RISE with SAP towards a Sustainable Enterprise E-Book

Adil Zafar

• Herausgeber: Packt Publishing
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 748

Veröffentlichungsjahr: 2023

Beschreibung

If you’re unsure whether adopting SAP S/4HANA is the right move for your enterprise, then this book is for you. This practical and comprehensive guide will help you determine your next steps toward building a business case, while preparing you for all the possible scenarios and enabling you to make informed decisions during implementation. RISEwith SAP toward a Sustainable Enterprise is packed with clear and detailed advice, including a run-through of what it takes to design the landscape using RISE with SAP. As you go through the chapters, you’ll get a solid understanding of precisely what services are available (such as Process Discovery, data migration, the fit-to-standard approach), and which scope items on RISE with SAP should be considered, allowing you to make the most of RISE with the SAP-based model. Finally, you’ll get an overview of different industry-based use cases and how they can be brought to reality with the platform that’s set up on the RISE with SAP offering. By the end of this book, you’ll be able to build a detailed business case to determine if RISE with SAP is the right transformation engine for you, along with a clear idea of optimized landscape design on RISE with SAP that addresses the pain points for your implementation and support activities.

Leseprobe

RISE with SAP towards a Sustainable Enterprise

Become a value-driven, sustainable, and resilient enterprise using RISE with SAP

Adil Zafar

Dharma Alturi

Sanket Taur

Mihir R. Gor

BIRMINGHAM—MUMBAI

RISE with SAP towards a Sustainable Enterprise

Copyright © 2023 Packt Publishing

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Authoring this book required a lot of effort and dedication, so you can imagine that without the support of our families and extended teams, it wouldn’t have been possible. We authors want to say thank you to all the supporters (family, friends, and mentors) who helped us complete this book.

Adil Zafar would like to dedicate this book to his wife, Saira, and his three children, Naila, Haroon, and Hammad. Without the support of his family, he would not have been able to write this book. Adil would like to thank Mark Dudgeon for believing in him when he brought him to IBM to lead RISE with SAP. He would like to thank Joseph Msays for his counsel and for providing the opportunities in leading the RISE with SAP Premium Supplier program. He would also like to thank his IBM mentors, such as Allan Coulter, Andrew Worsley-Tonks, and many others, as well as his coach, Richard Maund for opening up new opportunities to him. Finally, he would like to also dedicate this book to his (late) parents. Without their prayers and guidance, he would not be the man he is today.

Dharma Atluri would like to dedicate this book to his wife, Swetha Ginjupalli, his lovely son, Abhinav Atluri, and nephew, Akhil Mallela, without whose support and patience during each weekend, it wouldn’t have been a possibility. He would also like to thank A. B. Vijay Kumar and Joseph Msays for providing him the opportunity to be the chief architect for the RISE with SAP program, which allowed him to deep dive into RISE with SAP at the most granular level and get to know the intricate details of the dos and don’ts. Finally, he would like to thank his parents and in-laws for their blessings and understanding during his long absences away from them.

Mihir Gor would like to dedicate this book to his wife, Gopa, and his two children, Hemal and Devisha, as well as his parents and in-laws. All of them have stood by him as he’s progressed in his career at IBM. He is passionate about driving sustainability solutions, developing new SAP thought leadership, and operating at the cutting edge of technology innovation. This book helped him to integrate all of his collective thinking into the RISE with SAP context and share this with the community. He would like to thank his IBM mentors, such as Allan Coulter, Mike James, Sheri Hinish, and many others, as well as his coach, Hayden Bamber, for opening up new opportunities to him. In the end, for him, the book was a team effort and the final credit really goes to his fellow authors, Dharma Atluri, Adil Zafar, and Sanket Taur for inviting him to contribute.

Sanket Taur would like to dedicate this book to his wife, Janhavi Taur, for her steadfast support and patience throughout the past year and the understanding of his awesome son, Sharvil Taur, who showed great character while Sanket was busy writing the book on weekends or away taking care of his father. He drew the inspiration to complete this book from his father, the late Dr. Machindra Bajirao Taur, who achieved the amazing feat of completing his doctorate while fighting cancer in its final stages, and also his autobiography before he bid us all farewell. Dr. M. B. Taur was an accomplished professor with an unwavering commitment to guiding and shaping the lives of thousands of his students. He would also like to express his gratitude to his mentor, Allan Coulter, CTO SAP IBM; Andrew Worsley-Tonks, SAP Leader, EMEA; his IBM colleagues; and the client teams he worked with who gave him the opportunity to garner the valuable experience that has been reflected in this book.

Contributors

About the authors

Adil Zafar is an associate partner with over 22 years of experience as a S/4HANA technical architect. He is also the global leader for RISE with SAP at IBM. Over the years, Adil has developed into an all-rounder with a hands-on approach to winning and delivering SAP consulting services. Adil is an experienced S/4HANA technical solutions architect, technical project manager, and delivery manager. He is an experienced team builder, managing teams both onshore and offshore.

Dharma Alturi is an executive architect and AI/ML evangelist at IBM. He has more than 20 years of experience working in hybrid-cloud-driven architectural deployments, both SAP and non-SAP. He leads the RISE with SAP program for IBM as a chief architect, a service integrator, and the core design lead for putting together the architecture on multiple hyper-scalers. He has provided strategic direction to clients globally regarding the adoption of RISE with SAP, helping clients achieve the vision of being an intelligent and sustainable enterprise. His recent contributions towards RISE with SAP, sustainability, and data intelligence-driven use cases have been recognized by a global audience on different forums.

Sanket Taur is a technology evangelist and speaker at events with SAP ASUG, SAP TechEd, and IBM. He is an associate partner and a global offering leader in intelligent and sustainable enterprise within IBM, leading service offerings with ecosystem partners such as SAP, Red Hat, AWS, and Microsoft. He helps global clients across industries to define and realize their digital strategies and business transformation goals using hybrid cloud platforms and technology-driven, innovative digital solutions. He has influenced C-suites and business leads to create new service propositions for their customers while bridging the gap between their business visions and outcomes with new business models, helping to monetize the investment in technology.

Mihir R. Gor is an IBM distinguished engineer with over 25 years of successful project delivery experiences across large, complex, and global SAP programs. He is the IBM SAP global sustainability innovation CTO, responsible for driving new SAP solutions that can meet his client’s sustainability goals and objectives. He is a trusted advisor who engages C-suites to help develop their transformation roadmaps toward becoming intelligent, sustainable enterprises using the industry best practices, reference architectures, S/4HANA, and SAP BTP solutions that operate across a hybrid cloud ecosystem. He is an IBM consulting thought leader, a TOGAF enterprise architect, an AWS Cloud Certified Architect, SAP BTP-certified, and a member of the British Computer Society.

About the reviewers

Suma Rammohan is an author, speaker, and accomplished technologist with business acumen specializing in ERP, especially SAP S/4 HANA.

She has held multiple roles throughout her career – pre-sales/solution architecture, consulting, delivery, and so on. She has worked at large global companies such as SAP Labs, IBM, and Accenture. She is currently a senior principal enterprise architect and pre-sales lead at Capgemini, supporting European clients on their transformation journeys and focusing on mega-sized deals. She has a strong client-facing role, solving business problems via technical innovative solutions, creating enterprise solutions, and taking part in co-design workshops/discussions with clients.

Her key skills include enterprise architecture, technical solutions, Agile methodology, the journey to the cloud, delivery management, and technological innovation. Her SAP skills span RISE with SAP offerings for private and public clouds, two-tiered ERP architecture, S/4 HANA (migration and greenfield implementations), Enterprise HANA, BW/4HANA, and embedded analytics.

Haishan Qian is a technology visionary leader for large-scale and high-performance enterprise applications. His focus areas include IT strategy planning, new innovations, global system architecture, and business process improvements. Currently working as a lead solution architect at Apple Inc., he leads cross-functional teams and designs, builds, and implements various enterprise financial systems that support Apple’s global business operations, including its digital media store, subscription services, retail, and finished goods. Haishan lives with his family in Palo Alto, California.

A. B. Vijay Kumar is an IBM Distinguished Engineer and chief technology officer focused on hybrid cloud management and platform engineering. He is responsible for providing technology strategies for managing complex application portfolios on hybrid cloud platforms using emerging tools and technologies.

He is an IBM Master Inventor who has issued more than 31 patents and has 30 pending in his name. He has more than 23 years of experience at IBM. He is recognized as a subject matter expert for his contribution to advanced mobility in automation and has led several implementations involving complex industry solutions. He specializes in mobile technologies; cloud technologies; containers; automotive technologies; sensor-based, machine-to-machine technologies; the IoT; and telematics.

Table of Contents

Preface

Part 1: Overview

1

Truth and Dare – The CxO Challenges

The market

Uncertainty about the future

Trends

Glocalization

The supply chain

Financial challenges

CapEx versus OpEx

Maintenance costs

The cost of living

Lack of investment

Recession

Return on investment

Accuracy cost estimation

Regulation compliance

GDPR

The CCPA

Industry regulations

Data residency

Technology evolution

Flexible adoption of new technology

Technology strategy

Emerging new technologies

Evolving customer perspectives

Consistent customer service

Operational challenges

Sustainable supply chain pressures

Resourcing issues regarding raw materials, people, and skill gaps

The multi-vendor model

Choosing a SAP service provider

Key considerations for businesses when opting for a cloud provider

Keeping the lights on

Organizational challenges

Transformation challenges – business- or IT-driven

Factors affecting transformation

Environmental challenges

Sustainability challenges

COVID-19

Political polarization

Impact of the war in Ukraine

Summary

2

Faith of Four – Vision of the Masters

The four masters

Chief Executive Officer (CEO)

Chief Finance Officer (CFO)

Chief Information/Technology Officer (CIO/CTO)

Chief Sustainability Officer (CSO)

The business challenge

Top-line growth

Bottom-line growth

Green-line growth

Other focus areas

The way forward

Uncertainty

Insights

Yesterday’s ERP

Sustainability insight

The next steps

The phoenix transformation

How does Spark4Life Ltd take the first step?

What is value advisory?

Building a business case for transformation

Approaches

Reasons why organizations would favor one migration option over the other

Why RISE with SAP?

RISE with SAP – what’s included?

Summary

3

Eureka Moment – the Missing Link

Understanding RISE with SAP

What is RISE with SAP?

Exploring tools and services available within BTP as part of RISE with SAP

Demystifying myths around the adoption of RISE with SAP

Understanding options available with RISE with SAP

Option 1 – Standard Edition

Option 2 – Tailored Edition

Option 3 – Customer Data Center

Option 4 – Critical Data Cloud

Option 5 – Partner-Managed Cloud

Use case traceability and what to plan for with RISE with SAP

Exploring a case study for transformation with RISE with SAP

Summary

Further reading

Part 2: The Journey with RISE with SAP

4

Intelligent Enterprise and Sustainable Design

Holistic transformation

A culture of innovation

Assessing capabilities

CBM for SAP (CBM4SAP)

Business Process Intelligence (BPI)

Why BPI?

BPI Starter Pack for RISE with SAP

SAP Process Insights

SAP BPI – Signavio Process Transformation Suite

An Intelligent Enterprise

Autonomous processes

Keeping the core clean

Extension Scenarios

SAP BTP CPEA credits as part of RISE with SAP

Summary

Further reading

5

Cloud with Silver Lining: Busting the Myth – Part 1

Putting together a business case for RISE with SAP

The need stage of the business case proposal

The evaluation stage of the business case proposal

The commitment stage of the business case proposal

Industry trends influencing S/4HANA adoption with RISE with SAP

Shifting to S/4HANA and the relevance of outcome path and sizing

Getting back to the standard with a clean core approach

Safeguarding the effort to migrate to S/4HANA

Understanding architectural patterns within RISE with SAP

Exploring what is possible and what is not possible within RISE with SAP

Looking into alternate options for RISE with SAP

Summary

Further readings

6

Cloud with a Silver Lining: Busting the Myth – Part 2

Understanding the standard and tailored editions

The standard option for RISE with SAP

The tailored option for RISE with SAP

Understanding the roles and responsibilities of standard, optional, and additional services

The approach for handling rollouts and upgrades on RISE with SAP

Understanding changes with AMS in RISE with SAP

Exploring CAS packages – what you need to know

Summary

Further reading

7

Back to the Drawing Board: Reimagined Processes

The enterprise experience

Experience-led process modeling

Experience and process design

Insights to design

Simulating the “to-be” world

Continuous improvement – the infinity loop

Data-to-value transformation

Managing data and the challenges it brings

Architecting intelligence

The AI fabric

Engagement (AI-X thread – conversational AI and digital assistance)

Learning (cognition thread – machine Learning)

Design considerations for intelligent workflows

Going cloud-native with SAP

Inner ring and outer ring

Summary

Further reading

8

The Exodus – Data That Matters

Understanding different move/implementation scenarios

Greenfield implementation

Brownfield migration

Selective data migration

Looking into the importance of data migration – why, what, and how

Understanding the importance of data governance and data quality

Debunking myths around data migration

Looking into the SAP Activate methodology and the adoption patterns related to data migration

Looking into the different options available for data migration

Summary

Further reading

Part 3: The Way Forward: The Art of Possible

9

The Pilot: High Stakes

Accelerating your transition

S/4HANA public cloud/new implementations (greenfield)

System conversions (brownfield)

The Readiness Check tool

The Custom Code Migration app

Selective Data Transition

Iterative data loads

Mitigating the risks by starting earlier

An Agile approach to data conversion and integration testing

SAP Activate

SAP’s EML

The UX strategy

Importance of a UX strategy

Change management

Getting ready for the pilot

Scenarios for the use of TMS + CTS for on-prem deployments

Transport management with SAP CALM

Bringing it all together and the pilot rollout

Summary

10

Going All In: A Leap of Faith

S/4HANA deployment patterns

Focusing on defining the Global Template

Defining the instance strategy

Methodology

The rollout approach

Deployment

Release management

Cutover management

Solution readiness

People readiness

Business operational readiness

The readiness of AMS for deployment and transition

Monitoring progress to go-live

Go-live

Hypercare

Stabilization and Hypercare – post-go-live support and incident management

Rollout post go-live

Summary

11

Innovation Unleashed: The Hunger Games

The cultural shift to innovation

Sponsored innovation hackathons

Innovation awards

Rewiring the enterprise for agility and scale

Citizen developers

Multi-layered APIs

Security-as-a-Service

LCNC in SAP (SAP Build)

SAP Graph and SAP One Domain Model (ODM)

Web 3.0

The future of work

The spectrum of automation and digitalization

Digital employees

Brand ambassadors

Futuristic retail experiences

Business and commercial models

A subscription economy

Revenue recognition

Subscription-based business models for sustainable Consumer Packaged Goods (CPGs)

Other considerations for subscription models

An Industry 4.0 lens

Dealing with after-sales service issues

The futuristic outlook of Spark4Life

Adopting sustainability in every aspect

Summary

12

Digital Supremacy – the Path to Sustainable Growth

Reflections

Chapter 1 reflections

Chapter 2 reflections

Chapter 3 reflections

Chapter 4 reflections

Chapter 5 reflections

Chapter 6 reflections

Chapter 7 reflections

Chapter 8 reflections

Chapter 9 reflections

Chapter 10 reflections

Chapter 11 reflections

Envisioning the future

New horizons

The rise of ESG priorities

RISE with SAP for S/4HANA with SAP Cloud for Sustainable Enterprises

The waste you can see

Sustainability and SAP enterprise architecture

Initiation

Summary and conclusion

Index

Other Books You May Enjoy

Preface

Welcome to the first comprehensive guide on RISE with SAP towards a Sustainable Enterprise! Since the launch of RISE with SAP as an offering in January 2021, clients and consultants alike have been trying to figure out what needs to be considered and the benefits the program can provide to help revolutionize their journey toward the cloud and toward being a sustainable enterprise. This book provides a practical perspective on the journey to the cloud and beyond, with RISE with SAP enabling your transformation into a value-driven intelligent, sustainable, and resilient enterprise. For the successful adoption of S/4HANA and RISE with SAP, three key components need to be considered:

Identifying the problem statement and use cases that are value-adding for the businessBuilding a strong business case by being aware of all the possible levers, such as process discovery, process mining, the adoption of best practices, the automation of testing, and data migration, along with sustainability-driven, intelligent, enterprise-based use casesKnowing more about what RISE with SAP provides, gaining insight into the roles and responsibilities involved, and ensuring you avoid any surprise costs as you proceed with and sustain the implementation

There are many different blogs and independent points of view (POVs) published by members of the SAP community. The focus of this book is to provide a journey map to you as a client or consultant, not just detailing what RISE with SAP is but also walking you through each of our three aforementioned key components and enabling you to handle each of them without any ambiguity. We will provide relevant information not just about the offering but also about relevant use cases for it and the options available on the market that apply to these use cases. We will also outline the lessons learned in different sections to ensure you can plan appropriately for your adoption of various technologies and RISE with SAP as an offering.

Who this book is for

This book is targeted at CXOs, IT owners, architects, process owners, cloud security consultants, administrators, and project managers who need a consolidated overview of the value of RISE with SAP and the other services connected to it. We’ll cover different industry use cases, along with the benefits realized by adopting RISE with SAP, and the potential journey map to follow to achieve the most cost-optimized scenario. We also believe this book is relevant to all SAP-interested readers across all industries and technologies, even outside S/4HANA, so that they can understand its actual impact on the wider ecosystem.

Throughout the book, you will learn about the different trends in the industry today and the impact they have on business outcomes. We will talk about how being aware of these allows organizations to build a strong business case for RISE with SAP. You will understand what RISE with SAP is, along with the different services and products made available as part of the ecosystem around it. You will be informed on how to make the right choices and decisions when it comes to defining their use cases, scopes, and journey maps in order to achieve a sustainable enterprise.

Let’s go through some key personas and how the book will help them:

IT owner/CXO/SAP architects/process owners: These personas will be involved from the initial evaluation of the journey toward the cloud, along with security and other key decision factors. These also focus on TCO reduction while providing users with a strategic platform for both automating and infusing AI-enabled intelligent workflows into their daily activities. CXO/IT Owner: These personas will also be interested in identifying how their IT costs translate into business benefits. They will also need help with building the business case to either move toward S/4HANA with RISE with SAP or just their journey toward the cloud in general. These personas will be interested in understanding the security implications, along with the ROI, when it comes to the various services on offer.SAP architects: These personas will be interested in how the landscape architecture changes. What new services are available that can help the implementation, its management, and the business teams involved? What services will be part of the baseline model and what other additional or optional services should be opted for? What services should be requested of partners and how will monthly, quarterly, and yearly release cycles look after the move to RISE with SAP?Process owners: These personas will be interested in what value moving to RISE with SAP adds from a business process point of view. These personas will also want to understand the intelligent workflows and transformation options available and their potential.

We want to encourage our readers to take a deep dive into the concepts we introduce in this book and keep them in mind when adopting, implementing, and migrating or upgrading to S/4HANA, RISE with SAP, and beyond, building the necessary skills to meet your particular needs.

What this book covers

This reference book on RISE with SAP is both an overview and a detailed look at several topics related to trend evolutions and business challenges, and how organizations can build business cases to justify the adoption of RISE with SAP. The book also deep dives into RISE with SAP as an offering, explaining its different services and the dos and don’ts involved to prepare for the right service delivery. The structure of this book will guide you from a strategic level to a practical level, explaining each of the levers and different components to be considered. On an ongoing basis, you can pick up different chapters as needed and still learn about all the required details by reading through a chapter. You’ll only need to jump to other chapters if more details are needed. However, we recommend that you start from the beginning and work through the chapters in order because some topics are built upon in later chapters to avoid the repetition of certain topics. Chapter 1 and Chapter 2 will provide you with the full context needed for the rest of the book.

To make the learnings more relevant and interesting we have introduced a business case: a hypothetical global electronics brand Spark4Life, facing unprecedented challenges due to the recent global upheavals. Every chapter helps you to go through the due diligence required for the pivotal decisions that need to be made at every stage of the transformation that Spark4Life sets out to take on. While doing so, we have given numerous examples and use cases helping solve the business challenges step by step. To ultimately bring it all together in the last few chapters to help you see how all the decisions (related to people, process and technology) taken in the previous chapters has helped turn the tide for Spark4Life and to reveal how the holistic transformation is greater than sum of its parts.

This book is organized into three parts; here’s a quick overview of each:

In Part I, Overview, you will understand the need for innovation and the patterns evolving in the market both pre- and post-pandemic, along with the risks that businesses and clients need to prepare to face to survive in the market. We will then look at persona-based journeys for CXOs and businesses to identify how different LOBs need to evolve and how to manage expectations throughout this evolution. Furthermore, this part will set the context of how RISE with SAP, along with the industry solutions built around it, can help you achieve the objectives and the vision that you have initially set out. This part includes the following chapters:

Chapter 1, Truth and Dare: The CXO Challenges

This chapter provides an overview of various challenges faced by the CXOs in terms of the current market, financial aspects, regulation compliance, evolving technology, evolving customer perspectives, operational aspects, organizational aspects, and environmental aspects. You are given a glimpse of each of these ambits and how they impact the business operating model, with examples.

Chapter 2, Faith of Four: Vision of the Masters

Chapter 2 builds on the challenges mentioned in Chapter 1 by walking you through the levers of change and various decisions to be made by CXOs to overcome these challenges in the context of a business transformation. This chapter goes through the perspective of CEOs, CFOs, CTOs/CIOs, and CSOs. It then sets the context of actual business challenges and the key objectives to address in both the short and long term. It then takes you through the typical issues within the landscape of an example organization and the different steps to go through to achieve what is needed, applying different levers such as S/4HANA adoption, the journey to the cloud using RISE with SAP, process mining/discovery, best practices, industry solutions, the relevance of data migration, and the adoption of different intelligent workflows, along with automation.

Chapter 3, Eureka Moment: The Missing Link

In Chapter 3, we expand upon one of the key components mentioned in Chapter 2 – what RISE with SAP is, why RISE with SAP is useful, and the different options available within RISE with SAP, along with other alternate options beyond RISE with SAP. You will understand in detail how RISE with SAP as an offering can address business challenges and help achieve an organization’s vision and objective, enabling value-driven outcomes. We will also dispel various myths around RISE with SAP to ensure that the right decisions can be made along the way. We will wrap up with a sample journey map for how a customer organization has evolved over different stages by leveraging RISE with SAP.

Next is Part II, The Journey with RISE with SAP. This part includes the following chapters:

Chapter 4, Intelligent Enterprise and Sustainable Design

Chapter 4 provides you with details about what steps can be considered by CXOs and how organizations can use the tools and services offered by RISE with SAP to help pave the roadmap toward becoming a sustainable enterprise. The chapter walks you through the basics of BTP, the design principles to follow from a shift-left POV, insight-driven approaches, the adoption of a clean core, and sustainable, intelligent workflow-based solutions.

Chapter 5, The Cloud with a Silver Lining: Busting the Myth – Part 1

Chapter 5 walks you through all the dimensions and parameters to be considered when building a business case for both the adoption of S/4HANA as part of the RISE with SAP offering and the different services under consideration. You will also get more information about the different industry trends to consider, as a follow-up to Chapter 1, and how RISE with SAP addresses these. You will then get insights into the architectural patterns of RISE with SAP, along with what is possible and what is not possible with RISE with SAP. We will wrap up by providing possible alternatives to RISE with SAP in case you are not yet ready for the journey to the cloud or the move toward S/4HANA but are still looking for managed services temporarily.

Chapter 6, The Cloud with a Silver Lining: Busting the Myth – Part 2

Chapter 6, as a continuation of the previous chapter, dives deeper into the different types of variants available within RISE with SAP and what they mean to you. The chapter then walks through the roles and responsibilities made available by SAP, defined as Standard, Additional, and Optional services, allowing you to make the right decision around the scope of services to select. You will also be given information on how to handle rollouts and upgrades as part of RISE with SAP and how daily life will change in terms of the application management services within the RISE with SAP offering. We will wrap up the chapter by introducing the Cloud Application Service (CAS) packages offered by SAP as part of RISE with SAP and how they complement the Standard, Additional, and Optional roles and responsibilities mentioned earlier.

Chapter 7, Back to the Drawing Board: Reimagined Processes

Chapter 7 provides an overview of how the design inputs across the different levers mentioned so far will influence the overall design and enable you to simulate and model new processes for future customer and employee experiences, changing existing processes and considering and introducing new processes. The chapter provides insight into how SAP Signavio Journey Modeler, for instance, can be used to design the user experience (UX), along with an organization’s operating model and the relevant workflows. You will also see how the data within the landscape can be leveraged to generate value-driven insights for your business. You will then get information about how these insights can be consumed to orchestrate relevant, intelligent workflows that can eventually solve the challenges that we have previously identified.

Chapter 8, The Exodus: Data That Matters

Chapter 8 provides you with details on how important it is to plan your data migration to a target S/4HANA instance based on the type of migration activity planned as part of the move to the cloud (RISE with SAP). The chapter also provides an overview of why data governance and data quality are important aspects when it comes to safeguarding your investment in AI and intelligent workflow-based solutions. We finally wrap up the chapter by looking into SAP Activate Methodology and the adoption patterns available when it comes to data migration.

We’ll conclude this book with Part III, The Way Forward: Art of Possible, which includes the following chapters:

Chapter 9, The Pilot: High-Stakes

Chapter 9 brings forward all the practices and best practices mentioned so far in the book to enable you to understand how these can help accelerate your transition toward becoming an intelligent and sustainable enterprise. You will be provided details on how the implementation/migration effort can be shifted left using the ready-to-use content from SAP and its partners. You will also be informed about the key dimensions of the UX strategy to be considered to achieve the desired business outcomes. Finally, we will wrap up the chapter by talking about the change and release management to be considered when deploying a pilot for either a region or a representative business unit before proceeding with a global rollout, which is termed “all in.”

Chapter 10, All In: A Leap of Faith

Chapter 10 is about how to convert a successful pilot implementation into a global rollout, considering multiple localization- and regulation compliance-related requirements to make sure the solution is globally ready, including those of various processes that might be unique to certain countries. This chapter will provide you with insights into the factors to be considered when defining the instance strategy and the rollout strategy.

Chapter 11, Innovation Unleashed: A Hunger Game

Chapter 11 takes you beyond the initial implementation, providing information on why continuous innovation/improvement beyond the initial iteration is important for an organization to continue to evolve. This chapter will provide insight into how the cultural shift toward innovation within an organization plays a key role in this cycle. It will then provide a walk-through of the importance of enterprise agility and scalability as the key aspects to support an emerging operating model as trends progress. We will then explore the Web 3.0 and Industry 4.0 models, along with their importance to organizations driving intelligent solutions. We will wrap up the chapter with information on different business and commercial models to consider.

Chapter 12, Digital Supremacy: The Path to Sustainable Growth

In the final chapter of the book, we will summarize the findings from each of the chapters, along with the ongoing vision organizations can plan to differentiate themselves. You will also understand the steps you need to take to achieve the vision you have laid out and what to consider at different stages.

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Part 1: Overview

In Part 1, readers will understand the need for innovation and the patterns evolving in the market both pre- and post-pandemic, along with the risks that businesses and clients need to prepare to face to survive in the market. The reader will then look at persona-based journeys for CXOs and businesses to identify how different LOBs need to evolve and how to manage expectations throughout this evolution. Furthermore, this part will set the context of how RISE with SAP, along with the industry solutions built around it, can help you achieve the objectives and the vision that you have initially set out.

This part has the following chapters:

Chapter 1, Truth and Dare: The CXO ChallengesChapter 2, Faith of Four: Vision of the MastersChapter 3, Eureka Moment: The Missing Link

1

Truth and Dare – The CxO Challenges

If one is asked the question of what is at the heart of any change for an organization, the response, more often than not, would be the consumer. Whether it relates to sustainable products, user experience, or value for money, the list is endless. While consumers come in all forms, such as end users, end consumers, wholesalers, and retailers, the outcome is the same. Consumers generate demand and cause a shift in the business ecosystem.

The example of the consumer is just one of many reasons businesses will react to challenges. Their reaction will be one of survival or adaption to change. In this chapter, we will look at what challenges businesses face on a day-to-day basis. To define a way forward, we will explore the characteristics of challenges in order to understand them, determine how to address them and find a solution, and examine how they impact the decision makers we know as the CxOs or the C-suite.

As you proceed to read through this book, you’ll see that it has been designed to give real examples of challenges and provide solutions based on RISE with SAP as the platform to deliver a S/4HANA transformation. Although we appreciate that digital transformations can take many forms and scopes, our objective is to first provide you with an appreciation of the challenges businesses face and how they impact businesses, and how CxOs can react to those challenges in determining a solution.

The challenges impacting the day-to-day activities of a business can be defined in eight broad categories:

The marketFinancial challengesRegulation complianceTechnology evolutionEvolving customer perspectivesOperational challengesOrganizational challengesEnvironmental challenges

Let’s begin!

The market

There are external factors that affect businesses and how CXOs are compelled to make decisions to avert any short- and medium-term effects. Market-related effects are impacted by many factors, and this list is by no means exhaustive but only a glimpse into some of those issues.

Uncertainty about the future

If we all had a crystal ball or the ability to have knowledge of the future, it would help to weather the storm of change, but more importantly, thrive under such conditions. Alas, those prophetic abilities are in short supply, but there is a serious point to the uncertain future. It remains a constant threat to organizations’ ability to deliver their services and products to market.

A business must determine ways in which to temper the constant flux in demand – changes in the market that can and do divert the organization’s focus and can be exhausting and exacerbating. As the world becomes more uncertain, those organizations that can thrive under such conditions will have an advantage.

Trends

If we look at the last 3 years, during COVID-19, we can clearly see a surge of activity in conducting meetings remotely, with little or no travel. If we look at the impact of global warming, it can be seen as one of the direct causes of the increase in energy prices. The point we are making is that any trend has a cause and an effect.

In a similar fashion, whatever the trend we see, whether induced by technological advancements, environmental factors, or global health-related, it forces a shift in demand and supply, which invariably impacts the organization’s ability to react.

Glocalization

According to Encyclopedia Britannica, the definition of glocalization has become more relevant than at any time before, where regional and global synergies are reflected at local levels. There has been a shift in developing global products and services at a global level that have local brand recognition, making them more relevant to the local market. For example, KFC is a global brand with common products available, but at the local level, you will find market-focused products.

If we look at this through the lens of an organization, it is acclimatizing its products and services created for the global market for its local market presence by adapting them to local cultures. For example, Frito-Lay, a division of PepsiCo, primarily uses the brand name “Lay’s” in the United States and uses other brand names in certain other countries: Walkers in the UK and Ireland and Smith’s in Australia.

The impact of localization is global and increases the challenges of ensuring the continuity of a brand, its quality, and the supply of its products and services.

The supply chain

There is a lack of supply chain diversity and the risk of multiple points of failure when relying on a globally distributed just-in-time supply chain. These are often broken, rigid, and have a myriad of regulations, increasing the threat of geo-political or climate-related disruption, with increased costs to sustain those supply chains, and making them less predictable. How do businesses protect their supply chain from becoming disrupted?

Financial challenges

The financial effect on a business is all too apparent, whether it’s the effect of the rise in an interest rate in the US or the price of crude oil. The change in the value of the USD against the GBP determines the profitability of a company when it announces its results in USD. The value of a stronger USD gives a business greater purchasing power. In this section, we are going to understand the cost challenges businesses face.

CapEx versus OpEx

As is commonly understood, CapEx or Capital Expenditures (CapEx) derives from the purchases an organization makes that are for the long term or where the return on investment is seen over a long period of time. Conversely, Operating Expenditures (OpEx) are those expenses that are derived over a short period of time, that is, which are accounted for on a day-to-day, week-by-week, or month-by-month basis.

As consumers have adapted to the pay-as-you-go model of paying only on consumption of a service, the same has now happened with organizations where technology has moved rapidly in providing businesses a pay-as-you-go model for using traditional IT services heavily dependent on CapEx, and they can now be seen as IT as a service. The challenge here for organizations is to adapt to a differing financial model and accounting principles, along with managing those services.

Maintenance costs

The support and maintenance of infrastructure, whether bricks and mortar or hardware and applications, draw similar parallels. Both require constant maintenance, upgrades, and expansion as the business grows.

For IT applications that are at the core of supporting the operations of a business, two key challenges are always at the forefront:

Keeping the existing systems goingAdapting to new technologies without affecting the business

The question arises at what point do you stick to what you know and continue investing in existing initiatives and at what point do you divert and start to change the focus to new technologies?

The cost of living

It would have been unthinkable only a few years ago if the cost of living was quoted as a factor affecting decisions taken by the C-Suite. However, in recent times, it’s seen as the measurement of everyday items, such as fuel, energy, groceries, mortgages, travel, and many other things.

What is the cause of this cost-of-living crisis? The slow emergence from COVID-19 impacted supplies of raw materials and thus caused a surge in costs. The geopolitical impact in Europe of the war in Ukraine impacted energy supplies from Russia. The effects of Brexit affected imports from EU countries and compounded the already depressing situation regarding the surge in the cost of living. All of these things converged, creating a crescendo of uncertainty, and limiting the already regressed business recovery.

The CPI inflation forecast published by the UK government’s Office for Budget Responsibility provides an insight into the inflationary impact on the economy:

Figure 1.1: Inflation forecast in the United Kingdom issued by the Office for Budget Responsibility

The forecast nominal and real average earnings growth published provide an insight into the average earnings growth impact on the economy:

Figure 1.2: Earnings forecast in the United Kingdom issued by the Office for Budget Responsibility (https://www.instituteforgovernment.org.uk/publication/spring-statement-2022/cost-living-crisis)

Lack of investment

To some, a lack of investment in talent and innovation to support a business is an existential threat to its very survival. Looking at the last 3 years of the pandemic, the overnight adoption of remote working was like the flick of a switch. If your workforce is not ready to adopt change due to a lack of investment, then challenges are compounded. Similarly, if your organization is not set up to adopt new innovations, it will cause a huge upheaval when change is forced upon the organization. We have seen this with many tech companies that started sending thousands of laptops to their employees to cater to remote working. See this link to read more about it: https://www.zdnet.com/article/coronavirus-how-we-got-10000-staff-remote-working-from-home-in-just-one-weekend/.

The lack of the right talent has been steadily building up for years, and organizations are continually battling with attrition. We are now entering a digital era of accelerated change and organizations need to counter that with the right talent investment, not just in complex low-touch tech skills, but also basic tech skills just to keep up with all of the changes, such as working remotely and interacting using remote PMO tools such as Jira, Mural, Slack, and so on. If you don’t keep up with change, then there is every chance the organization will fall further behind, due to not reacting to demand and changes in technology focus, and not harnessing new talent with the skills required.

The failure to innovate will almost certainly leave many organizations behind. The ONS carried out a survey on the impact of the coronavirus pandemic and other events on UK businesses and the economy. This survey was based on responses from the voluntary fortnightly business survey (BICS) about financial performance, workforce, prices, trade, and business resilience. The following figure shows the stark reality that up to 26% of businesses were either temporarily or permanently closed. It can be presumed that some of those closures were a result of inaction, lack of innovation, inflexibility in business processes, and a lack of agility in technology:

Figure 1.3: Impact of COVID-19 on businesses (https://www.ons.gov.uk/businessindustryandtrade/business/businessservices/bulletins/businessinsightsandimpactontheukeconomy/8april2021)

The lack of investment in people and technology go hand in hand, and during times of economic, political, societal, and technological changes, it would be an unthinkable decision to not innovate and include technology within a business model, alongside the right talent to help accelerate the change from survival to prosperity. The COVID-19 pandemic is just one example of the myriad of challenges that impact businesses and how those challenges are met is the key to success. The number of businesses impacted by COVID-19 was beyond anyone’s imagination. Almost a million UK businesses were at serious risk of bankruptcy before April 2021. See the report by Peter Lambert and John Van Reenen here: https://blogs.lse.ac.uk/businessreview/2021/02/02/a-wave-of-covid-related-bankruptcies-is-coming-to-the-uk-what-can-we-do-about-it/.

Recession

There is not a single person today who has not experienced a recession. The reality is that recession will impact every single person in some way, and this includes businesses. If you take the current economic situation in the United Kingdom, the country is facing its highest inflation since the conversion to decimal currency back in 1971. We are all experiencing the impact of inflation, with increased prices of basic consumer goods, including energy prices, along with higher interest rates.

Pensions and investment portfolios have most likely been impacted by inflation and the threat of a recession, and this is yet another challenge for businesses when they must cut back to survival mode as they brace themselves for a sharp decline in consumer confidence and spending. As a result of a recession, unemployment goes up because businesses have to cut back their workforce in order to manage the challenges of reduced consumer spending.

Return on investment

For a business to invest in any opportunity, it must consider the return on investment (ROI). However, it’s important to first understand the expected outcome expected of the ROI. Here are some focus areas for a C-Suite to look at when considering ROI:

Better customer experience and satisfaction and improved customer service and supportIncreased usability leads to increased salesIncreased user satisfactionImproved/automated business processesBetter access to data insightsImproved digital executive dashboardBetter forecastingImproved software vendor supportReduction in vendors and smoother service delivery

ROI is usually a metric that is used to understand the profitability of an investment. However, when it comes to understanding ROI in technology and solutions, it relies on measures made up of several other KPIs. Here are some examples:

Revenue enhancement – where the investment results in increased salesCost reduction – faster MRP runs and a reduction in operational and maintenance costsCost avoidance – fewer outages and increased productivityCapital reduction – a shift from CapEx to OpExCapital avoidance – divest investment from fixed assets

Accuracy cost estimation

Estimating the cost of a project or service being delivered is one of the most important functions in IT. The impact of a wrongly estimated IT program not only hurts the business financially but diverting key resources to the project means the loss of time on other initiatives, which would have otherwise driven growth.

With failed, overrun projects drawing away investment and resources away from the business, the challenges of cost estimation are largely centered around people, processes, and technology:

Data-driven insight is critical to estimating the cost of a programProcess adoption opportunities that would lead to greater returns and profitabilityEstimation requires strong and timely alignment across stakeholdersROI – time spent and the value generated in spending time on estimations

Regulation compliance

If you look at the history of regulations, they were created to protect – to protect businesses and consumers, to promote fairness and efficiency, and to encourage healthy competition.

Regulatory compliance exists to ensure that organizations not only comply with the legal statutes laid down by the local laws in a country but there are additional laws that pertain to specific industries that require additional rules in order to maintain those policies.

There are local, regional, and global laws for all organizations to follow and comply with, however, in order to maintain transparency both operationally and financially, organizations are adopting more consolidated sets of rules, policies, and compliances.

There are typically six types of regulations:

Laws that impose burdensLaws that directly confer rights and/or provide protectionSelf-regulationLicensing bodies and inspectoratesEconomic regulatorsRegulators of public sector activities

In other words, regulations and compliance are where a set of rules and policies are set by a body that forms a part of external factors that are deemed necessary for businesses to comply with. These can be standardization, regulations, and legislation. These cannot be bypassed or ignored as they will invariably cause issues in the long run. For instance, non-compliance with the net-zero carbon footprint goal may preclude a business from entering a market in Singapore.

The topic of regulatory compliance is vast. For the purposes of understanding the challenges faced by businesses, there are three regulatory compliances that may specifically affect how businesses are able to function in specific regions and countries that would impact their IT solutions. Let’s check them out in the following subsections.

GDPR

The General Data Protection Regulation (GDPR) centers around privacy and security laws of individuals and consumers and it is seen as the toughest privacy and security law in the world. Although the laws apply to companies in the European Union (EU), its impact in terms of obligations organizations have is vast and covers businesses situated anywhere in the world, so long as they target or collect data related to people in the EU.

The consequences of ignoring GDPR can mean heavy fines for a business, which could result in reputational and financial damage or even exclusion from carrying out any business in the EU. Fines can reach tens of millions of euros.

The CCPA

The California Consumer Privacy Act (CCPA) was inspired by the work carried out in the EU for GDPR, and in the state of California, businesses’ privacy policies are required to include information on consumers’ privacy rights. The world’s largest and most successful electronic, big tech, financial services, and energy companies are headquartered in Silicon Valley, so where more appropriate to apply this act than the state where the impact is greatest?

Such laws, as described here, form the fundamental policy of businesses, and adherence is as essential as adhering to human rights laws pertaining to work and pay conditions.

Industry regulations

Industry regulations are rules and policies applied by an expert agency in that industry that govern the behavior of businesses. These regulations are supplemental to the fundamental laws applied across all businesses and organizations relating to privacy, security, and ordinary common law rules. In summary, these additional laws ensure there are no gaps in compliance with any laws governing industry-specific regulations.

Data residency

Whenever discussions are centered around business transformation, the subject of data residency is often not the most pressing issue to be addressed. However, it’s a topic that causes the most concern when it comes to compliance with regulatory and taxation laws and perhaps for policy reasons imposed by the business itself. This is when businesses specifically ask for their data to reside in certain geographical locations.

Another contrasting aspect is the consideration of data localization where the law of the country requires that data created within a certain territory stays within that territory. For example, Russian federal law dictates that both Russian and foreign companies that manage and collect the personal data of Russian citizens must have the data stored locally within the Russian Federation.

Technology evolution

A recent IBV report stated that “An uneven response to the COVID-19 pandemic has taught us that to operate effectively in the presence of an unanticipated crisis, organizations need to be agile, robust, and secure. They need to be able to seamlessly engage customers and employees in both physical and digital domains. However, current events have been challenging —even painful—as industries and enterprises react and adapt.”

Flexible adoption of new technology

Today, when we refer to the flexibility of adoption of technology, it is not just centered around IT infrastructure, that is, the hybrid cloud. There are also a number of other considerations, such as the adoption of new processes, techniques, and innovations, including AI and ML.

From a digital transformation perspective, there are four characteristics that need to underpin any transformation and the adoption of new technology:

Agile: Based on the fundamental principle of keeping the core clean, standardizing business processes provides agility in extending the business processes and integrating with other solutions without disruption.Flexible: A cloud infrastructure inherently provides flexibility in terms of services that are on offer. That flexibility goes further into the application layer when you want to increase or reduce the number of services provided. This is even more critical when you want to scale as the needs of the business change.Consumable: Switch from CapEx to an OpEx financial cost mode to pay for a service, whether related to infrastructure, software, or services.Software innovation: Innovating at the speed of external innovation comes with its own challenges and businesses have never been able to truly master this, with the disruption of maintaining business as usual and at the same time bringing in new enhancements and innovation.

Technology strategy

With the backdrop of adopting new technologies, what are the challenges businesses face when considering digital transformation in the cloud?

Business transformation rather than more of the same.Focusing on the value addition that the cloud brings. For example, opening up a technology platform to intelligent workflows accelerates moves to both enterprise platforms and the cloud.Innovating at the speed of external innovation. An enterprise platform must deliver new innovations without additional cost and with minimal impact.The number of options when adopting and adapting to the cloud when shifting core business processes, for example, hybrid migration in less time to preserve the investment.A consumption-based offering that compliments software application flexibility in delivering a complete solution.Greater emphasis on cost efficiencies, that is, lower TCO and shifting the cost model.

Emerging new technologies

With the emergence of Industry 4.0 technology (for instance, IoT, digital twins, and AI), products have become more connected, and OEMs and service providers now have ready access to products’ and equipment’s field performance data. This enables them to analyze, predict, and control the performance in order to maximize the efficiency at the customer’s end.

Integrating and keeping up with the evolution of technology is yet another example of how businesses are under immense pressure to continually re-invent themselves to remain relevant both for consumers as well as for stakeholders.

Evolving customer perspectives

With the evolution of smart devices over the last two decades, fueled by the revolution of social media platforms, access to information is at the core of the evolving customer perspective.

Faster access to information, helping people to make informed decisions, and changing trends mean all of this has impacted the way businesses have had to adapt and react. At the same time, business are treating products/equipment not as CapEx anymore but as OpEx during the complete maintenance life cycle (from CapEx to OpEx).

Consistent customer service

A good customer experience is at the heart of business success and forms a key part of the business strategy to create and improve on a great customer experience through seamless, effective customer interaction.

Research by American Express found that the most common reason why customers take their business elsewhere is not that they are dissatisfied with the product or service they bought, but rather the post-sales customer service.

Read this to learn more: https://www.americanexpress.com/en-us/business/trends-and-insights/articles/why-86-of-customers-quit-your-business/.

The challenge of maintaining consistent customer service remains a volatile endeavor, with fluctuating demand and the quality of products and services making delivering a brand identity associated with customer satisfaction just one of many considerations businesses need to incorporate in their strategy.

Operational challenges

Operational challenges for businesses have become more acute in the last few years due to COVID-19; however, these pressures have always been present. The question remains as to what those operational challenges are and how you can determine where lies the greatest effort in overcoming them. Although operational issues cannot be bound to a mere few, the following are some challenges that have a wide impact on businesses through an IT lens.

Sustainable supply chain pressures

Every one of us has a story about how the pandemic impacted our daily lives, whether it was a lack of goods on the shelves, price increases for goods and services, a lack of availability of car parts, or a lack of critical medical services. All of these and so much more have been topics of discussion in our homes, in our businesses, and in every sphere of life.

Take any business today, and there will have been an impact on the supply chain, which can be determined by cause and effect. Take the motor industry as an example, which runs on the just-in-time approach. It cannot manage vast quantities of raw materials because the throughput would not change no matter how fast you delivered the raw material. Yet during the pandemic, we saw a lack of raw materials, which determined the pace at which cars could be manufactured.

Managing a myriad of factors, such as people, processes, partners, materials, services, and so on. determines how operationally effective a business is, and this is a key issue keeping our leaders awake at night.

Resourcing issues regarding raw materials, people, and skill gaps

There is a direct link between the cost of operations and the resources at a business’s disposal. No matter what business you are in, cost control, especially within IT operations, plays a significant role in operational efficiency. The following factors impact operations:

The right talent: It does not matter how advanced technology has become if you do not have the right talent to harness that technology to your advantage. A vastly underestimated aspect that businesses only started to learn about a few years ago is that developing and nurturing talent is at the core of a business’s survival.

If we look at attrition in just the last 2 years, the IT industry has seen a surge since the passing of the peak of the pandemic.

Figure 1.4: Attrition trend in the IT services industry in India due to COVID-19 (https://www.businesstoday.in/latest/corporate/story/why-infosys-tcs-wipro-and-other-indian-it-giants-are-facing-record-high-attrition-rates-346139-2022-09-01)

As we came out of the pandemic, we saw demand outstrip supply as the economy started to recover. Organizations’ inability to be able to keep pace with demand, with the backdrop of attrition, was coupled with intense competition for skilled labor where the skilled workforce had a choice of taking up roles that suited their economic and personal circumstances better.