For digital evolution, the right partner is key
IBM can ensure that your ERP transformation is implemented to prepare your business for the future
By Dayna Sargen | 5 minute read | November 19, 2019
Looking ahead: An ERP evolution on the horizon
The world of enterprise resource planning (ERP) software has long been difficult to navigate. Companies often stick with the same solutions for years, fearful that improving their ERP software, or moving away from customized systems, would cost too much or disrupt their businesses.
“Most of our clients haven’t taken a serious look at their business processes since Y2K,” says Keith Costello, the IBM Services Global SAP leader. “Instead, what they’ve done over the last 20 years is simply layer stuff on top.”
But that is changing. SAP, the world’s premier ERP software company, has a new version of its platform, which will radically modernize and simplify SAP-supported businesses. This real-time enterprise resource planning suite, called SAP S/4HANA, makes use of an in-memory database and can help SAP customers in ways that would have been unthinkable even a few years ago.
The S/4HANA platform and digitally transformed processes allow companies to make smarter and more informed decisions, respond immediately to unpredictable situations or changing conditions, boost productivity and increase speed through automation and machine learning. It’s both a necessary evolution of SAP (since SAP will end support for previous iterations of its software in 2025) and an opportunity for companies to proactively standardize and improve their business processes for the coming decade and beyond.
To help with this important move, businesses will need a trusted partner. And no other company has more services experience with SAP, business processes and emerging technologies than IBM.
Getting started: IBM helps organizations understand the benefits and challenges of deploying SAP S/4HANA
IBM makes the implementation process simple with its project discovery service, which includes the SAP S/4HANA Impact Assessment tool. Within one week, this tool can produce holistic analysis results of the impact of moving to S/4HANA. Through tailored workshops involving deep analysis, IBM identifies the end-to-end impact of a move to SAP S/4HANA, including the potential effects on data, custom code, interfaces and level 4 business processes.
Companies will be able to anticipate obstacles and reduce delays in the switch to SAP S/4HANA and also pinpoint ways the current version of SAP may be underserving business needs. Clients may move just what they want and standardize some processes, reimagine others and orchestrate them all for their businesses.
“We help define the business case based on pain points and where there will be value in SAP S/4HANA,” says Mark Dudgeon, the IBM Global SAP CTO. “We look at the wider road map to take businesses from the current mode of operations to the future model of operations.”
With IBM’s advanced evaluation tools, the SAP S/4HANA move doesn’t have to be burdensome. The company offers a service called IBM Rapid Move for SAP S/4HANA, which can leverage existing investments in current SAP systems and dramatically reduce the time it takes to deploy SAP S/4HANA.
“IBM Rapid Move is a hybrid approach that is generating a lot of interest with the large organizations who have invested heavily in SAP over the years,” Dudgeon says, “because it enables them to get to S/4HANA faster, unlocking the value while leveraging key parts of their existing investments in the current SAP solution.”
A personalized approach: IBM addresses each company’s needs with a customized strategy
One of the business benefits for the move to SAP S/4HANA lies in its ability to accommodate specific use cases. Building on this, the IBM Services approach to SAP S/4HANA is even more focused to ensure that every fulfillment is carried out according to customer needs in the most efficient manner. IBM has in-depth experience working with a variety of business types, with a profound understanding of the specific challenges and requirements for each industry.
“We take an extract of technical metadata and usage data from the customer’s system and run it through the analysis tools on the IBM Cloud and then generate a comprehensive report on the impact,” says Dudgeon. This deep dive allows IBM to examine the ways its organization is using SAP and outline the best options for an SAP S/4HANA evolution.
One benefit is that SAP S/4HANA won’t be bogged down by any customized code that businesses might have applied to previous versions of SAP, which can result in an ERP that is “completely unmaintainable” and difficult to upgrade, says Costello. “This is not the way we do things today,” he says.
Underpinning IBM Services’ implementation tools is a holistic focus on security. “Security starts many layers removed from SAP,” Costello says. “Whether that’s firewalling and other forms of encryption or security at the operating system, our security teams are embedded in every aspect of what we do.”
SAP S/4HANA in the real world: How to overcome real-world challenges in a wide variety of industries
A main concern for clients considering a new ERP is that the switch-over may interrupt business operations. IBM, with its world-class capabilities and wide-ranging experience, helps businesses not only reduce friction during the move but also improve operations.
Take, for instance, an automaker that uses its ERP for material requirements planning (MRP), assessing supply and demand once a month. With SAP S/4HANA, businesses can now run real-time MRP assessments, says Cameron Art, a managing partner for Next Gen Enterprise Cloud Applications at IBM Services. “This means they can gauge their demand for paint colors, for example, on an ongoing basis,” Art says. “So if the ruby red version of a certain car suddenly becomes very popular, the lag time to change the spraying of those cars can be reduced from 31 days to the time it takes to paint it.”
MRP is just one example of how SAP S/4HANA improves productivity across a variety of business processes and industries. It can be implemented in a variety of environments as well. SAP S/4HANA provides complete choice, with consistency of data model and user experience whether run on premise, in the cloud, or in a hybrid model.
“Most of our clients are deploying SAP S/4HANA in a private cloud, with a growing number of public cloud implementations with high levels of enterprise-grade security,” Costello says. “We help them leverage all the capabilities that IBM brings to the fore to ensure that they’re getting the most competitive economics of the solution they deploy.”
Supported by IBM advanced technology
In the move to SAP S/4HANA, IBM also offers an array of integrated technologies and services, including blockchain, IoT and artificial intelligence, all of which can help businesses remain competitive as they move into the future. IBM leads companies down a seamless integration path leveraging APIs, containers, microservices and more.
Any modern company should be looking at how it can use big data along with an updated and digitized ERP solution, Dudgeon says. “Whether it’s IoT or weather data, you need to look at how you can empower business users with live information from across your operations, plus external data to enable data driven decisions in the moment and responsiveness to changing conditions.”
It is also important for businesses to look at the entire ecosystem. “Connect workflows across every part of your enterprise and your value chain to increase productivity, improve collaboration and drive innovation,” Dudgeon says. “These are areas where you can liberate blockchain. These are processes that you can bring in machine learning and robotic process automation.”
Certain pharmaceuticals, for example, must be kept at an exact temperature to remain effective. This can pose transportation challenges that today’s advanced technologies can solve, Art says. One of the many solutions that IBM has prebuilt is Blockchain Coldchain for SAP, which uses supply chain data and IoT data to let us know ahead of time if there is going to be any compromise in the pharmaceutical that gets delivered.”
Begin your reinvention: The support you need for every step of your digital transformation
“If your company is considering the move to SAP S/4HANA, IBM offers options to help with every step of your digital transformation. “If you want to start with your existing ERP configuration but add all these great new capabilities, IBM can do that,” Art says. “If you want to start again and support a new business model, IBM can do that. We can automate, convert, assess or change thousands of things that you couldn’t a few years ago, all with the intent of making it the most cost-effective value for supporting your business.”
Making this move early can give companies a big competitive advantage. “We help our clients discover that much value is tucked underneath this move,” Art says. “They find, ‘Oh, wow, we can do this now that we couldn’t do in the past.’ It’s wildly beneficial to their business.”