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SAP S/4HANA Customers Make Change Management Central to Digital Transformation

June 23, 2016 by Dania Fayyaz 349

One of the most notable trends from SAPPHIRE NOW in 2016 was how much emphasis SAP S/4HANA customers placed on change management.

Embarking on a digital transformation impacts all facets of an organization, therefore the importance of getting employees onboard and accustomed to future changes before they happen is not just critical, it is essential. Our customers believe that in order to truly embrace digital transformation, a cultural shift must occur in tandem.

Embarking on a digital transformation impacts all facets of an organization

As more and more businesses see the value in embracing digital transformation, there is a trend towards simple, straightforward and “out-of-the-box” implementations. This is in stark contrast to the drastic wave of customization that was characteristic of much of the last decade. This 360-degree shift in approach points to an emerging trend among like-minded CIOs toward standardizing basic “parity” processes. These are widely perceived as being non-mission critical and do not create additional business value for organizations (such as accounts receivable).

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Niel Nickolaisen, CTO of O.C. Tanner, clearly emphasized this viewpoint at SAPPHIRE NOW when he stated that O.C. Tanner was adamant on moving away from the “monolithic, hairball of customization” they had grudgingly developed over past 18 years.

“We’re going from an environment where we customized or built everything, to one where we’re not going to do any customizations. The only people who don’t agree with that are the 1,500 employees of O.C. Tanner who demanded the customizations over time,” said Nickolaisen. “We had to change the culture. That’s the biggest barrier.”

“[We] had to change the way people thought about their work because we had to eliminate 18 years of parity process, creativity and craziness,” he said.

Watch SAPPHIRE NOW replay: Focus Your Innovation While Improving Operational Excellence

Employees who have devoted many years to their respective companies are the most hesitant to adopt changes to any IT landscape transformation. First, they face the uncertainty of whether they will be able to master the new, proposed system as they had done for the current version. Second, they feel a sense of attachment to the processes they’ve traditionally used to get work done. This gives rise to all sorts of statements such as “we’ve always got it done this way” and “why change a good thing if it’s not broken?”

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It’s important to remember that we are creatures of habit and have a tendency to cling to that which gives us comfort. This is the greatest challenge involved with setting a company on a path to digital transformation. It’s not costs, implementation schedules, hardware procurement or testing. It’s getting people on board with the new.

“It’s not an IT implementation. It’s a change management implementation. So we’ve got to get the whole organization charged up,” said Ajit Shriram, Joint Managing Director of DCM Shiram.

Watch SAPPHIRE NOW replay: Embrace Digital Transformation with SAP S/4HANA

In order to combat this  internal resistance, the directives for IT transformation need to begin at the top and resonate down all the way to the end user. The orders need to be crystal clear as to “why we are doing this” and then clearly outline “the how” and “when we expect to get there.” Getting internal stakeholders on board is critical, thus identifying key individuals and involving them in the initial planning/decision process may help breakdown a few of the resistance strongholds.

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“[We] changed our strategy and our focus from being a travel related business to a software company servicing the travel industry,” said Steve Strout, VP Corporate Systems at Sabre. “It changed how we went to market but it changed also how our people were thinking.”

Watch SAPPHIRE NOW replay: Transform Your Business with SAP S/4HANA

Through these sessions, SAP S/4HANA customers shared their insights as to how they successfully navigated internal concerns. They stressed the need to emphasize milestones, KPIs and value drivers continuously; these are key, but they must be augmented by a firm direction of corporate vision and how IT plays a role in that. The CIO needs to be the center of this vision.

These ideas will help cement the necessity of change in the minds of individual employees. The biggest challenge is changing employees’ mindset from viewing a systems transformation as just a standard ERP upgrade to using it to strategically position enterprises to succeed in the complex digital economy.  Once convinced of how the change will make their lives simpler, and drive greater organizational success, the adoption and utilization of the new structure follows quickly.

To hear more about what happened at SAPPHIRE NOW in 2016, check out the SAP S/4HANA Session ReplaysLearn more about SAP S/4HANA at www.sap.com/S4HANA

This story originally appeared on SAP Business Trends.

Top image via Shutterstock

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