How to increase SAP S/4HANA^® transformation success: the human factor

The first phase of the joint EY-Oxford University research uncovered factors critical to successful transformations: a people-centered approach, based on establishing six key conditions of human behavior. 

While all six matter, our interviewees consistently pointed to three of these conditions as crucial to the success of SAP S/4HANA transformations. They are:

1. Adaptive leadership
2. Psychological safety
3. Disciplined freedom

Diving more deeply into each, we can see how the organizations we interviewed addressed them effectively.

Adaptive leadership: orchestrating complexity with clarity

SAP S/4HANA transformations are not just IT upgrades — they are business reinventions. Leaders must simultaneously orchestrate business redesign, technical enablement and organizational change. They must do all this within ambitious timelines. Traditional product-, geo-, and function-oriented organizations don’t have an end-to-end process orientation. This new “flying formation” can be a significant shift for many companies.

Picking the right program leaders is crucial. Executive sponsors, overall business and tech leads with day-to-day responsibility, and the transformation’s global and enterprise business process owners (GPOs and EBPOs) – all require a unique combination of both technical and “Emotional Quotient” (EQ) skills to be successful. GPOs in particular need to be simultaneously fluent across process, solution design, people management and value realization (via LinkedIn).

 “Balancing capacity of these roles – full vs part-time allocation – is critical to get right from the beginning. These types of transformations are notoriously understaffed and dedicating critical roles like GPOs and EBPOs can prevent issues early on,” says Nicole Licciardi, Change Experience Officer at Mars.

Licciardi also emphasized the importance of dedicating full-time resources to key roles. Part-time allocations could lead to misalignment and delays.

It’s critical to keep executives and business leaders, who are not involved in the day to day, close to the program so that they can help the team navigate turning points when needed - an engaged leader is a useful leader. Mars embedded human-centric leadership training early in its transformation. Its EOS transformation business leader at Royal Canin sponsored it. Executives were challenged to reflect on their own growth areas across six transformation conditions. As a result, program advocacy, leader engagement and role modeling kicked into high gear right from the start.

“You know that we nailed our humans-at-heart value when leaders are asking what we are doing for our people,” Licciardi recalled, referencing a moment when her organization’s president inquired about the program’s employee wellness strategy.

Engaged leaders at all levels of the organization and a program with the complexity of a multiyear SAP S/4HANA transformation are key to navigating “turning points” — those inevitable hiccups along the way when a sense of progress becomes stagnation and momentum stalls. Examples of common inflection points include:

• End of explore/design phase, when gaps and customizations exceed the budget
• Build phase, when detailed design activities are disrupted by new SAP ^® module releases
• Go/no-go decisions near deployment

Effective program leaders not only manage through these but also anticipate them:

•  Include contingency timelines and budgets (OpEx/CapEx) in plans and the business case.
•  Use “discuss-then-decide” mechanisms to balance inclusion with swift decision-making.
•  Call strategic timeouts to realign on purpose and guiding principles, identify issues and address root causes with a timely action plan.

One transformation leader we interviewed, from an organization with many legacy acquisitions, paused early in the explore phase when silos threatened to derail timelines, budgets and engagement. The team decided to embed dedicated change resources into workstreams to provide clarity; align GPOs, business and IT leads, and requirements-gathering stakeholders; and reinforce shared understanding and focus through consistent messaging.

Psychological safety: listening and recognizing to build trust

Team emotions are often a leading indicator for transformation health, even before issues show up in traditional KPIs. Leaders who listen at scale and act on feedback create cultures where people feel safe to speak up. These leaders are much better at getting ahead of challenges.

Leadership can demonstrate responsiveness, reinforce a culture of trust and maintain program momentum through active listening. Some effective practices include:

• Running regular, anonymous pulse surveys or pulse checks to detect early signs of team sentiment deterioration
• Rapidly deploying targeted interventions by quickly analyzing these insights, identifying the true root causes, and turning them into actionable improvements

Purposeful recognition reinforces positive behaviors, promotes continuous improvement, strengthens morale and encourages ongoing engagement.

• Formalize financial incentives in the cost case, tied to both team and individual milestones, to encourage teamwork and ownership.
• Visibly recognize individuals and teams in real time for impactful contributions.

In one case, a change leader proactively flagged a communications gap that could have derailed alignment across teams. Leadership publicly recognized their insight in an all-hands meeting, modeling and encouraging this type of proactive engagement. As a result, overlooked issues were reduced.

Disciplined freedom: empowering teams within guardrails

SAP S/4HANA programs are inherently complex because they simultaneously reimagine end-to-end business processes, adopt standard SAP software and scale globally across business units. Without clear decision authority and aligned governance, escalation paralysis among workstream leads and IT counterparts can stall progress velocity and design integrity, causing ripple effects across interconnected functions.

Effective governance provides the guardrails for timely, informed decisions and smooth escalation to the executive level. A robust structure should include clear roles, escalation thresholds and cadences that enable collaboration and maintain program velocity. Key elements include:

• Specialized decision forums to address different decision types:
  • Solution Integration for cross-E2E process design and reviews.
  • Design Authority Board (DAB) to manage RICEFWFs counts, limit customizations and adhere to Clean Core principles.
  • Change Control Board (CCB) for KDDs and governance of scope, budget, timeline, or value changes.
  • Executive SteerCo for critical risk and issue resolution.
• Defining responsibilities within each forum (e.g., chair, coordinator, facilitator) and setting expectations for required inputs and outputs. This ensures productive meetings and enhances post-meeting alignment.
• For example, before a CCB convenes, preparing a KDD document outlining the problem statement, rationale, trade-offs, implications for value, cost and timeline, along with the team’s recommendation. Similarly, for DAB reviews, request teams to provide the business value, regulatory considerations, level of effort, and technical complexity up front to enable evaluation based on a standard set of criteria.
• Adjusting governance periodically by assessing what’s working and what’s not.

Governance only works when teams feel safe to use it. Effective leaders normalize early risk identification, escalation and resolution as a routine matter.

“I’d weigh potential for failure, and if the risk was low, I'd let my teams make the decision even though I sometimes didn't fully agree,” says Vaidy Subramanian, Chief Digital and Information Officer at Daikin North America. “This fostered our empowerment culture. Over time, my teams understood I wouldn't make decisions for them, but that I trusted them.”

Leaders can’t underestimate the diversity of starting points across teams and the effort required to build a common knowledge base. Teams tasked with designing the future state must not only challenge the current state but also rethink future processes — which often requires upskilling them. Providing just-in-time, basic training ahead of each major program phase can help, such as:

• SAP S/4HANA 101 sessions ahead of the kickoff
• PMO playbooks as a reference guide for governance and structure
• Phase-specific workshops to align objectives, timelines and roles

E2E process teams should think beyond compliance and efficiency toward value creation and user centricity. ERP modernization programs often aim for becoming “easier to work with” and “easier to work for” as goals. To achieve this:

• Use prework such as persona definitions, day-in-the-life scenarios and experience maps to highlight friction points and moments that matter.
• Offer training on innovation and future-back thinking to arm teams with design skills to reimagine and humanize change.
• Embed external subject-matter resources (SMRs) where an outside-in perspective and industry-leading practices are essential.