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The Top 5 Reasons Why SAP Implementations Fail

Top 5 Reasons Why SAP Implementations Fail – And How To Avoid Those?

It’s no secret that the essence of a company’s success lies in how well it manages its business operations, vendors, employees, and customers. Of course, many companies have sought to tap into that essence. And many of them have turned to powerful technology tools to do that, and SAP implementation software has been a pioneer in that space.

These companies have realized that using a unifying system like an ERP (Enterprise Resource Planner) implementation can help them chart the road to success, especially as every organization has started its journey of digital transformation. ERPs have, obviously, evolved ever since they gained popularity. One of the most powerful ERPs out there is SAP S/4HANA. SAP S/4HANA is a next-gen ERP that provides real-time insights and drives value for companies irrespective of the business or industry size. It acts as a nerve center to connect operations across business units into a unified structure. It provides managers with real-time information to help them make better decisions.

Although SAP implementation offers plenty of benefits, a study from 2018 revealed that only 50% of the companies had found success in SAP implementation. What are the possible reasons why some organizations face problems in SAP implementation & achieve the benefits of SAP S/4HANA implementation and do not get the value they sought?

What is SAP Implementation?

SAP implementation meaning refers to the process of integrating SAP software, specifically SAP ERP (Enterprise Resource Planning), into an organization. It’s a complex undertaking that involves multiple steps and can take a significant amount of time to complete, depending on the size and needs of the company.

Here’s a breakdown of what SAP implementation process:

  • Planning and Preparation: This initial phase involves defining SAP project goals, assembling a team, and understanding the current state of the organization’s business processes.
  • Business Blueprint: In this stage, a blueprint is created that outlines how SAP implementation will be configured to meet the specific needs of the company. This includes defining workflows, data migration strategies, and customizations.
  • Implementation: Here’s where the actual configuration and customization of the SAP software occurs. This may involve data migration, system integrations, and user training.
  • Testing and Go-Live: After the system is configured, it undergoes rigorous testing to ensure it functions correctly. Once everything is validated, the system goes live and becomes operational within the organization.
  • Post-Go-Live Support: Even after launch, ongoing support is essential to address any SAP implementation issues that may arise and ensure users are comfortable with the new system.

SAP implementation offers various benefits, including improved efficiency, streamlined operations, better data visibility, and enhanced decision-making capabilities. However, it’s a significant investment that requires careful planning and execution.

Why SAP implementation is Used And 5 reasons how to avoid sap implementation failures?

  • Lack of a clear strategy

The top reason for SAP implementation services failing is that companies do not have a clear strategy in place. It may be surprising, but it is true nonetheless, that many SAP implementation projects don’t start with a clear and specific end objective in mind. While they have a high-level goal of erp implementations, they fail to ask themselves several critical questions. A leasing giant abandoned a massive SAP-based creation of a leasing system that was seen as the crux of a worldwide IT transformation after 2 years and millions of Pounds. The issue was that, even after the SAP implementation, the system was clearly unfit for the digital strategies demanded by the new world because it would have hindered, rather than aided the agility of the company.

Understanding the company’s goals for the SAP S/4HANA implementation is crucial. This will help identify potential SAP implementation issues and ensure the project aligns with business needs. Key areas to consider include resource allocation, timelines, and how the new system will support overall business goals.

Solution: The easiest way to avoid this  SAP failure is by creating a clear strategy with other stakeholders and tying it to the achievement of some specific business goals. The role of the sap implementation companies could be key here too. A partner who understands the technology is, of course, essential but a partner who can look at the business context and help you define the most effective way to wield the power of that technology is invaluable.

  • Lack of Agility and haphazard change management

Moving your business to the SAP cloud offers great benefits, but neglecting user training can be a major problem in SAP implementation. For a smooth transition, you need to address not just user adoption but also how well the new system integrates with your existing processes. The ideal situation is where the SAP cloud fosters built-in flexibility for your business.

The sap implementation challenges here is that businesses today operate in a fluid world. Customers are fickle, the competition is alert, and the market extremely dynamic. This means that the business must be extremely nimble to stay ahead. As the example of the leasing giant showed, that agility must be built into the S/4HANA implementation too. Sap implementation companies use hide-bound, inflexible, and hierarchical implementation effort may achieve what it set out to follow  a path to avoid SAP project failures.

Solution: We need to deliver an SAP implementation that is in keeping with the “current” business needs. Post-implementation, it’s critical to ensure that all the decision-makers are completely cognizant of the changes that would take place in processes and workflows. These leaders will become the change agents across their functional areas.

  • Not aligning with the existing systems

SAP S/4HANA implementations aren’t standalone projects. They need to fit within the existing enterprise technology stack. Different departments likely rely on specific systems that work together smoothly. If the new SAP system doesn’t integrate well with these existing systems, it can lead to SAP project failures.

Solution:  The only way to fix this is by working with experts who do have the knowledge and experience of implementing such systems. A premier SAP implementation partner will be able to help you implement the solution, handhold you as the systems take root across the enterprise, and train you to be able to use the systems to their maximum power.

  • Lack of knowledge

Over half (51%) of IT managers report lacking the necessary knowledge and skills to handle SAP S/4HANA migration or implementation. This lack of expertise can be a major source of SAP implementation challenges.

Solution: The only way to fix sap project failures is by working with experts who do have the knowledge and experience of implementing such systems. A premier SAP software partner will be able to help you implement the solution, handhold you as the systems take root across the enterprise, and train you to be able to use the systems to their maximum power.

  • Ignoring the technology complexity

Switching to SAP S/4HANA is a powerful move, but it’s not easy. The new system works very differently from older ones, which can cause problems during implementation. The new system’s architecture is fundamentally different from legacy ERP systems, requiring companies to navigate this shift during implementation. The same applies to data formats that need to be changed as data is migrated. Another issue is data redundancy. Data migration takes time and effort. Nailing down and removing redundant data becomes a key priority in the interest of efficiency. Designing and provisioning the right infrastructure is important as is an array of important technology choices that have the potential to derail the implementation.

In one instance, a 2016 merger between two cosmetics giants exposed a situation where migrating processes from not one, but two incumbent systems caused the implementation to come unstuck. The merged entity sought to replace the existing ERP systems in each company with a new, unified SAP HANA implementation solution. Unfortunately, the migration and rollout was poorly planned and executed, leading to possibly millions of dollars in sales losses as a key manufacturing facility ran aground.

Solution: Prior to moving to a new ERP software, companies must answer all the important technology questions related to the Enterprise Resource Planners. Consider whether it will be on-premise or on cloud? Will the cloud-based ERP be single-tenant or multi-tenant, etc. these answers will help companies to be prepared for a smooth transition.

Conclusion

As you can imagine, much of this comes down to the implementation partner. The right SAP HANA implementation partner should be able to understand the business objectives of the enterprise and then design the right solution set and implementation strategy. Agility and responsiveness become critical to success. A deep understanding of the technology is mandatory and so is experience in having delivered such complex solutions. One way is to look for a partner who has an SAP CoE with demonstrated capabilities and who has invested the time, money, and energy into building implementation assets like project management tools and processes specific to SAP migration.

It’s been said that how enterprises collect, manage, and leverage information could be the critical difference between success and failure. For the modern enterprise, a powerful ERP like SAP S/4HANA could become the key to winning -if implemented well!

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