RISE sooner than later - Part 2

[Jimjees]

This is a continuation of the previous blog which covered the basic outline on Enterprise Architecture in the context of RISE with SAP S/4HANA.

In this blog, we will address: 

Step-by-step approach of Enterprise Architecture engagements with different set of stakeholders

• Working with different value streams, functional and solution architects, transformation leads
• What are the key elements that should be always checked - golden rules?
• What artifacts should different work streams typically produce at each stage?

Let's take an enterprise which is common in an SAP ERP landscape.

Let's say we have :

• Finance and Controlling
• Sales and distribution
• Material Management
• Production planning

In addition to this, there is SAP EWM, SAP Transportation Management, SAP HCM, SAP SRM, SAP BW on HANA and SAP CRM.

In a landscape like this, due to the complexity and size, a multiphase modular approach could be adopted for Enterprise Architecture. This is to showcase the value early by identifying the critical deliverables in the first iteration of EA. As mentioned in Part 1, this iterative approach is often used to help decision makers take early decisions, to equip the team with a framework for detailed fit-to-standard analysis, and to provide guardrails for the target state definition.

The assumption is that the prerequisite checks and initial impact assessment is performed as a part of Discovery.

For example technical prerequisites like checking the current release, Unicode compliance, ABAP and Java Stack, DB version and size, version of front end server, custom code check, 3rd party add on validation etc. are performed.

From functional point of view, the checks and validations are performed for each component, for example Impact of Finance like moving to New GL, new asset accounting, etc. Impact on SD such as transition to SAP credit management, changes of SD revenue recognition if used, SD foreign trade replaced by SAP Global trade services etc. Impact on MM such as changes to Material requirement planning (MRP) etc.

In addition to this, initial assessment for Customer/Vendor/Employee Master Data to be moved to Business Partner approach is also performed.

Let say, we go ahead with defining work streams or squads based on end to end business process approach.

 As an example, we take the case of "Lead to Cash" process and the squad is set up with the following team members :

• Head of Sales 
• Process owner
• Business Architect / Subject-matter expert
• Functional Expert / Solution Architect
• Enterprise Architect
• Data Architect

The squad should be delivering the following:

• Identify the current concerns and strategic priorities
• Define the target outcomes - both business and IT value drivers
• Define the target Business process from the current state.
  • For this, the approach is to bring on to the table all the existing processes (catalog of existing processes) broken down into the business activity level. The recommendation is to use SAP Signavio Process Explorer to facilitate this and to document. This helps the team to revisit and appraise all the current processes with a critical mindset and decide on needful changes.
  • Validate the existing processes with the best practices outlined in the SAP Reference Business Architecture.  (For example, the current Quotation management in SAP CRM would be replaced by the Sales Quote in SAP Sales Cloud.)
• Map the processes to the business capabilities that enable these processes (SAP Reference Business Architecture from LeanIX as a starting point).
• Heat Map the business capability and evaluate to prioritize these in terms of business criticality, relevance, usage, and current concerns.
• Mapping of the process to the business capabilities and to solution capabilities and validate those with a TIME (Tolerate, Invest, Migrate, Eliminate) approach .
• Suggest alternatives and tradeoffs to comply as close to the best practices.
• Identify areas where AI capabilities can be utilized. (For example, simplify the order-to-cash process by automatically matching incoming bank statement items to open receivables or accounts. This brings a 71%​ reduction in accounts receivable matching effort​ - and has quantifiable benefits based on the volume.)
• Identify the custom code migration, data migration, selective data migration, etc. in case of brownfield or selective brownfield. 
• Identify the extension needs and the extension strategy
• Define the application architecture once the target state is defined
• identify the technical components that are required - for example, BTP, SAP Datasphere, etc.
• Identify the deployment strategy and roadmap for implementation.
• Identify change management elements and possible use of SAP Enable Now for change management.

Kindly note SAP Signavio is used for any aspects around processes, best practices, transformation of the processes and optimization, process intelligence, process mining and to document any changes to the processes. When it comes to business capabilities and IT landscape, SAP LeanIX is recommended. One approach to follow is to refine the processes using SAP Signavio Process Insights and simulations to see the optimized view of processes and then connect to the capabilities.

Enterprise architects should ensure that they facilitate the following aspects:

• Facilitate the target process definition by bridging the business and IT 
• Ensure close collaboration between different squads to ensure business capabilities are reused from the right domains. (Similar outcomes should be produced by different squads with specialization to each of the end-to-end process)
• Always encourage the team to stick to 5 golden rules  
  1. Foster a cloud mindset by adhering to Fit-to-Standard and Agile Deployment. 
  2. Use pre-configured solutions with predefined processes and utilize SAP Fiori UX
  3. Use modern integration technologies.
  4. Use modern extension technologies.
  5. Ensure transparency on deviations from these Golden Rules

Few additional key elements that should emerge from the squads :

• New business capabilities that are introduced and their cost-to-benefit analysis.
• New application landscape and end user experience. 
• Introduction and consumption of emerging technologies like AI and Automation.
• Tag the debts (could be process, technical or system) that would be eliminated and to quantify the benefits.

What are the key skills an enterprise architect should ideally process for RISE with SAP S4/HANA?

• Holistic evaluation and assessment of the current SAP deployment landscape - which includes the components, integration with other enterprise systems, etc.
• Envision the overall transformation in the context of business processes, leveraging existing and new business capabilities.
• Expertise in tools like SAP Signavio, SAP LeanIX to facilitate the workshops, stay close to the best practices, and document the outcomes to define the target state.
• Knowledge about SAP Product offerings and existing product transition roadmaps.
• Technical expertise and knowledge about SAP technical stacks and cloud transformation with Hyperscaler to ensure that the right activities are prioritized and performed in the right sequence.
• ABOVE ALL, a great attitude to collaborate, identify and respect the role of each stakeholder involved, and always remember that Enterprise Architecture is not hierarchically above Solution or Application Architecture - rather, all these aspects should go hand in hand for a successful RISE with SAP transformation. Enterprise architecture is not just about governance; it is about collaboration and effectively facilitating the collaboration with an enterprise wide vision and guiding principles.

Going back to the questions we had in the Part 1, after the initial phase of EA engagement, there should be clear answers. Let's revisit those and see how they are addressed.

• Why move to S4/HANA because everything is working now ? Where is the value? Convince me about what would S4/HANA do better from what we already have today. 
  • EA should be able to showcase the areas of improvement by mapping the processing to the new capabilities for each LOBs, Business Units - and its contribution to different value drivers such as Increase in sales, increased operational efficiency, faster turn around for order processing, easier and non-disruptive adoption of innovative technologies etc. to name a few.
• Is it a push from SAP to move everyone to cloud ?
  • The capabilities S4/HANA is providing and how those contributing to the IT value drivers of cloud adoption should clear this doubt of the customer - as the benefits could be seen beyond just an upgrade.
• My custom developments and enhancements are so complex, and it's too risky to touch any of those. How do we deal with it?
  • When the processes, capabilities and solution components are mapped and validated against the SAP Reference architecture and best practices, many of the enhancements can become obsolete as there are tradeoffs possible to be closer to the Fit-to-Standard mindset. However, if the enhancements are critical, then a clear transition path is defined and addressed.

To conclude:

RISE with SAP S4/HANA is a real game changer, and it's not a sales pitch. With the adherence to clean core principles, BTP and easy adoption of AI and Automation, the value we see today is just the tip of an iceberg. The benefits will evolve, and new unforeseen opportunities will arise because of the foundation that is laid by S4/HANA on cloud, BTP, etc.

So, don't wait for the sunset - RISE and shine aSAP. 

Feel free to comment / collaborate about this topic.