SAP’s S/4HANA presents opportunities and challenges for organizations moving to it. On the one hand, it offers the challenge of large-scale technology and digital transformation, eventually resulting in a business transformation. On the other hand, that same change results in centralization and standardization of business processes.
Large companies are often reluctant to change from more than a technology level but adopting standardized business processes can greatly simplify doing business for organizations that approach M&A as a growth model.
We interviewed René van der Zanden, VP of Sales at Cognitus EMEA, to discuss how adopting SAP’s Best Practices as part of your S/4HANA transformation will provide business advantages to acquisitions and carveouts.
“Moving to SAP S/4HANA is a great time to assess which business processes you’re using, which ones still makes sense for you, and which can be moved to the SAP Best Practices. SAP has a library of 370+ best practices and sub-practices, many of them are slightly customizable, and many of them have been adopted by some of the largest organizations in the world. Taking that time to standardize processes will set your organization up for simpler M&A activities”.
Here, market changes can be significant. For many organizations, challenger companies are succeeding not because they offer something new, but because they can operate in a nimble and Agile way. Often, that relates to using software and digital platforms with centralized data and centralized management – rather than the big business approach of using a central core with supporting satellite systems.
For businesses with a growth model built around mergers and acquisitions, the business model must center around quickly standardizing data, being able to carve out data from a centralized location and minimizing timelines and expense. If you have 3 months to complete a deal – you want to ensure data and systems are optimized towards that kind of transition to simplify the process as much as possible.
“Often, creating a better alignment of processes with the business model can help a great deal. One of the first things we do at Cognitus is to use an assessment to see where you’re coming from, what kind of business model you have, and how existing processes support that. Then, we work towards creating a roadmap and plan to optimize that. For M&A it often means stepping away from the legacy processes and implementing standardization because it’s needed to support the business. “
Implementing SAP Best Practices as part of your SAP S/4HANA transformation will set your business up with a structure designed around business needs. Once you get away from customized processes, you can support M&A growth in a much more efficient way:
“Quite often, large organizations with legacy systems have data but not available information. So, people can’t make decisions quickly without having to process data coming in from satellite systems. Switching to a digital platform can empower those decisions – whether on what data to keep or cut, customer-facing information, marketing information, etc.”
“Stepping away from completely custom processes means that your organization will be more prepared for M&A activities. Implementing Best Practices means that you remove many of the disruptive and cumbersome work involved with mergers, reducing the impact, and supporting the divestiture of companies. That will eventually streamline how you set up in new systems, how you onboard new assets, and the time it takes to clean and separate data for divestments and carve outs.”
“Everyone who’s been involved in an M&A knows that it’s complex, that’s never going away, but moving to Best Practices means you’ll have a better way to separate data and streamline those processes. Of course, I don’t think M&A is a reason to adopt Best Practices, but it can be extremely beneficial to this kind of growth model once you have Best Practices in place”.
Cognitus helps with that process by delivering an assessment of your existing processes and environment, in line with your business model and growth strategy. Our Gallop Pilot and Assessment allows us to assess what you have in place now and to build a transition plan that addresses how those processes support the business, help you to increase revenue, improve customer satisfaction, etc.
Based on that assessment, Cognitus can deliver a Roadmap, complete with cost predictions, timelines, and optimization strategy – so we can deliver a predictable, phased approach to transitioning to SAP S/4HANA and then to SAP Best Practices, where it makes sense for your business model.