Basic details about the Fast Implementation Track to ensure you deploy SAP Enterprise Resource Planning on time and within budget and fit for purpose.
Many companies struggle with implementing SAP Enterprise Resource Planning on time and within budget and fit for purpose. You hear of many disastrous money spilling failed attempts to introduce SAP.
Many projects start with asking "what do you want" where you should focus on "what do you need".
The Fast Implementation Track allows you to focus on what you need when introducing SAP Enterprise Resource Planning into your business. It is pragmatic, flexible, offers quick results and keeps you on track.
Whether you are new to SAP or been running SAP for decades, you need to deploy the new S/4 HANA platform.
Implementing S/4 HANA is not plug and play. You need to take the opportunity to look at your business processes and aim to move as close to standard SAP functionality as possible.
You have to engage change management and assess which business processes are still profitable in the future.
It might seem an enormous complex exercise, but it is much easier than many expect. You need dive into the large data pool and eliminate the noise before making decisions which activities generates the highest turnover, profit margin and cash flow.
As soon as you know which core business processes are vital for success, make them your focal point when implementing S/4 HANA. This is the method to make sure that you can deploy SAP with the assurance that your money making activities have been tested and ready for deployment.
First of all, it would make sense to read the book as it will explain the basics. After reading you understand which most vital event in your business is key for a successful SAP ERP implementation.
Gather a core team of accounting, manufacturing and logistics business experts and define a short list of products and services your company offers that generate the highest turnover or highest profit margin or fastest cash flow. Now identify which suppliers are in scope to sell these products and services. In parallel compile a short list of loyal clients that would buy these products and services. Finally, bundle all this data and identify which business processes support the procurement, manufacturing and sales.
The business experts present their findings to a group of SAP integration consultants. These SAP experts will build a prototype in a green field SAP system, only using standard SAP functionality. Primary focus is to see how you can configure end-to-end business processes with the bare minimum of master data. Special attention is required with the interaction between the core SAP modules for procurement, manufacturing, logistics, sales, finance and controlling. At the end of this week the prototype is presented to the business experts.
Improve the prototype after receiving the feedback from the business experts and also add additional components such as warehouse management, credit management, transportation management and production planning. Again, only use standard SAP functionality and use minimal amount of master data to enhance the vital end-to-end business processes. Show the upgraded prototype to the business experts and ask for their feedback.
Make further improvements to the prototype to ensure the end-to-end business processes are taking on board the feedback from the business experts. So far your focus has been on goods flow and money flow. Now also add all standard SAP output generated and review with the business experts to what extend they are fit for purpose. At the end of this week the business experts can make decisions which enhancements to standard SAP are necessary to achieve a successful deployment.
In the meanwhile...
The business experts informed their departments on the prototype and request more in depth analysis on crucial functionality by subject matter experts, but out of scope for the prototype. For example, building a chart of account, strategies for material requirements planning, rules for consumer pricing, operational and strategic reporting requirements. The aim is to have the core requirements identified by the end of the fourth week to identify whether additional enhancements to the standard SAP system are necessary.
Collect all the feedback and verify whether requests for SAP enhancements could be avoided through change management. Maybe some minor updates in the daily procedures or a reorganisation of tasks or roles could allow you to stick within standard SAP functionality. If enhancements are needed, then estimate the effort and then prioritise.
And after that?
Now it is the time to determine a potential go-live date. The chance of meeting this date increased because you took the time to analyse the core business processes and translate them into a working prototype. This prototype remains important throughout the implementation period as it is a guide what is essential for a successful deployment.
Chose your team wisely. They need to be true experts in their field and capable to understand their challenge ahead.
Avoid subject matter experts, as they tend to apply silo thinking. Instead find integration experts with knowledge that cross over between accounting, manufacturing and logistics.
Keep your team small, ideally between 3 to 7 people. Having too few in your team could limit the explore to all vital business processes. The more people the more difficult to keep on track and keep the focus on what is essential.
Understand that you are building or reviewing a prototype. It will not have all the bells and whistles on purpose. Instead concentrate whether you can receive a customer payment or successfully procure the correct amount of components to manufacture the finished goods or picking list output contains sufficient detail to find the product in the warehouse or prevent delivery of goods when the client has outstanding payments.
You need to challenge your current business processes when standard SAP applies a different philosophy. Remember that SAP has become a market leader for a reason, so maybe their approach might have some merit. You can have reservations on SAP approach and make note why standard SAP might not be ideal. But it will be a task of change management to make decisions whether to deviate from the prototype.
Do not seek perfection while you are prototyping. You need to make progress on finalise end-to-end business processes using a greenfield system. Forget rules for strategic reporting and specific master data requirements. Keep it simple.
Do not keep the prototype too simple. Make sure you set-up multiple fictitious companies to trigger inter-company billing and various distribution centres within a country to prove intra-company goods transfers. Multi-national enterprises need to create made-up businesses in different continents using different local reporting currencies in their prototype.
Do not forget to include the handling of complaints. You need to demonstrate you are able to handle frequently occurring issues within procurement, manufacturing, logistics and sales. Show how to generate invoice corrections and good returns. Scrap some stock in the warehouse. Receive less raw materials from suppliers than invoiced. Majority of these processes are available out of the box.
Keep the prototype because it is very useful as a reference. You never know when you want to go back to basics and verify how the working prototype handles specific steps within a process. Also, do not make any changes to the original prototype after the that phase in the project has finalised. When necessary, take a copy of the prototype and make adjustments to test new variations.
You will get the tempted to spend a lot of effort in SAP functionality that prevents you to make the needed progress to deliver a working prototype. Even though some SAP functionality is essential for a successful deployment, that does not automatically mean it is vital when building a prototype.
Common mistake is to enforce the current chart of accounts in the prototype to record financial transactions. You can easily copy one of the template SAP chart of accounts for an instant seamless integration of procurement, manufacturing, sales and logistics. During prototyping you should not care whether a general ledger account is used that reflects your current configuration.
Many businesses use variant configuration where a single product code to handle multiple configurations. Obviously this would be critical to get it configured correctly in a live system, but during prototyping you can make multiple product codes per configuration. Just make sure that each configuration allows you to procure the correct raw materials to manufacture the finished goods.
You can lose a lot of precious time setting up a fictional warehouse. Try to stick to demonstrate basic activities. Yes, you can include handling unit management and cross-docking. There is no need to set-up hundreds of bin locations and a multitude of put-away and picking strategies. In essence you need to perform the core activities to support the end-to-end business processes.
Pricing in sales documents can become very complex. However, during prototyping you should be able to determine a sales price and cost price. Ignore sales deals, rebates and complex discount algorithms as they are not essential to generate an invoice.
Standard SAP output for documents are not that pleasing for the eye. You might be persuaded to change the layout, add a logo or include additional data. That would mean you need a developer to take part. This is not the objective of prototyping. Show that standard SAP has to offer and be aware that document output need a lot of attention.
Get a high level understanding of Enterprise Resource Planning without getting bombarded with jargon.
In a nutshell, your company uses one system to control your manufacturing, procurement and sales activities. The advantage is that information is shared between your departments so that you have an instant up-to-date data.
Everyone feels the impact of Enterprise Resource Planning. Whether you are the CEO or the forklift operator, you feel the impact how successful it has been implemented.
The Fast Implementation Track is designed to look at the core business processes that generates at least 80% of your turnover, covering
Logistic and Financial Supply Chain Management.
You can be very academic about jargon, but we should keep it simple.
Logistic Supply Chain Management focuses on the flow of goods and services. It involves forecasting of expected demand, planning capacity for manufacturing, procurement of raw materials, storage in warehouses and delivering to customers on time and with zero defects. In case of complains, collect the faulty goods and inspect whether it can be refurbished.
Financial Supply Chain Management focuses on the flow of money. It keeps a close eye on your cash flow, making sure you can keep your financial obligations and prevent bankruptcy. It covers activities such as vendor evaluation, customer credit management and asset management. When you need additional financial resources, you can determine which option is the most profitable based on the estimated Return On Investment.