The foundation for successfully becoming an intelligent enterprise with SAP S/4HANA
The foundation for successfully becoming an intelligent enterprise with SAP S/4HANA
Many organisations struggle to define why they should be moving to SAP S/4HANA. ERP often loses the battle to other top management priorities; and to make it relevant, ERP must solve more than just being another source of questionable information.
In this article, we will explore SAP Process Insights, one of the tools in SAP’s Business Process Intelligence suite that supports growth and return on investment as key elements in the journey towards becoming an intelligent enterprise with SAP S/4HANA.
We have all been in search of the Holy Grail, i.e. the business case for why we should move to SAP S/4HANA. The general perception has been that it does not exist – or does it?
We see that the main reason why organisations hesitate when it comes to adopting SAP S/4HANA is the competing priorities of how to utilise the available resources in the organisation. Normally, the difficulty in producing a SAP S/4HANA business case is not even one of the top 3 reasons for not moving to SAP S/4HANA.
So, organisations struggle with far worse things than not being able to define the business case for transitioning to SAP S/4HANA. But how can that be?
For some reason, ERP is losing the battle to other top management priorities. Is it because our mindset about ERP has changed – or maybe not changed at all – since the early days of the first adoptions back in the 1990s?
Illustration: Tasks that ERP has to solve in order to become great again
Firstly, let us agree on the definition of business process management (BPM) as various definitions exist out there. The BPM definition which we prefer is the one from Gartner*:
“Business process management (BPM) is a discipline that uses various methods to discover, model, analyze, measure, improve and optimize business processes. A business process coordinates the behavior of people, systems, information and things to produce business outcomes in support of a business strategy. Processes can be structured and repeatable, or unstructured and variable. Though not required, technologies are often used with BPM. BPM is key to align IT/OT investments to business strategy.”
Based on the definition of BPM, we then need to identify which areas BPM should address in order to be fit for the future and not become another outdated discipline:
Key areas handled by a future-fit version of business process management
When we look at the various areas that future BPM is required to support, it becomes very clear that there will be a huge increase in the requirements for using data and intelligent applications as part of BPM. This makes SAP Process Insights highly relevant, especially when embarking on the S/4HANA journey.
SAP has realised just how important business processes are when it comes to any type of transformation of organisations. Consequently, SAP is currently investing massively in a Business Process Intelligence suite in order to be able to fully support all the disciplines required in a future-fit version of business process management.
Currently, SAP Business Process Intelligence suite consists of stand-alone applications that cover various functionality such as:
Key phases of business process management linked to Business Process Intelligence suite functionality according to SAP
If you want to discover the opportunities and potential impact that you as an organisation can obtain with SAP S/4HANA, we recommend that you take a closer look at SAP Process Insights which will deliver tailor-made recommendations based on your current use of SAP.
In the following sections, we will reveal some of the insights that will be available to you when using SAP Process Insights.
Have you decided on moving away from SAP ECC and onwards with SAP S/4HANA? Or do you have an early SAP S/4HANA version, and are you curious about what benefits an upgrade to the latest version can bring? One of the most promising tools you can use to accelerate your digital transformation and start your journey towards becoming an intelligent enterprise is SAP Process Insights.
Every organisation is unique. Therefore, you should plan and execute your digital transformation so that it fits your organisation. Also, it should be planned and executed in a manner and at a pace that takes your organisation to the next level and does not leave something crucial behind.
The approach you choose, plan and execute is vital. This is the case as it will radically influence your ability to adopt the next generation of technology as well as business processes when embarking on a SAP S/4HANA transformation journey.
Transforming your organisation takes both courage and stamina. You need to be persistent when insisting on transforming your organisation into supporting new business models, new ways of working and utilising new technology. Because it requires extensive and strong top management support to stick to a “fit-to-standard” approach all the way through.
Using SAP Process Insights to accelerate your digital transformation
Once you have decided to move away from SAP ECC or an early version of SAP S/4HANA and onwards with the latest available SAP S/4HANA version, we would strongly recommend you to use SAP Process Insights to support your business case preparation and SAP S/4HANA road map planning. It is one of the most promising tools to accelerate your digital transformation and start your journey towards becoming an intelligent enterprise.
Based on your existing use of SAP, the tool gives you concrete, personalised feedback and a detailed analysis of your business process quality.
With SAP Process Insights, you will also get specific recommendations for which process steps are most critical to fix and how you can utilise different SAP applications and functionalities in your business process transformation.
This enables you to create a solid foundation for becoming an intelligent enterprise that is both fit for your future business model as well as for the people in your organisation.
SAP Process Insights
Offers a user-friendly and fast way to identify inefficient business processes based on accurate insights. The solution helps you save time and money by ensuring that you only invest exactly where you have an opportunity for improvement.
Using SAP Process Insights, you can obtain the following benefits:
Prerequisites for using SAP Process Insights:
Get valuable insights into your end-to-end business processes
Do you know how your current business processes are performing?
With SAP Process Insights, you can get deep insights into your current business processes within asset management, manufacturing, sourcing and procurement, sales, supply chain and finance, even on an organisational level with standard KPIs.
Based on accurate insights, you will get a quick way to identify inefficient business processes and specific suggestions for improvements. This helps you save time and money by ensuring focus exactly where you have an opportunity for improvement.
Visualisation of your current business processes
Using SAP Process Insights, you will be able to analyse the current situation for each process step in an end-to-end process in order to improve and optimise how you run the process today.
You will be able to compare and break down performance on organisational levels so that you can get insights into how each organisational unit performs and measure them against each other.
In short, this will provide you with a solid foundation based on data from SAP and a visual overview of your current business processes. The overview enables you to have dialogues in your organisation on how the operational process is performing right now and what you can do in the short and long run to improve the process.
The visualisation will give you valuable insights into how to use your SAP system. For example, do you know how much time is used on standard transactions or z transactions?
Backed by such insight, you will stand stronger when designing your future S/4HANA road map for how to get “back to standard” and having process workshops on how current SAP standard solutions can replace your custom code.
Benchmark your performance within your industry
SAP Process Insights can give you insights into how your business processes are performing compared to the industry.
For each process step, SAP will provide possible causes for inefficiencies as well as negative business impact. These inefficiencies can be investigated further in order to calculate expected benefits to be part of the SAP S/4HANA business case.
However, be aware that the foundation for the benchmarks performed is other SAP customers, and it can therefore be biased. Therefore, we recommend that you also compare the results with other KPI benchmarking services.
Discover processes with automation potential
Besides the benchmark, SAP Process Insights also highlights the top 50 processes with the most automation potential by looking at two parameters:
For each process with an automation potential, SAP Process Insights recommends what you can do in order to automate and reduce the manual effort by suggesting capabilities like a SAP Fiori Lighthouse app, machine learning or a robot that can assist you in your daily operations. This will free up valuable time from repeating and non-valuable tasks – time you can use for value-adding tasks instead.
Recommendations when you consider moving to S/4HANA
Based on data from your system, SAP suggests the top recommendation where you as a company benefit the most from S/4HANA.
The recommendations are grouped into five different areas:
SAP rates each of the areas on how relevant they are to your business. The relevance of a recommendation is tailor-made to your organisation as it is based on the current usage of transaction codes in the system. This will then give you insight into how to apply new technologies in your transformation journey to S/4HANA.
In the next section, we will look at the different technologies and the advantages you can gain from them.
SAP S/4HANA capabilities
Based on the usage in your current system and industry popularity, SAP highlights the main business processes that are relevant to you in S/4HANA. You can take a deep dive into each process and get information about what is new in S/4HANA for this process compared to your current SAP solution, best practice (scope item), road map for the solution and related licence information.
In order to get the full benefits of the digital enterprise, SAP has developed many machine learning capabilities that can assist and optimise the current business process.
Imagine that the machine can analyse the approval pattern history for purchase requisitions based on price, source of supply, material group and so on and provide recommendations for a mass automated approval.
For each machine learning recommendation, you will be passed on to SAP Best Practice Explorer to learn more about the relevant scope item.
Please be aware that most of the machine learning recommendations are not part of the SAP S/4HANA digital core and therefore have separate license fees.
SAP Intelligent Robotic Process Automation
Repetitive tasks are boring for the user and very costly for the organisation, and human errors can still occur.
Here, SAP has focused on several operational tasks that can be replaced by a robot. This will free up time for the user and do the job much faster without any errors.
Imagine having a robot that creates inbound deliveries based on data from an Excel file attachment received in MS Outlook. This happens by monitoring incoming emails and recognising the attachment referring to existing purchase orders.
These robots come preconfigured, and you can take them for a “test drive” before deciding on the relevance for your organisation. Please be aware that most of these recommendations are not part of the SAP S/4HANA digital core and therefore have separate licence fees.
As part of the SAP UX strategy, SAP has nominated a number of Fiori apps that are “best in class” to use with SAP S/4HANA. To ensure that organisations are being informed about the existence of these apps, SAP has categorised them as Lighthouse apps; and from SAP Process Insights, you are navigated directly to the SAP Fiori app library to learn more about the recommended Fiori apps.
Based on data in the system, Situation Handling provides the user with guidance on how to handle a specific situation or sends a reminder to the user to act on a situation that is about to happen. This could be a sales quotation that is about to expire or informing the user about exception messages that occurred during the MRP run for purchase orders or production orders.
We expect that SAP Process Insights will be enhanced with different types of recommendations, e.g. in relation to Business Networks. This way, SAP can promote their full suite of solutions to illustrate how SAP can support all aspects of your business processes.
What benefits and pitfalls can you expect when using SAP Process Insights?
|Pros when using SAP Process Insights||Cons when using SAP Process Insights|
But if you want to ensure that your organisation continues to have resilient, best-in-class, standard, yet agile business processes, it is not sufficient to get process insights through analysis and monitoring. You will also need to be able to master disciplines within process design, process simulation and process governance. In addition, you will need to have skilled people who can bridge the often-seen gap between management (business strategy and business model), line of business (process landscape) and IT (system landscape). This will ensure that you have full visibility of the enterprise architecture of your organisation.
Being able to build a digital twin of your organisation will be a demand of the very near future. By doing so, you will be able to simulate process improvements before actually implementing the best improvements in your organisation.
You will also be required to have strong governance in place surrounding the business processes. If you do not, you will experience an ever-increasing process debt* that will more than deplete the benefits of implementing the latest and greatest technology.
*Process debt – Suboptimal activity or process that might have some benefits but generates a sustained negative impact on cycle time, error rates, quality, consistency, complexity or customer experience.
Today’s integrations (interconnectedness) will fuel tomorrow’s intelligence, making enterprise/business architecture a critical discipline
The article is written in cooperation with our colleagues Anne Fjelbro and Kai-Morten Rosendahl from Implement Consulting Group.