The Journey to SAP S/4HANA: U.S. Federal Government Perspectives

Between keeping up with rapidly evolving technologies, complying with government laws and mandates, and addressing increasingly complex economic challenges, federal organizations today face a number of unique hurdles when it comes to financial management. And according to the Department of the Treasury, nearly half are navigating these hurdles while running financial systems that will require significant modernization by 2025.

This reality isn’t slowing federal organizations down; instead, many digital leaders are feeling galvanized by the art of the possible. If technology modernization is necessary – and imminent – what can be done differently with this transformation to make systems easier to migrate, more efficient to use, and — most importantly — to better support agencies in accomplishing their missions?

At the recent SAP Federal Forum in Washington, D.C., two federal agencies that are actively reimagining financial reporting and business processes shared their plans – and lessons learned – on their journeys to SAP S/4HANA.

Director of Business Integration at the U.S. Department of the Interior, Martin Quinlan, and chief enterprise architect at the U.S. Department of Agriculture, Adrian Carter, have decades of collective experience navigating digital change management initiatives, including the execution of complex system and data migrations. As long-term users and advocates of enterprise resource planning (ERP) technology, and some of the earliest adopters of SAP S/4HANA in the federal government, here are their top insights.

Understand and Balance Priorities

Federal agencies are complex ecosystems, containing multiple component organizations and delivering a broad range of programs and services, impacting a wide variety of individuals, businesses, and institutions. What an agency itself is looking for from a system might be completely different than what the end user wants. Therefore it’s critical to understand the needs of each audience, and to balance these competing needs to derive the greatest value from the system.

For example, security is naturally a top priority for federal agencies, but the consumerization of IT means that many stakeholders also value an intuitive user interface for ease of adoption and operational efficiency. Moreover, migrating separate federal bureaus to a single ERP like SAP S/4HANA means replacing systems and customizations that users have become attached to over the years.

As Quinlan points out, migrating to a unified system is an absolute game-changer, but a fair amount of compromise is also necessary in order to make it happen.

“The different bureaus are really separate, so pulling everybody together was a huge deal for us. We replaced 86 systems with one, and that required compromise because at first nobody wanted to give up any of those systems. But after bringing all the bureaus together and taking the time to make those compromises, we were ultimately able to get it done.”

The impact of these compromises, says Quinlan, is a system and applications that benefit all stakeholders, including universal search, real-time reporting, updated user interface, and task-based security. “What does get the business excited is the value that we can bring.”

Strategic, Deliberate Migrations are Critical for Success

Federal agencies are well aware of the myriad benefits of cloud migration, including increased operational agility and an enhanced capacity for innovation. Unlike many of their corporate counterparts, however, federal agencies must contend with particularly strict budgetary constraints, as well as the need to remain vigilant to constantly evolving legislative mandates.

According to Carter, being strategic and deliberate throughout all phases of the migration process can go a long way toward preventing unexpected challenges as the project moves forward. This includes prioritizing standardization, designing a system that is thoughtful of the end user, and above all ensuring that the migration aligns with all of the agency’s various objectives. In his own experience, Carter has found that early missteps surrounding funding and acquisition in particular have a tendency to result in frustrating bottlenecks down the line.

“One of the things that I stressed from my team is that I wanted to get our funding and acquisition strategy in place. I’ve seen too many of these projects go forward, and then by year three or year four, you’re suddenly looking for money. So it was important to show that we had our funding and acquisition strategy aligned with our technical road map before doing anything.”

Learn from Experience — and Each Other

Both the DOI and the USDA have been working with ERP tools from SAP for more than a decade, and that experience has revealed the importance of learning from past experience and – more importantly – using those lessons to anticipate future obstacles to modernization. By knowing what to expect ahead of time, you have a better idea of which obstacles might consume the most time and effort, and therefore have the opportunity to plan accordingly.

Both Quinlan and Carter have found that prioritizing standardization can be particularly helpful, as it establishes a road map and best practices for overcoming challenges that are unique to federal agencies. Meeting obligations surrounding data, for example, can be difficult when new requirements are being passed down regularly with emerging legislation and government policy. As Carter noted, having a shared standard and processes for data collection and management puts agencies in a better position to leverage the data that they already have, and ultimately to become more efficient at meeting new requirements.

Finally, the value derived from building strong relationships and learning from one another on the path toward innovation is significant. Over the years, federal organizations have made an effort to work together with companies like SAP, and being able to share insights continues to benefit both the development and implementation of intelligent ERP solutions.

Going forward, continuing to capitalize on what has been learned through experience and from collaboration across agencies and SAP will further enhance the ability of federal agencies to enact positive change through digital transformation.