Hansa Iyengar — Practice Leader, HFS Research[00:21]
Hello everybody, welcome to yet another edition of Unfiltered Stories, where we bring you no-fluff insights from enterprise leaders and industry experts on all things IT. Today on our episode, we have with us Kimberly Reid, who is the Vice President of SAP Solutions US at Hitachi Digital Services. Kimberly, welcome. Hello, how are you today? You’re good, thank you. Today’s edition of Unfiltered Stories focuses on SAP. SAP has been at the heart of enterprise transformations for decades now, and it’s not changed. But what is changing is the impact that it’s having on large enterprises versus the mid-market. And Kimberly is going to help us understand what the top digital priorities are for mid-market companies today when it comes to SAP transformations and what SAP can do for them.
Kimberly A.R. Reid — Vice President of SAP Solutions US, Hitachi Digital Services[01:12]
Awesome. So I think to just start off with, a lot of times when we work with the mid-market companies, they’re struggling with three key decisions. Number one, when should I make my move from my on-prem environment into the cloud? And then when I’m on a version of SAP that is going to be reaching end of life, how do I get to S/4HANA? What’s the path that I take? And then also, which hyperscaler should I choose? And how much of my lift should be net new functionality? Or should it be sticking and just trying to clean up old code? So they’re trying to figure out the scope and the path and the approach. And in the mid-market, they have a need for straight answers. And so a lot of the things that I hope we talk about today are about how we give them straight answers to guide them on their journey.
Hansa Iyengar — Practice Leader, HFS Research[02:09]
Yeah, absolutely. And I think that’s a very good point that you’ve made there, straight answers. And when it comes to straight answers, here’s the first question. You know, the biggest problem that most mid-market companies face is budget constraints. They don’t have the deep pockets of the large enterprises to spend hundreds of millions on a large transformation project. And oftentimes they end up maybe cutting corners or not being able to strike the right balance between affordability and quality. So how should an enterprise or mid-market enterprise approach that problem? How do you balance quality in SAP implementations and transformation versus affordability? And how does that work?
Kimberly A.R. Reid — Vice President of SAP Solutions US, Hitachi Digital Services[02:47]
I think part of it is doing some sort of initial phase to clarify requirements and to really understand what is the business problem that you’re trying to solve. And in the mid-market, because resources may be constrained, we have to tackle it strategically. We have to look at what is the case for change? What can fund this particular benefit that you might get? So for example, we use SAP’s value lifecycle management tool because we’re able to identify the process areas and pain points and what the value drivers are if you were to improve them and to quantify it. And then we can bounce that up against the cost of the implementation to see what are the quantified benefits that we’re going to get from making this change. And so in the mid-market space, we are known for taking advantage of best practices wherever possible to make sure that you’re not introducing overly customized solutions and that you can standardize because that’s going to help you with the effort to implement and test. We also advocate keeping your core clean by taking advantage of using SAP Fiori user experience because that’s where a lot of the innovation is. And we also talk about clarifying the business need and helping them to understand what their options are. We are often helping them evaluate options, pros and cons, key considerations that will allow them to make the best decision. Because until you really answer their questions and educate them, they don’t often know what they don’t know. They’ve seen things on webinars or internet, and they really don’t understand what the effort to do it is. And once we can have an honest conversation about what’s really important to them and their business and what initiatives they’re wanting to invest in, like AI or just conserving costs or protecting them from cyber incidents, we can then laser focus our message and our solution offerings around what their greatest need is.
Hansa Iyengar — Practice Leader, HFS Research[04:57]
That answers one of the top questions that you said does kind of imply when it comes to mid-market SAP transformations. The second question you said, which is very important, is selecting the right partner. Now, in your experience, what are some of the common mistakes that mid-market companies make when selecting a partner? And how do they avoid making these mistakes in the future?
Kimberly A.R. Reid — Vice President of SAP Solutions US, Hitachi Digital Services[05:18]
I think sometimes they make a selection based on cost. And they don’t allow the interaction with the team before the deal closes. Oftentimes they will just send out an RFP and then you have to ask some questions in writing and then you submit your proposal and you get down selected or you don’t based on cost. And I think that’s a mistake. In the mid-market, I think even though it sounds funny, it’s a relationship. It’s an ability to help them through sometimes one of the most challenging things for their organization. I always like to think of SAP as there’s a human element to it. And there’s a fear that you have to calm when you’re on their journey and their decisions. And they have to build trust. And if they don’t know you, they won’t trust you. So if they just pick on cost and they don’t get a chance to meet the key leaders, at least the key project manager or the officer in charge or a couple of track leads, unless they meet and get a sense for how they facilitate meetings, how they navigate you through the tough decisions, I think that’s a miss.
Hansa Iyengar — Practice Leader, HFS Research[06:33]
So in a way, they should look at addressing the root cause of the problem, not just medicate the symptoms, to use that analogy of yours. So when you talk to a partner, when a mid-market enterprise talks to a partner, how can they be assured that this is the right partner for me? Because oftentimes everyone says the same things. They say, hey, we have these assessments, we can help you identify the issues. But then when it comes down to the actual execution part, things fall short or they don’t meet the expectations. And a lot of mid-market companies have burned their fingers and spent a valuable budget on SAP transformations that haven’t worked or haven’t delivered results. So how do you build that trust? What is the hallmark of a trusted partner in this scenario?
Kimberly A.R. Reid — Vice President of SAP Solutions US, Hitachi Digital Services[07:21]
I think there’s probably three key factors. One is, are they battle tested? So if you’ve talked to a couple of their references, it doesn’t have to be an exact match for everything in your project or your industry. But have you talked to their other customers and gotten some insight into how they help that customer on their journey? So sometimes a customer is the best reference on how you are under stress. What sort of battles have you faced? How have you overcome them? Second thing is SAP. When you look at the SAP partner ecosystem, how has this partner done to deliver value for other SAP customers? Do they really understand the customer value journey? Is SAP someone who would say, yes, that’s a good partner? And then the third thing I would say is meet the people. Do an on-site discovery where you can spend a day or half a day with a few people from the company. See how they run a discovery session. How do they ask questions? How do they educate? How do they equip you during just a short half a day or a day? I believe that if a customer would invest a half a day or a day in a discovery with a consulting firm, they would know at the end of that session whether that’s a partner that should be shortlisted or not. And when you don’t do that exercise, you miss out on incredible stories that they could share, incredible examples that would allow you to probe deeper and understand what makes that person tick.
Hansa Iyengar — Practice Leader, HFS Research[09:04]
Yeah. And the other biggest fear for most mid-market organizations is the fear of failure, right? And how do they solve that? Apart from choosing the partner, there’s also a lot of things that can go wrong during the implementation and integration process itself. So how do they minimize the risk?
Kimberly A.R. Reid — Vice President of SAP Solutions US, Hitachi Digital Services[09:24]
So there are a lot of risk mitigation strategies that we define at the beginning of an engagement. We’ll outline what are the risks, what’s the impact, and what’s our mitigation strategy, and what’s the status of it. And we track that from the very beginning of the program so that we can make sure that we’re on target because the risks are going to be there. We have a tool, Hitachi Delivery Execution Platform. It is a cloud-based tool that helps us track issues, risk, requirements, development objects, defects, test scripts, everything. It’s a one-stop shop for everything around project execution. That in and of itself is a risk mitigation factor because we’ll say things like, the issue doesn’t exist if it’s not on the H-DEP list. And we got that from one of our projects where we used it because it’s full transparency. No hiding things in hidden Excel sheets about what’s going on. Everyone has to put all of their tasks, their action items, their issues, whatever they’re working on, defects. It’s all visible. And we have neat dashboards so that the PMO, the Project Management Office, has full insight into what is going on with the program. And when you give them that transparency, you squash their fear. And when you address their fear, they’re able to focus on the things that are really important to make decisions because they have full insight into what’s going on with the program. So that when their chief financial officer asks, is this project on track? They can give them a fact-based approach instead of the subjective, I don’t feel good about X, Y, or Z. Well, what do the facts say?
Hansa Iyengar — Practice Leader, HFS Research[11:06]
Fair point. I think that that’s a really good insight to be able to have those strategies in existence and the tools to give that transparency across the board through the entire program. That really helps build confidence. And Kimberly, a last question for you. For those mid-market companies that are still on the fence, you know, should I modernize? Should I not? You know, it works. So why mess with it? What’s your message? What do you want to leave them with?
Kimberly A.R. Reid — Vice President of SAP Solutions US, Hitachi Digital Services[11:31]
I think it’s okay to take a risk because without the risk, there’s no reward. I’ve had a lot of great mentors in my career, a lot of great people that I’ve learned from. And, you know, I’ve been doing this for a really long time. I mean, 28 years this August, I’ve been doing SAP work. But prior to that, I spent 11 years in industry working as a chemical engineer. So if you do the math, and I started when I was 10, of course, if you do the math of it, it’s really about when you don’t lose the heart of what you’re focused on, when you keep the people first, and you know that it’s about giving them hope for a brighter future. It’s about helping them to make this transition. It’s about authenticity and credibility through the journey. And it’s about having, I would say, humility in the moment that you don’t know everything, that everyone’s learning and growing. You’re going to learn a lot of things as you make this transition from one system to another. And you shouldn’t let fear hold you back from making those important decisions because I think that companies that don’t take a risk, they won’t get the reward and they’ll become irrelevant. It doesn’t mean that you have to fully embrace every aspect of the change, but I’ve learned that as an effective leader, and this is one of my favorite authors, John Maxwell, he talks about a leader shift that you have to make, making a pivot to be flexible, to adapt to the changes and to embrace them. And as leaders, taking that shift, making that pivot to face a brighter future is so important for your company to grow and for your people to grow and for you to retain your top talent. So that’s what I would say to my mid-market customers. Don’t be afraid. We’ll be here to help you. And you just have to recognize that there will be some mistakes. It won’t be perfect, but it will be successful.
Hansa Iyengar — Practice Leader, HFS Research[13:37]
Excellent. Thank you so much, Kimberly, for being with us on Unfiltered Stories. We loved this conversation and we look forward to having you again. Thank you.
