Discounting the moving SAP mandates of ECC end of life support S/4HANA is far beyond backwards compatibility and its reinvention of capabilities along with retirement of legacy functions has led to the realization that the longer one waits the more “must” comes into play.
Most customers looking at business continuity risk as a priority are holding in place not only at the cost of inflating the transformation bubble but more importantly the lost opportunity gains leveraging new capabilities to drive business efficiency. Also, competition may be moving ahead and taking market share as a result of its early gains by adopting new technologies. Lastly, there is a demand/supply constraint to consider in obtaining SI support at a reasonable cost as the bow wave of demand builds.
Doesn’t Covid 19 change "When"?
Yes and No.
The force majeure event that is the Covid-19 pandemic only highlights the need to:
- Maintain a competitive differentiation
- Develop lean processes leveraging organizations best and brightest people
- Automate decisions wherever possible and expedite decisions where automation is not possible
- Leverage cloud and other collaborative forums (migration to OPEX vs. CAP EX)
- Communication through a common platform with immediate tangible actions related to a more complex demand and supply ecosystem
- Establish a clean footprint and ready for demand surges and/or M&A expansion
- Leverage offshore lower cost run models leveraging the deep talents pools of system integrators
- Improve online customer experience, digital commerce with B2B and B2C presence aligning to the shift in the competitive GTM landscape
- Avoid obsolescence and address burning platforms (which includes SAP ECC)
- Minimize ECC to SAP S/4HANA business continuity risk by migrating sooner rather than later given that mandatory green field spaces continue to grow as the platform evolves
Many organizations will use this time to postpone any large investment or capital expenditure and run from the storm with targeted operational focus. Others will take this as a unique opportunity to come out of the storm stronger that its competition. This is achieved by steadily preparing to ramp-up with new operational efficiencies in place designed by its best resources whom otherwise might not be available and with solutions only possible with the latest technologies and ready to take on pent up demand.
Think of the Buffalo
Great plains of mid-west have frequent storms. The snowstorms are the worse.
When a snowstorm is on the horizon, all animals run in the other direction. Not the buffalo. These animals turn towards the storm and run right into it.
It may appear foolish, but it is the best thing to do in a storm on an open plain.
If you run away from the storm, the storm will eventually catch up with you and you will be running with the storm increasing your exposure time. Running into the storm drastically reduces it.
When you are running away from the storm, you can’t see objects flying in the storm, you can’t see the changing intensity of the storm. Obviously when you are facing the storm you can avoid the debris and respond the changes better.
Most importantly when you are running towards the storm, you can see when the storm is ending before anyone else. You get to be in the post-storm sun and calm before anyone else. Based on the market rebound currently underway it’s an enviable position to obtain through action now.
An Alternative View: Inside-out versus Outside-in
As organizations weather the Covid-19 induced recession many budgets related to SAP platform investments have changed. Some organizations have been forced to simply focus on business continuity, others have used this as an opportunity to leverage its otherwise overburdened thought leadership to plan and action business transformation to address new market dynamics with others addressing pain points that the crisis have accentuated (including a mass migration to eCommerce).
An alternative to SAP driven business transformation is to take advantage of the several cloud-based solutions including Customer Experience (CX), Integrated Business Planning (IBP), SuccessFactors (SF), IoT and machine learning/Leonardo, ARIBA, Qualtrics, and the SAP Analytics Cloud (SAC) as a starting point and then secondarily to examine the S/4HANA digital core. These initiatives require less investment as they address niche solution areas with more easily defined ROI timelines.
The answer lies in the prioritization exercise of the organization. Example: If 80% of sales were through brick and mortar sales, then an expedited CX (ecommerce) solution is an obvious priority. If core ERP systems are overly complicated, fundamental financial compliance is at risk and MRP trust is compromised, then the digital core commonly may be the priority.