When companies today build their IT strategy for the next five or ten years, they face a lot of challenges on their way, e.g.:
- a complex and grown IT landscape with SAP and Non-SAP systems
- a constant change of priorities between operations and innovation
- a world around companies them with more and faster changes with new competitors growing customer demands
On the other side, every organization must invent new business models to avoid disruption, increase efficiency, fund innovation and transform mission-critical systems without business risk. What are reasons for that?
- 50% of human tasks will be automated by 2025 (World Economic Forum - Future of Jobs 2020 )
- 20% of revenue growth will come from "white space" offerings by 2025 (IDC FutureScape - Doc # US45599219)
- 90% of data and analytics innovation will be driven by public cloud services by 2022 (Gartner Data Analytics 2020)
That leads to important strategic priorities for your business, e.g., automating tasks, finding new opportunities, and using data to drive revenue.
To tackle this points, SAP driven companies should think about their ERP architecture and build a S/4 HANA or even a cloud strategy. At this point typically some challenges with arise:
- Complex legacy IT landscape
Legacy landscape contains a myriad of ERP systems with country-specific configurations, custom modules, interface dependencies, and manual workflows, which hampers visibility into business capabilities, processes, and IT assets.
It is expensive to maintain and difficult to integrate with modern, API-based systems. - Stakeholders buy-in
Insufficient data means an inability to build a proper business case, failing to get stakeholders on board and secure required investment.
IT risks such as resistance to change, application dependencies, and data transformation concerns dissuade stakeholders from committing to extensive transformation exercises required for an SAP S/4HANA transformation success - Ownership and accountability
The ERP transformation involves many concurrently running analyses, assessments, transformations, and other crossover activities with different stakeholders.
Lack of understanding for stakeholders’ responsibilities hinders streamlining project management. - Poor project implementation
ERP transformation project failures are caused by the lack of proper preparation with regard to conceptualization and definition of business objectives, transformation roadmaps, and monitoring of project interdependencies, risks, and costs.
Inadequate documentation, tracking, and competing priorities push managers to make uninformed decisions - Insufficient change adoption and management
The state of IT is always in flux as application and component lifecycles change.
Introducing new ERP systems without properly tracking dependencies and monitoring data flows can lead to serious consequences - Increased security and compliance threats
In S/4HANA, the database layer is extended with an application functionality, which means more data interfaces will provide real-time access to sensitive information than in SAP ECC.
Special attention must be paid to information security and compliance to avoid unauthorized data access.
To start your journey to an Intelligent enterprise based on SAP S/4 HANA and BTP, these preparations might help you:
- Identify most promising and critical business capabilities that would benefit most from a migration.
- Define the target maturity for those business capabilities and their related applications functional and technical fit.
- Achieve high transparency about the legacy ERP architecture, their dependencies and migration cost drivers & risks.
Important steps on your journey are:
- Design the target ERP architecture and evaluate on opportunities for an on-premise to cloud-hosted model, realizing a hybrid architecture.
- Design of a comprehensive ERP Integration Architecture that puts in place standard integrations for typical integration use case patterns as e.g. on-premise-to-on-premise, on-premise-to-cloud, cloud-to-cloud.
- Evaluation of possible migration options based on their architecture impact, taking architecture dependencies into account.
These initiatives are often supported by an Enterprise Architecture Management (EAM). A team of Enterprise Architects can support you in multiple ways:
- Accelerate transformation
- Streamlined strategy and scenario planning for S/4HANA transformation
- Faster and reliable decisions based on up-to-date, un-siloed data
- Ad-hoc available reports reducing manual work for management update
- Gain transparency and enable collaboration
- 360° overview of transformation initiatives, their as-is and to-be architecture
- One single source of truth integrated with SAP Signavio
- Improved alignment of process owners, transformation drivers, and system experts
- Identify and manage risk
- Dependencies between SAP & non-SAP systems spotted early on in easy-to-understand reports
- Automatically updated SW & HW lifecycles of current and future IT components running SAP
- Less downtimes and saved project costs during S/4HANA transformations
When you go this way, you should decide on a tool to make the results transparent and available for the project and furthermore for your complete transformation journey. This can by done with the office toolset or in a more sophisticated and collaborated way by a EAM tool. If you would like to go with a tool, I suggest to take o look on LeanIX as a very good solution for it. LeanIX is a SaaS solution, what is easy to use and with a lot of ready to use integrations with SAP. Very useful is e.g. the native integration with Signavio. The combination of both tools will support your team very well on the process and architecture level.
After implementing your EAM processes, you are able to drive continuous transformation with e.g. with EA & BPI as next level EAM.
Some questions and feedback I got in recent projects:
- Is EAM always an expensive and long term project to implement (EAM process and tools)?
Capturing baseline information is very helpful, however, it is not necessary to capture the complete IT landscape including all EAM artifacts. Rather, it is recommended to start with specific questions, generate the data collaboratively and use integration to keep data up to date without manual effort. - Do I need a tool for EAM?
Starting with Office products, Miro/Mural or White Boards I think is a very good idea. When it then comes to evaluations, analysis and collaborative work between business and IT, a tool helps immensely. Of course, an investment is necessary, but it helps to do the right things right. - Do I need EAM, when I build SAP Standard with a Clean Core approach?
The use of SAP Best Practices and a Clean Core is I think a good decision to implement S/4 HANA future-proof for the challenges of next ten or twenty years. However, RISE with SAP and a Modern Cloud based ERP leads in total away from a monolithic application and towards a MicroService based landscape, which makes operation and further development rather more important.
What are your ideas around EAM and SAP transformation?
Do you use a tool to support your journey and what are your experiences?
What could be a good starting point to make EAM a strategic enabler for you Intelligent Enterprise?
I will be very happy to discuss these topics with you!
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