Writing an effective S/4HANA business case is both a science and an art. Although this statement may sound obvious, it is actually quite profound. As a business
and digital transformation specialist who has spearheaded and/or engineered many such initiatives across global companies from a whole gamut of industry verticals, this continues to be my most important takeaway.
The ‘science’ part is easier to handle – there are tools SAP provides, you probably have your own tools that you want to use, metrics/KPIs that you devise – all of which give you a strong handle on the quantitative aspects of what you want out of an S/4HANA implementation (greenfield/new or brownfield/conversion). The harder one is the aspect of ‘art’. And it is hard because no two customers are alike. Therefore, it is hard, almost impractical to adopt a ‘one size fits all approach’. Nevertheless, I approach each such business case discussion with a minimum set of success factors or criteria in my back pocket. Here are a few of the key components:
Business drivers: Never forget the word ‘business’ in ‘business transformation’. Your business case for implementing or converting to S/4HANA needs to be rooted in your enterprise’s corporate strategy & KPIs
Pain points: Most organizations hate this cliché but sorry, there is no escaping it. Maybe you can rephrase it to ‘challenges’ or maybe a more optimistic sounding ‘improvements needed’. This aspect is related to business drivers but whereas I see business drivers as strategic, I see pain points as tactical and therefore largely emanating from the business user community
Key success factors (KSFs): Here I’m referring to the qualitative key factors such as better user experience, opportunities for innovation, real-time analytics etc.
Stakeholder analysis: Even the most air-tight business case will not succeed if you do not have the right level of stakeholder engagement & support. So, it is important to analyze and ensure that you maximize stakeholder buy-in
Organizational readiness: Some organizations I have worked with did not consider making an assessment of their organizational readiness for embarking on a business transformation journey. There needs to be an organic appetite for change
Let me now move to the ‘science’ aspects of an S/4HANA business case. Things are more structured in this realm. SAP provides customers with many tools that help them quantify and thus catalyze their case for S/4HANA. Among the tools we employ are primarily the SAP Transformation Navigator and Business Scenario Recommendations (BSR). It is not uncommon for customers to augment the capabilities of these tools with their own tools, techniques & calculations. Financial KPIs that are popular are Net Present Value (NPV), Internal Rate of Return (IRR) etc. A whole slew of KPIs can be leveraged or customized or designed in every functional/business process area that the business transformation is going to cover.
Needless to say, building a powerful business case for your S/4HANA journey requires extensive planning and meticulous execution. If you would like to learn more and/or get guidance on this important topic, please attend my session “How to Build a Business Case for S/4HANA” during the upcoming SAP Controlling Conference in San Diego, CA, October 7-10.