SAP S4 HANA - the race for talent and the role of interim Programme Directors

It’s an astonishing statistic but an estimated 4 out of 5 Digital Transformation Programmes are delivered late, over budget and fail to realise the return on investment documented in the business case approved by Boards.

In a recent webinar, Devraj Banerji discussed how companies can prepare for the costly and complex move to the new SAP S/4 HANA or other platforms, to ensure they are one of the 20% who deliver on time, budget and realise the return on investment in the business case.

Many companies with an earlier version of SAP have the opportunity (and challenge) to move to the cloud-based SAP S4/HANA platform when support for existing SAP systems ceases from 2027.

For the typical mid-cap FTSE a SAP transformation takes on average 24 months from design to delivery, so most SAP related projects need to start at the beginning of 2025. Crucially, these dates will have an impact on the supply and availability of experienced talent.

Interim Programme Directors who have a track record in ERP bring an advantage of proven best practices that have given success to other companies and can act decisively with pace. They bring focus and understanding of important ERP pain points to a programme to ensure it starts strongly and continues successfully.

Since the Programme Director is a key partner to the CIO and CFO in ERP implementations they will provide a high level of capability and assurance on a significant investment, and as such there are a number of risks and pain-points (highlighted below) that will need to be front and centre of the CIO or CFO’s agenda:

Devraj highlighted the critical role of a well-defined target operating mode (TOM) and a robust business case in achieving successful ERP outcomes.

The TOM should be defined with a clear understanding of the capabilities of the ERP system. This involves a thorough ‘fit-gap’ analysis to understand how the business operations align with ERP functionalities. Devraj cautioned against the misconception that all functionalities reside in the cloud, not all of which are, making TOM redundant and that ERP vendors are often ambitious about the scope of functionality in the cloud. Impartial vendor agnostic Programme Directors will give perspective, experience and neutrality in this important area.

The business case should articulate the expected benefits, costs, and risks associated with the implementation and it’s very important that the programme director can bring perspective from other companies in terms of the expected savings that can be realistically achieved in the core business functions. An external perspective, who can act with impartiality and authority, is beneficial here.

Many ERP programmes struggle to contain cost, schedule and scope overruns, and it is unfortunate that the triage of ERP vendor, system integrator and business team often don’t achieve an outcome-based delivery approach. This is often due to the incorrectly set responsibility matrix that stems from absence of strong programme leadership. An experienced programme director will normally correctly diagnose this and put in place a delivery structure that optimises the value that the vendor, system integrator and business team bring to the programme. This guards against a responsibility matrix that favours one stakeholder at the expense of others thereby avoiding potential cost and schedule overruns.

Active engagement from business stakeholders is also crucial for the success of ERP projects. Business leaders and employees should be involved in the design and local user acceptance testing (UAT) phases to ensure the system meets their needs. Relying solely on technology vendors can lead to misalignment between the ERP system and business requirements.  

To address these challenges, organisations must adopt a structured approach that includes clear communication, comprehensive training and robust change management strategies.

Interim Programme Directors can play a pivotal role in delivering successful ERP projects by bringing specialised skills and fresh perspectives. Their temporary status allows them to focus on specific project areas without being derailed by long-term organisational politics.

If your company is assessing options for SAP and whether to move to S4 HANA or other platforms, please contact Devraj Banerji or Tom Legard:

tom.legard@odgers.com / devraj@listonferrypartnership.co.uk