Point of View

Enterprise leaders must demand broader transformation skills from their S/4HANA service providers

December 17, 2021

The Bottom Line: Without a comprehensive services partner evaluation, you won’t get the full benefits of your ERP transformation

Too many service providers fail to deliver the non-technical requirements of a successful S/4 HANA transformation.

Our ongoing SAP S/4HANA (S4H) services Top 10 research allowed us to speak with 22 enterprise leaders about their services partners’ ability to support their S4H transformation journey. They told us of a few essential qualities missing from their services partners:

  • Ability to provide a dedicated resource pool throughout the engagement,
  • S4H product vision and thought leadership,
  • Robust business process knowledge, and
  • Consistent process improvements.

During our interviews with clients, around 66% scored their service providers low on the S4H product vision and thought leadership. More than 60% aren’t getting the resources they need throughout the project, and around 33% of clients discussed inadequate business process expertise.

The upcoming SAP S/4HANA services Top 10 report points out that enterprises are demanding more than just implementation excellence. Neglecting to deliver the bullet list of missing qualities risks slowing the whole implementation and migration program and reducing the transformation’s benefits. Beyond general delivery capabilities and industry expertise assessment parameters, tools and capabilities that focus on product vision, talent, and non-functional requirements will accelerate the whole transformation program.

The right mix of talent resources is a crucial lever for a successful S4H transformation

The right resources are critical for any IT transformation, and S4H is no exception. An important criterion is for an enterprise to analyze its services provider’s resource pool beyond its regular S4H technical skills. Look for experienced and certified resources with industry and processes knowledge (finance, procurement, etc.). During our client interviews, we observed that one of the enterprises’ key concerns is the “lack of dedicated resources” throughout the engagement.

Enterprises must secure commitments from their services providers to allocate resources dedicated to their projects. Undedicated resources could be stretched or shared between projects, and the inevitable stresses could lead to an increased risk of poor quality or attrition. A dedicated resources allocation would accelerate project speed and improve collaboration.

Clients pointed out that because of these issues, they are suffering significantly and having trouble with resource replacement or bandwidth when someone leaves a project. Therefore, enterprises could demand the right mix of experienced and dedicated resources until the program ends, ensuring resources aren’t rotated to other projects before the first program ends. Alternatively, they could engage with a partner that can provide dedicated resources. These challenges could be discussed and mitigated during the contractual phase.

A large automotive conglomerate told us that three of its services partner resources recently left to pursue better opportunities. The partner struggled to replace those three resources immediately from a pool of 12,500 SAP S4H professionals.

A clear S4H product vision and thought leadership is an essential factor for a successful transformation

Services providers received lower scores for S4H product vision and thought leadership than other evaluation parameters. To ensure they have the partners they need, enterprise clients must evaluate the services provider’s S4H product vision and thought leadership in the initial selection process. Additionally, set up dedicated meetings to only discuss the product vision and roadmap (an update on the market and development in the space) at a frequent interval with a provider’s business and technology leaders.

A provider’s ability to deliver consistent process improvement gives an edge

At the beginning of the engagement, services providers regularly show commitment to bringing new process improvement ideas. But, over time, providers tend to show lower interest in bringing new ideas, and eventually, their commitment to care falls short.

Clients expect consistent, proactive process improvement ideas such as executing a new proof of concept developed with your specific business scenario or a unique solution created to solve a particular issue. Such proactive process improvement consistently holds an advantage over others and avoids uncomfortable situations like clients having to push and nudge services partners for innovation.

I would like to see more folks coming back and challenging us to say, hey, there is a completely different way of doing this process. Don’t look at what we do today. Bring us innovative, simple cutting-edge ways, challenge the status quo and bring new things to the table.
– Senior Director of Finance, Fortune 500 beverage organization

Takeaways

As part of your services partner evaluation process, speak directly to each providers’ reference clients to understand their experiences. Go through the providers’ SAP product vision and thought leadership papers, co-developed solutions, and go-to-market strategies and verify internal talent development and retention programs. Demand thriving industry uses cases with unique innovations adopted in the program.

Non-technical aspects are the true differentiators, and enterprises would be well advised to focus more on their services providers’ selection criteria. All Tier 1 services providers have similar levels of S4H delivery experience, industry expertise, industry-specific solutions, tools, accelerators, and methodologies. But what makes a unique fit for an enterprise is the service providers’ product vision, talent pool, business process knowledge, and process innovation. Investing considerable effort and money in these aspects increases the likelihood of a successful S4H transformation.

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