3 minute read 27 Jan 2020
Why simplicity, standards and strategy are at the heart of successful business and system transformation

Why simplicity, standards and strategy are at the heart of successful business and system transformations

By

Johan Lenders

EY Belgium Advisory Partner

SAP advice and implementation.

3 minute read 27 Jan 2020

Companies seeking to modernize their ERP systems can be led astray by the range of options available, but EY helps companies to find answers.

For the past few decades, SAP has been helping businesses transform their operations, facilitating the exchange of information among departments. But many of the Enterprise Resource Planning (ERP) systems have become highly customized and complex over the last decades, and thus costly to maintain, and upgrade.

In recent months, EY has addressed how it can best help companies simplify and modify their systems, launching its Agile Business Transformation service. Advances in digitalization, in-memory computing and cloud solutions have created the ‘perfect storm’ for companies to optimize their business strategies. They are seizing the opportunity to replace their customized systems, that commonly date from the 1990s, with new ‘greenfield’ options.

Planning for the long term is of vital importance

But EY advises caution. While applying the latest software, SAP S/4HANA, represents an excellent way of reinventing a business, we advise companies to first carefully consider their options and assess what they want to achieve. EY works alongside its clients to produce a roadmap for the future. Commonly, clients are asking whether they should choose to upgrade – the brownfield option – but we strongly advise to consider both options and define the long-term view.

Sufficient time should be allocated to the creation of a strategy and a corresponding roadmap. The roadmap should take a long-term view, including a timeframe for the different steps to be taken over the coming years. It should also adopt a broad perspective that recognizes that the project is not simply one of replacing technology, but also of simplifying processes within the company and ensuring that all people are onboard.

Simplification of company processes

If the solutions implemented are too complex, they will probably need to be changed constantly to meet the changing environments, adding to the total cost of operation. Simplification is the watchword. Moreover, simplification should begin with the company’s processes before new technology solutions are even considered, given that automating an inefficient process will not solve the original problem. It is also advisable to harmonize data ahead of migration to the new system. Messy data in a clean system remains messy.

If people are not onboard with the program, it will not be a success!

Guidance of people throughout the transformation

People in the organization are not only stakeholders to be informed, they should be in the driving seat of any transformation. They need to be empowered by management to make the right decisions, from the beginning of the process redesign to the end of the technology implementation. Ownership and awareness are vital from the beginning. In this way, less time is needed to convince them that the process and technology transformation is in their own benefit.

Focus on strengthening a company’s value creation

While ‘quick wins’ can be desirable, they should not compromise quality. It is important to always ask whether what is being implemented will bring added value to the company. For example, a client could have a very good consolidation system that is being potentially replaced just for the sake of it. Key questions to ask include: does the solution return the system to a more standard way of working? Is the technology future-proof? What does success look like, and when will that be apparent?

We provide the best -fit answer in terms of guidance and proposed system landscape. For companies running SAP today our offer in the SAP S/4HANA is commonly the best-fit choice. The response from clients has been very positive. They see that the system landscape is highly complex and appreciate the value of seeking guidance in this journey of transformation. 

  • Cloud solutions increasingly support application of SAP

    Cloud Solutions can be interpreted in 2 ways: hosting your ERP systems in a cloud environment or buying an application based on a subscription fee.

    The process of managing your own data center for your SAP systems is rapidly being replaced by cloud hosting services, which allows you to install your ERP system and easily upscale its processing power and storage.

    SAP is increasingly providing cloud applications via a subscription fee per user. SAP provides this type of applications for HR departments, for travel and expenses, for reporting, for planning, etc. These subscription fees make it very accessible. You can subscribe to a standard solution, which is easily integrated in your core ERP system. This allows you to immediately adopt a more standard way of working, which means you need to organize your business in a different way. Your processes should adapt to SAP standards, not the other way around.

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Summary

Automation and cloud solutions are further transforming company ERP systems, but before embarking on a program of modernization, it is vital to plan ahead carefully. EY’s SAP S/4HANA support to clients emphasizes simplicity, standardization and long-term strategies.

About this article

By

Johan Lenders

EY Belgium Advisory Partner

SAP advice and implementation.