Migrating from older generation ERP systems to SAP S/4HANA offers great potential to improve operational performance and transform business processes. However, this major program doesn’t happen in isolation. The new ERP system must be integrated with many other systems including internal SAP and non-SAP systems as well as external trading partner systems. As companies plan for their S/4HANA migration they should ask themselves the following questions.
How are we minimizing risk and disruption?
The average cost of a greenfield migration including system operation over a 7-year period is estimated to be around $22 million USD. The high costs raise the stakes around managing risks related to the budget, but this is only a part of the story. Since ERP systems play a central role in supporting day-to-day business operations, ensuring minimal disruption during the transition is a key priority for organizations. In fact, 87% of SAP customers agree and list managing disruption to business operations as the number one requirement for their S/4HANA migration. Strategies around risk management should involve careful planning and preparation and ERP integration is not an exception. Yet, too many organizations treat it as an afterthought and set themselves up for encountering delays and other issues during implementation.
Do we know our integration requirements?
To allow data exchange between the ERP and other systems that it needs to connect with, the ERP data model needs to include all the various data elements required. With internal systems this is usually a lesser issue since they are managed by the organization itself. However, external partner systems tend to cause a lot more headaches since partners can have very diverse requirements. Making matters worse, existing integrations with partner systems that hold the key to figuring out these requirements have usually been built over years – or even decades – project by project and without comprehensive documentation.
How much can we trust the data coming from external partners?
A survey by IDG found that 44% of the data feeding corporate ERP systems comes from external sources. Business operations, therefore, are highly reliant on the quality of the data exchanged with trading partners. According to another recent IDG survey, only about two thirds of respondents considered external partner data to be accurate. With such a high expectation of errors within partner data, it’s important to address this at a very early stage – preferably by incorporating B2B data quality as a strategic consideration when defining the new business processes for S/4HANA. Overall, transitioning to S/4HANA offers a great opportunity to address challenges around data quality – one that organizations should embrace.
Do we have the integration tools and skills we need?
Talking with large organizations worldwide, the Aberdeen Group found that many organizations were frustrated by the performance of integrations that were managed in-house, leading to reduced customer satisfaction levels and the risk of lost customer revenue. Problems are often related to using legacy integration tools, and in the case of B2B data exchange generic integration tools that are not designed for managing the complexities and diversity of connecting with external systems and managing partner engagement. To tackle these issues, organizations need a modern integration solution that supports B2B integration, API integration and community management as well as the related skills to design and implement it.
Are we ready?
Today, most organizations don’t have clear visibility into their detailed B2B integration requirements and may lack a clear strategy around integration. Identifying the requirements in the beginning of the S/4HANA migration project minimizes the risk of encountering surprises and delays during implementation and can even accelerate system blueprinting by speeding up data model definition. Modern integration technology, in turn, allows for optimal solution design by leveraging most suitable integration patterns for each use case from real-time API integrations to efficient message-based transaction flows. Having both a clear understanding of the current integration needs and the solution design options enabled by modern integration technology is an essential component of readiness to embark on the journey to S/4HANA.
OpenText integration solutions combine modern integration technology with deep integration expertise and best practices. Thanks to the company’s long history in delivering B2B/EDI integration solutions on global scale, OpenText is also able to offer a unique data discovery capability to automatically review B2B data and generate insights into the specific requirements including which standards, versions and individual data fields each partner uses.
To find out more about how OpenText can help accelerate and optimize your SAP S/4HANA migration, read more about our solutions here