Incompetence Compensation Competence

The Art of Concealing One's Own Inability from Oneself and Others

“An investment in knowledge always pays the best interest.” Benjamin Franklin

There are situations where all alternatives feel equally right and wrong. Many SAP customers are well aware of this dilemma, and recently it particularly takes the form of the transformation to SAP S/4HANA. This is characterized by looming pressures like the end of maintenance for SAP ECC, but also by innovations and new opportunities. The latter are often unclear to most customers, both in terms of their functioning and applicability in the real corporate context.

Many questions arise from this uncertainty, only a selection of which will be mentioned here:

• What added value and perspectives does SAP S/4HANA actually offer me?

• Should I perhaps consider switching to another provider?

• If I choose SAP S/4HANA, do I go into the Public or the Private Cloud?

• What does this mean for my system landscape solutions, for individual regions and organizational units, for third-party solutions and interfaces?

• Does it make sense to do in the future with a new solution all that I have done so far?

• And if my system and process landscape is too complex, how do I conduct the transformation in multiple steps to merge and consolidate ERP systems?

Whatever the decision, one thing is certain – you have to face it, because the end of maintenance looms like a threatening guillotine over one's own head. Herein lies the crux, because this critical choice can influence and shape my possibilities for years and decades. It's good to have the right competencies and information to set the digital course towards the Cloud.

But can I really be sure of this? Experience shows that many projects fall short of the expectations and ambitious visions set. Indeed, against the backdrop of business reality, it often becomes clear that goals need to be revised and plans adapted. This situation of enforced plan changes can also be casually referred to as an involuntary Brownfield approach, for instance when the Selective Data Transition increasingly loses the planned innovative developments, or an ambitious Greenfield approach ultimately leads to a project turnaround.

In any case, this development is neither desired nor planned. Therefore, it is important to keep in mind the drivers of these impending plan disruptions, by addressing the reasons and impacts that lead to them, and to ultimately discuss the possibilities of recognizing and circumventing pitfalls and obstacles in a timely manner.

Why Many Transformations Fail

Before we tackle the reasons for potential failure, it is necessary to analyze the peculiarities and specifics of transformation strategies more closely – even if most readers should be aware of the differences:

• The “Greenfield” approach means starting anew and redesigning the SAP processes. All customer-specific adjustments and developments one might be accustomed to become obsolete, yet this can make room for new and standard-close solutions. A Greenfield approach allows companies to define transformation objects in advance, which leads to lower total cost of ownership and faster value creation. However, a key challenge is the selection and migration of relevant data.

• One usually speaks of “Brownfield” or “Conversion” when an existing SAP implementation is upgraded rather than transformed. This approach enables the migration of existing SAP systems to SAP S/4HANA but only superficially questions the existing processes and structures through selection or broad adjustment. Those who choose the Brownfield approach often rely on downstream developments and innovations in the course of a later migration from one SAP S/4HANA version to the next.

• Few customers are willing to completely start anew with a Greenfield strategy or forgo possible innovations in the course of the Brownfield approach. The solution to this dilemma is called “Selective Data Transition” (SDT). Particularly in scenarios of complex landscapes and distributed applications with high usage intensity and data volumes, this “hybrid” approach is recommended, yet it can also be an ideal solution path for smaller systems.

But how does this strategic decision contribute to the failure of transformation projects? By keeping in mind the reasons why projects fail or cannot meet their set goals, this becomes quickly clearer.

The degree of process standardization requires the consideration of all relevant data and perspectives

This applies not only to SAP S/4HANA transformations; from the revision of project experiences from the past years, certain patterns that are particularly typical here can be derived. In the following list, we have gathered highly significant causes that can lead to not only negative but even fatal consequences in a transformation:

1. Lack of knowledge about one's own processes and thus the true system usage
   Opinions differ on the role that comprehensive knowledge of existing and lived business processes, further developments, and adjustments play in which strategic approach, especially with regard to one's own value creation models and priorities. The answer is simple: they always have the highest priority. Those who do not know their real needs will neither be able to correctly formulate nor ultimately translate them into software. Further tasks such as preparatory clean-ups of data and configuration or the implementation of custom code under new technological conditions are highly dependent on the complete capture of the current state.

   
   

2. Ignorance of the true possibilities and potentials of the new software
   This lack quickly leads to the exclusion of value creation potentials. Particularly, the logical connection of functionalities of the legacy system with subsequent deployment possibilities and especially their interaction with process innovations play a large role here. This connection requires a high level of application knowledge of both technologies and especially for in-house developments and adjustments, this correlation can be difficult to assess.

   
   

3. The capabilities and capacities of one's own project participants are not clear
   Ignorance about the real resources and skills fogs the view of efficient project control and similarly lack experience with the software's requirements and restrictions. This rigidity leads to poor planning and thereby to bottlenecks. In particular, most key resources are not only involved in various projects but should be primarily dedicated to operational daily business requirements. There is reliance on manufacturer information and a lack of knowledge about Real Product Cost and Ownership, exacerbating an already precarious situation.

   
   

4. Starting too late with preparation and being unprepared for changes
   Since the transformation involves transitioning from an old system to a new one, careful consideration should be given, much like moving house, to what will be needed in the future. An important planning support is the current analysis of existing processes and data. This can and must begin in good time as it significantly impacts the planning and execution of the transformation. Otherwise, project delays and missed deadlines are threatened.

The mentioned causes quickly lead to a negative project progression, especially when they occur in combination. Projected onto the transformation strategies, this provides a clear picture of the relevance of the presented problems, irrespective of the chosen path:

The problem effects presented in the table all too often lead to misplanning of the transformation. The consequences can be restrictions due to an unnecessary Brownfield approach concerning one's own possibilities, or overly ambitious and unachievable expectations. In summary, this means that for every form of transformation, an integrated and targeted analysis environment like the products of IBIS Prof. Thome AG is needed.

The analysis results help to correctly identify and understand the existing customer-specific SAP system and process situation, and furthermore, they reveal the potentials and implementation possibilities in SAP S/4HANA. This understanding assists the project team as well as project management, helping to guide the transformation onto a safe path. And thus to avoid and circumvent the specter of incompetence compensation competence – something that might feel good but isn’t actually effective.