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Why SAP Projects Fail

Common reasons why SAP S/4HANA implementations fail include treating them solely as IT projects rather than business process transformations, lacking executive sponsorship, reluctance to standardize processes, poor risk management, insufficient testing, and lack of independent governance. While SAP's Activate methodology provides a solid foundation, it does not fully address change management or define key processes like communication and reporting. Clear acceptance criteria and governance are important to ensure project milestones and deliverables meet expectations.

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241 views4 pages

Why SAP Projects Fail

Common reasons why SAP S/4HANA implementations fail include treating them solely as IT projects rather than business process transformations, lacking executive sponsorship, reluctance to standardize processes, poor risk management, insufficient testing, and lack of independent governance. While SAP's Activate methodology provides a solid foundation, it does not fully address change management or define key processes like communication and reporting. Clear acceptance criteria and governance are important to ensure project milestones and deliverables meet expectations.

Uploaded by

AptWorks Solutions Private Limited
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Why SAP S/4 HANA Implementations Fail

Implementing SAP S4/HANA is not a trivial undertaking. Gartner have previously reported up to
75% of ERP implementations do not fulfil their full expectations. This article will examine some
of the most common reasons these projects fail.

Not Just an IT Project

Many organisations still see SAP S4/HANA implementations as solely technology-based projects
in which data and systems need to be migrated from one platform to another. This is only true
in “brownfield” implementations which only offer the outcome of being on the latest system
and not the benefits of the new features it enables. To achieve long term strategic benefits,
implementations need to be undertaken as re-evaluations of a business’ end to end processes
(also known as “greenfield”). This means a change management plan for staff and business
operations need to be at the heart of the strategy to ensure success.

Sponsorship

Any project without an influential and engaged sponsor is going to have difficulty mobilising.
This is particularly true where participation is required from SMEs across the organisation, not
to mention significant investment is needed. Having a senior sponsor on board will help with
resource allocation, alignment to organisational strategies, issue resolution, and project
communication within the executive community.

Reluctance to Embrace Standardisation

Many enterprises have complex systems and processes which are the product of legacy
technologies and technical debt. The temptation when implementing a new ERP system can be
to transpose the custom nature of these rather than consider a fresh and simpler approach.
SAP S/4HANA provides a number of “best practices”; standardised business processes which
have been designed to require little to no customisation. There will always be some exotic
scenarios where customisation is needed, but the more a company takes on during an
implementation the greater the cost, timescale, and risk to on time delivery.

Poor Risk Management

SAP S4/HANA implementations will inevitably impact a number of operational and mission
critical systems. Proper identification, evaluation, and mitigation of potential risks should be
carried out at all stages of the project, or the consequences can be significant.

Poor Testing
While not the only workstream as previously mentioned, technology is still an integral part of
SAP S4/HANA implementations and rigorous test management is a pivotal step in any system
delivery project. SMEs should define User Acceptance Testing Scenarios which verify the new
systems are fit for purpose to avoid operational disruption.

Lack of Independent Governance

Having an independent team separate from the customer and system integrator can help
alleviate the challenges of accurately reporting progress. This takes bias and emotion out of the
picture and holds both parties accountable to the schedule and deliverables they signed up to.
Why Activate Alone Won’t Guarantee SAP S/4 HANA Success

Activate is a methodology created by SAP which is used to implement many of their products
including S4/HANA. Launched in 2015 it is the successor to previous methodologies such as
ASAP and SAP launch. Divided into 6 phases, it can be described as a hybrid approach to project
management combining waterfall elements such as quality gates with agile elements such as
waves and sprints to produce work packages. While activate is a solid foundation on which to
base a SAP S4/HANA implementation, it can’t work alone without customisation or additional
considerations.

One common criticism of Activate is that it’s a purely technology-based approach which fails to
accommodate organisational change management. By not considering how the target
operating model will impact roles and business processes, implementation projects will struggle
to formally close down and move to a BAU state as staff are not able to work properly in the
post implementation environment. The overall organisational structure of a company may need
to change as certain functions become obsolete. Job roles may need to be altered as certain
tasks once carried out by staff become automated. The skills profile of an organisation will need
to be re-evaluated, some skills will no longer be required while others may now be in demand
(and if there is a shortage, HR may need to look to the external market and launch recruitment
campaigns).

Activate also assumes standard project management practices take place without explicitly
defining them. Communication is a critical workstream in any project which is
underrepresented in Activate. Project managers need to ensure stakeholders are kept up to
date to prevent delays or dependencies being missed. There is also little recommendation with
regards to reporting. With several key optics to consider including schedule, risk, and benefits,
as well as a hybrid project management approach, governance reporting needs to be carefully
considered and agreed to ensure meaningful MI is presented to facilitate informed decisions.

Considering a SAP S/4HANA or other ERP implementation? Integrated Cloud presents a SaaS
application that is designed to reduce risk, improve transparency and governance by bringing
automation and a consistent delivery to SAP S/4HANA PMO delivery.
The Importance of Acceptance Criteria in ERP Implementations

Closure or acceptance criteria is a simple but powerful concept in project management. It is a


clear, unambiguous definition of what is required to satisfy the completion of a task agreed by
all accountable parties, as well as a repository for the evidence and authorisation of the closure.
Depending on an organisation’s appetite for rigour, this can be dialled up or down to fit
requirements. The following are some examples of how this practice can facilitate successful
SAP S4/HANA implementations.

The pre-project phase of any initiative is critical to success and can be the most difficult to
complete if done diligently. For a SAP S4/HANA implementation this includes building a
business case, evaluating the current technology and process landscape, and crafting the
strategic plan. Clearly defining the expectations of these deliverables and imposing
accountability on the overall approver ensures quality output and prevents their creation
becoming a “tick box” exercise. These artefacts form the “North Star” for a project and should
never be defined with haste or negligence. In a highly regulated environment (such as financial
services) having a common storage location for evidence can facilitate the process of satisfying
regulators and saves teams scrambling through various repositories to locate a document. They
know exactly where to look and can see the documented evidence, who submitted it when, and
who approved it.

Stakeholder buy-in can be one of the most frustrating elements of any project. As a SAP
S/4HANA implementation involves cross functional teams, there are various individuals
involved who need to be prepared to go on the journey and sign up to the expected outcomes.
SAP’s Activate methodology recommends holding a series of Fit to Standard workshops across
business areas such as Finance and Supply Chain. Formally documenting attendance and agreed
decisions at these meetings is an effective way of capturing as a matter of record that key
stakeholders are onboard and prevents denial of responsibility later in the project.

Testing is another critical phase of a SAP S4/HANA implementation and inattention towards
creating fit for purpose UAT scenarios has been the downfall of many ERP projects. Prior to the
Realize phase of the Activate methodology, end users should meticulously define test scripts
which stress every conceivable business scenario and capture who performed it. Once again
naming the individual who carried out the work and who reviewed it fosters a culture of quality
and attention to detail.

Considering a SAP S/4HANA or other ERP implementation? Integrated Cloud presents a SaaS
application that is designed to reduce risk, improve transparency and governance by bringing
automation and a consistent delivery to SAP S/4HANA PMO delivery.

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