Disruptive ROI for SAP Migrations
White Paper 03/22/23
KPI Analyzer Sales Agent
What are Disruption Opportunities for Customers
Integrating and Migrating to SAP S/4HANA?
A Business ROI Roadmap for SAP ERP As-Is Assessments on the Journey to SAP S/4HANA
For readers of the earlier white paper on this topic, we are pleased to issue this update to include additional Business Impact ROI opportunities, including:
- Intangible ROI Benefits impacting the supply chain and Customers
o Assessing SAP Industry Solutions
o Structured data for business cases
o Third party ERP assessment opportunities
o The Value of the KPI Analyzer App one year license
- The Total Business Value ROI Balanced Scorecard™ Workbook and process as a licensed deliverable engaging Customer decision makers to evaluate both the tangible and intangible total business value for their company
- The North American West Trax | BTT proprietary Due Diligence Value Discovery Virtual Roundtable to help Customers accelerate their understanding of their data and decision to migrate or integrate.
Every industry is facing accelerating disruption risk. This is primarily due to digital technology, process innovation, and people transformation. For customers, these risks are often cited as why you should migrate to newer technologies that enable innovation and transformation. The good news for customers is that the migration services supply chain is also experiencing disruption…which benefits you.
This paper is a review of an “As-Is” assessment innovation that is disrupting the SAP S/4HANA migration process, resulting in customer opportunities for …
- Significantly faster migration journeys
- Lower total cost
- Lower risk
For suppliers offering these opportunities, the new assessment innovation helps their customers disrupt their competition by taking advantage of beneficial disruptions in the migration process and the acceleration of subsequent opportunities to build upon their digital ERP with integrated digital technologies.
SAP customer complexity risk requires a serious effort to begin migrations to S/4HANA early to avoid being caught by the 2027 deadline and everyone else trying to migrate. Due to the sheer number of SAP customers and systems, waiting too long may result in insufficient future system migration and integration resources to handle the demand bubble. The challenge is magnified with customers who have a large number of system instances.
The good news is that recent migration innovations are helping accelerate the process. For example, what is often considered as the primary clog in getting started is finding the “As-Is” business process transactions data and technical data on your existing systems. This paper will focus on a disruptive first step solution to unlocking migrations by identifying the “As-Is” data required for developing each business case and operational migration plan. It will focus on significant intangible and tangible ROI opportunities.
The purpose of this white paper is to create a check list to help you, the customer, maximize the migration process while teaming with suppliers who also provide strategic advice on how to migrate beyond yesterday’s business-as-usual business model to the requirements of tomorrow’s changing world. SAP S/4HANA migrations are merely the initial step of a much broader business strategy enabled by technology.
The following comments are based on actual data and estimates but will vary by company and by industry.
Step One: Accelerate the “As-Is” process to develop the migration business case
To our knowledge, there is currently only one solution on the market that has the impact that we are about to describe. That product is called the West Trax KPI Analyzer. This is an app that is SAP approved, ordered through the SAP Store, and referred by the SAP Office of the CTO.
What does it do?
To obtain “As-Is” information the traditional way, teams of consultants and internal resources working on medium to large size production system instances often spend a year or more in face-to-face meetings. Depending on size and complexity, the time required could be less than a year or more than two years per production system instance. However, the West Trax KPI Analyzer app uses technology on technology innovation to perform the same review in one day for all business process transactions including custom code, down to level six. Review of the data in a results-to-advice session and subsequent development of a migration business case would be recommended next steps.
What are the benefits of the West Trax App?
Actual benefits will vary by company and industry.
1.Acceleration of time by an average of a year or more per system. Reduces disruption risk by creating the “as-is” data required to create the business plan for migrating faster to S/4HANA. This will also accelerate the timeline for additional digital technology and application options that can drive future digital, process, and human capital transformation.
For example: If you have 10 production systems, that may mean a savings of ~10 years of internal and external work to diminish business disruption
risks…and lower migration internal and external cost.
2. Lower risk of human error down to level 6, including custom code. In face-to-face assessments, the quality of the data interpretation depends upon the SAP expertise and experience of team members. Human error is not uncommon and could result in protracted assessment engagements and/or incorrect decisions, missed additional savings opportunities, and even rework.
The West Trax App dramatically reduces human error risk by using technology on technology with deep SAP experience in over 1,860 prior assessments and includes identifying vulnerabilities existing in operating and business processes.
3. Provides comprehensive data for business case and migration planning. Many assessments focus on either technical data or post-migration business processes. West Trax includes all “as-is” data from level 1 to level 6, including business processes. This enhances the accuracy and data detail required for strategic business decision-making, business plan development, and technical migration implementation planning.
4. Eliminates tying up internal IT resources for manual “as-is” assessments. The tangible financial cost of tying up resources for years to produce “as-is” results that can now be produced in a day is easily estimated. However, intangible costs and risks to the business for tying up key internal resources can be even higher. When knowledgeable employees are taken off ongoing projects, what is the impact to productivity, deadlines, quality assurance and continuity? What is the potential risk and cost to the business?
In today’s disruptive and multi-generational world, finding any IT resource is challenging. Finding those who are competently skilled in SAP, your
business, and specific projects is harder, takes time, and impacts the company.
The benefit of the KPI Analyzer app is that required “as-is” assessments worldwide could now be done in a day without tying up internal resources for years. What is the value to your company for maximizing key internal resources productivity?
5. Lowers the total time, cost, and risk of migrations for the entire supply chain.
In addition to the savings noted above, additional opportunities available within a day include:
a. Assessing SAP Industry Solutions as part of the standard “As-Is” analysis.
b. Signavio tool acceleration of initiatives using the KPI Analyzer app output exported into Signavio, down to 6-Level, further optimizes productivity, reduces costs, and increases the accuracy of using Signavio. This automated routine is feasible due to the KPI Analyzer’s structured data hierarchical output, for Signavio to document, model and simulate business processes.
c. Third party ERP system assessments for consolidations into the SAP landscape.
d. Providing actual Customer structured data that can accelerate business cases and implementation planning with less human error risk, deeper levels of business processes, industry KPI benchmarking, and the replacement of competitive workshops and static power point slides.
The KPI Analyzer App also includes online reporting and filters enabling real time understanding of actual business processes and operational details at all six levels.
e. Providing structured data for major standard business case templates, such as the SAP Value Engineer VLM business case app.
f. Using the KPI Analyzer app one year license, or longer, for ongoing repeated “As-Is” Rescans at no additional cost to reduce human error risk and increase data depth and accuracy to:
i. Write the Scope of Work for housekeeping, system optimization, implementation, and integration projects; including eliminating projects that are unnecessary, such as migrating unused custom code which may also be a security risk. Also provides an opportunity to reduce service partner risk and allow tighter RFP pricing due to using accurate data.
ii. Support Governance and Quality Assurance to reduce rework, eliminate unnecessary project work, support executive reporting status updates, and manage estimated services costs.
iii. Use the data for incremental projects, such as providing visibility to employee use to optimize productivity, identify training opportunities, provide feedback for the use of the correct business processes and forms, and analyze the opportunities for incremental AI automation impact savings.
The key question becomes, “How can a company evaluate the total business cost, risk, and financial impact of a disruptive product like the KPI Analyzer?”
Since intangible benefits are hard to value at all levels within a company, we are offering a new financial / procurement model to enable key executives to express their opinions about the business impact value, the risk impact benefit, and financial impact estimate that are then included in the Total Business Value ROI™ for their company. We call it the Total Business Value ROI Balanced Scorecard™Workbook. The workbook process enables companies to evaluate the West Trax KPI Analyzer tangible and intangible benefits internally to accelerate internal decision making without the potential for third-party sales bias.
HIA includes the Total Business Value ROI Balanced Scorecard™ Workbook and process as a licensed deliverable of the North American West Trax | BTT Due Diligence Value Discovery Virtual Roundtable. The Roundtable is proprietary for the specific SAP customer. These provide additional intangible values.
The following calculations are examples. Actual company results depend upon size, complexity, and knowledge of migration system integrators and company internal staff.
1. Financial savings of the total cost of the traditional manual assessment process, including internal and external resources, versus the cost of the app will vary. Below is one example for just one system migration assessment. The savings are disruptive…in your favor.
2. Additional savings opportunities are identified through West Trax calculators. Each opportunity can be reviewed, validated, and implemented as appropriate for your company.
Checklist is based on experience of >1,860 assessments in 15 industries.
a. Unused Custom Code Net Maintenance Savings, including labour
Often, >45% of applications are custom code and >50% of customcode is unused or extremely old and not state-of-the-art.
b. Review of S/4HANA Features Reducing Need for Custom Code
Up to >70% of existing SAP standard functionality may not be used. More than 30% of custom code might be replaceable by standard current SAP functionality.
c. Optimization of Remaining Custom Code Performance
d. Accelerated Workflow Data Entry Productivity Gain
Estimated Additional Savings are up to ~$1M+ per production system.
3. Total savings from the West Trax KPI Analyzer app and associated data calculations.
To estimate the impact potential for your specific company, the initial assessment savings versus traditional face-two-face processes can be estimated company-wide by using your traditional requirement calculations versus West Trax pricing listed in the SAP Store or provided in a West Trax Proposal. Estimates on the additional opportunities require your company or business partner’s review of actual data from your system instance created after running the KPI Analyzer app.
Actual results will depend upon your industry and company. After your initial use of the App for one or more target system instances, your specific company results should help you estimate a pro forma impact for business decision maker reviews.
We strongly recommend using the App for every production system to reduce the risk of errors or omitting critical custom code in the migration process. The App can also be utilized as needed with a multiple year license to help monitor the results during the migration process and for ongoing S/4HANA updates, optimization, and change governance.
4. Major additional savings opportunities for reviewing multiple or all company SAP system instances for consolidation and optimization.
As an illustration, if you have 10 similar SAP Production System Instances with the same average savings, simply multiply by 10 for a view of your
Depending upon how many server instances you are migrating, when you add the multiples plus the West Trax Savings Calculator results, an ROI
opportunity range may look like this:
Total Tangible Cost Savings Potential for Consolidating 10 Similar System
Tangible savings and ROI opportunities will vary, but they are a compelling reason to consider the West Trax app.
Step Two: Estimate a total ROI for Why the Business Should Migrate Now
There are three major ROI considerations.
1. What is the value of reducing business disruption risk versus the cost of migration?
2. What is the time and savings opportunity for accelerating migrations times each production system instance that you have?
3. What is the data for the “as-is” on each system that allows you to quantify the business plan to migrate each system and/or to create a global business and technology roadmap for the consolidated digital platform opportunities to reduce business disruption risk and create your own industry disruption opportunity?
Value of Reducing Business Disruption Risk
Disruption is accelerating globally. Some industries are being impacted more than others, but all industries will be impacted. This requires business transformation that includes people, process, channel, supply chain, and technology transformation.
The foundation of business transformation rests upon the digital technology platform that enables the other forms of transformation. Each company will have different competitive and industry priorities requiring specific application software suites and new technology capabilities, such as AI, ML, IoT, and Blockchain. But the technology platform is the foundation that enables building an integrated technology engine to empower changes for tomorrow. Otherwise, companies may create a hodgepodge of applications to address immediate needs but not integrated into tomorrows consolidated real time requirements for disruptive business intelligence decision making, planning, and operations.
The cost of reactive hodgepodge development, maintenance on older platforms, and being behind the disruption curve will vary by company. The question is, “What is your company’s strategy to mitigate disruption risk while lowering total cost?”
Time and Savings Value of Accelerating Migrations
We’ve already shown how companies can save a year per system instance “as-is” assessment time with significant cost savings that can be applied to reduce the total cost of migrating. There are additional migration savings opportunities, beyond the “as-is” assessment, that we will discuss in a later white paper.
The question is, “Does your company want to accelerate migrations to S/4HANA by years and pay considerably less money as well?”
The First Step is to Discover your Existing System(s) “As-Is” Usage Data
Whether you choose to pursue traditional Face2Face yearlong meetings at a higher cost or choose to utilize the West Trax app is up to you. Either way, we recommend learning more about the West Trax KPI Analyzer app.
If you would like to begin learning more now, feel free to schedule a thirty-minute meeting to discuss our KPI Analyzer Executive Brief to see why companies are choosing to accelerate their migration process through the App.
You can schedule with a team member by clicking here. Our Executive Brief prepares you for our KPI Analyzer app demonstration conducted via our virtual demo center.
For more KPI Analyzer information, click here. We look forward to hearing from you!
Author: Jim Villwock, Founder and CEO, Human Investment Advisory, Inc.
About the Author
Jim Villwock, Founder and CEO of Human Investment Advisory (HIA) is a strategic global business and thought leader with more than 35 years of innovation and results in Fortune 500 and small-to-medium size businesses. This includes a significant background in finance and supply management with innovations impacting billions of dollars in revenue and over half a billion dollars in profit.
His primary focus is helping CEOs and CXOs transform their #1 Challenge into their #1 Business Opportunity by maximizing their investments to increase alignment, engagement, agility, and innovation for higher business revenue, profit, and competitiveness in today’s disruptive marketplace. To enable HIA solutions, Jim teams with world class channels, such as West Trax / BTT, SAP, and others, to help partners and clients with disruptive innovations, applications, metrics, and the SAP S/4HANA migrations required to also optimize HIA Solutions.
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