Building the business case for S/4HANA

Main visual : Building the business case for S/4HANA

One of the biggest challenges of migrating to S/4HANA isn’t just understanding its benefits. It’s about helping the rest of the business understand where the value lies.

It’s more difficult than it sounds. S/4HANA is usually seen as an IT project. And while IT is usually enthusiastic about the prospect of simplifying databases and becoming more efficient, in reality, these benefits aren’t seen as essential to the rest of the business.

Leaders tend to think of S/4HANA as a mere upgrade. An extension of what has come before. However, the resources and investment needed are significant. Spending millions of dollars on an upgrade to help IT work slightly faster doesn’t justify the investment and the effort at the board level. To really explain the value, you have to see the wider picture.

Financial savings

There are a number of strategies to really getting across the value of S/4HANA. But first, you have to understand the challenges.

Businesses are usually very aware of costs linked to their core business. For example, if they’re a manufacturer, their finger should be on the pulse of all figures associated with manufacturing their products. What’s harder for them to understand are the other internal and operational costs.

You can add up the invoice raised against materials and machine parts. But costs relating to people and inefficiencies are much harder to pin down. Yet this is one of the key areas where S/4HANA adds value.

So, one strategy is to really define and communicate the value here. If you have access to a business’s financials, that’s great – it will enable you to make some really personalized projections relating to reduced operating costs. If not, you have to be more creative.

I like to use the ‘moving the needle approach’. Rather than tell a business leader that they’ll save a large percentage, right out of the gate, I’ll show them the incremental benefits they can achieve by just improving some aspects of their core business. A lone percentage may not be that impactful but it’s more realistic, and easier to grasp; and then the conversation can evolve into bigger numbers and possibilities.

The wider vision

Another strategy is linking S/4HANA to the wider business vision.

Generally speaking, business leaders don’t care what ERP system is running in the background. They will usually think in terms of capabilities and outcomes. Specifically, they care about the capabilities they’ll need in the future to stay competitive.

You often hear about the ‘cost of doing nothing’. Well nowadays, that cost is extremely high. The pace of innovation is lightning fast, and businesses need to adopt the technology that’ll enable them to keep their competitive edge.

More often than not, these technologies rely on a backend that seamlessly processes large volumes of real-time data. And again, that’s exactly where S/4HANA comes into play.

It really pays to look at the wider picture. Yes, there’s a serious investment involved. But there’s no question that businesses need to digitally transform. Leaders are looking at the so called “emergent technologies”, such as AI, IoT, Machine Learning, Analytics, blockchain, etc., and trying to figure out how they can be deployed in their own business. S/4HANA is therefore a key part of that wider transformation journey, because it’s the intelligent ERP and the foundation for all of that to happen.

And let’s not forget about the employee benefit too. The better user interface, efficiency and automation S/4HANA brings leads to serious savings, which frees up employee time to work on more engaging projects, and that is the fundamental principle of the Intelligent Enterprise. In many cases, we’ve seen these projects lead to new product lines and additional revenue streams – all of which can be directly or indirectly tied back to S/4HANA.

So ultimately, when making the case, think about who you are talking to, and what their pain points are. Your conversation with a CTO will be completely different than to one with a line manager, and you have to be able to pivot from features to business outcomes as you switch your audience.

Use financial figures when you can, speak C-level language, but more than anything, think long term, and really try and tie the proposition with the overall vision of where the business is going.