Implementing SAP S/4HANA is a complex, multilayered experience. To help streamline and simplify this process for organizations, SAP developed SAP Activate, a methodology designed to help guide customers through their implementations of SAP S/4HANA.
ASUG interviewed the authors of "SAP Activate: Project Management for SAP S/4HANA." We spoke with Sven Denecken, SVP of product success and co-innovation at SAP S/4HANA at SAP SE; Jan Musil, chief product owner of the SAP Activate Methodology at SAP; and Srivatsan Santhanam, a senior director and chief product owner at SAP. The three authors discussed the methodology, how it can help customers, and where companies can apply it when managing their SAP S/4HANA implementations.
Jim: What are the key functionalities and technologies in SAP S/4HANA that separate the platform from other ERP software?
Sven: There are three things I would like to mention out of the many values we see in SAP S/4HANA. First is the real-time performance this product provides. You can process transactional analytics without the traditional way of pushing data back and forth and looking at historical data. Data is consistent across all platforms, regardless if you are running the platform in the cloud, any-premise, or in between with a hybrid system. And given the platform that is underneath SAP S/4HANA—SAP HANA—you have no latency or duplication. You see what you get. That simplified data model and database for real-time performance helps optimize the TCO for our clients.
The second value is based on the real-time insights provided by SAP S/4HANA. You can make data-driven decisions. Your data, in your context, is at the business user—exactly where you need to make the right decisions. It’s a single solution for everything. Usually, you have separated systems for business intelligence and financial planning, for example. With SAP S/4HANA, you gain all of those detailed insights when you use the smart assist capabilities. The system helps you identify situations and gives you advice because it knows you, your data, and what you want to do next. Automation and intelligence are built in.
Finally, I want to highlight the consumption as a service notion that comes with SAP S/4HANA. It’s not the traditional ERP approach. It’s a self-guided, content-driven activation of value. People still call it implementation. I love to call it activation, which is why we have the methodology of SAP Activate. Because SAP S/4HANA generates at the consumption level, it adapts to the customer’s scope. You grow with your systems based on your scope. SAP S/4HANA also visualizes business models and process descriptions, so you see exactly where you are in the business process.
I also want to mention that we do not force customers into a specific deployment model. We pick customers up where they are.
Jim: Why should organizations adopt the platform? What is the main value of adopting it?
Sven: There are three main reasons. First is the business model transformation. We’re seeing the individualization of customers and the consumerization of ERP. Customers instantly want a lot of information at their fingertips and look for a solution dedicated to their specific requirements. But you want to look above the cubicle line, so you’re not just doing purchasing 365 days a year. You need financial data and you want to help the business with your data.
And that helps customers cope with the industry disruptions that we see out there. Many companies are not operating in a single industry. They leverage a lot of innovations. For example, you could be an oil and gas company, but you also have retail shops. You need a homepage to engage with your consumers. These are changes that happen in the business transformation. It all boils down to the complexity of processes, the high volume that you need to cope with, and the subscription economy.
The second reason why companies adopt SAP S/4HANA is the pressure the digital economy puts on core processes. The lot size of the transaction goes down. So, there’s less value in one transaction, and the number of lots in a transaction goes up tremendously. That means you produce more for less revenue. And that calls for a robust, real-time, automated platform like SAP S/4HANA that can manage this workload in a cost-effective and resilient way
Finally, I want to pay tribute to the people who manage the IT environment for our clients. Everyone talks about business transformation, but an IT transformation also is happening.
This group is hit very hard by digital transformation. Luckily, if you have one platform like SAP S/4HANA, there are fewer moving parts. Before implementing SAP S/4HANA, companies need to decide on the deployment model: cloud, hybrid, and any-premises (we call it any-premises, because you can put the implementation on hyperscaler, a server farm, or you can ask a partner to manage it for you). This is where IT comes in to see the value of the semantically integrated system, the underlying automation, and the agility to adopt and automate.
Jim: Let’s talk about some of the key concepts behind SAP Activate. How does the methodology help customers as they implement SAP S/4HANA? Where exactly do SAP Model Companies fit in?
Jan: The concept that Sven covered in the previous two answers are at the core of SAP Activate, starting with running business processes that come pre-delivered in an SAP Model Company or SAP Best Practices. These allow customers to start fast, confirm the fit of the solution, and embrace the cloud mindset of fit-to-standard.
Fit-to-standard means that you start with the mindset of adopting standard functionality as much as possible while not limiting your ability to tailor the solution to benefit your business in areas where you’re differentiated. Those are concepts that we have embedded in SAP Activate, including building on capabilities that cloud technologies allow you to bring into the project. Regardless of whether you’re deploying in the cloud or any-premise, your project can benefit from leveraging cloud technologies. For example, you can use cloud technology early on in the project when you’re setting up a sandbox environment where you’re deploying the SAP Model Company.
We also have built SAP Activate to be agile and support you during SAP S/4HANA deployment. In that sense, we are building on the fit, identifying the delta requirements, putting them in the backlog, and realizing them in a series of iterations that build on each other.
We created SAP Activate as a modular framework. You can scale it up and down—depending on the project size, complexity, scope—and tailor it to your needs. It can serve customers with a fairly small footprint and large companies with global SAP S/4HANA deployments.
Jim: Why is having a working system so vital for SAP Activate?
Jan: Building on those concepts and principles, the foundation of SAP Activate is to embrace the fit-to-standard mindset and look at how you can leverage the pre-configuration that SAP delivers in your projects to the maximum degree. In the past, projects used to run long blueprinting sessions where the users looked at product documentation and presentations. But they never really got to touch the system right at the beginning.
And that’s a huge value for the business users as they go through the early stages of the project: experiencing new software and seeing how it behaves. Hands-on work in the system gives customers much more confidence and understanding of what the system brings to them. Ultimately, a working system brings value to the company because you don’t need to configure all of this functionality. SAP pre-delivers it in the SAP Model Company that’s based on experience from thousands of projects that we encode in so that our customers can start building their solution on top.
Jim: How should companies prepare for the configuration, data migration, extensibility, integration, and testing stages of the implementation process? And how do each of these stages differ if you’re implementing SAP S/4HANA any-enterprise and SAP S/4HANA Cloud?
Srivatsan: In a way, the methodology of implementation and the project-management discipline are the same. It starts with your basics. Then, we slowly move into the specifics of configuration, data migration, extensibility, integration, and testing based on how SAP S/4HANA is deployed (cloud or any-premise).
Let’s use configuration as an example. First, you make sure you’re starting with the fit-to-standard. You then ensure what is required from a configuration perspective is captured and done. For SAP S/4HANA Cloud, you will ultimately use a self-service user interface (UI) to configure the solution to fit your needs. In SAP S/4HANA any-premise, you will start configuring using your Implementation Guide (IMG) or SAP Project Reference Object (SPRO).
SAP Activate also tells you that you need to identify which systems you’re going to connect to your SAP S/4HANA system. From that perspective, defining the landscape, defining the endpoints, and defining the semantic data is your starting point, regardless of how SAP S/4HANA is deployed (cloud or any-premise).
In SAP S/4HANA Cloud, the pre-packaged configuration is delivered as a standard and customer can scope what functionality they want to use. It’s a jump-start for your project.
For data migration, data cleansing must be done, whether you use a cloud-based deployment, any-premise deployment, or a hybrid deployment. To harmonize your data, you must be sure to cleanse your data before you move on to the next stage.
Using SAP Activate as a methodology helps you always get your basics right. Then, once you start moving into your deployment types, it tells you the specifics of how you get going.
Jim: What are some ways that companies can cultivate an Agile work environment, and what makes an Agile approach so effective in an SAP S/4HANA implementation?
Jan: We have seen Agile adoption gaining traction in the IT world over the past decade. But it has picked up in the past few years when companies realized that they are going to get a lot of value out of empowering their teams to use Agile techniques and to self-direct in their implementation projects. What they’re gaining in return is better flexibility in responding to change—because every project is going to experience some level of change—and having the ability to respond to that change is valuable.
Companies are also getting better visibility into the process and progress of their projects. There’s a lot of structure in Agile. You do a lot of planning on an ongoing basis in each sprint, you provide visibility into what you’re doing in a project, and you do demos and retrospectives at the end of each sprint. It gives the business users who are involved in the sprint and the demos confidence that the solution being built will meet their requirements.
The key in SAP Activate is that we combine Agile techniques with the fit-to-standard-driven cloud mindset. It’s not pure Agile in the sense that we start sprinting right from the beginning. We want to use the value of the SAP Model Company to confirm the fit-to-standard processes, identify the delta requirements, and then build those delta requirements in sprints.
The companies that use Agile most effectively are the ones that empower their teams to drive the decisions during the projects within the confines of the Scrum framework that we built into SAP Activate. They benefit from having the teams make a lot of these decisions and move at their own pace. In larger companies, what we also see is a set of scaling frameworks. SAP Activate supports scaling through execution of a Scrum of Scrums (a technique where representatives from different teams that are involved in a project come together to regularly coordinate) or formal scaling frameworks like the Scaled Agile Framework.
We talked a little bit about them in the book. Readers will learn about the Agile framework, its benefits, how to make it work within their SAP projects, and how it ties into these scaling frameworks in case they are already using them in their organization.
Jim: Why should some companies consider implementing SAP S/4 HANA Cloud, and how does SAP Activate help streamline that implementation process?
Sven: Customers and partners today are much more educated than two or three years ago when you said, “cloud,” and everyone started running. They understand what the cloud is now. And after looking at thousands of projects, the high level of standardized business processes associated with the cloud do drive efficiency.
The pre-configuration is key. When you leverage that SAP Model Company as pre-configuration content, you start right away on a higher level. Cloud solutions offer agility, especially when you look at the ERP environment where we run businesses with our best practices. SAP is known for finance, manufacturing, supply chain, and procurement. Those functions are especially vital during these times. If you want to transform and adapt fast, you should ask, "Why not cloud?"
SAP S/4HANA gives companies the ability to adopt innovation much faster. We deliver innovations four times a year. On a Monday, after an upgrade, you log on. Your system perfectly includes pre-configuration into those processes that you might need tomorrow. You just turn them on with our methodology, deploy them, and they work in your solution.
It’s a perfect fit for a hybrid ERP model. Maybe you have the people, the skill sets, and the power to run the any-premise system. But in your subsidiary, or a certain workload, or a department in your company is looking at different services. There you just go standardized.
And you can connect them easily.
Standardization for some people is hard. So, we make it extendable via a platform as a service called the SAP Cloud Platform. This doesn’t punish you for standardization, but you have the freedom with a platform as a service underneath. The way SAP Activate supports all of this is important because that pre-configuration gives you ready-to-run business processes. The methodology enables fast, efficient fit-to-standard.
It’s a prescriptive and supportive capability. Prescriptive sometimes sounds negative, but in this case it is supportive guidance that SAP Activate provides through step-by-step implementation processes. It gives you guardrails for your success. And it’s updated frequently. Even the SAP Activate methodology doesn’t stand still. We learn day in and day out from customer projects. Key to that success is having a close calibration between a customer care function and our partners, consulting services, and the SAP Activate team you’re working with.
We are in very interesting times right now, where this interview is happening remotely. Customers need to get accustomed to remote processes, so we just released the playbook for remote fit-to-standard.
Jan: Over the past few weeks we’ve seen a shift across the globe. Everybody is in some level of lockdown. We know that this is not going to last forever, but we want to help our customers continue with their deployments. At SAP, we have worked closely with our colleagues in consulting and put together a framework for remote delivery. As part of the framework, we focused on key project activities that customers may not be as confident in doing as other areas. We analyzed the entirety of SAP Activate and felt strongly that running remote testing and doing remote configuration had been done in some manner in many projects before. What our customers don’t have as much confidence in doing remotely is fit-to-standard. So, we built a playbook for it that is now in SAP Activate and helps customers prepare, run, and conclude the fit-to-standard workshops in remote settings.
We also released the playbook for remote cutover and go-live. Customers usually conducted the cutover activities in their on-site war room. We have completely virtualized that setup in the cutover playbook. You can run these cutover and go-live activities either in a full or partially remote setup. All of these playbooks are based on real customer project experiences. And we continue to refine them as more people use them and give us feedback.
Jim: What requirements would indicate that an any-premise SAP S/4HANA deployment is right for your organization, and how does SAP Activate help companies as they deploy SAP S/4HAHA any-premise?
Srivatsan: This is for the customer base to choose. For example, using the cloud as infrastructure, you have options of SAP HANA Enterprise Cloud hosting, private cloud, or hyperscaler-based hosting. So, whether you use cloud as infrastructure as a service or software as a service, it will give you flexibility and choice.
The starting point should be what sort of flexibility and business process the customer wants to run. With a hybrid deployment or a two-tier ERP, you have headquarters potentially running more flexible software with SAP S/4HANA any-premise while your subsidiaries would use a standard out-of-the-box solution like SAP S/4HANA Cloud. This flexibility is what we want our customer base to choose based on their business processes.
Jan: Let’s say you recently implemented SAP ECC and you have a clean system. You want to move to the next level of technology and use that set of benefits that Sven talked about earlier in your organization. Customers in that space may choose to conduct a system conversion into SAP S/4HANA. In that case, you’re going to be leaning more towards an any-premise implementation because that’s the option that SAP supports currently.
On the other hand, if you’re considering a new implementation and you’re new to SAP, you have a choice to make based on the scope of functionality that you need, the capabilities that you’re looking to have in your organization, and where you need to store data. Your deployment approach may change based on your industry. Certain industries require you to have data within your own data center. There is a lot that goes into defining the right deployment strategy for you. And SAP and our partners can certainly help define that for your organization.
Jim: How is deploying a hybrid landscape different than other deployments of SAP S/4HANA?
Srivatsan: It’s all about a business entity deciding what kind of a code stack and deployment model it wants to deploy and run. It could be a headquarters/subsidiary system, or shared services, or an ecosystem model.
Returning to the example of SAP S/4HANA Central Finance I used earlier, you have a headquarters SAP S/4HANA any-premise system and subsidiaries running standard SAP S/4HANA Cloud, feeding data into this central box.
Hybrid, two-tier ERP is all about making end-to-end business processes work across deployments in a seamless way with standard connectivity content. Hybrid landscape deployment gives you speed to start a sales and distribution office setup with standard SAP S/4HANA Cloud in a new geographic location without the need for a long, drawn-out implementation and seamlessly connecting with your existing SAP S/4HANA any-premise system.
SAP Activate will help you identify your starting point via fit-to-standard and core business processes. The methodology also helps you identify your end-to-end processes and figure out which business processes exist in your headquarters or subsidiary environment.
Hybrid gives you that choice. It’s the flexibility that your business needs. Not all companies would want to start with a full-fledged cloud. Hybrid should be seen as that stepping stone toward potentially adopting full-fledged cloud.
Jim: Can one of you explain what SAP Cloud ALM does and how is it different than SAP Solution Manager?
Jan: We have a long history at SAP of providing our customers with our full application lifecycle management (ALM) tools. Both SAP Cloud ALM and SAP Solution Manager are ALM tools that SAP brings to our customers. They are independent and related solutions. SAP Solution Manager has been around for years and has been serving our customers well. As we are moving a lot more of the workloads into the cloud, the SAP Cloud ALM has been introduced to extend our SAP Cloud ALM offerings and standardize ALM.
With the SAP Cloud ALM, customers can get onboarded into the system very quickly within a few clicks without any extensive configuration or tailoring the system to your company needs. The Cloud ALM, initially, was introduced as the implementation portal for SAP S/4HANA Cloud. That was the first generation of the ALM functionality that we introduced to our cloud customers.
Customers have access to complete configuration information about business processes, business process models, and the test scripts that help them educate their business users. This is coupled with the tasks that are coming out of the SAP Activate methodology that help customers structure the project and track their progress as they go through the implementation.
There are a number of things that are currently in SAP Cloud ALM that support the self-guided and content-driven implementation of SAP S/4HANA Cloud based on SAP Activate. It is just like any other cloud solution. It doesn’t require any setup or configuration. Customers log on and then onboard the project team members by sending them invites and implementation tasks that are pre-assigned based on their roles in the project and the definitions in SAP Activate methodology.
Jim: Organizational change management (OCM) is crucial for any company that’s making a significant change. How does change management factor into SAP Activate?
Jan: OCM is critical for organizations, especially when you’re deploying standard processes in the cloud. Because these standard processes may lead to changes in the processes that you have been using and the processes that you will be using, you need to manage that change actively with all your business users.
We have embedded OCM in SAP Activate, but we’ve moved beyond the pure function of OCM. We enriched it with end-user enablement and solution adoption activities. You will not find an OCM workstream in SAP Activate. You will find a Solution Adoption workstream that encompasses all of these elements. We group OCM, user enablement, and adoption activities together with value management. These are the disciplines needed to come together in your project to assess the value at the beginning of the project as you’re going through the fit-to-standard. You’re implementing the solution after you have activated it, so you perform all the configuration activities you need to enable your end users.
Then, as they are embracing the system, you will want to monitor the adoption by tracking key business metrics to determine whether the system is truly being adopted and used in your business. You can start with that baseline and then continue to monitor this through the adoption journey. The SAP Activate road maps have strong coverage for both cloud and any-premise adoption journeys. But the focus in the cloud is on ongoing adoption and identification of additional capabilities after your initial go-live in much faster cycles.
Jim: Can you all summarize the book for our readers?
Jan: We aimed to comprehensively cover all aspects of SAP Activate for SAP S/4HANA. As we mentioned, SAP S/4HANA offers a wide range of options for customers to adopt it. What our readers will find is two major parts of the book. The first part lays out what SAP Activate is, its value, and its key principles.
We then switch into specific deployment options and cover the hybrid deployment in a lot of detail. And then we talk about specific flavors of SAP S/4HANA Cloud and how you can adopt them. We do the same thing for SAP S/4HANA any-premise. Toward the end, we also introduce other flavors of SAP Activate. It is not only available for SAP S/4HANA—we have versions of SAP Activate available for SAP Ariba, SAP SuccessFactors, and SAP Hire to Retire, among others.
Last, but not least, we want to help our readers prepare for certification if they are aiming to take the certification exam, so there’s a section in the book that provides practice questions for the exam.
Sven: One last thing. SAP Activate has a very vibrant community of more than 35,000 users who contributed directly to the book. I want to say thank you to all those practitioners who regularly give us feedback. Such a book would not be possible without that community.