An Inside Look at Implementing S/4HANA Cloud

On the heels of all the attention given to SAP S/4HANA Cloud at Sapphire 2017, I had the opportunity to sit down with NIMBL’s VP of Delivery and S/4HANA Cloud Lead, Michael Jolton, and the S/4HANA Cloud Architect Anthony Plute to discuss NIMBL’s own implementation of S/4HANA Cloud and the lessons they learned in the process.

Q: What were some of the major factors that compelled NIMBL to Implement S/4HANA Cloud?

Michael Jolton: There were a couple factors. NIMBL wanted to be a lighthouse partner and get direct implementation experience with the tool, so that we would get lessons learned and know what we were getting into going into the customer implementation. The second reason is that NIMBL is a growing concern. And as a growing concern we are outstripping our use of QuickBooks and as a result we need a better, more robust accounting system and S/4HANA Cloud presents a great opportunity to move to a world class system.

Q: Can you break down the specific skillsets you needed to successfully complete the implementation?

Michael: You need a few different types [of skillsets]. You’re going to need a project manager who coordinates everything. There are a lot steps involved. You’re going to need a technical resource who’s savvy on the network architecture because you need to make sure that you have the bandwidth in your wireless network or your hardwired network for moving to a cloud based application like this. It’s not a huge requirement but it is something that you should double check so there are no surprises when you go live. Also, there is, for printing, some downloaded software that’s required that would need to go onto a server. So you want to know someone who knows how to put that software onto a server. Next you need a functional resource depending on what scope you’re implementing. If you’re implementing core finance only then you’ll need a functional finance resource…someone who is versed in financial processes, understands the “close the books” processes, understands everything about chart of accounts and general ledgers, accounting , accounts receivable, and so on and so forth. That person should also be skilled on S/4HANA…whether that’s on premise or cloud. Obviously cloud is preferred, but on premise is also fully acceptable.

Q: What if you’re looking to do more than core finance?

Michael: If you’re doing more than core finance, if you’re also doing order to cash, procure to pay, plan to produce, or professional services, you’re going to need different functional skills for them. It would follow that same pattern. You are also going to need at least one of those resources who is able to go in and modify forms. That’s not a heavily technical process so they don’t need to be technical but they will need to understand Adobe Forms Designer. Depending on the size of the source data or your legacy data, you’ll need a resource to do the data migration. That team is first going to scope out what historical data is being migrated from the current legacy system over to S/4HANA Cloud. Then that person is going to download data from the source system; they’re going to go through the migration process using the S/4HANA migration cockpit, and then they’ll upload the information in. That’s generally a data manager-type role…someone’s who’s done data migration.

Q: What were some of the technical and functional challenges when it came to the implementation?

Anthony Plute: I would say, a functional challenge is understanding “what is self-service configuration versus expert configuration?” I think that’s key. I mean, once you do it, you understand it, but if you come from the on premise world, you’re so used to doing so much different configuration that’s not expert configuration. So discovering that difference [self-service vs expert configuration], I think is a challenge.

Michael: Yeah, that’s actually a role I left out, the subject matter experts. You have to have your business area subject matter experts separate from your configuration team. Building on Anthony’s point about challenges, the master data, there’s a lot of codes and it’s not always clear what those codes stand for or how they impact processes down the road. That’s where it really helped having Anthony who knew S/4HANA and the SAP code structures.

Q: What is the profile of the company that you see benefiting most from S/4HANA Cloud?

Michael: There’s a couple of different profiles. Certainly the company that is running SAP today…they’re on an outdated version of ECC…they’ve overly customized it…not necessarily because they have an overly unique way they do accounts receivable or process orders but because they didn’t fully understand how to use the system. Maybe when it initially rolled out it didn’t meet their needs, so they created customizations and over time that functionality had been built in – but because they created customizations, they weren’t able to upgrade. The list is long. The point is, if you have a company that really has basic ERP usage requirements, but is on an outdated SAP system: they become a great candidate to move to S/4HANA Cloud very quickly. The same goes true if you’re on an outdated Oracle or J.D. Edwards or any other system that you’re paying maintenance for and you’re not getting any value out of that maintenance because you can’t do the system upgrades. Another excellent customer is the two tiered scenario where you’ve got a parent company that’s a huge multi-national conglomerate and they own many subsidiaries. They’ve been chasing the holy grail of having every business unit on a single platform and the different business units are different enough that they really can’t go onto one single instance of SAP and they’re not big enough that they would justify an on premise customized solution like S4 on-prem. Therefore, they become – all these subsidiaries or separate strategic business units – excellent S/4HANA Cloud candidates.

Q: Would the reverse be true? Meaning if you have a company that is running S/4HANA and they want to create a parent company. Would the parent company be a candidate for S/4HANA Cloud?

Michael: Absolutely. That’s the other two tiered example… where you’ve got a company that is running SAP or S/4HANA on premise – either way – and then they decide to create a parent company. The parent company would not have all the necessary manufacturing requirements that would come with S4 on premise and so you could just implement S/4HANA Cloud just for the financial support and then integrate that way…even though the subsidiary is actually bigger and running the bigger system. A third type of customer is the growing customer, like NIMBL …one that is outstripping its current application. Whether it’s cloud based or on premise, the functionality doesn’t meet the company’s needs anymore as it’s getting bigger and more sophisticated.

Q: What advice would you give to a company considering implementing S/4HANA Cloud?

Michael: My first piece of advice is: this is an ERP, so don’t take it lightly. Don’t expect the integrator to do it to you or for you. They need to do it with you. You need to have your business people involved in this. The second piece is, again, this is an ERP, this is a big project and even on a small scale there is a lot of coordination. You’re going to want a project manager coordinating everything.

Anthony: I would agree. You’re looking for total devotion, participation, and buy-in from your subject matter experts and management. I’d say…and we heard this from another company whose doing an implementation right now…make sure that your master data is as cleaned up as possible. At the end of the day, the business owns the data and they need to make sure that the data is pristine, strong, accurate and that will make things a lot quicker and easier. And definitely make sure that the business and the people [of the company implementing] are ready to adopt business best practices into the solution.

Michael: Exactly. This is a paradigm change. You, as the company, are adopting best practices. You’re changing your business to meet the software. A perfect example is the chart of accounts. The SAP best practices has a full chart of accounts: 724 accounts or something like that that’s out there. If you don’t like those accounts, the first question has to be, “Well can we use the same account structure and modify what’s within…in terms of you changing the name of an account or just to be more specific?” As an example if you’re talking about magazine sales vs newspaper sales. You’re still working within that structure. You don’t want to add new general ledger accounts unless it’s absolutely mandatory. You can do that, but you want to try and live within the best practices first.

If you would like to see a more comprehensive presentation of this journey, please register for the upcoming webinar, “Diary of an S/4HANA Implementation”: https://cc.readytalk.com/r/gzhkqm13yc7l&eom