibility management (employees and retirees)

» Screening » Premium Billing and Reconciliation

» Employment Verification and Pre-Employment » Maintenance of employee benefits records

Testing » Vendor administration; communication with
» Employment Offers/Selection carriers regarding claims problems and
administrative issues
» Background Investigations
» Employee communications regarding plan
» Employee Orientation and Deployment
updates
» Benefits accounting
4. Training and Development
» Identification and analysis of Organization » Management analysis and reporting related to
training and development needs benefits Administration

» Employee development planning » Retirees support

» Content management
8. Pension or Superannuation Plans Administration
» Curriculum Design, development, and Delivery
» Maintenance of employee plan records and
» Tracking of Job Descriptions and competency beneficiary Data
profiles versus training need
» Performance tracking of Third-party providers’
» Developing, organizing, and delivering training investment vehicles
courses
» Plan enrolment and update administration,
» Registration accounting, and analysis
» Invoicing/Billing » Management analysis and Reporting related to
» Learning Logistics pension & savings plans administration
» Learning management Systems » Cost analysis of plans provided (benefit per dollar)
» Performance management » Monitoring of ERISA (employee Retirement Income
» * Note that for the scope of this survey, training Securities Act) compliance
should only include HR related training such as » Communication of plan revisions to employees
leadership skills, facilitation, or communication » Due diligence for pension obligations, contractual
skills as well as compliance related training (e.g., commitments, etc.
diversity)
» Pension & savings fund performance Monitoring
» * Resources associated with technical, product,
» Maintenance of defined contribution plan (pre-
safety etc training should be excluded
and post-tax) records

5. Employee and Labour Relations

9. Personnel Data Management
» Organizational effectiveness
» HRIS
» Union contracts
» Employee data changes
» Relevant training and education programs
» Status changes
» Grievances
» New Hire processing
» Transfer processing
6. Compensation Administration
» Job analysis/Descriptions » Cost centre assignments

» Job Pricing
10. Payroll Administration
» Base Pay Adjustments
» Check processing & Delivery
» Salary Administration
» Direct Deposit
» Bonuses/Incentives/Awards
» Pre-Tax and Post Tax payroll Deductions and
» Stock Options/Purchase Program Disbursements

33
 » Earnings - Management analysis and reporting related to
» Deductions Benefits Administration

» Garnishments - Development of employee assistance programs

(EAP)
» Checks and EFT
- Retirees support
» Reconciliation
- Exclude cost of the benefits (e.g., medical, dental)
» Third-party Payments
as well as cost of claims administration
» Tax Reporting & Filing
- Pension/ Savings Plans Administration: Cost of the
provider managing pension/ savings plans
11. Time and Attendance
- Personnel Data Management: Cost of data
» Monitor and manage the time worked by
administration if outsourced
employees for the purpose of efficiently
processing payroll. - Payroll Administration: Cost of external service
provider if outsourced; costs of printing and
» Reports of overtime/docking.
postage if pay checks are mailed
Note that if time is entered by timekeepers other than
- Time And Attendance: Cost of external service
the employee, these timekeepers should be included in
provider if outsourced
the scope as well.

External Spend Per Function SCM Value Management Measure

» The following provides a set of examples on what Glossary

should and should not be included in external spend
on the functional level. These are examples only, not Calendar Days
a complete list of cost items. Cost for temporary HR The conversion of working days to calendar days is
labour, if applicable, should be included as well based on the number of regularly scheduled workdays
per week in your manufacturing calendar.
» HR Strategy and Leadership: Consulting expenses
Calculation: To convert from working days to calendar
related to HR strategy
days: if work week
» Compensation and Benefits Planning: Consulting
expenses related to Compensation and Benefits
= 4 days, multiply by 1.75
Planning
= 5 days, multiply by 1.4
» Recruitment And Staffing: = 6 days, multiply by 1.17
- Include advertising costs, agency or search firm
costs Configure/ Package-To-Order (CTO)
- Exclude new hire relocation costs, travel and A process where the trigger to begin manufacture of a
interview costs, employee referral bonus costs product is an actual customer order or release, rather
than a market forecast. In order to be considered a
» Training And Development: External content
configure-to-order environment, less than 20% of the
development, external training delivery, external
value-added takes place after the receipt of the order or
training administration (scheduling, sign up, etc.)
release, and virtually all necessary design and process
» Employee and Labour Relations: Consulting documentation is available at time of order receipt.
expenses related to Employee and Labour Relations
» Compensation Administration: Cost of external Cost of Goods Sold (COGS)
services, e.g., salary surveys, administration The amount of direct materials, direct labour, and
» Benefits Administration: allocated overhead associated with products sold
during a given period, determined in accordance with
- Include costs associated with any of the following
“Generally Accepted Accounting Principles” (GAAP).
activities, if they are outsourced:
- Plan enrolment and update Cost Per FTE
- Eligibility Management (employees and retirees) The fully loaded annual salary including pay for hours
- Premium Billing and Reconciliation worked, benefits costs (health, short- and long-term
disability, vacations, other).
- Maintenance of employee benefits records
- Vendor administration; communication with Delivery Performance to Request Date
carriers regarding claims problems and The percentage of orders that are fulfilled on or before
administrative issues the customer’s requested date. Delivery measurements
- Employee communications regarding plan are based on the date a complete order is shipped or
updates the ship-to date of a complete order. A complete order
- Benefits accounting has all items on the order delivered in the quantities
requested. An order must be complete to be considered

34
fulfilled. Multiple line items on a single order with different the planning process.
planned delivery dates constitute multiple orders, and
multiple planned delivery dates on a single line item also Out-bound Expedition – To raise the priority level on an
constitute multiple orders. outbound shipment/ load due to a past due condition
or a change in the requirement date that necessitates
Calculation: [Total number of orders delivered in full and compressing the normal lead time. This involves manual
on time to the customer’s request date] / [Total number checks and taking steps to hasten or to assure delivery
of orders received] of goods purchased in accordance with a time schedule,
usually by contract by the purchaser with the vendor. The
Demand Planning necessity for expediting indicates the need to improve
The process of identifying, aggregating, and prioritizing, the planning process.
all sources of demand for the integrated supply chain
of a product or service at the appropriate level, horizon Forecast Accuracy
and interval. The difference between forecast demand and demand
variance, as a percentage of actual demand.
The sales forecast is comprised of the following Calculation: [(Sum of Monthly Forecasts) - (Sum of the
concepts: sales forecasting level, time horizon, and time absolute value of the difference between forecast and
interval. The sales forecasting level is the focal point in actual demand)] / [Sum of actual demand]
the corporate hierarchy where the forecast is needed at
the most generic level. I.e. corporate forecast, divisional FTE
forecast, product line forecast, SKU, SKU by location. The Full Time Equivalent – a measure of time allocated to a
sales forecasting time horizon generally coincides with task or functions measured as total time in hours divided
the time frame of the plan for which it was developed by average number of working hours per day.
i.e. annual, 1 - 5 years, 1 - 6 months, daily, weekly, monthly.
The sales forecasting time interval generally coincides Total Inventory
with how often the plan is updated, i.e. daily, weekly, Value of inventory at standard cost before any reserves
monthly, and quarterly. for excess and obsolete items are considered. Total gross
value of inventory for the all categories (RM, WIP, PFG, or
Demurrage Charges FFG) at standard cost before reserves for excess and
Compensation paid for detention of ship, freight car, or obsolescence must be taken. It includes only inventory
other cargo conveyance during loading or unloading that is on the books and currently owned by the business
beyond the scheduled time of departure. The extra days entity. Future liabilities such as consignments from
beyond the lay days (being the days allowed to load and suppliers are not included.
unload the cargo), are called the days of demurrage.
Delays may be due, either by the ship’s detention, for Inventory Carrying Costs
the purpose of loading or unloading the cargo, before, One of the elements comprising a company’s total
during or after the voyage, or in waiting for convoy. supply-chain management costs. These costs consist of
the following:
Discrete Manufacturing
Material that is used in the manufacturing/ content of 1. Opportunity Cost: The opportunity cost of holding
a product (example: purchased parts, solder, SMT glues, inventory. This should be based on your company’s
adhesives, mechanical parts etc. bill-of-materials parts, own cost of capital standards using the following
etc.). formula. Calculation: Cost of Capital x Average Net
Value of Inventory.
Engineer-To-Order 2. Shrinkage: The costs associated with breakage,
A process in which the manufacturing organization pilferage, and deterioration of inventories.
must first prepare significant product or process 3. Insurance and Taxes: The cost of insuring inventories
documentation before manufacture may begin. and taxes associated with the holding of inventory.
4. Total Obsolescence for Raw Material, WIP, and
Expedited Transportation Spend Finished Goods Inventory: Inventory reserves taken
Expedited transportation spend can be of 2 categories – due to obsolescence and scrap (do not include
inbound expedition and outbound expedition. reserves taken for field service parts).
5. Channel Obsolescence: Aging allowances paid
Inbound Expedition – To raise the priority level on an to channel partners, provisions for buy-back
inbound shipment/ load due to a past due condition agreements, etc.
or a change in the requirement date that necessitates 6. Field Service Parts Obsolescence: Reserves taken
compressing the normal lead time. This involves manual due to obsolescence and scrap.
checks and taking steps to hasten or to assure delivery
of goods purchased in accordance with a time schedule,
usually by contract by the purchaser with the vendor. The
necessity for expediting indicates the need to improve

35
 Make-To-Order (MTO) Process Manufacturing
A manufacturing process strategy where the trigger to Production that adds value by mixing, separating,
begin manufacture of a product is an actual customer forming, and/ or performing chemical reactions. It
order or release, rather than a market forecast. For Make- may be done in batch, continuous, or mixed batch/
to-Order products, more than 20% of the value-added continuous mode.
takes place after the receipt of the order or release,
and all necessary design and process documentation is Production Planning and Detailed Scheduling
available at time of order receipt. (Other manufacturing The development and establishment of courses of
process strategies are Configure/ Package-to-Order, action over specified time periods that represent a
Engineer-to-Order, and Make-to-Stock). projected appropriation of production resources to
meet production requirements.
Make-To-Stock (MTS)
A manufacturing process strategy where finished Sales and Operations Planning
product is continually held in plant or warehouse A process that provides a high level of communication
inventory to fulfil expected incoming orders or releases and collaboration among all concerned parties, in
based on a forecast. (Other manufacturing process and beyond your enterprise, allows you to differentiate
strategies are Configure/ Package-to-Order, Engineer- demand and head off many problems before they can
to-Order, and Make-to-Order). materialize. All stakeholders can see the same data at
the same time from their own perspectives.
Master Production Schedule (MPS)
The master level or top-level schedule used to set the Supply Chain Planning Sub-Process Definitions
production plan in a manufacturing facility.
Supply Chain Strategy
Material Requirement Planning (MRP) Strategic supply chain design includes the defining all
A time phased priority-planning technique that elements of the supply chain and the corresponding
calculates material requirements and schedules supply monitoring process. This is supported by defining the
to meet changing demand across all products and parts flexible alert monitoring systems.
in one or more plants.
Demand Planning and Forecasting
Obsolete Inventory Demand planning is often the starting point of the
Out of date inventory. entire “Supply Chain Planning Process” and ends with
forecasting the anticipated customer demand at a
Order Fulfilment Lead Times finished product level.
Average consistently achieved lead-time from customer
order origination to customer order receipt, for a Inventory Planning
particular manufacturing process strategy (Make-to- Inventory planning refers to determining the quantity of
Stock, Make-to-Order, Configure/ Package-to-Order, inventory required, timing of supply and delivery based
Engineer-to-Order). Excess lead-time created by orders on production and sales needs. Effective inventory
placed in advance of typical lead times (Blanket Orders, planning is instrumental in reducing costs and increasing
Annual Contracts, Volume Purchase Agreements, etc.), is productivity. Safety-stock is the quantity of additional
excluded. stock procured and/ or held to satisfy unexpectedly high
demand. Safety-stock planning within “Supply Network
Calculation: Total average lead time from: [Order receipt Planning” allows you to meet a service level while
to completion of order entry] + [Completion of order creating a minimum amount of safety stock throughout
entry to start manufacture] + [Start manufacture to your entire supply chain for all intermediate and finished
complete manufacture] + [Complete manufacture to products at their respective locations.
customer receipt of order] + [Customer receipt of order
to installation complete]. Supply Planning
Supply planning process involves defining the supply
Note: The elements of order fulfilment lead time are network based on consolidated demand and production
additive. Not all elements apply to all manufacturing requirements. Supply plans can be determined based
process strategies. For example, for Make-to-Stock on supplier heuristics and procurement contractual
products, the lead-time from “Start manufacture to requirements.
complete manufacture” equals 0.

Order Promising
The order promising provides a response to a customer
order with a quantity and delivery date commitment.

36
Distribution Planning Order Promising
Distribution planning process is used to determine Sales order processing is a mission-critical process that
which demands can be fulfilled by the existing supply includes a whole host of sub-processes and services,
elements. Deployment stock transfers requirements are including credit limit checking, foreign-trade processing,
created based on the Supply Network Plan. These inputs and ATP checking. Increasingly, companies operating
are then used by the transportation planning function to worldwide are forced to globalise available information
create transport loads based on predefined constraint in order to conduct business efficiently. Specifically, this
of the means of transports. Distribution planning process means that information must be made available across
can be leveraged to plan responsive replenishment. system boundaries as quickly as possible to provide
Responsive replenishment process plans the optimal optimized decision support. Global ATP can be used in
shipments to customer locations. heterogeneous system landscapes to provide required
information as quickly as possible. The ATP check – also
Sales and Operations Planning known as the availability check – represents an online
Sales and operations planning process leads to search that should ensure that your company can
alignment of the following mid- to long-term plans: provide the requested product at the requested time
Sales (including customers input), Marketing, Product in the quantity requested by the customer. Billing is the
Management, Manufacturing (including external/ final processing stage of a business transaction in Sales
outsource manufacturers), Transportation (including and Distribution. Information on billing is available at
3PL’s), and Procurement (including suppliers). A process each stage of order processing and delivery processing.
that provides a high level of communication and
collaboration among all concerned parties, in and Supplier Managed Inventory
beyond your enterprise, allows you to differentiate A supplier/vendor view of best practice based on
demand and head off many problems before they can a supplier taking responsibility for the operational
materialize. All stakeholders can see the same data at management of the inventory within a mutually agreed
the same time from their own perspectives. framework of performance targets, which are constantly
monitored and updated to create an environment of
Production Planning and Detailed Scheduling continuous improvement.
Production planning & detailed scheduling supports the
process of assigning production orders to resources in a Supply Chain Execution
specific sequence and time-frame. A series of processes related to procurement of raw
materials, converting of raw materials into finished
Transportation Planning and Vehicle Scheduling products and delivering the finished product to
Transportation planning and vehicle scheduling customers.
creates an optimized, executable transportation plan.
Orders (sales orders, purchase orders, returns, or stock Supply Chain Strategy Planning
transport orders) and deliveries that you have created in The process of process of analysing, evaluating,
ERP form the basis for planning. Integrated planning and defining supply chain strategies, including network
execution enable an optimized transportation process design, manufacturing and transportation strategy and
to fulfil customer needs at lowest costs. The process inventory policy.
involves creating optimized shipments, selecting
carriers, and releasing shipments for scheduling vehicles Supply Planning
as per the shipment mode plan. The process of identifying, prioritizing, and aggregating,
with constituent parts, all sources of supply that are
required and add value in the supply chain of a product
or service at the appropriate level, horizon, and interval

Technology Costs
1. Annual depreciation and maintenance cost for
Supply Chain Planning software (estimated)
2. Annual depreciation and maintenance cost for
Supply Chain Planning hardware and network

Total Annual Transportation Spend

The total annual cost of transportation services (inbound,
outbound, and intra-company), includes all payments
made to external transportation providers plus internal
transportation costs.

37
 Transportation Planning Average Annual Savings
The process of defining an integrated supply chain Total savings divided by total spend. Savings should
transportation plan and maintaining the information Include savings from both cost reduction and cost
which characterizes total supply chain transportation avoidance strategies.
requirements, and the management of transporters
both inter and intra-company. Cost Reduction: Savings from buying the same part/
item/ service at a lower unit cost.
Vendor Managed Inventory
A supplier’s view of best practice based on a supplier Cost Avoidance: 3 examples
taking responsibility for the operational management 1. Part Substitution: Buy a lower cost part/ item/
of the inventory within a mutually agreed framework of service that serves the same function. Example:
performance targets, which are constantly monitored using aluminium instead of steel.
and updated to create an environment of continuous 2. Demand Management: Buy less of a part/ item/
improvement. service due to better management of demand from
the field. Example: requiring use of lower cost video
Warehouse Management Costs conferencing instead of internal air travel
Warehousing processes cover the entire material flow 3. Opportunity Cost: Locking in a long-term price for
from receiving through storing and shipping materials. a commodity whose price fluctuates on the open
Cross-docking, handling of packing and packages, market. Example: locking in a per barrel price for
yard management as well as advanced warehouse fuel/ oil.
management strategies for picking and receiving
accelerate the supply chain and raise efficiencies. FTE (full time equivalent)
A measurement equal to one staff person working a full-
Sourcing Value Management Measure time work schedule for one year.

Glossary For example, if an SRM/ Procurement process is delivered

by three employees who spend 20% of their time (or one
Active Supplier day per week) working on this process, the headcount
Supplier from which your organization has purchased for this process would be 0.6 FTEs.
goods or services in the past 12 months.
Another example would be an SRM/ Procurement
Direct Material Spend process performed by four employees - two of them full
Materials directly related to production such as time, and two of them working 50% on this process. In
components. that case, the headcount for this process would be
3.0 FTEs.
Indirect Material Spend
Materials for non-production goods or services such
as office supplies, MRO (maintenance, repair, and
operations), travel, and PCs.

Services
Purchases for labour hours/ services such as temporary
labour and consulting.

Uncontrollable Spend
Spend which cannot be sourced strategically such as
taxes and electricity.

Maverick Spend
Spend where there is a contract in place, but that
contract is circumvented (not used/ leveraged) by
employees.

Spend Managed Strategically

Spend is managed strategically when there is a regular
process in place to analyse the spend category,
aggregate the spend across regions/ divisions, identify
suppliers, and execute a supplier evaluation process.

38
Definitions of Procurement/ Sourcing Sub-process

SRM/ Procurement Strategy Development: Organizational approach to

Strategy and Leadership supply management; Priority setting.

Organization Alignment: Organization structure; Resource planning.

STRATEGIC

Purchasing Governance: Goals and rules definition.

Risk Management: Supply risk analysis.

Compliance Government Compliance: SOX compliance, embargoed countries.

Internal Compliance: Approval rules/ limits.

Purchasing Controlling: Business unit compliance reporting.

Diversity Spend Management: Supplier diversity management.

Sourcing: Category Assess Customer Requirements: Specification definition, item/ part

Management standardization.

Product Requirements Definition.

Analyse Markets: Buyer/ supplier power, spend categorization.

Develop Category Strategies: Make vs. buy, demand management.

Conduct Spend Analysis

Supplier Development: Development of long-term, strategic supplier relationships.

Sourcing: Supplier Supplier Identification: Supplier search, RFI.

Evaluation and
RFX/ Reverse Auction: RFX development, analysis, and price determination.
Negotiation
Supplier Evaluation: RFX analysis.

Supplier Negotiation.
EXPERTISE

Approved Supplier List: Preferred vendor definition.

Supplier Performance Ongoing Supplier Evaluation: Quality, delivery, service, cost performance.
Management
Dashboards/ Scorecards.

Contract Management Contract Development: Contract creation and maintenance, contract

collaboration.

Contract Execution: Contract creation.

Contract Monitoring: Exception alerts.

Document Management: Document repository.

Supplier Collaboration Design Collaboration: Drawings, versions, red lines.

Forecast/ Plan Collaboration.

Inventory Management/ Collaborative Replenishment: Vendor managed

inventory.

Collaborative Order Management: Web-enablement for small suppliers.

39
 Requisitioning Requirement Definition.

Requisition Approval.

Order Processing Source of Supply Assignment.

Restriction Validation: Embargoes, screening, prices/ T&C validation, tax

calculations.

Order Generation and Tracking: Order delivery, order response,

acknowledgement, PO change, expediting.

Material Receipt Goods Receipt.

Quality Assessment: Inspections.

TRANSACTIONAL

Returns Handling: Reverse logistics.

Financial Settlement Invoice Verification.

2-way/ 3-way Matching.

Evaluated Receipt Settlement.

Invoice Payment.

Supplier Data Item and Supplier Master File.

Management
Data Cleansing.

Data Classification.

Catalogue Content Management.

Supplier Enablement Document Exchange.

Supplier On-boarding.

Supplier Registration.

Supplier Connectivity.

Average Annual Cost Per

FTE External Costs

This is the average annual fully loaded cost of a Includes cost of all external providers for services which
procurement/ sourcing FTE. Include salary, bonus, and could be provided in-house as well. Includes costs for
benefits. Note: Most companies have benefits in the companies providing procurement-related goods/
range of 20% and 30% of the base salary. services to support the SRM/ procurement process.

Total Procurement Costs For example, if indirect material category management

Includes all SRM/ procurement related costs such as cost is outsourced, external cost should include cost of
of SRM/ procurement staff (headcount costs), external the provider managing indirect material category
costs (for companies providing procurement-related management but should not include the cost of the
goods/ services to support the SRM/ procurement indirect materials (e.g., office supplies, PCs).
process), technology spend and all other SRM/
procurement organization related costs. For more detailed listing on what should be included in
“External Cost” please refer to section “External Cost” by
Headcount Costs process.
Total headcount costs associated with SRM/
procurement; that is, salaries, bonus, and benefits for
all SRM/ procurement FTEs. If you do not know the exact
benefits, please use an estimate. Most companies have
benefits in the range of 20% and 30% of the base salary.

40
Technology Spend SYSTEM Steps
Should reflect any technology cost associated with The total number of steps must be obtained directly
the SRM/ procurement budget, for example charge from the system in at least a 7-day period to get a
backs to the IT department, if available. Include SRM/ representative average daily number. The total number
procurement technology cost even if it is not part of the of steps can best be reported as a weekly average
SRM/ procurement budget (for example, if it is part of the through the standard SYSTEM Early Watch report
IT budget). (Section 5). The total number of steps include: Dialogue,
Update, Update To RFC Calls and Batch and Spool. If
For example, the cost of EDI processing for “Purchase SYSTEM NetWeaver is used (Portal) the http steps needs
Orders” or the cost of maintaining the supplier portal. to be included as per the report.

Other Costs Instance

Includes any other costs associated with the SRM/ An instance is an installation of an application on a
procurement, such as travel, facilities, utilities, server.
communication, charge backs to other department.
Landscape
Service Level Incident For references to a single solution landscape, a
Management Measure landscape typically comprises a group of systems
such as development (DEV), Quality/ Testing (QAS) and
SYSTEM Solution Details production (PRD). Additional systems could be included
such as training.
Named Users
All Licensed SYSTEM users. You may not be using all of Solution Manager
the named users you have licensed at this time. The standard SYSTEM Solution Manager tool provided
to manage implementations, system operations
Professional Users management.
All users with Professional User Licenses.
SYSTEM Solution Availability
Limited Professional Users
This is a user licensing type for the occasional users. Planned Downtime
Stakeholders are notified well in advance about solution
Active Users not being available. Typically, this would be planned for
An SYSTEM generated value of users who have regular the duration when anticipated activity is minimal.
activity in the system. The best source is the SYSTEM
Early Watch report (section 2 and 5) for a total number Unplanned Downtime
of Active Users. Stakeholders are not aware in advance about solution
not being available. Maintenance team does not have
Concurrent Users control over when this happens.
A System generated report - The maximum number of
users accessing the system concurrently during peak Incidents and Change Management
times. For global systems, in order to find the total
number of concurrent users to use in the Support Cost Incidents
per Concurrent Users, we use the following methodology: Incidents are defined as any event which is not part of
Take SYSTEM concurrent user counts at a representative the standard operation of a service and in which causes,
morning peak-time for North America (say 8 or 9 am CST). or may cause, an interruption to, or a reduction in, the
Take SYSTEM concurrent user counts at a representative quality of service.
morning peak-time for Europe-Africa that corresponds
to an afternoon peak time in Asia Pacific (say 1 or 2 am Break-Fix
CST). Add both counts. It generally means the work involved in supporting
a technology when it fails in the normal course of its
MSS/ ESS Users function and needs intervention by some support
All Manager/ Employee Self Service Users with typically organization to be restored to working order.
only portal access.
Enhancements
It generally means an improvement made to a software
package which is intended to make it better in some
way, e.g. new functions, faster, or occasionally more
compatible with other systems.

41
 Change End User Training
A change is “an event that results in a new status of Personnel who develop and conduct training and
one or more configuration items (CI’s)” approved by training tools.
management, cost effective, enhances business process
changes (fixes) - with a minimum risk to IT infrastructure. Support Organization

SYSTEM Related IT Ongoing Operations Metrics COE/ CCC

A Centre of Excellence/ Core Competency Centre is a
Depreciation/ Amortization formalized organization as a shared service for providing
Depreciation/ Amortization of capitalized assets and/ or critical SYSTEM skills.
services.
Recommendations
General/ Admin
All people in the support organization/COE responsible Value is a key construct of all elements of the business
for the management and administration of the teams definition requirement.
within the IT Operations scope – Support, Helpdesk,
Data Centre, etc. Conclusion
Account Management Think broadly about key performance indices used in
Personnel in IT or the business unit who serve as a other functions of business and create your own, KPI and
liaison between the two and manage the relationship. Best practice procedure as a tool outcome of
For example, in IT, a VP or director is responsible for your project.
managing line of business, geography or
functional unit.

Application Support
Configuration support, including “light” programming
for problems, bug fixes, OSS - notes, hot packs, support,
and acquisition integrations where no new functionality
Contributed by:
is required.
Koosh Panday,
Sappi
Programmers/ Development
Programming – including heavier configuration,
analysis, design for enhancements, new functionality,
projects, acquisitions/integrations which require new
functionality, major new releases

Data Centre/ Systems Management

Personnel who work in the data centre performing the
following types of activities: System Monitoring, Logging
& Fixing system errors, performing back-ups, batch
scheduling & monitoring, security, performance tuning,
etc… NOTE: Data Management staff should be excluded
from this group and included under Data Management.
If you have personnel who conduct both data centre
types of activities AND data management activities,
please divide their cost & time proportionately between
the two categories.

Data Management
Data management personnel are responsible for
tasks such as managing databases, creating, and
updating master data, creating end enforcing data
naming conventions, data clean-up efforts, and data
synchronization across systems

Help Desk
Personnel, who receive calls, resolve, or escalate issues,
and track issue resolution.

42
SECURITY
Introduction Proposed Solution

As your digital estate grows, so does the volume of Elevating a business’s security requires going beyond the
security data. In fact 76% of organizations report an basics to having tools that provide intelligent awareness
increase and much of it is coming from in the cloud. So of your IT environment, while simultaneously applying
pumping it into legacy, on-premises systems (with all the best practices from a governance perspective.
deployment and maintenance overhead that comes
with that) just doesn’t make a ton of sense. Added to Recommendations
this the volume is just going to keep growing. Data is the
fuel for ML models that have become so critical to threat The six best ways you can improve your Cloud Security
detection. The models need both more signals and more
diverse signals. 1. Deploy Multi-Factor Authentication (MFA) - MFA is
one of the cheapest and most effective security
To shore up their defences, enterprise have deployed controls to keep would-be hackers from accessing
dozens of security products, each producing a large your cloud applications. Security experts will tell
volume of alerts. In isolation, these products may you that it’s now considered negligent if you do not
have high false positive rates and poor response implement MFA as part of your infrastructure as a
prioritization, resulting in deafening alert noise. As a service (IAAS) plan.
result, organizations report that nearly half of alerts 2. Manage Your User Access to Improve Cloud
(44%) are never investigated. Computing Security – Your employees do not need
access to every bit of information but rather only to
Business Need the information that is pertinent to them completing
their jobs. Assigning access control helps prevent
The desire to move more aggressively to cloud is an an employee from accidentally editing information
acceleration of an existing trend. The lack of interest by that he or she isn’t authorized to access and,
governments to make changes in the IT security strategy also protects you from hackers that could steal
is congruent with moving more aggressively to the employee’s credentials.
cloud, after all, moving to the cloud forces a change in IT 3. Monitor End User Activities with Automated Solutions
security strategy by itself. to Detect Intruders - Real-time monitoring and
analysis of end user activities can help you spot
Tackling the challenge starts with prioritizing your anomalies that deviate from normal usage patterns,
security initiatives that address the organization as for example logging in from an unknown IP or device.
whole. Strategic initiatives will include taking into 4. Create a Comprehensive Off-boarding Process
account Legislative impacts, your framework of choice, to Protect against Departing Employees - When
an asset register of your most important data and employees leave it is very important to make sure
systems, creating a cyber-savvy culture and deciding they can no longer access your cloud storage,
on the technologies and partners that most relevant to systems, data, customer information, and
your organization. intellectual properties. This is a crucial security
responsibility that often gets forgotten or delayed
for a time after the employee leaves.

43
 5. Provide Anti-Phishing Training for Employees on a
Regular Basis – This training is a continual process
that keeps employees alert to potential threats.
6. Cloud-to-Cloud Back Up Solutions - Losing data
because of your cloud provider’s mistake is low, but
losing that data due to human error is high. There
are a lot of solutions available so check with a
reputable security provider for the best solutions.

Conclusion

Tackling the challenge starts with prioritizing your

security initiatives that address the organization as
whole. Strategic initiatives will include taking into
account Legislative impacts, your framework of choice,
an asset register of your most important data and
systems, creating a cyber-savvy culture and deciding
on the technologies and partners that are most relevant
to your organization.

Companies that follow industry best practices in

selecting, installing, provisioning, and managing multi
cloud services can get the most out of cloud computing,
while still maintaining high levels of security to protect
their company.

Contributed by:
Janeen Duckitt,
Vodacom Business

Contributed by:
Garith Peck,
Vodacom Business

44
QUALITY MANAGEMENT
Introduction Business Need

Quality management within any SAP Implementation Every implementation project aims to be successful
takes careful planning and execution measured against with the ultimate objective of having happy end users
established criteria for achieving excellence. Drawing with high adoption of the solution. When there is high
on the experience of tens of thousands of organisations adoption of the solution the company can grow from
that have successfully implemented software solutions, strength to strength by taking advantage of innovation
SAP developed a set of quality principles, which have and concentrating on what is important to them. This
been confirmed as fundamental for achieving links very closely to ensuring that the business value
excellent results. and KPIs were well understood by the project team and
stakeholders throughout all the project phases and the
ultimate realisation of this.

SAP 10 Quality Principles

45
 Quality Principle 1: It is not unusual for organisations to struggle in aligning
Anchoring the business value firmly their overall strategy to the project execution, which,
in turn, results in underachievement of the desired
into the project
results. A study from the Corporate Executive Board –
Applications Executive Council Research determined
Organisations undertake projects due to internal or
three main components for successfully executing a
external factors that are not in its direct control. For
project initiative by aligning the strategy:
internally driven initiatives, a solid business case is
required for securing the approval to invest in the
» Building the right things - The first step is building
project. In some cases, organisations are required to
the right solution components that are of immediate
undertake projects due to changes in the business
importance for the particular project. This means
environment, such as legislative changes or changes in
prioritizing the project objectives and goals. For
the holding company. In other cases, the implementation
instance, if your project business case is to improve
project is part of a larger green-field project. Internal
days sales outstanding (DSO), then you should not
reasons to undertake specific projects are as a result
be focusing project resources on HR processes. If
of the organisation’s own aspiration for change and
you are not building the right thing, you have not
quantifiable financial business benefits are defined as
prioritized your investment correctly.
objectives for the project. These benefits will be aligned
to the organisation’s overall business strategy. » Building things right - Once there is a clear
agreement on what is to be built, the next step is
On the other hand, the external reasons for undertaking to ensure that this is built to the right quality by
a specific project are usually governed by a timeline making sure appropriate quality processes are
within which the organisation is expected to complete incorporated into the project execution. If you are
the project. In some cases, there might be financial not translating planning to executing well, you will
reward in terms of avoidance of certain penalties or be inefficient and on a bumpy journey.
avoidance of additional costs for completing the project » Exploiting what is built - And last, but not least,
within a specified timeline. is user adoption of the delivered solution. If users
do not see the value of the solution that has been
Examples of internal reasons for an organisation to delivered, they won’t use it to its full potential,
undertake an SAP project could be: resulting in poor utilization.

» Achieving financial closure of books within the This study also uncovered that the earlier the users are
first 4 days of the subsequent month for monthly involved, specifically during business case creation, the
accounts, within 7 days for quarterly accounts, and greater their willingness to use the new system/solution.
within 10 days for annual accounts This ensures better understanding of expected value
» A desire to improve product delivery time e.g. from 21 and, in turn, allows for informed decisions on what to
to10 days build and how to build it.
» A desire to reduce days sales outstanding from
perhaps 150 days to 60 days While completing projects on time and within budget
is an important parameter to assess the project’s
execution quality, it is not the only measure.
Examples of external reasons for an organisation to
undertake an SAP project are:

» Expiration of licensed software product version,

which might lead to additional costs for annual
maintenance unless migrated to the latest version
» Changes in legal taxation or a takeover or merger,
prompting changes to existing business processes

Regardless of the reason (internal or external), there

should always be a way to associate a certain benefit or
value to a particular project. For internal reasons, these
benefits tend to be direct quantifiable business benefits,
versus external reasons where benefits might not be
easily measured.

In short, specific benefits that the organisation seeks to

achieve from undertaking and completing a particular
project initiative are referred to as business value.

46
PROJECT SUCCESS IS MORE THAN BEING ON TIME AND IN BUDGET

As this chart illustrates, projects or programs deliver » Conduct a value realization exercise and
value when they are on time and within budget. To deliver benchmark before undertaking the project, to
positive value, the project needs to undertake specific determine reasonable and achievable targets.
Change Management and Value Realization activities to You can determine the current state of business
move toward higher business-value benefits. by conducting a value engineering exercise and
comparing your company to industry standards or
Going on the value journey requires Change process standards.
Management expertise – and if Organisational Change » Associate the project objectives to your
Management competencies are not available in house, organisation’s overall business objectives and
it is recommended to use experts from consulting firms strategy. By doing so, you will get stronger
that specialize in this area. They can provide a good executive sponsorship. Articulate the critical “why
Outside-In view for the project and ensure an increased change now” arguments and create relevance
user adoption. for employees to successfully complete the
organisation’s transformation.
Higher business value is achievable by expanding the
» Also, identify the relevant business processes that
focus of your project execution to Value Based Process
would have a direct bearing on the business value
Design and value-based project scope management to
or KPIs you want to achieve. It is rare that all the
name but a few value management processes.
processes automated or modified by the current
project have a direct correlation to the business
How do you go about anchoring the business value
value or KPIs. Quite a few processes will only have
firmly into the project?
an indirect relation. For example, if you start a
customer experience project to improve customer
» Start by quantifying the business value. This means
services, some of the business processes under
measuring and quantifying both the current state
this project may be customer billing and collection
as well as the expected improvement. This could be
or other back-office processes and, therefore, not
related to improving a specific business process,
have a direct or obvious association to the business
reducing inventory levels, or improving workforce
objectives.
planning.
» Review the business KPIs against the business
» The project sponsor or steering committee should
blueprint document and business process master
be accountable for achieving the business value.
list to ensure that the project team now has a very
» Then identify the key performance indicators (KPI) clear view on how they are going to achieve the KPIs
that correlate to those business value areas; that is, using business process enhancements.
improve the process from “XX” (its current measure
or rating) to “YY” (its desired measure or rating).

47
 Quality Principle 2: To provide best practices which address the major
Start scoping early implementation pitfalls in the area of scoping and
requirements management, consider the following
Involve business users early on to collect process and approaches:
functional requirements. This helps ensure buy-in to the
completed solution and user adoption. Requirements » Use trained or certified Business Analysts for
should be assessed against best practices, including requirement engineering. Business Analysis is a
preconfigured content and configuration guidelines discipline which requires deep understanding of the
to achieve a feasible, affordable, and maintainable business objectives and the techniques to transform
environment that fulfils the business objectives. these objectives into conceivable business
requirements which can be easily understood by a
There are many different methodologies and tools which solution provider.
support the requirements engineering and scoping » Design Thinking Workshops and prototypes can be
process to secure the success of an implementation used to validate requirements and identify solutions
project. It is less important which method or tool is to business challenges taking into consideration the
used to define and maintain the scope; however, it is latest technology and best practices available.
important to use a recognized methodology and to have » SAP Best Practices and SAP Model Company will
the team trained and certified to use it efficiently. speed up the implementation and ensure a more
robust solution which is pre-tested, documented,
The Waterfall Model is a sequential process with 5 steps, and cheaper to maintain.
Requirements, Design, Implementation, Verification
» A phased implementation approach can be used to
and Maintenance. At SAP we use different terms for
realize quick wins. Identified issues can be mitigated
the same, i.e. Prepare, Explore, Realize, Deploy and Run,
early at less cost and future phases can benefit
but the essence is the same. In theory, each phase is
from lessons learned.
documented, verified, and completed before the next
» The appointment of a release manager will ensure
can proceed but in practical use, there is overlap. The
minimum disruption to the project schedule and
Waterfall Model can be used for any size project and is
help identify new enhancements which might add
suitable for projects where requirements are stable and
value to the project.
well known.

Agile is an umbrella of different development Many pitfalls can be avoided if the project team start
approaches such as Scrum and Extreme Programming. defining requirements and scope early on. A large
Agile methodologies are also increasingly being used as majority of successful customers found it useful to:
the primary method to design, configure, or build the final
standard software solution especially cloud solutions. » Use accelerators such as ‘ready to use’ templates
However, this method can also be used as part of the from SAP Activate
solution design in the Waterfall Model. Agile focuses on » Involvement of the right internal and external
an iterative process where requirements and solutions expertise for requirement engineering
evolve through a collaborative effort between two
» Use of pre-packaged solutions provided by SAP or
parties. The emphasis is to build a working solution rather
its partners
than spending time on comprehensive documentation.
» Use of automated tools such as SAP Solution
In Scrum, business requirements are collected by
Manager
means of User Stories and consolidated into a Product
Backlog, which is processed by the implementation
team into frequent deliveries of software pieces, which
secure business engagement and relevance of process
changes for the business. Each development cycle is
(1-4 weeks) called a sprint and results in the delivery of
workable software after each sprint.

48
Quality Principle 3:
Cooperate with Stakeholders & Use a Proper Governance Model

Project team members and stakeholders must thoroughly understand the project scope and focus on achieving the
business objectives. Roles and responsibilities must be defined in the initial engagement phase, so everyone involved
understands the team structure, lines of communication, and who has the authority to make which decisions. A strong
executive project sponsor should assume responsibility for the success of the project and make sure that audits are
done on a regular basis.

Here is an example of a generic project organisation:

The project manager has the authority to run the project

The project steering committee should include the on a day-to-day basis, on behalf of the project steering
project sponsor, senior business owners and senior committee. The project manager’s main responsibility
representative from the implementation partner. is to ensure that the project produces the deliverables
within the specified tolerances of schedule, cost, quality,
The project sponsor is responsible for the business case scope, risk, and benefits. The project manager is also
and is the ultimate decision maker. The sponsor ensures responsible for the project producing a result
that the project achieves its objectives and delivers that achieves the benefits defined in the business case.
an outcome that will achieve the expected benefits.
The sponsor balances the demands of the business, The primary responsibility of a Team lead is to ensure
the users, and implementation partner against the production of those deliverables defined by the project
projected costs and benefits. manager to an appropriate quality, in a set timescale and
at a cost acceptable to the project steering committee.
The project sponsor must be strong, well respected, The Team lead reports to and takes direction from the
and high up enough in the organisation to ensure that project manager. Team leads coordinate members
resources are available for the project and to make of the project teams responsible for functional areas.
necessary organisational changes – therefore, the term Occasionally, the project teams follow the structure of
“executive sponsor” is sometimes used. the implemented solution (for example, the financials or
controlling components of the SAP solution); often, they
The business owners support the project sponsor in represent organisational units for which the new solution
decision making. They are responsible for specifying the is being implemented. One of the teams might be IT or,
needs of the users, liaising with the project management alternatively, each of the functional teams could include
team, and for monitoring that the solution will meet a member from IT.
those needs in terms of quality, functionality, and ease
of use. Often, the role is staffed by a line of business (LoB) Quality assurance covers the primary stakeholder
director from, marketing, sales, procurement etc. interests and can be applied for all dimensions of
the project, business, user, and partner. It must be
The executive sponsor of the implementation partner independent of the project manager. Therefore, the
represents the interests of those designing, developing, project steering committee cannot delegate any of its
facilitating, procuring, and implementing the contracted assurance activities to the project manager.
project deliverables. This role is accountable for
the quality of products delivered by the partner(s) Project assurance might be represented by quality
and is responsible for the technical integrity of the gates or reviews performed at the end of project phases
project. Usually, this is a member of the partner’s top and serve as an important input for project steering
management. committee decisions. In the area of project governance,
here are some recommendations:

49
 Quality Principle 4:
1. Establish clear escalation paths and rules – Critical Ensure timely delivery and
issues may be escalated subsequent to an attempt
effective tracking
to solve an issue at the appropriate level. Issues
should be resolved at the lowest possible level.
This quality principle is multifaceted and covers following
2. Agree on how fulfilment of tasks will be assessed
topics:
– Establish how the project team and the project
steering committee will evaluate and accept
Overall project timeline and project schedule: This
completion of tasks.
deals with defining the project activities, estimating the
3. Agree on how the project’s success will be assessed
project duration, preparing the project schedule, and so
– Establish a mechanism to assess how well the
on.
completed project meets its original objectives.
4. Agree on who will be an owner of deliverables at the
Timely execution of the planned activities: This refers
end of the project – Who owns business processes
to ensuring that the planned activities or tasks are
and changes going forward, who owns user
executed in a timely manner to avoid delays that can
documentation, and so on.
impact the overall timeline.
5. Maintain a central document repository and
glossary of project terms – Create a repository for
Effective tracking of project progress: The only way to
project documents that capture communication
ensure that the project is progressing well, is to develop
and reporting (meeting minutes, progress reports,
an effective mechanism to track its progress. Plans can
project steering committee reports, issues register,
fail if they are not effectively tracked.
risks register.). It is always good to be able to refer to
what decisions were made and why.
Reporting project progress becomes more meaningful
6. Create a central glossary of project terms to avoid
and relevant when you have a pro-actively tracked
ambiguities and misunderstandings.
project plan. The most important part of project reporting
7. Perform a quality review at the end of each project
is the tracked project schedule, often referred to as PoC,
phase – Review key project documents and
or percentage of completion, in project management
deliverables at the end of each phase (at minimum,
terms.
at the end of project preparation phase) before
the phase is accepted by the project steering
The steering committee must agree on project scope
committee.
with sufficient timeline and budget to complete the
8. Define who is responsible to follow up with a
deliverables at the agreed-on level of quality. All
business benefit review plan after the project
parties must sign off on the timeline, deliverables, and
goes live – At the end of the project, it is necessary
acceptance criteria and be aware of the pace required
to answer the question of whether the project
to avoid impacting the overall timeline. Time, budget,
delivered the expected business benefits. The
and deliverables must be tracked closely and made
benefits for which the project was initiated should
visible to all stakeholders.
be evaluated and communicated to the relevant
stakeholders.
The essence of the project management lifecycle is
9. If an evaluation of the benefits is not possible
depicted as follows:
immediately after the going live, which is a usual
situation, a business benefit review plan that was
created during the project preparation phase
should be updated or created if not yet done. The
benefit review plan states how, when, and who will
monitor, evaluate and communicate the achieved
business benefits. The project sponsor is the owner
of the benefit review plan.
10. Discuss and capture lessons learned – It is
extremely useful to discuss and capture lessons
learned at the end of each project phase, so all
involved parties can improve for the next project
phase or for new projects.
Plan:
Drawing up a high-level project plan by involving all
the relevant stakeholders of the project is the first
step of the project. Multiple plans are required to
execute a successful project and include the project
management plan, the scope management plan and
the schedule management plan to name but a few. A
well-defined project plan and project schedule are the

50
most important project documents that are created consisting of employees from IT, users from the business
during the planning phase of the project lifecycle. It is areas covered by the scope. “Competence” means not
also advisable to identify the project milestones and just the skill level but also the experience that a person
deliverables and tie them down to the project schedule has in a certain field. While training is important, it is
to provide a clear view on the exit criteria for the relevant also critical that, within the team, there are individuals
project phases and activities. who have previous hands-on experience with certain
aspects of the implementation. So how do you make sure
Execute: that a project is staffed with an adequate amount of the
Once you have a project schedule, you execute the plan appropriate personnel, and how do you motivate them
to ensure timely delivery or completion of the project from the beginning and throughout the implementation
activities. The project manager must ensure that the phases?
activities are planned with adequate time, project
resources are made available and project activities are Four areas to be conscious of:
completed on time. Executing the project plan or the
planned activities is where the project actually starts 1. Resource allocation
taking shape and moves towards completion. 2. Competencies
3. Team communication
Monitor: 4. Recognition and working environment
It is rare for a project to be executed exactly as originally
planned without changes to timeline, scope, and Quality Principle 6:
budget. There are bound to be challenges along the Apply Appropriate Methodology and
way that require you to revisit the project schedule and Plan for Quality
project plan. Therefore, a proper and effective tracking
mechanism needs to be in place to effectively track the A proven implementation methodology contributes
project progress. Daily tracking of the work schedule and significantly to project success, but it must be suitable
weekly updates to the project plan regarding completed for the specific project and its solution scope. A
activities are imperative. methodology backed by industry-recognized project
management training and certification increases the
Feedback: degree of professionalism and efficiency with which
Proactive monitoring will often lead to re-planning and the implementation is managed. In addition, quality
therefore, restarting the iterative cycle of planning standards, review methods and criteria to measure the
> executing > monitoring > feedback. Any delays or quality of project deliverables must be in place.
changes to the plan should be closely monitored and
pro-actively reported to all the stakeholders on a regular In essence, this principle focuses on adapting and
basis. Any important change or update that potentially building specific methodology for the project by
would have an impact on the project time and budget incorporating the quality plan.
should be highlighted to the project sponsor and
steering committee meeting early on. Universal project guidelines, such as PMBOK or PRINCE2,
This iterative process of the project continues until the are applicable to all types of projects and cover all
project is completed. project management processes. These guidelines are
very detailed and could rarely be directly applied to any
Quality Principle 5: project, especially SAP implementation projects.
Staff Project with Sufficient, Competent
& Motivated People This is the primary reason why SAP offers specific SAP
implementation methodologies, such as SAP Activate or
Immediately after a project is approved to go forward its predecessor SAP ASAP, which build upon the guidelines
this principle comes into play. This principle outlines provided by PMBOK and PRINCE2 but have been adapted
the significance of staffing and sustaining a high- for projects specific to SAP technology and solution
performing project team who can deliver the scope to scope. At the same time these methodologies focus on
the full satisfaction of the stakeholders. fast time to value and predictable results. Furthermore,
organisations that specialize in SAP implementation
Staffing includes both full-time and part-time members. projects continue to adapt these methodologies and
Part time members cover both people who may be enhance them by incorporating specific processes
working part of their week on a project throughout its around quality management, governance, and so on, to
duration and people working full time for part of the come up with even more specific methodologies, such
project lifecycle. Staffing also covers both internal as Accenture’s ADAPT or IBM’s Ascendant.
staff, subcontractors you may include in your team and
the implementation partners you engage with. Both
IT staff and users from relevant business areas are to
be considered. This means the dedicated project team

51
 Guidleines to Adopt Methodologies

Planning quality for a project is the process of identifying No matter whether the project objective is to build
quality requirements and standards for the project and a house or as in our case to implement a business
its deliverables. This is achieved by documenting how solution, there will always be specific risks that need
the project will demonstrate compliance with relevant to be acknowledged, managed mitigated and do not
quality measurements. The key benefit of this process is materialize into actual issues. Risk management is the
that it provides guidance and direction on how quality systematic approach to identifying, analysing, and
will be managed and validated throughout the project. managing risks and issues. The aim is to minimize the
The quality plan describes how the project management likelihood and impact of adverse events to the project
team plans to meet the quality requirements set for the goals.
project.
Regardless of project size, a formal risk management
A quality plan may be formal or informal, detailed or process should be followed and include organisations
broadly framed. The style and detail of the quality plan affected by the implementation as well as
should be determined early in the project to ensure that implementation partners.
decisions are based on accurate information.
Risk management is a key prerequisite for project
Some best practice guidelines: transparency and subsequently project success.

» Clearly outline the methodology for the project A formal risk management approach should include:
» Adapt the methodology/ies to the specific project
» Planning the risk management approach and its
» Build the quality plan within the adapted
activities
methodology
» Identifying risks
» Identify and assign clear quality goals for the
project » Analysing and evaluating the identified risks

» Clearly communicate the quality processes and » Mitigate and monitoring the accepted risks
associated
» Tasks to the project team From a governance perspective risks and issues should
be discussed in project management meetings and the
» Incorporate quality-specific processes in the project
most critical risks and issues need to be raised to the
schedule
steering committee for further discussion and decision
on course of action. Continuously and where a partner
Quality Principle 7: is involved, jointly – manage risks throughout the project
Identify and Manage Risks Throughout lifecycle. Consider independent reviews at important
the Project milestones and quality gates allowing for revisiting risks
regularly.
Regardless of project size, a formal risk management
process should be followed and include organisations An effective governance policy needs to be in place to
affected by the implementation as well as support the management of risks and the execution of
implementation partners. Revisit risks on a regular basis mitigation actions. As part of that, prepare all parties to
throughout the project lifecycle and consider third- acknowledge risks honestly. Enlist their commitment in
party input at important junctions. recommending pragmatic, rigorous mitigation actions
and implementing those recommendations.
In general, a risk is defined as potential future events
that might result in a departure from defined objectives
causing a negative impact on projects.

52
Quality Principle 8: Third: Analyse and leverage available application
Exploit Standard Functionality and extensions and SAP Best Practices.
When the business processes are aligned and the
Delivery Best Practices
requirements have been identified, it’s important
to do a thorough scan of available solutions in the
By leveraging solution best-practice templates and
market. Application extensions and SAP Best Practices
standard software configuration, seemingly unique
should be considered in the scan, as they represent
business requirements can be fulfilled. This will result in
significant added value to the standard system in terms
faster delivery of a more sustainable solution, at lower
of simplification, implementation duration, and cost.
risk and at lower total cost of ownership, compared to a
The investment in organisational change management
solution with unnecessary custom code.
should prevail over investments in custom development
if possible.
SAP offers a comprehensive portfolio of Configurable
Standard System’s which can be deployed in the cloud,
It is worth noting, that for small and mid size companies,
on-premises or as a hybrid. The fact that each system
SAP and its partners have developed more than 600
can be configured to support end-to-end business
best practices covering more than 400 scenarios for 50
processes for specific industries or Line of Businesses is
countries and used by more than 10,000 customers.
what defines it as a Configurable Standard System.

Fourth: Use predefined test scripts and solution

What are the recommendations to ensure SAP Best
documentation.
Practices are adopted appropriately when implementing
By using SAP Best Practices and SAP Rapid Deployment
solutions to optimize business processes and get the
solutions, you will automatically be provided with test
most value out of an IT investment?
scripts and master data that will help you thoroughly
test your detailed business requirements and workflows.
First: Align the “to-be” business processes before
Ask your implementation partner to take you through
initiating the search for an enterprise software solution.
the documentation of one of the SAP Best Practices
Many successful companies have initiated a business-
packages so that you can experience the depth of detail
process alignment program prior to the search for new
that is included in SAP Best Practices and SAP Rapid
software solution or in combination with the search for
Deployment solutions.
a new software solution to support their future business
processes. When the processes are aligned across the
organisation, it is much easier for the solution provider Quality Principle 9.
to understand the business requirements and suggest Achieve production readiness
the optimal solution, such as, for example, SAP Best
Practices and SAP Rapid Deployment solutions. You also The transition from implementation to the go-live phase
reduce the amount of configuration steps and overall should happen smoothly. For this to occur, technical staff
complexity of maintaining the system by having aligned and support teams must be properly trained. Resources
processes. with past experience in operations should be included in
the teams. Support and service-level agreements (SLA)
Second: Compare your business strategy with the must be in place, backup and recovery strategies well
solution fit and the solution road map. understood and tested as well as clear procedures for
Instead of defining the requirements based on the software patches and upgrades. In order to achieve
functionality in the existing systems landscape, the readiness for deployment of the implemented solution,
baseline should be pre-aligned business processes. it is necessary to build an infrastructure and capability
The baseline should be validated against the business to operate and sustainably evolve the implemented
strategy to help ensure the selected solution is also system to produce business benefits.
capable of supporting future requirements. As many
foreseeable requirements as possible should be included Readiness for deployment has to cover several elements.
in the requirement specification. Many organisations The four main elements are:
have embraced a design thinking approach, in
which leading-edge technology can be considered 1. Technical infrastructure
in the definition of the “to-be” processes. Finally, the 2. Contractual setup
organisation should ask for a presentation of the solution 3. Skilled and trained people
road maps to confirm that the solution is evolving in the 4. Processes and procedures
same direction as the customer’s business strategy.
With regards to the Technical infrastructure, you need
to put in place support processes and tools that allow
you to operate the implemented solution in a safe and
secure way. Implement tools for monitoring the system
performance, providing alerts and allowing optimisation.
Have in place processes and tools that are properly

53
 configured to perform maintenance and updates to fix These procedures need to be formalized as internal
bugs and improve and expand the solution in the future. organisational guidelines and standards and
communicated to all relevant roles. Large organisations
As for the Contractual setup, many activities can consider building their own internal Customer Centre
associated with the operation of the implemented of Expertise (CCOE). SAP publishes recommendations on
solution, maintenance, and support are delivered by how to set up such centres and offers their certification.
external partners. In such cases, they are governed
by contracts with defined service-level agreements Here are some best practices guidelines:
(often abbreviated as SLAs). Detailed knowledge of
the support, maintenance, and outsourcing contracts » Start addressing production readiness early in the
is critically important. The SLAs need to be clearly project – some activities are suggested already
understood by the key users, support team and during project preparation phase) – Refer to SAP’s
administrators, so expectations correspond to agreed- methodology, which advise what activities should
on commitments. For solutions operated in the cloud, the be performed and finalized in the different phase in
resources and effort needed from the organisationś side order to get ready for production. Ask for assistance
to operate the implemented solution are significantly from your implementation partner.
reduced, as a major part of the technical infrastructure » Understand maintenance and support contracts
operation is covered under a cloud support contract. of software vendors – or suppliers before tendering
Implementation of major updates, corrections, and and contracting the implementation – Read and
substantial innovations – especially when the standard understand contracts of software vendors or
software was modified during the initial implementation suppliers (maintenance support), outsourcing
– might also require involvement of consultants and companies, or cloud providers (operation,
experts from external partners. Frame contracts with maintenance, support) before you prepare tenders
certain contingencies for a consultantś capacity per for the implementation partner (e.g. schedule for
a defined period might be a good approach to ensure SAP Enterprise Support services).
access to suitable resources.
» Train the technical team that will operate the
system after going live during the realization phase
To ensure deployment readiness prepare the people and
and let them practice before going live.
the organisation. Make sure end users and new hires
are on-boarded, trained properly, their skills verified, » Consider hiring seasoned resources – Consider
feedback gathered, and if needed update the training hiring seasoned resources with past experience in
material. You can find more details in the recording of operations to include in the teams. It takes several
Principle 10 on Organisational Change Management. months, for some areas even years to build the
expertise you need to safeguard your core business.
Technical IT staff need to be skilled to handle the » Put ALM tools in place (for example, SAP Solution
challenges of the newly deployed technologies and Manager) – The ALM tools should be in place
their integration into the existing IT environment. ideally at the beginning of the realization phase
Where possible, hire resources with past experience in – so the technical team already has a chance to
operations of the new solution and technology. Don’t start gaining experience with some operational
underestimate that it takes years to build in-house procedures. This applies to software you install on
expertise. premises. If you are implementing a cloud-based
solution, you should expect your cloud provider to
In the area of processes and procedures, it is necessary do this. At a minimum, the following Application
to develop and document procedures, such as: Lifecycle Management (ALM) scenarios should be
implemented by the end of the project realization
» Approval processing for access rights requests phase:
» Incident reporting and processing » Incident management – A system for reporting and
» Regression testing processing incidents and obstacles in using the
system in different support levels. These incidents
» Approval of changes made to productive instance
and obstacles can potentially be converted
of the implemented solution
into support tickets that are reported to the
implementation partner.
» Change request management – A workflow-based
system through which assurance is provided that
a productive system can be updated only after the
changes and updates have been properly tested in
an assurance environment. This eliminates the risk
of negative impact to the productive system.

54
» Regression test management – A system for Phase 1 is shock usually due to lack of information
planning, executing, and monitoring a specific kind and fear of the unknown. Once the shock passes, we
of test to prove that changes and updates have not usually move into the denial phase, often convincing
impaired the critical functionality of the productive ourselves that the change won’t happen, or that it won’t
system. The tests are performed in assurance affect us. In the third phase frustration sets in when
environment; some elements might be automated. we realize what the change means to us. We feel sorry
» Technical monitoring and diagnostics – A system for for ourselves and blame others. In the so called “valley
preventative real-time monitoring of the productive of despair” we show anger and consider worst case
system that provides alerts before critical situations scenarios which can lead to depression. At this point, job
can disrupt usage. It also allows optimisation by performance tends to be at its lowest. In Phase 5 we start
indicating where performance bottlenecks and to experiment with the change and try out new ways of
ineffective processing algorithms are. working. In the acceptance phase we begin to feel more
positive about the future and slowly start accepting the
change, which leads to an increase in self-esteem and a
Quality Principle 10: feeling of greater control. Lastly the change is accepted.
Use Organisational Change We are integrating it into our daily routines. Motivation
Management to Transform Business levels are back to normal, if not higher and we are more
productive.
For any implementation organisational change
management is key to success. Note that the The time it takes for individuals to transition from one
wholehearted adoption of a business solution, which phase to the next will vary and although leaders can’t
can determine its success in transforming the business always make people feel comfortable with change,
requires a dedicated effort of organisational change they can minimize discomfort and influence the change
management (OCM) to handle and balance the impacts process positively by managing change pro-actively
of change on individuals and increase the chances using Organisational Change Management.
of overall success. Identify, analyse, and manage the
impact a new business solution has on employees, Most OCM approaches have three basic phases:
customers, and suppliers. The impact that the new
solution will have on employees, suppliers, customers, » Prepare for change. This phase includes identifying
and management must be discussed and managed. stakeholders impacted by the change including
employees, customers, and suppliers, assessing
Organisational Change Management is basically taking change readiness, analysing risk, identifying
care of the people side of change. Pro-actively managing expected resistance, setting up the team
the effects that transformational change programs structure and sponsors, and defining the change
have on the workforce, includes supporting employees management strategy.
changing the way they think or behave, identifying new
» Manage the change. This phase includes defining
competencies or skills required to perform work.
dedicated OCM plans, such as communication and
training plans that prepare employees to adopt new
OCM manages the path from the present to the future
ways of working. These plans will be integrated into
and answers questions such as “Where are we heading”
the overall project plan and executed accordingly.
and “Why are we doing this now?” It’s the road map
that takes the company and its people from “old” to » Reinforce the change. This phase includes
“new.” It uses a structured process and relevant tools to gathering feedback, checking adherence to the
support the people impacted by change to achieve the change, identifying gaps, looking for pockets of
desired outcome. Its human nature to dislike change as resistance, and executing further activities to
explained by the change curve developed by Elizabeth cement the change.
Kuebler-Ross, to explain how people respond to change:
Although projects differ in many aspects, the impact
of change and employees’ reactions to change are
predictable and manageable. Change management can
have a significant positive impact in a transformational
project when applied consistently.

55
 You can benefit from: Go to the SAP Quality Awards for
customer Success website
» Lower overall program risk and a greater chance of » Download the 10 SAP quality principles here
sustainable project success » Complete the questionnaire in English
» Improved business‐case alignment and an » Submit your nomination online (S-User required for
increased value realization logon).
» Less disruption to the business after going live and » Access your draft or submitted nomination
in the stabilization phase as the organisation moves
» Watch this short tutorial to find out how to complete
from the old to the new reality
and submit a nomination
» Greater internalization and ownership of the change
by moving people up the “change curve” at an
appropriate pace for them
Conclusion
» A stronger foundation for long‐term ownership and
Planning for quality in any SAP project is made so much
adoption of the change
easier by following the SAP 10 Quality Principles. It is
imperative for every project member to understand it’s
Celebrating success purpose and importance to the success of the project.

Once you’ve gone live, don’t stop. Verify that the business Additional Information
value you set out to achieve has in fact been realized,
and make improvements where needed. Continue to use The Underlying Quality Principles Whitepaper (PDF)
what you’ve built and learnt. Realize more value from
your investment through new business transformation Recordings:
initiatives.
» P1. Anchor business value firmly in your project
NOMINATE YOUR PROJECT FOR AN SAP QUALITY
» P2. Start Scoping Early
AWARDS FOR CUSTOMER SUCCESS
» P3. Cooperate with stakeholders and use a proper
governance model
SAP honours and celebrates customers who have
excelled in the implementation of their SAP software » P4. Ensure timely delivery and effective tracking
solutions by recognizing these quality principles in its » P5. Staff the project with sufficiently skilled,
prestigious SAP Quality Awards for Customer Success. motivated people
If you have successfully completed an SAP software » P6. Apply the appropriate methodology and plan for
implementation, consider nominating it for an SAP Quality quality
Awards for Customer Success to gain acknowledgment
» P7. Identify and manage risks jointly throughout the
within your organisation and recognition externally in
project
the marketplace. Consider the following benefits:
» P8. Exploit standard software using solution and
Recognition internally delivery best practices
» Prestige and pride for teams and individuals » P9. Achieve production readiness
» Ease financing for future IT projects » P10. Use organisational change management to
transform business
Recognition externally
» A thought leader and innovative company
» Proven professionalism to stakeholders

Prizes
» Promotion in media
Contributed by:
» Winner logo
Sharmila Jasmath,
» Plaque for local market unit winners SAP
» Invitation to SAP Quality Awards for Customer
Success Ceremony

56
PROJECT SUCCESS
Introduction Although new implementations and conversion projects
are very different by nature, S/4HANA projects and
Benjamin Franklin said, “ if you fail to plan , you are programs call for special focus around multiple areas
planning to fail”. This topic explores the considerations including:
for project success to assist organizations on the start of
their S/4HANA journey. It explores the essential aspects » Program Governance, Methodology and Approach
of the project setup and specific considerations across » Program Team Skills
conversion and new implementation projects.
» Functional and Technical Architecture
Considerations
Business Need
» Alignment of Business Processes to SAP S/4HANA

Today, one can hardly imagine running a business without » Ensuring the accuracy and applicability of data
an ERP system. ERP has become such a commodity that
its value often gets overlooked while the “total cost of Program Governance, Methodology and Approach
implementation” and “total cost of ownership” have
become the primary facets of consideration. Establish a Practical Governance - These three elements
are crucial to an efficient and effective governance for
Like any other infrastructure, an ERP ages and SAP S/4HANA projects:
accumulates complexity over time. At the same time, the
business processes designed around the technology » Project’s steering committee
limitations of the past, stand in the way of the adoption The steering committee is the project’s principal
of new best practices that can be implemented much authority. It should include senior leaders from
more efficiently with the new technologies. business and IT, as well as senior management from
your implementation partner and a representative
For many, SAP S/4HANA transition programs start with a from SAP.
debate on how to approach the project and what options » Joint design authority
to consider. Most swiftly conclude that the company’s A joint design authority is a decision body that
vision, readiness to change, and ability to manage these provides guidance on major functional design
changes play a much bigger role than any technology topics. Like the steering committee, the joint
aspects. Irrespective of the chosen transition option, the design authority must include representatives
way the project is set up and managed will determine from the respective business departments, IT, and
the ability to turn SAP’s innovations into business implementation partner(s).
advantage.
» Architecture governance board
The architecture governance board is a decision-
Proposed Solution making board concerned with the key architectural
topics. It should include at least the chief enterprise
Once key strategic choices around the SAP S/4HANA
architect, leading IT architects, senior staff from IT
journey have been concluded and the business case
operations, and representatives from your cloud or
accepted, the pivotal elements of the future project will
hosting provider (if applicable).
need to be planned and managed.

57
 Leverage the SAP Activate Methodology Architectural Considerations

The SAP Activate methodology is a harmonized Ensure that the overall architecture receives the
implementation approach for cloud, on-premise, and necessary diligence across the following tasks:
hybrid deployments. The methodology scales extremely
well, becoming lightweight for smaller engagements or » Understand the extent of ERP Functionality currently
more robust for larger projects or programs. in use, and how it maps onto the functional
capabilities of SAP S/4HANA and other SAP solutions.
The workstreams and work packages defined by SAP The SAP Transformation Navigator tool aids in this
Activate build a solid baseline for your project plan. regard.
Make sure these are reflected in your project’s work » Request a system’s bill-of-materials “from your
break-down structure and responsibilities. architecture team for both the old and especially
the new system, including hardware, operating
Program Team Skills system, SAP HANA revision, and the software
components’ release levels. This information must
The enablement of users and teams is a significant be accurate and up to date.
building block in a project’s success. An IDC white paper
» Plan how to deal with the installed third-party add-
revealed that:
ons. For each add-on, make a conscious decision
about whether it can be kept, replaced with
» Well-trained implementation teams can save up to
standard functionality, or un-installed.
11% in deployment time.
» Create landscape diagrams depicting the
» Well-trained administrators make fewer support
landscape for each conversion cycle. Ensure
calls and critical tickets. For SAP S/4HANA, this
that these reflect both the connectivity to the
resulted in an average reduction in monthly support
satellite systems and the transports and software
calls of 20%.
deployment.
» Well-trained SAP S/4HANA users improve their
» Assess Interfaces while paying special attention to
performance by over 50% across KPIs.
cross-platform and cross-vendor integration.

The program team enablement activities are often

SAP Model Company and Best Practices
overlooked as a planning consideration as focus is
usually on the creation, administration and dissemination
SAP Model Company offers a ready-to-run solution
of training content related to the solution being
and serves as a market standard for AP S/4HANA
implemented to the end user / super user community.
implementations. It includes both best practices and
SAP Education organization and SAP Learning Hub offers
next practices.
certifications for both consultants and users. An SAP
certification helps validate the expertise of your staff
SAP Model Company is built on top of the latest SAP
and is recognized globally.
Best Practices content. SAP Best Practices are available
free of charge with SAP products and provide a solid
Users of SAP S/4HANA have access to standard
foundation for each SAP implementation. SAP Model
enablement content directly through in App learning. In
Company services build on and extend these best
addition, the SAP Enable Now solution allows customers
practices based on the experience of SAP Digital
of SAP S/4HANA to customize this content and develop,
Business Services, which stems from the most successful,
publish, and consume bespoke content.
real live transformation projects.

Functional and Technical Architecture Considerations

Transparency in both functional and technical

architecture is one of the key success factors for your
project. Leveraging SAP Model Company and SAP Best
Practices aid in fast tracking architectural considerations
however require planning and management to align
program activities effectively.

58
Role Based Fiori UX Ensure Appropriate Hardware Planning

SAP Fiori is the go-to user interface of SAP S/4HANA. Pertinent hardware planning must factor in these
SAP Fiori launchpad offers a role- based, single- aspects:
access point for business users to access all UIs of SAP
S/4HANA. Business users can access many innovations » Regular annual data-volume growth
in SAP S/4HANA through SAP Fiori Apps that support key Think ahead and plan your hardware for the next
processes. Users can gain real-time insights and monitor three to four years. Use the current system statistics
key concerns of their business domain using embedded to estimate the regular annual data volume growth.
analytics. Therefore, customers who don’t implement » Business growth
SAP Fiori and continue to use SAP GUI as their primary UI Understand the plans of your business for the
will have only a limited benefit from the innovations in next years and the implied requirements for the
SAP S/4HANA. hardware. Consider the planned mergers and
acquisitions and understand the associated post-
SAP Fiori offers a navigation network of task-oriented UIs merger integration plans. Estimate how these new
interconnected through SAP Fiori launchpad content. business entities will increase the system workload
Selectively implementing only some individual SAP Fiori and expected volume of master or transactional
Apps not only breaks the user experience but also results data.
in very high implementation costs. In short, SAP Fiori
» New system functionality
Apps are not designed to be used individually.
Review other projects that plan to introduce a new
Therefore, SAP recommends the following role-based
functionality and estimate the associated system
approach to implementing SAP Fiori:
workload and data footprint

» Always implement complete business roles and not » Data volume reduction
just single Apps Archiving old data can greatly assist in reducing
the overall data footprint on the new S/4HANA
» Copy the SAP-delivered business roles and
Landscape. SAP provides the Quick Sizer tool to help
catalogues and adjust them to your needs
you with planning hardware requirements. In new
implementations, use the tool for all application
Managing Customization (RICEFW) components to establish a baseline for your sizing
and adjust it with the above considerations
RICEFW stands for “Reports, Interfaces, Conversions,
Extensions, Forms, and Workflows.” Regardless of the
Custom Code
transition scenario, RICEFEW’s need to be managed
meticulously through the project. As such developing an
Over the past years, many long-term SAP customers
early understanding of the full scope of RICEFW objects
have heavily extended and modified their SAP solutions.
in your current system is important.
Take the transition as an opportunity to clean up your
system.
Cataloguing and tracking RICEFWs that require
adjustment or replacement , which ones are outdated
Put “clean core” and “zero modifications” on the list
and can be deleted, and which ones are new is an
of your project’s goals and ensure that all impacted
important step early in the project timeline. Make
custom code objects are either adapted or deleted
sure not to underestimate the importance of this task
during system conversion.
while dealing with simplification items and conversion
activities. Neglecting it will most certainly result in a
The custom code workstream should have these three
failure of the first integration test and frustration of
major work packages:
the users.

» Removal of unused code

» Automated and manual code adaptation
» Review of modifications, clones, and implicit
enhancements

The performance optimization of custom code is usually

part of the overall performance test ,therefore, you may
or may not consider it an extra work package

59
 Alignment of Business Processes to SAP S/4HANA Ensuring the accuracy and applicability of data

SAP S/4HANA provides companies with breakthrough SAP S/4HANA requires high-quality standards on master
technology and brings a new software architecture that data and coerces these through an extended set of
exploits this technology to the utmost degree. However, check rules. Technical inconsistencies found by these
this is of little benefit if a company uses a 2021 system checks should be addressed prior to the transition to
to run its business processes in the same fashion as in SAP S/4HANA, regardless of the transition scenario. It’s
the 1990s. important that you curate your master data before, and
not during, the project.
The first step is to understand that performance isn’t all
about doing the same things faster. In the past, many For systems with high amounts of master data and
steps in a business process executed in a traditional quality issues accumulated over decades, this may take
ERP system were actually performance workarounds a considerable effort. Make sure to assign a team lead
aimed at overcoming the limitations of the databases and charge them with the preparation and execution of
and the hardware. When such “band-aid processes” these tasks:
are used long enough, it becomes increasingly difficult
to tell apart the actual business purpose from the » Archive unnecessary master data records, such as
workarounds. those pertaining to inactive customers and vendors
» Identify and eliminate duplicates
Some general thoughts to enable the alignment of
» Standardize the master data
Business Processes to SAP S/4HANA are:
» Extend the master data records with fields that are
» To find the opportunities for process innovation, relevant for SAP S/4HANA
you need to ask the right questions. Unpacking » Learn from business users how they employ
the thought process for the design of the existing customer and vendor account groups and use this
process is key. Investigating slow or tedious information to guide the design of the business
processes will provide insight into improvement partner data model
opportunities. Understanding the architecture » Discuss the new number ranges with business users
of specific business processes allows for better to allow enough time to agree on a new concept
mapping to S/4HANA.
» Document the business partner concept, including
» Have an open discussion on how far the users’ the current usage of account groups mapped to
actual ways of working resemble the initial business partner groupings and business partner
blueprints. At times, it is truly impressive how often roles
people work around outside of the system and only
enter the data at the very last moment.
» Be persistent. Raise interest by showing what’s
possible. Be assured that business users will be able
to extrapolate what you have shown and to build
on these ideas. You should also be prepared to find
that some of your peers remain constrained by their
experience with the old technology.

60
Recommendations

The recommendations per specific focus area is as follows:

Focus Area Recommendation

Program Governance , These three elements are crucial to an efficient and effective governance for SAP
Methodology and Approach S/4HANA projects:
» Project’s steering committee
» Joint design authority
» Architecture governance board
» Methodology and Approach
» The SAP Activate methodology is a harmonized implementation approach
across a myriad of deployment options.
» The methodology scales extremely well, becoming lightweight for smaller
engagements or more robust for larger projects or programs.
» The workstreams and work packages defined by SAP Activate build a solid
baseline for the project plan

Program Team Skills The enablement of users and teams is a significant building block in a project’s
success. The program team enablement activities are often overlooked as a
planning consideration as focus is usually on the creation , administration and
dissemination of training content related to the solution being implemented
to the end user / super user community. The IDC indicates that a well-trained
implementation teams can save up to 11% in deployment time.

Functional and Technical Transparency in both functional and technical architecture is one of the key
Architecture Considerations success factors for your project. Leveraging SAP Model Company and SAP Best
Practices aid in fast tracking architectural considerations however require
planning and management to align program activities effectively. Special
focus against customization objects (RICEFW) is required to ensure an early
understanding of the overall scope.

Alignment of Business S/4HANA optimizes certain processes and ways of working , as such functional
Processes to SAP S/4HANA considerations to the impact of business processes must be planned for and are
often overlooked as business as usual activity.

Ensuring the accuracy and Various data model changes have been affected with S/4HANA. The most
applicability of data notable being the new Business Partner concept. As such additional focus on
the accuracy and applicability of data in support of the data model changes in
S/4HANA is required.

Conclusion

The way in which the project is setup and managed from inception to closure will ultimately determine whether the
benefits related to the implementation of S/4H HANA and the innovation it brings is achieved. Placing focus on specific
program elements and aspects aids in ensuring that the S/4HANA journey is fruitful and will provide the ability to SAP’s
innovations into business advantage.

Contributed by:
Shamit Maharaj,
Ernst & Young

61
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