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This blog is going to be a short outline for solution architects, product owners who is on an implementation journey for any of the deployment options for S/4HANA - Public Cloud, Private Cloud and On-Premise Editions. There will be series of blogs which helps SAP experts to perform Fit-Gap(done during Explore phase) and define product backlog for implementation(Start with Realize phase).

Blog covers a outline on approaching Technical Extension option space based on fit-gaps performed for each SAP Solution process based on the scope items selected per line of business or business capabilities.


The motivation to write this blog is to share my solution design approach based on my experience working with various enterprises defining S/4HANA Fit-Gap approach across their business functions - Finance, Supply Chain, Operations, Sales etc.

SAP S/4HANA Solution Scenarios

As you might know already or please be informed that SAP shall deprecate the use of SAP Best Practices library for S/4HANA and its product capabilities. It is replaced by Process Navigator by SAP. I would recommend to read the blog by holger.steffens about Process Navigator by SAP released today! | SAP Blogs

There are two best practice solution scenarios available for enterprises to choose based on deployment options for S/4HANA

  1. Best Practices for SAP S/4HANA for On-Premise Deployments

  2. Best Practices for SAP S/4HANA Cloud for Public Cloud Deployments

These best practices contains relevant solution processes based on Line of Business or Capabilities in an Enterprise.

Now the questions arises on How to connect SAP S/4HANA Solution Scenarios to Enterprise Business Capabilities ?


Capability Segmentation to drive SAP Best Practices Adoption and map to SAP extension options

Natural next step would be to translate relevant best practices solution process steps towards capabilities that an enterprise wish to implement or executes currently in its entirety. Here I would recommend to start with Business Architecture thereby defining Application Architecture followed by Data Architecture.  The most common method is to use Enterprise Architecture Framework by SAP which connects Business Architecture Domains to IT Solution Architecture Domains. Upon using this method relevant best practice solution process steps are identified with their scope items. But there are few challenges while doing so. Enterprise Architects, Product Owners and Business Analyst needs some support to drive standardization and harmonization while implementing S/4HANA as per the guiding principles - Keeping the core clean, Adopting SAP Standards to move towards Intelligent, Sustainable Enterprise.

To address this it is advisable to start with Capability Segmentation across Line of Business for an Enterprise. It is simple exercise which is performed with Capability Owners or Business Process Owners to segment respective capabilities and functions in to 3 different categories:

  1. Standard - Capability/Function is essential to execute business but highly standardize. Say Financial Reporting for a listed Enterprise (based on IFRS or local GAAP)

  2. Industry Specific or Capability Specific Function - Capability/Function is specific to the industry that the enterprise runs its business. Say In-Store Merchandise Management for Retail Industries

  3. Tactical - Capability/Function is essential for enterprise to differentiate from its competition in a specific industry

Overview of Capability Segmentation is shown below

Capability Segmentation Method

An exemplary guidance would be to map capability segmentation to SAP S/4HANA Solution possibilities based on extension options.

SAP Realization upon capability segmentation

SAP Extension Options based on capability segmentation

Now in order map Business Scenario to IT Solution Scenario, it is important to understand the options that are available for SAP. An overview of Technical Solution Options are shown below based on capability segmentation. This will help Implementation team to provide an overview about to be implemented solution process with regard to business value and required solution components required for the implementation.

SAP Extension Options upon capability segmentation

After reading above guidance, next step would be on how to define below must-do deliverables required for SAP Implementation

  1. Business Scope and Identify Capabilities

  2. Enterprise Capability Map and SAP Solution Capability Map

  3. Target Solution Process Flow for Implementation

  4. Configuration Specification per solution process flow

  5. Extension specification per solution process flow

Definition of must-do deliverables between 2 and 5 shall be explained in detail in next series of blogs. Keep watching this space.

Closing Summary

I hope after reading my blog that you fit-gap execution using Capability segmentation and use the results to map it toward the extension options available in SAP. Upon completion of this step it would make sense to proceed with SAP Activate steps to build product backlog for implementation

Thank you for reading my blog, please feel free to share feedback or leave your thoughts in comments. I would be excited to know your experience and more importantly to optimize the approach as things change.

Please follow me on balakumarsantharamey for similar blog post.  ‎
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