The 6 biggest risks of an SAP transformation

Mergers and spin-offs are part of today's agenda. There are a number of business transformations that can be distinguished. In the following, this blog post will present the four main scenarios and, above all, explain their problems and pitfalls. These central business transformations include merge, carve-out, reorganization and harmonization.

A merge is usually carried out as soon as different SAP systems, different clients or smaller organizational units such as company codes are to be merged. There are numerous application examples for merges such as the acquisition of companies or parts of companies or the merging of different independent units within a company.

Essential application areas of a carve-out are, among other things, the separation of systems or clients as well as the separation of organizational units such as company codes, plants or sales organizations. The data is extracted from a productive SAP landscape after the sale of a part of the company in order to integrate it into the buyer system.

Reorganization refers to changes to organizational or master data and data cleansing. Various SAP objects can be converted using this procedure, such as profit centers, cost centers, material numbers or customer and vendor number logic. In addition, it is possible to remove master data duplicates and adapt product hierarchies. All changes are made at database level by the special software SAP Landscape Transformation 2.0.

The harmonization is related to the merge, since objects are usually merged here as well. The area of application for harmonization ranges from the classic combination of posting and controlling areas, sales and purchasing organizations, to chart of accounts conversion and adjustment of the fiscal year variant. In this case, too, the changes are made possible by direct intervention in the database.

The hurdle race to success

Every transformation scenario conceals pitfalls and challenges that need to be overcome in the transformation process. Based on our many years of experience from numerous carve-outs and post-merger integration projects, we would like to explain the most common pitfalls here in order to save them for our customers in the future.

1. lack of experience of the IT department

Since business transformation is not part of the day-to-day business of a classic IT department, it is not only advisable, but indispensable, to bring on board a qualified and, above all, certified consultant who can demonstrate experience in M&A projects. This person has the necessary knowledge of which scenarios are possible and can simultaneously assess and evaluate opportunities and risks.

2. time pressure

As a rule, transformation projects are subject to high time pressure, not least because IT was often integrated into the process too late. A "Hauruck conversion" is then expected, whose process could not be devoted the necessary care. For this reason, we recommend an early involvement of IT in the change process in order to be able to provide an early evaluation of the IT transformation approaches and thus achieve a smooth go-live.

3. ignorance about transformation tools

Experience has shown that standard migration problems include the lack of historical data or inflexible implementation only at the turn of the fiscal year. These are restrictions that do not exist with SAP Landscape Transformation 2.0. This tool makes it possible to convert all data during the year, including the data and document history. You can also change the master data and transaction data retroactively at database level. Since the SAP tool is certified by auditors, changes do not cause any problems during an audit. Nevertheless, it makes sense to involve the auditor in the change process at an early stage.

4. different stakeholders

Internal views of a system do not have to coincide with the view of a financial investor. Topics such as greenfield vs. brownfield or cost-benefit considerations can be considered controversial in a company. It is therefore advisable to involve a financial investor in decisions at an early stage in order to examine and evaluate all possible changeover scenarios with him. In this context, it also makes sense to compare short and medium term costs of the solutions.

5. in-house developments

Often, a system has grown historically and is therefore covered with user exits and proprietary developments, which are often underestimated in the transformation project. The transformation tool SAP Landscape Transformation 2.0 therefore offers both a usage analysis and a fixed value analysis to ensure consistent and transparent data changes.

6. test

The urgency of testing is often underestimated. As a rule, 2-3 test phases are planned into the transformation process in order to ensure that there are no surprises during the productive run. After the test transformations it is therefore important to extensively test data and functions for correctness and completeness. In addition, it is essential to prepare test documentation in order to have a detailed record of the tests.