From delivering 40 to 60% quicker time-to-value to being named a leader in the Gartner 2022 Magic Quadrant for cloud ERP solutions, the SAP S/4HANA public cloud is steadily progressing on the path to becoming the ultimate ERP solution for modern businesses of all sizes.
As more businesses with a cascading network of complex operational workflows become ready to embrace S/4HANA, there is an increasing focus on determining the right implementation approach. The challenge that most enterprise tech leaders have today is to choose between Big Bang or a Phased Approach to S/4HANA implementation.
Let us explore what each approach brings to the table and what are their pros and cons. This will help bring the much-needed clarity leaders need to accelerate their journey into S/4HANA.
What Is the Big Bang Approach?
Synonymous with the concept of our universe’s origins, the big bang approach is one in which the enterprise makes a single-shot transition from their existing ERP solution into S/4HANA. The entire gamut of end-to-end operations, workflows, and business processes will witness their underlying technology transition into respective modules on S/4HANA in one go.
From a software perspective, the most effortless understanding would be to say that all modules of the business go live on the new S/4HANA Cloud simultaneously.
What Is the Phased Approach?
In simple terms, the phased approach is a method wherein your enterprise’s new S/4HANA ERP goes live in phases on different dates — department or function-wise. For instance, a company may choose to go live with the supply chain team first, then revenue management, followed by payroll, etc.
Older systems are replaced eventually in this approach rather than switching them all off at once and moving everything to a new system like S/4HANA in one go.
Big Bang vs Phased – Which Approach Should You Take?
Before we begin to look at the specifics, it is important to know that transitioning to a new ERP like S/4HANA is the equivalent of brain replacement surgery. Every step forward should be carefully taken after considering all aspects of your business. Let us now explore how each implementation approach should be evaluated for critical success elements or traits that modern business must have:
Surety of Completeness
If your business is operating in a highly competitive sector, it is imperative to be able to gauge the exact timeline for completing a major transition like an ERP upgrade to S/4HANA.
A big bang approach, when done with adequate resources, is the perfect approach for getting your entire ERP live in the fastest time possible. It becomes easier for your business to bring certainty on important areas that affect your customers, partners, vendors, staff, etc.
For example, it is easier to establish a solid timeline for rolling out a new AI capability or innovation across the entire ERP landscape in a big-bang implementation. All departments and stakeholders can enjoy the new capabilities with just one release. For a phased approach, such a surety is not achievable as different departmental modules may get the new AI innovation at different phases.
Achieving Quick Wins
While we have seen the benefits of using a big bang approach for completeness, there is another area that must be considered from a flexibility perspective. There may be custom features that need to go live fast in specific modules like finance or HR to enable some quick wins for the business in that area.
In such instances, a phased approach is the best option. It allows the technology team to build and deploy the feature without having to gain approvals or buy-ins from other departments. It also provides them with the liberty to independently verify and validate the quality of deployment for the specific feature.
Data Management
If your business deals with a very high volume of data, then the phased approach would be the ideal choice for ERP change implementation. Complex data stores across departments would need to be carefully migrated to their respective destinations in S/4HANA with no scope for errors or misses.
In a phased approach, stakeholders need to deal with only a limited scope of data in each phase, and it gives them more control to ensure the integrity of data is not compromised. In a big bang approach, however, there is very little scope for testing the compatibility or operational stability of different data sources against their new S/4HANA counterparts as everything goes live in one single go.
Cost Considerations
Achieving a big bang approach may help businesses reap revenue from their end-to-end operations faster. But on the downside, transitioning the entire technology landscape of the business into a new system like S/4HANA will require a large pool of resources who must collaborate efficiently to complete the transition successfully. This will involve a significant cost overhead on operations.
A phased approach allows a more targeted rollout of features in a gradual feature roadmap. This helps in bringing down or streamlining costs and spreading them evenly over a large timeline. However, a phased approach would result in a slower achievement of financial goals and revenue benefits from the S/4HANA implementation as it takes longer to complete the end-to-end transition.
The Final Decision
The final decision to select an approach depends on how well-positioned the business is with its data, financials, and market competitiveness. Enterprises can take a call on the right approach if they are able to prioritize the objectives they wish to realize with S/4HANA.
There isn’t a one-size-fits-all option, but irrespective of the approach chosen, the success of S/4HANA depends on how well the platform is tailored to meet your business’s unique needs. This is where an expert partner like Sapours can make a big difference. Get in touch with us to know more about redefining your business with powerful platforms like S/4HANA.