Slowly but surely, SAP’s ECC 6 enterprise resource planning (ERP) solution is being replaced by a new system: S/4HANA. From 2027 on, ECC 6 will not be fully supported and will become costly to maintain. SAP is steering new customers to the S/4HANA system, and all ECC 6 customers will eventually have to find a new solution.

Organizations that have already implemented S/4HANA are finding that it brings powerful new capabilities in areas like supply chain and finance. Yet despite the eventual upsides of the migration, no organization relishes the prospect of a major ERP transition. That may explain why, globally, 70–80% of ECC 6 customers have not yet transitioned to S/4HANA.

Moving to S/4HANA is no simple upgrade. The shift will transform supply chain, finance and sales/distribution processes in every corner of the organization, impacting ways of working across functions, sites and geographies. Enterprises must be prepared to effectively manage the far-reaching human element of this transformation to ensure rapid return on investment and a steady path to new ways of working.

Focus on People to Avoid ERP Implementation Failure

No new enterprise technology, however beneficial, creates positive change in and of itself. Organizations can spend hundreds of millions of dollars ironing out a host of technology and process challenges, but in the end, thousands of human beings need to simultaneously and enthusiastically adopt the new solution if it is going to contribute to improved business outcomes.

In the context of ERP implementation, problems can often be traced back to poor change management, which manifests in a lack of executive support, a lack of widespread buy-in, and sometimes even an actively change-resistant culture. A people-driven organizational change management (OCM) approach to ERP implementation actively counters these tendencies in order to drive effective implementation.

An OCM approach anticipates the human barriers to change by understanding how the transformation will impact people across the organization. Implementation leaders need to develop and consider a wide range of employee personas, model the impact of change on those various personas, and tailor each user journey in order to incentivize buy-in and create positive user experiences.

By targeting the right interventions at the right employees at the right time, persona-led engagement and learning provides all stakeholders with the tools they need to embrace and support the profound shifts required to achieve maximum ROI from S/4HANA implementation. 

Delivering ROI for S/4HANA Implementation: Seven Change Management Levers

No matter the exact implementation approach (“greenfield” vs. “brownfield”, moving from a SAP or non-SAP product, cloud vs. on-premises — see figure above), the following seven interventions are crucial to achieving persona-led transformation and maximizing returns on ERP investment. 

• Align leaders across the entire business. S/4HANA implementation is typically led by particular lines of business, such as supply chain and finance, but wider business leaders must be on board as well. To support the long implementation timeline, a robust organizational change management approach will insist on a regular drumbeat of engagement with senior leaders to improve leadership commitment and alignment and equip leaders to actively sponsor and lead the change.
  
  
• Engage GPOs early to drive the change. It may not be immediately apparent that Global Process Owners (GPOs) need to be intimately involved in the early stages of S/4HANA implementation. However, because they are the bridge between the high-level strategy and the on-the-ground reality, their early input and mobilization is critical. As they consider how a new ERP system will impact processes and frontline teams, GPOs are ideally positioned to both envision the future and lead people toward that future state. Change leaders need to ensure that early onboarding provides GPOs with a crystal-clear picture of S/4HANA processes and capabilities.
  
  
• Assess business impact. Business impact assessments help leaders model the impact of the change on functional teams like finance and supply chain, on third parties, and on the leaders themselves. These assessments surface needs for additional communications and training, and should be conducted at a high level of granularity in order to develop change management interventions for each user persona. Business impact assessments should be frequent and iterative, as the intelligence derived from the impact assessments will evolve as the system design unfolds.
  
  
• Emphasize integrated planning. To de-risk S/4HANA implementation, change management activities need to be aligned with the SAP Activate methodology, which ensures tight integration of activities into the overall plan, including clearly articulated and managed dependencies and risks. As process and system design evolves, the change team should stay abreast of changes and their implications on people through a seat on the Design Authority (the body program responsible for managing continuous updates). Finally, there should be a close partnership with HR representatives to ensure that HR manages the implications of job role changes and that change management plans adhere to legal frameworks and consultation milestones.
  
  
• Cultivate a change community. Change leaders can stand up a community of influencers to drive the change locally (in both a regional and organizational sense) and infuse change into the core of the enterprise. A change community is a network of influencers that creates a forum for disseminating messages and getting feedback from the wider business. It should include both geographic and functional representation of well-networked individuals who are able to influence peers and translate the change in a way that is meaningful on the ground.
  
  
• Deploy readiness and adoption measurements. Change leaders need to periodically measure the people side of business readiness prior to go-live. Feedback surveys, training completion rates and evaluations, and stakeholder interviews can give leaders a qualitative and quantitative picture of readiness. Post go-live, feedback surveys, system adoption metrics and helpdesk query analysis will capture how well the organization is adapting to the change, and surface opportunities to course correct where necessary.  
  
  
• Socialize the change with learning and development. A formal learning and development (L&D) program should accompany any S/4HANA implementation. Persona-based training curriculum (both classroom and digital) mapped to individual learning pathways will reduce cognitive overload on end users and prepare them for go-live, and tools like Articulate, Powtoon and Captivate can ensure that courses are gamified, engaging and interactive. Meanwhile, SAP’s Enable Now platform can facilitate hands-on practice while avoiding the costs of creating and maintaining a dedicated training environment.
  
  The through-line of these change-management activities is an emphasis on modeling and understanding user journeys. Throughout the implementation exercise, change leaders should refer to user journey models as they seek to understand the state of adoption across roles and functions. By focusing on the unique stumbling blocks for each user type, change leaders can create targeted solutions rather than falsely assume that a one-size-fits-all approach will be effective.

Achieving S/4HANA Implementation Success

No ERP implementation will be without its challenge. The benefit of a persona-led approach is that it allows organizations to anticipate many of those challenges, regularly measure readiness and subsequent adoption, and act quickly when necessary to resolve problems before they become systemic. A persona-led focus on each user journey works because, in many ways, the GPOs and end users are best positioned to understand how S/4HANA will impact their own roles and responsibilities. While leaders may best grasp the strategic importance of the change, they need eyes and ears throughout the organization as they seek to assess the state of the transformation in real time. Organizational change management provides the tools to receive and act on that feedback, minimizing the potential for transformation failures while accelerating adoption so that the full benefits of the new system can be realized more quickly. 

David Lyons
Partner, Talent & Change, Europe

David has more than 20 years of experience in change management, organization design and HR advisory, and has led end-to-end consulting engagements for many household brands, including programs involving Oracle- and SAP-enabled ERP transformations. 

Signe Reiser
Managing Consultant, Talent & Change, Europe

Signe has twenty-six years of international experience in consulting, leading change and digital transformations across multiple industries and functional areas in EMEA & APAC for both SMEs and Fortune 500 organizations.

Contributor 
Arun Kumar Pothapragada
SAP Practice Director