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carmen_constantinescu
Product and Topic Expert
Product and Topic Expert

The second article in this series “Innovate Faster: The Power Duo of SAP Activate and Scaled Agile Framework (SAFe) ” is explaining how the SAP solution implementation activities specific to SAP Activate Discover project phase should be executed in an organization using SAFe. 

This is where you can find the first article in the series : Innovate Faster: The Power Duo of SAP Activate and SAFe.

Simply put, both the SAP Activate Discover phase and the creation of Epics in SAFe share a common goal: to thoroughly outline and endorse the business case driving the implementation of the SAP solution.  Further elaboration on this point will be provided in the following lines. 

 

The key activities in the Discover phase help to crystallize the organization’s vision about the SAP solution implementation. They cover the creation of the SAP solution adoption strategy and the documentation of the Solution Implementation Value and Business Case as part of the customer organization's digital transformation roadmap. 

During the Discover activities, SAP Solution adoption paths are identified. In an SAP S/4HANA Cloud Private Edition solution context, for example, a company should decide which of the three possible paths is bringing the most value: system conversion, selective data transition or new implementation scenario. 

Refinement for the chosen implementation scenarios is conducted to answer SAP solution specific questions like, for example: 

  • How many systems are ideal for the to-be business scenarios? 
  • Is Co-Deployment preferred, or should we deploy standalone? 
  • What about IT-Security Requirements? 
  • What will be the sequence of co-deployment? 
  • What business processes should be covered by the solutions? 
  • What benefits will the business realize by deploying the new solution with standard processes? 
  • What do we need to do to keep the system ready for innovation? etc. 

Let’s see now how the SAP solution implementation vision, roadmap and adoption strategy generated by SAP Activate activities in the Discover phase are used by Lean Agile organizations that are implementing SAFe. In such organizations, technology efforts that were traditionally organized as projects are turned into a continuous flow of product-centric features in a value stream which timeline is exceeding the implementation project time and continues with improvements and product life cycle management activities until the product’s end of life. 

 SAFe provides practices for managing that flow using a construct called ‘Epics’.

An Epic, in SAFe, is corresponding to a solution implementation initiative that is supporting the organization’s vision and that will bring value to one of the organization’s operational value stream (OVS). You can see examples of such Epics in the European Medicines Agency published roadmap available in the references link. 

In a project-oriented approach, the Epic from SAFe corresponds to a project although the two concepts are operating quite differently (see below figure). SAP Activate guidelines for the project implementation should therefore be mapped and converted to the corresponding Epic elements of a Lean Agile enterprise.  

The obvious differences in the two approaches can be mitigated by adapting the scope, the sequence or the execution frequency of the activities recommended by SAP Activate Methodology. All the other differences illustrated in the below picture are not manifested in the SAP Activate project methodology as Agile practices are used to measure the progress and to implement the SAP solution that will be covered in the future articles in this series. 

carmen_constantinescu_0-1713262381532.png

In SAP Activate Discover phase tailoring is needed for the Business Case activities covering committed scope identification and cost estimation 

Looking at typical the Business Case creation activities, if, for example, an organization implementing SAFe evaluates the opportunity to support the operational value stream that includes Procurement processes with the implementation of the SAP S4/HANA solution, an Epic that details this opportunity will be defined by the owner of the initiative, the Epic Owner, to cover: 

  • the value statement,  
  • the business outcomes,  
  • the leading indicators, and  
  • the most important nonfunctional requirements associated with this initiative.  

Due to their considerable scope and impact, the Epic requires the definition of a Minimum Viable Product (MVP) and the approval by Lean Portfolio Management (LPM) which is the approval and funding entity in an organization implementing SAFe.  

There are many similarities between the Epic Lean Business Case and the SAP Activate Value Case for solution implementation statement that is created during the Discover phase, as you can see in the figure below. 

 Epics and SAP Business Case.png

 

 The SAP Activate Value Case documentation includes: 

  • the expected business outcomes and business success measurements (both predictive and lagging) are nothing else but the business outcome hypothesis and the corresponding leading indicators in the Epic’s Lean Business Case. 
  • the functionalities in scope and out of scope for the SAP solution as well as other solution level requirements like security, compliance, response time and data volumes etc. with a clear correspondence to the Epic’s Lean Business Case components. 
  • business capabilities that will be implemented by the SAP solution, expressed as SAP L2/L3 business processes in the solution scope; in an organization using SAFe, these processes correspond to the Features that will implement the Epic MVP. 

 

While SAFe is giving general recommendations for building the Lean Business Case, SAP Activate is detailing concrete, SAP solution-specific elements and activities for the business case creation. It also provides tools  and usage guidelines to perform the analysis necessary to fundament the Lean Business Case and helps to create a high-level design, through the design principles identified in the Value Case for SAP solution implementation. 

The activities in the SAP Activate Discover phase necessary to document the Value Case for solution implementation are showing how to decide and measure the benefits of adopting the SAP solution, like, for example, the organization of a Digital Value Discovery Workshop, in the scenario of an SAP S4/HANA solution adoption, that helps to document the expected Business Outcome of the Epic 

Solution Discovery Workshop is another example of Discover activity that serves to the Epic MVP identification. In this workshop, the Epic Owner, the Business Owners, the Product Management, and the System Architect from the SAFe organization work together with SAP solution experts to: 

  • select the business capabilities available in the SAP solution that must be part of the MVP and of the MVP extension, 
  • identify integrations, and extensibility needed in the customer’s landscape, 
  • document any other requirements specific to the customer’s journey to SAP S/4HANA Cloud. 

For the Epic leading indicators and business outcome proper specification, SAP Activate provides solution-specific tools and accelerators like, for example, the use of SAP Signavio Process Insights application that helps customer organization to discover the value of moving to SAP S/4HANA, better understand their current business process performance and provide continuous monitoring, assessment, and improvement of their business processes. For further information about this application please check the article in the references. 

Based on the implementation scope elements included in the Epic Lean Business Case, a forecast estimation of the Epic duration is made by the organization in which is considered, if the case, the costs with Suppliers if they are participating in the Epic MVP implementation. 

Lean Agile Enterprises that implement SAFe evolved from the project funding model to the Epic funding model. When an Epic is created, the focus is set on the identification of the MVP functionalities expressed as Features, and on the MVP cost estimation. The Features in the MVP typically correspond to the minimalistic list of business processes to be implemented in the SAP Solution to support the Operational Value Streams (OVS). For the estimation of the implementation costs, as the level of details for the initiative is quite high at the Epic approval moment, the cost estimation is given as monetary range, as for example, between 1M and 1.5M for the Epic MVP. The range varies depending on the Epic and can be within hundreds of thousands or within millions or even tens or hundreds of millions. The same type of cost estimation is made for the Epic full implementation. 

The Epic investment often includes the contribution and cost from Suppliers (e.g., the team with deep expertise on SAP solution implementation), whether internal or external. Ideally, enterprises engage external suppliers via Agile contracts, which supports estimating the costs of a supplier’s contribution to a specific Epic. As only high-level scope definition is available at the Epic definition moment, a cost range estimation is expected from the Supplier as well, that is a lot different from the traditional project budgeting approach with fixed cost and scope. 

The implementation of an Epic follows an iterative approach and manages investment and risks in an incremental way. The Epic Owner will incrementally refine the total Epic implementation costs for the organization as the MVP is built and learning occurs. Once the Epic MVP implementation is finished, if the Epic benefit hypothesis is not proven, the investment into adding further features to the MVP and the corresponding investment (additional budget) is stopped. If the benefit hypothesis is proven, the Epic Owner works with the Agile teams to add functionalities to the solution using the WSJF (Weighted Shortest Job First) Feature prioritization technique until WSJF decides otherwise. 

In a project-based approach, the SAP solution implementation scope and effort estimation and, as well, the high-level solution implementation plan are attached to the project's contract and make possible the start of the implementation project. 

For an organization implementing SAFe, the SAP Activate Discover phase’s result corresponds to the Epic approval (Go/No-Go) decision. 

In the next article in this series, we will cover the execution of the activities corresponding to SAP Activate Prepare and Explore phases in a SAFe organization context 

 

References: 

Network Portfolio Roadmap 2023-205 (europa.eu) 

SAP Signavio Process Insights - The fastest path to process improvements 

Create an Innovation Strategy and a High-Level Road Map - Roadmap Viewer (sap.com) 

Advanced Topic - Innovation Accounting in SAFe - Scaled Agile Framework 

Executing a SAP Digital Discovery Assessment - Roadmap Viewer (sap.com) 

Review and Request SAP Process Insights - Roadmap Viewer (sap.com) 

Government - Transitioning from Projects to a Lean Flow of Epics - Scaled Agile Framework 

Operational Value Streams - Scaled Agile Framework 

Epic - Scaled Agile Framework 

Advanced Topic - Agile Contracts - Scaled Agile Framework 

WSJF - Scaled Agile Framework 

 

Main Reviewer@Seb_Ziegler