Both customers as well as the supporting consultancy companies are facing new challenges when it comes to implementing Cloud based ERP systems such as SAP Business ByDesign and S/4HANA Enterprise Management Cloud. Over the years both parties leaned on old fashioned implementation methodologies and the thought that “everything is possible” and “If we do not have it in the standard we will develop”.
For customers this resulted in extensive investments, long lasting projects and high risk implementations with low customer satisfaction. And most important, a low return on investment and the risk of not meeting the goals as set in the beginning of the project. For the consultancy companies this most of all resulted in a business model that for the bigger part was based on consultancy revenue streams instead of license sales, lots of discussions and even unsatisfied customers. Customer that are not that willing anymore to invest in new functionalities and innovations.
Now with the up rise of Cloud solutions this has changed and both parties are facing a few paradigm shifts they have to cope with and need to adapt to in order to successfully implement a cloud based ERP system.
Paradigm 1: Fit to standard vs Detailed Configuration
As already mentioned both the customers as the consultancy organizations where used to build custom made solutions based on not only available configuration options within the OnPremise solution but also via custom developments.
This is going to change when you implement a Cloud solution. Most of the Cloud ERP solutions are based on Best Practices scenarios and standard end-2-end business processes. Software vendors translated their yearlong experience into proven processes that, in general, fit more than 80% of the processes that the business needs to run their daily operations.
The ability to alter these standard processes to the specific business needs of the customer is present, but limited compared to traditional OnPremise solutions. Therefore, both the customer as well as the consultancy organization that support the implementation need to adapt to this thought.
Do not ask “What do you need?”, but ask “Do you meet the process steps as presented in the standard? And if not, are you willing to adapt to the standard?”. And that’s a big change for those consultants that use their yearlong ingrained traditional consultancy skills.
Paradigm 2: Agile way of life vs Big Bang projects
Consultants talk about reducing implementation lead times and investments for a long time now. But although they use terms like agile and scrum the reality is that most of the implementations are based on full extended scopes and big bang go-live approaches. Now with the rise of Cloud ERP solutions this is finally going to change.
The scope of projects will be lesser than ever giving the customer the possibility to implement in a fast and secure way. After the initial implementation, with a limited scope, customers go into an innovation phase in which they either start to implement additional functionality and/or processes or integrate their system with branch specific applications or apps that are not present in the implemented digital core.
This giving them the flexibility to adapt their solution to specific business needs and making sure that the pressure on the organization in regards to adapting to the change that is ahead is minimized.
Paradigm 3: Automated and Guided vs Expert Driven
As already mentioned, cloud solutions are based on best practices and standard end to end scenarios. Because of this, ERP vendors are able to pre configure the system in an automated and, in the case of SAP Business ByDesign and S/4HANA, even in a guided way. Based on preconfigured Line of Business packages and intelligent questions and answers the ERP solutions will be set up for 70% or more.
This means that the role of the consultant is changing from a module expert, that knows all the bits and bytes of a specific module, to a consultant that supports the customer in embracing the standard end to end processes, creates small customer specific adjustments and extensions, and most of all supports the key-users in their journey to accept the processes where the specific key-users are responsible for in the end. Talking about business outcomes instead of product features is what is most important.
Transformation is needed
The conclusion is that in order to implement a Cloud based ERP environment it is necessary that both customers as well as the supporting consultancy organizations need to transform.
And most of all wonder whether they are willing, and able to make the transition to the cloud and thus answer the paradigms in positive way. If so the future is a prosperous one for both the customer as well as the consultancy organization. If not, they both will ask themselves in a few years what happened and why they missed what is probably one of the last disruptions in IT.