When it comes to implementing SAP S/4HANA, the process is complex, and the stakes are high. Companies need to make strategic decisions that not only affect their technology but also reshape their entire business operations. That’s where experts like Uli Neubert from Tirum Consulting come in. Tirum Consulting, a trusted advisory firm known for its deep expertise in enterprise solutions, helps businesses navigate these critical transitions with a holistic approach.
In this in-depth consultation between Uli and the CIO preparing for the SAP S/4HANA transformation, we explore the key considerations companies must address—ranging from understanding business processes to cleaning up master data. If you’re thinking about moving to S/4HANA, this is a must-read for avoiding common pitfalls and ensuring your project’s success.
CIO: Hi Uli, thanks for joining me today. We're in the early stages of considering a transition to SAP S/4HANA, and I'd love your insight on what we should focus on before moving forward. What are some of the key factors we need to consider when making this decision?
Uli Neubert: Glad to be here! There are indeed quite a few things to think about upfront. The very first question you need to answer is, why are you moving to S/4HANA? What’s driving this decision? Is it a business reason, or is it more of a technical one?
For instance, if it’s a technical reason, maybe you’re moving to a new platform to modernize or improve your infrastructure. But, will it be cheaper to run? Not necessarily. However, reducing the volume of data your system handles can certainly lead to lower overall operational costs. So, the starting point is to make a list of reasons why you want to move. Once you have that, you can dive deeper and see if these reasons align with your business goals and if they justify the investment.
Documenting Business Processes
CIO: That makes a lot of sense. Once we know our reasons for moving, how do we ensure that the transition will benefit our business operations? How do we assess whether the new system will fit our needs?
Uli Neubert: Great question. One of the first things to do is to document your business processes. Ask yourself: Do we have a well-documented process map of how our business functions today? If you do, that’s a huge plus because it helps you see if the new system will align with your current operations.
If you don’t have one yet, it’s important to create it. There’s actually an easy way to do this with your current ECC system. You can look at the standard functionality in ECC, and SAP will show you how often each transaction is used, who uses them, and for what. This will give you a picture of which functionalities are critical for your business.
From there, SAP offers a tool called Signavio, which helps you model your business processes based on this transactional data. It’s an excellent tool for documenting and mapping out what you’re actually using SAP for. Once you have this process map, you can evaluate whether the additional functionality you've built onto SAP or any other systems you’re using are the best long-term solutions.
This is the business process view you need to establish before moving to S/4HANA. You should ask yourself: Does it make sense to consolidate all of these processes into the new system? Or are there functions we might want to keep separate for now? That’s step one.
Exploring Future Functionalities
CIO: So, once we've mapped out our current processes, should we also be thinking about future opportunities? How do we account for growth and future strategic changes in our business?
Uli Neubert: Absolutely, and that’s step two. You shouldn’t just be looking at your current functionality—you should also think about the future. What strategic opportunities are on the horizon? For example, maybe your company is planning to expand its customer service capabilities.
Let’s say that right now, your customer service might not be as robust as you’d like. What does SAP offer in terms of enhancing this? Perhaps you want to move to a model where, instead of selling products one by one, you start selling based on usage—like a subscription or pay-per-use model. SAP has functionalities that can support monitoring products placed at customer sites and tracking their usage, billing accordingly.
These kinds of future functionalities should be noted and considered. What’s out there in the pipeline? What could benefit you strategically in the next five or ten years? If implementing these new features will save your company millions down the line, that gives you a solid business case for prioritizing certain aspects of the project.
Lessons Learned from Past Implementations
CIO: That’s really helpful. Now, I imagine there are also challenges we need to be aware of. From your experience, what are the common lessons learned from other companies that have implemented S/4HANA?
Uli Neubert: Yes, there are definitely a few recurring lessons that come up when people reflect on their S/4HANA implementations. The two big ones are change management and master data.
Let’s start with change management. This isn’t just a technical upgrade—it’s a transformation that affects your entire business. You have to prepare your team for how their roles and responsibilities will change. This includes new performance metrics and workflows. If your users don’t understand how to navigate the new system or their new roles, all the functionality in the world won’t matter. It’s crucial to get your people on board and train them well.
The second big lesson is master data. Over 80% of companies that move to S/4HANA don’t clean up their master data beforehand, and it creates huge problems. I’ve seen companies end up with the same issues they had before, like incorrect customer addresses or vendors with duplicate entries. This is a “garbage in, garbage out” situation. If you don’t address master data early, you’ll be carrying those problems into the new system. So, take the time upfront to clean your master data. It’ll save you a lot of trouble down the road.
The Business Partner Concept in S/4HANA
CIO: You mentioned master data—can you explain more about the changes in how S/4HANA handles customer and vendor information? How should we prepare for that?
Uli Neubert: Yes, S/4HANA introduces something called the business partner concept. In your current ECC system, you probably treat customers and vendors as separate entities, but in S/4HANA, they’re unified into a single concept called a business partner. This means that whether you’re dealing with a customer, a vendor, or even both, they’re handled under one entity in the system.
This is a major shift, and you’ll need to prepare for it. Thankfully, you can start building your business partner framework in your current ECC system before you even make the switch. This will make the transition much smoother because, in S/4HANA, working with business partners is mandatory. You don’t have the option to stick with the old customer/vendor separation. By starting this process now, you’ll reduce a lot of the complexity during the actual migration.
Financial Functionalities: New GL and Material Ledger
CIO: That’s definitely something we’ll need to work on. What about financial functionalities—are there specific features we can adopt in our current system to prepare for the transition?
Uli Neubert: Yes, there are. Two key features you should look at are the new General Ledger (GL) and the Material Ledger. These are already available in your ECC system, and setting them up now can make your move to S/4HANA much easier.
While the new GL and Material Ledger offer even more robust capabilities in S/4HANA, you can start familiarizing yourself with the basic functionalities in ECC. Implementing these features ahead of time will not only help you avoid disruptions later, but it’ll also give you a head start in understanding the financial reporting and tracking tools that come with S/4HANA.
Conclusion: Setting the Right Priorities for a Successful Transition
CIO: This has been incredibly insightful, Uli. To wrap up, what’s the most important mindset we should adopt as we prepare for this transition?
Uli Neubert: I’d say the most important thing is to recognize that this isn’t just a technical upgrade. Moving to S/4HANA is a strategic opportunity to rethink how your business operates. It’s about optimizing your processes, ensuring your data is clean, and preparing your team for change. By setting the right priorities—whether it's mastering your business processes, addressing future functionality, or getting your data in order—you’ll set yourself up for a successful implementation.
The key is to take a holistic view. Don’t just focus on the technical aspects—think about how this move can position your business for long-term growth. If you do that, S/4HANA will provide the foundation you need to stay competitive and agile in the years to come.
Final Thoughts
Transitioning to SAP S/4HANA is no small feat, but with the right preparation and mindset, it can bring immense value to your organization. As Uli Neubert emphasized throughout the conversation, understanding your motivations, documenting your processes, exploring new functionalities, focusing on change management, and ensuring your master data is clean are crucial steps. By addressing these factors upfront, you can unlock the full potential of S/4HANA and set your company up for long-term success.
FAQs
What is the business partner concept in S/4HANA?
The business partner concept consolidates customer and vendor data into a single entity, streamlining data management and simplifying operations.
Why is master data cleansing important before moving to S/4HANA?
Cleaning master data before the transition ensures that old errors don’t carry over, reducing the risk of system inefficiencies and data quality issues.
What financial features should we implement before transitioning to S/4HANA?
Implementing the new General Ledger (GL) and Material Ledger in your ECC system will make the transition smoother and prepare your team for advanced financial reporting capabilities in S/4HANA.
How does S/4HANA help with future strategic goals?
S/4HANA offers additional functionalities that can support future growth, such as advanced customer service models, pay-per-use billing, and real-time data processing.
What role does change management play in the S/4HANA transition?
Change management ensures that your team is prepared for new roles, processes, and metrics, preventing confusion and ensuring smooth adoption of the new system.
About Uli Neubert
Uli Neubert is Partner of Tirum Consultancy GmbH. He is a distinguished entrepreneur in the software and enterprise solutions industry, with extensive expertise in both international and national program, project, and account management. He excels in enhancing operational efficiency by fostering accountability for results through organizational governance, design, and performance management. His breadth of experience encompasses strategic planning, organizational design, business process transformation, technology governance, service management, and senior executive facilitation and mentorship. Uli has successfully grown multiple businesses in IT consulting and software development, both in Germany and the USA.
Connect with Tirum on LinkedIn.
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