Is your business ready for standardization?

If your organization is considering a move to SAP S/4HANA, adopting fit-to-standard is very likely part of your strategy. It is, after all, SAP’s recommended approach. As a concept, fit-to-standard is very straightforward, but often misunderstood. By aligning business processes with standard SAP best practices and functionalities — and minimizing custom developments — organizations can reduce the time and costs associated with implementation and future support and also drive business efficiencies.

In our experience, however, transition to a fit-to-standard model is rarely easy or smooth. Organizations often struggle to align a fit-to-standard approach with the entrenched realities of their business operations, especially those that rely heavily on legacy systems. And when not managed properly, fit-to-standard programs can be weighed down by delays, change requests and, ultimately, fail due to poor user adoption.

While there is no easy path to success, our experience both as business leaders and now as SAP leaders has taught us some of the best ways to lead organizations back to standard.

What follows is our hard-won advice on getting fit-to-standard right.

1. Understand the assumptions that derail fit-to-standard programs

   While the cost savings that standardization promises sounds great to the C-suite, to middle-management ears “standard” can signify cultural and operational upheaval. Indeed, program sponsors are often ill-prepared for the intense pushback these programs elicit from their business teams.

   It’s worth reflecting on this. For many line managers, fit-to-standard can feel unnecessary (“I’m meeting my targets, so why change the process?”), irrelevant (“fit-to-standard just means making the new system fit to my standard way of operating”) or downright scary (“I meet or exceed targets because our process is unique — so standardization will hurt the business”).

   In other words, for most users there isn’t an obvious value case for change.

   Another key challenge is that many SAP end-users don’t realize that their current systems are heavily customized. Many will also assume that their current processes are already “standard” or “best practice.” This is understandable and their knowledge of SAP is likely to start and end with their legacy system. They will quite logically expect any new SAP system to contain all that it contained — and missing everything it didn’t. After all both are SAP, right?

   Approaching fit-to-standard from the end user’s perspective makes their surprise — and dismay — when experiencing “standard” SAP more understandable.

   The crux of the issue is that the business won't be silent — after all, this new best practice system is not giving them what they know SAP can (be made to) do. Fit-to-standard programs often derail as project teams try to triage and prioritize the large numbers of delta requirements generated against “standard.” And while a strong governance framework can fight individual battles and win them back to standard, the costs of doing so can be huge in terms of project resources, delays and, crucially, lost trust.

   Remember that much of the business user pushback from phrases such as “fit-to-standard” or “out-of-the-box” is associated with lack of visibility to the extensive configurability of SAP S/4HANA. It’s important to emphasize to your teams that these words don’t mean “no options,” rather, they mean that the objective is to fully exploit the multitude of options available for configuring the solution to business needs. Clearly communicating and demonstrating the inherent flexibility of SAP S/4HANA in the early stages of an implementation can do more to mitigate fear and resistance than almost any other single action.

2. Take a value-centered approach to adopting standard

   In practice, adopting standard means convincing people that their business really isn’t so special, and that others have found better ways to do their jobs. This means trying to convince potentially defensive, skeptical people to buy into something they don't really want to do — and then agree that it's better for them and the business to do it.

   We’ve found the most effective approach is one that is value-led. Seeing fit-to-standard as an opportunity for the whole business to move forward by keeping the focus on differentiating processes and making KPI improvements is most effective.

   The first step will be to benchmark your processes and business KPIs. This exercise will inevitably bring up situations where teams have accepted levels of productivity and performance far below industry standards. Don’t shy away from the tough conversation that will follow. In reality, you are not only leading your organization towards industry best practices, you’re also offering a new perspective to your business regarding their KPIs and how they meet them.

   Go into conversations assuming your business wants to get better, but fear being “transformed,” especially by any program perceived as being IT-driven. This means that you can’t rely on IT or your chosen implementation partner alone to sell fit-to-standard to your business. IT departments often lack the underlying process knowledge to tell the business why their way of planning, accounting for time or doing work instructions, etc., can change for the better. Also keep in mind that many SI’s are only too happy to service the inevitable flood of change requests (and revenue) that will come their way from delta requirements.

   At the end of the day, your leadership needs to believe in the value case and be the ones to set the north star for the business.

3. Understand that your design workshops are actually about managing change

   One of the real benefits of fit-to-standard’s “show-and-tell” sessions is that you can demonstrate their new processes to users almost from day one. Compare this to the old days when you were almost building and configuring something from the bottom-up based on a requirement spec. Understanding the implications of this difference is crucial because in fit-to-standard, your Service Integrator(SI) is not gathering or discussing requirements anymore. Instead, they are just showing users the best practice path forward.

   Getting the right people into these design workshops thus becomes key. On the one hand, the business needs to make sure participants not only know the business well enough, but are also empowered to say “yes, we can use or configure that particular process and that it does everything I need it to do.” On the other hand, your SI needs to know both the business process and SAP capabilities well enough to push through any resistance and effectively sell the standard process to the users.

   In other words, your SI needs to be ready to defend the best practice and help your users navigate the whole change journey, covering why they can use standard and why it's better — effectively merging change management into the process so as to remove any barriers to using it.

   In the end, these workshops are where the rubber meets the road and the ability to bring that convergence of design and change alive for them, to make users see what they are signing up for and to accept this is really where the path to success is set.

4. Choose your implementation partner wisely

   One way to put further guardrails on the road to fit-to-standard is to choose the right implementation partner. Your SI must give unwavering support to your fit-to-standard vision and ensure their consultants don’t default to a “but I can always customize a change” position. And, crucially, design workshops and governance boards must be staffed with consultants that have both the deep process and SAP knowledge needed to allay the fears of your team — to show them how configuration may be able to meet their needs and to push back effectively when necessary.

   A recent example is illustrative. We recently took over a program from another SI. The reason for the change was that the competitor’s functional SAP consultants couldn’t connect with the business, and the business ended up rejecting everything. What they needed — and what we could provide — were consultants who could bridge the gap between the process and the technology using the language of the business.

   This leads us to our final, and most important point. The key to a successful fit-to-standard program is knowing when you should deviate from standard. Look for a partner who has both the tools and knowledge to help you do this. Even better, choose a partner who is expert in your industry and already knows where the solution gaps are and how to fill them.

   In our experience, most back office and many manufacturing processes are rarely differentiating. Depending on the industry, anywhere from 65%-90% of all processes can be replaced by standard SAP. We use tools like HCLTech’s FENIX 2.0 to help customers identify and focus on improving the remaining 10%-35%. To accelerate the design phase, we also use our pre-configured fit-to-standard HCLTech Base90 industry solutions, and industry products such as HCLTech’s iMRO, to help close already identified industry process gaps in SAP S/4HANA.

Conclusion:

It’s important to remember that technology alone rarely produces business value directly. Instead, it enables the behavioral and business process change that generates the value. The success of your program rests on the strength of your ability to sell the right vision and to have a partner that has the right tools and experience to help you transform the business in a way that leverages the best of what standardization has to offer without losing the essence of what makes it unique.

We’d love to continue this conversation with you and share more observations on how to successfully navigate your journey to standard. Please reach out to sap@hcltech.com to schedule a meeting and learn more about our assessment and implementation services.