Fit-to-standard implementation approach – does your company fit?

Unique business and non-standard business processes

Hanka Dziubińska-Kopka: How often do you hear during your first conversation with a client that their business is too unique for standard solutions? And are you able to convince them later on that the reality might be different?

Alena Sysoi: In my opinion, this happens very often. Of course, it depends on the industry and the size of the company, but clients like to talk about it and say – yes, your solutions are fine, but we are not entirely convinced that our unique process will be addressed. However, I think it is worth distinguishing between unique businesses and non-standard business processes. A unique business is built around a truly innovative idea and a unique offering to customers.But manufacturing, wholesale, and retail – these are not unique businesses; they are rather standard.But when we are talking about the business processes of a client who has been building them for 20 years, then such a business process can be quite unique. Then, of course, it is worth discussing whether it makes sense to maintain this process in the company, or whether it would be better to consider the standard process and what it might look like on the client side.

Hanka Dziubińska-Kopka: Kamil, what does it look like from your side?

Kamil Suszko: I agree with what our colleague said, that clients like to feel special. First of all, from the point of view of running the business itself, what we produce, what we do, what we make.On the other hand, every line of business that we are discussing – whether it is warehousing or finance – the core that we are going to talk about today is similar.Invoices are similar, warehouse processes are similar, so we can talk about uniqueness at the level of a specific structure of a given process. It will be the same at the core, but everything around it can be different. Our job as consulting companies and SAP is to show clients that we can unify this even more, that the process can be improved, and that at the end of the day the client will benefit in terms of time, money, efficiency, and decision making. From this point of view, we can talk about a certain uniqueness. And clients have every right to that.

Risk and costs, the reasons for switching to the fit-to-standard model

Hanka Dziubińska-Kopka: This sounds a bit like a “flick to the nose” of the entrepreneurial ego. Can you tell me why companies ultimately choose Fit-to-standard solutions? Because I know that it is also possible to create very personalized solutions for a given entrepreneur, right?

Alena Sysoi: Definitely. Very often we talk to clients who had an in-house solution – someone built a warehouse management system or even an accounting system and has been developing it for 15 years. However, there is a risk, for example related to the specific employee who created the code, that they will leave – to another company, to a competitor, or simply retire, whatever. And in fact, when we talk about unique solutions, maintaining them in the long term not only creates the risks I mentioned earlier, but there is also the question of cost. The development of such solutions requires additional work – a programmer or even a team of programmers who are constantly developing the system. For mid-sized companies, the question is: is it worth it? Especially since a programmer is not the cheapest person on the market these days. So clients, especially in the small and medium business segment, when they talk to us, they want to avoid that risk, they want to reduce maintenance costs. For example, they want to reduce the size of the IT department, which sometimes has several people. And these are the issues that companies are dealing with right now, also because of the economic situation. Not only on the Polish market, but also in other countries. We see a desire to transform IT departments primarily into business support and, ideally – transfer this function outside.

Time – another reason for switching to the fit-to-standard model

Hanka Dziubińska-Kopka: How can standard solutions be better than those tailored to a specific business?

Kamil Suszko: If you look at what SAP is offering today in terms of cloud solutions, which is what we are talking about today – we were talking about money – I would point to the other side: time. Today, time is of the essence, how quickly we deliver, how quickly and efficiently a given solution works. The cloud in general offers efficiency and speed, and the implementation of products like S/4HANA Public Cloud in the RISE or GROW models is fast and effective. . Previously, with on-premises solutions, we had to rely on the architecture layer, so we had to have hardware or a data center, then we had to draw that architecture, we had to install the system so that the people involved in development could make those changes... the time to implement business processes was much longer than what we have now.

From the time a subscription agreement is signed with SAP, the average time for system delivery is 4 to 5 weeks. We receive a ready-made system, configured, with support from the software producer. So if we consider when we want to go live with such a system, the answer is simple – cloud solutions win because they are available practically immediately. But we also talked about custom solutions, for example in warehouses. We have a client who has their own custom solution, and we had to show them that the standard SAP solution is also okay and also works well. You have to convince not only the managers, but also the business, by showing them the added value. Ok, it can be more difficult for a month, two, maybe three, because you have to transition . But in the perspective of one, two, three, four years, if you look at the total TCO of the project, they will actually benefit.

What is Clean Core?

Hanka Dziubińska-Kopka: So, Fit-to-standard – we are talking about the fact that more and more frequently we can adapt our businesses to the standard solutions. We are talking about the clean core that can cover up to 80% of company needs. And here comes this thought in the back of our minds – okay, but if we all have the same thing, how can we be competitive? So how is competitiveness built in the clean core and what is in the remaining 20%?

Alena Sysoi: Okay, so first let’s talk about what the clean core is. Clean core is an approach, in terms of technology, to system expansion.Well, in the case of a system based on ready-made business processes, there is always a need to create or address some business-specific needs.How are we going to do it? The only answer used to be: through development. We do the coding, a developer sits somewhere, and when someone from accounting or warehouse wants to see a feature, we prepare it. But this is how monsters are created, even in the case of some more standard solutions. What is the risk to business? There is technological debt, because it is very difficult to switch to a new version with such a system. We still have non-SAP clients who come to us and say that they have a solution which has not been updated for the last 5-10 years, which means their business is not getting access to innovation. And what Kamil said at the beginning – it is very important to react quickly to changes, especially now. The pandemic, anything, any new factor on the market with a huge impact on how we work and what our business looks like. So we need, I don’t know, robots, we need chatbots for our work – if we have a solution that hasn’t changed in the last 5-10 years, there’s no chance to adapt quickly to this new reality. Back to the clean core – clean core is an approach to extending business systems that allows you to take advantage of Fit-to-standard, but also address the specific needs that exist in a company at a given moment.

Fit-to-standard in the SAP Activate methodology

Alena Sysoi: When we talk about the Fit-to-standard approach itself – as some of you know and some of you will learn today – it is part of the SAP Activate methodology, which is the project management methodology for implementing SAP products. SAP Activate consists of several phases. Fit-to-standard is part of the Explore phase, where consultants, people who know SAP solutions – public, cloud, or on-premises – talk to the business, try to adapt what they get from the people who work every day with these documents, these warehouses. They collect this information and try to understand how Fit-to-standard can be used to later raise awareness and teach, because the role of consultants is mainly to educate.

Development and Clean Core

Alena Sysoi: It’s like in my field – we’re BASIS consultants, so we’re administrators, but we’re also teachers. We try to explain and show, for example – let’s leave it clean here, let’s make it clean core, don’t touch it if it works. If we want to expand, want to be unique, as we said at the very beginning, let’s use the technologies that SAP provides, at least from the point of view of BTP. There are many integration possibilities, many development possibilities – especially for the non-standard solutions. But we want the system itself to remain intact, to contain data, not development. Let’s take the development outside so that when SAP delivers an update under the maintenance plan, contract, subscription agreement, the core of the business can continue to operate with minimal disruption. Even if there is a bug in this custom solution, we will fix it externally. However, this factory, plant, or business will still be able to operate. And this is actually, at least in my opinion, a very important element of bringing this whole development, these non-standard solutions, this uniqueness of a particular client outside, but still within SAP products.

Choosing the right cloud

Hanka Dziubińska-Kopka: In fact, after everything the world has been through lately – the pandemic, the wars, the disrupted supply chains, and so on - we are all fixated on the fact that business has to continue operating. What you mentioned, Kamil. And that had a huge impact on the popularity of the cloud, which has been mentioned here before. So tell me, because this is the second big thing lately. The cloud – yes, but which one? And what kind? Which one to choose? Tell me about it.

Kamil Suszko:The answer is – it depends. This is a topic we could do another podcast on, or a separate episode for each element. What is important in the question of which cloud to choose – because we are now going to look at public or private clouds in the RISE model – is how a company, a given partner who is helping with the implementation or migration, because for existing clients we are going to migrate these systems, how they are going to guide the client, show them the pros and cons of a particular solution. But on the other hand, SAP provides a solution that helps you make these decisions. We are talking about Digital Discovery Assessment, where we select what we are talking about today, namely key business processes. We arrange them in large blocks, add the number of employees, the number of users, all this in the cloud – Digital Discovery Assessment is in the cloud and it is a cloud product. It shows and suggests. Sometimes it may tell you that you can only have Private, because you are so custom that you have to choose Private Cloud. And sometimes it may show you that you can choose this or that. It’s your choice, we’re not forcing you to do anything. And this is where you should reconsider and go back to your trusted advisor. Today we are speaking on behalf of Hicron, so I will talk about Hicron. It is worth going back to Hicron and consider whether it is worth spending more on additional extensions, buying new functionalities, for example in BTP, or whether a public cloud is enough for my business. And this is a matter of consulting and education, not even technology. On the other hand, it is also great and important that SAP is in the process of certification when it comes to Microsoft Azure in the Warsaw region. Soon the Warsaw region will join Google and Polish clients will be able to store their data directly in Poland. This is also important from the point of view that not all companies can or want to transfer their data to the European Union, Frankfurt or Amsterdam, for example. Or maybe it’s just the client’s preference, maybe they just don’t want to. This is the next step in the digital transformation that is taking place in Poland. It is already underway. And now it will snowball, because eventually we will all have to move to the cloud. But not everyone at once.

Features of Public Cloud

Hanka Dziubińska-Kopka: Alena, there is already a clue in your job title as to which cloud you are talking about, which is the Public Cloud. But tell me, is one of these types of cloud more closely related to the topic we are talking about today, namely Fit-to-Standard?

Alena Sysoi: Well, yes, actually, because the public cloud is software as a service, which means that the client gets a service that works much like Netflix, for example – we turn on the computer and start a movie. In this case, upgrades happen twice a year and are automatic. So, of course, the clients gets the information that there will be an upgrade in six weeks, but can they say that they do not want that upgrade? No. So it’s more like we’re imposing certain rules, but the client gets an inexpensive solution, and in the case of SAP, that’s an important argument. We all know – our partners and ourselves – that SAP is sometimes perceived as a vendor that has nothing to offer small and midsize companies. And in fact, the S/4HANA Public Cloud offer is primarily aimed at new clients, clients from the segment that we call mid-size enterprise. There is less industry specificity there, most of the processes are standard. For them, moving to the public cloud makes sense – we save money and time, as Kamil mentioned. Public cloud implementation sometimes takes 6 months. Previously, it was difficult to imagine implementing ERP in such a time frame. But coming back to what the public cloud is, it is a service provided by SAP, and when it comes to comparing public and private clouds, Kamil described this very well. The conclusion is very simple – we will move to the private cloud or the public cloud, either way. This is truly the future. On-premise solutions currently have too many problems for clients to still see the point in keeping them on their own servers, spending a lot of money on administration and development, changing hardware, and so on. So that is probably the biggest takeaway from this public or private conversation.

Support by an implementation partner

Hanka Dziubińska-Kopka: We talked about unique solutions, we talked about standard solutions, but no matter what solution the entrepreneur actually chooses, once it is implemented, it will not be like a magic wand. The solution is implemented not only by people from the outside, specialists, developers, consultants, but also by the whole company, which has to prepare for it. Can you tell us whether entrepreneurs are left to their own devices or whether they can count on support, for example from SAP, and what that support looks like?

Alena Sysoi: I would say that they can mainly count on the support of the implementation partner, because the implementation partner, as Kamil mentioned, plays a very important role. Especially when it comes to education, but not education in the sense that we know better, it is a conversation with the client about what makes more sense – to keep this business process or consider a standard one. Digital Discovery Assessment, which is an assessment of the client’s processes, is also done by the partner. And that is why partners implementing cloud solutions are SAP’s greatest strength today. What is also important, and in some ways the responsibility of the implementation partner, is change management. It doesn’t really have much to do with technology, IT, but with interpersonal communication. That is, how to implement this change, how to convince – as Kamil said earlier – not only decision makers, but also business users, someone from the warehouse, accounting, that it is actually worth moving these processes to the cloud and to the standard formats. We believe, and we are of course talking about our SAP Activate methodology, that the Fit-to-standard workshops that we conduct at the beginning, in the first phases of implementation, are extremely important. Because the solution itself is there, service is provided from the moment the contract is signed. You can go into the system and start working. The only question is whether there is the will and motivation to do so. And, of course, all this affects the final result and client satisfaction. I don’t know, Kamil, do you agree with me?

Kamil Suszko: Of course I do.

The role of the Basis department

Kamil Suszko: When I heard this question, I took it a step further and began to wonder what would happen next. We implement this system and then what? SAP offers its support when it comes to product support – solving problems related to the product, the key process. But the partner, whether proposed by SAP or chosen by the client – I am from Hicron, so I will say Hicron – at what level are they going to maintain it? How are we going to support the client?

Hanka Dziubińska-Kopka: This is where you come in.

Kamil Suszko:This is where I come in, more on the side of technology and integration of all the tools. Because SAP systems are typically connected to non-SAP software. This is where IT comes in – broadly understood BASIS, which is evolving at its core. We used to be administrators, and now we are becoming more like advisors. We know how to talk to SAP, we know how to talk to the client, we know how to talk within our own company. This is also crucial – to be able to translate several different languages into the one that is most understandable to everyone; to act as a relay and a connector so that on the one hand the client is satisfied and on the other hand we, as a partner, can complete a given project, CR, whatever we are doing for the client, on time – using the Hicron nomenclature. And this is important. Software is software. Artificial intelligence will never replace humans. The same goes for the delivery of these products. We will never truly disappear as advisors. That’s how I see it. SAP has evolved, SAP has changed, from very clumsy tools like GUI, that look, tables, transactions... When I started my career and someone said to me: “transaction”, my head would hurt . Now, when someone new enters the world of SAP, they see tiles and user experience.

Hanka Dziubińska-Kopka: There was even this big boom, people were talking about smartphonization when Fiori came out.

Kamil Suszko: Exactly, this is also crucial because you have to be able to translate it. It’s not a problem to make that tile in Fiori. The trick is to make it useful. So that the president of a given company or the director of a given department, when they come to work in the morning, before an important meeting, they can open their smartphone, click on the tile and see – okay, these are the financial trends, I can make this decision. And the tool is there. Software as a service is there. It’s delivered. Only the value needs to be delivered. Show that again 1 plus 1, or 2 plus 2, equals 5. That at the end of the day, we see value and profit in building a business.

Change management

Hanka Dziubińska-Kopka: So, in addition to change management at the beginning and during solution implementation, the support of the partner who will maintain our solution is also important. And also the education function that you mentioned earlier. Let me just say that we have an entire episode in our HiTalks series dedicated to change management. It is a meeting with Tomasz Zubrzycki and Michał Sarna, so I would like to refer our listeners to that as well.

GROW with SAP // RISE with SAP

Hanka Dziubińska-Kopka: Let’s go back to our discussion. Please tell me... because I thought you were going to mention programs like GROW with SAP or RISE with SAP, but somehow it didn’t come up. Tell me, do these programs really help with implementations or are they separate entities?

Alena Sysoi:Let’s start with the difference – RISE with SAP is a program created a few years ago to help clients migrate from on-premises solutions to the cloud. Later, just this year, the GROW with SAP program was created. We are targeting very different audiences with these programs. RISE with SAP, as I said, is the migration of existing clients who simply want to move to the cloud, and of course from SAP they get not only the solutions themselves, which is S/4HANA Cloud, but also tools, methodology, partner ecosystem, so a support program for that migration. However, clients who do not have SAP solutions obviously approach the implementation in a slightly different way because they do not have a legacy system. Sometimes they are approaching the topic of implementing an ERP system for the first time, because previously they had some accounting system, a combination of several systems, a patchwork landscape. This is a very common situation. With such clients in mind, we created the GROW with SAP program, which is based on S/4HANA public cloud , because for new clients we provide ready-made business processes. That’s right – we’re talking about Fit-to-standard, which includes over 600 ready-made processes that the client can use. We provide an implementation methodology, SAP Activate, in which all our partners are certified. The client gets a license, a subscription to S/4HANA Public Cloud , but we also mentioned all the customizations that can be done externally in BTP – we provide the ability to use BTP services for free. This means that the client gets this added value right at the beginning of the project and can use additional licenses from SAP. And what I think is extremely important is building a community – we have a community of clients, partners, and SAP experts in the form of an online forum where you can log in and ask the experts, so partners and also SAP experts, any question about implementing S/4HANA public cloud . We talked earlier about how we support clients; will the client face any problems in moving to the cloud alone – no, they always have a partner, but also the SAP community. Of course, there are also training sessions – any user can go into the system, watch a short video, and it’s all included in the package offer. Across our entire offer, we provide not just licenses, but all the additional tools a client might need to start their cloud journey. So RISE is for existing clients – implementation, migration to the cloud – while GROW with SAP is for new clients. At the moment, these are the main packages we sell as part of cloud ERP solutions.

Evolution of SAP on the example of RISE and GROW

Hanka Dziubińska-Kopka: Tell me, Kamil, from your point of view, are these really answers to the needs of clients? Were these programs the result of something you noticed was not being taken care of before?

Kamil Suszko: I will answer this way – RISE or GROW is a service which includes the ERP or BTP, depending on which version we are talking about. We have a lot of different products that none of us thought about before, because we were only focused on the ERP system layer. Speaking of SAP’s clean core approach, new products started to appear that SAP either bought – SAP itself likes to buy different companies – bought, took under its own aegis, put in its own box, implemented its standards – and that is the most important thing . I think it offers even more than it did before. Because we had this limitation of the on-premises layer, so how to deliver a particular service in an installable version. Now there is no such limitation, now we have the cloud, we double-click, enter the payment card number, and this is how it works – in simple terms. It just needs to be loaded with data and configured later. I would describe the RISE and GROW service as an “evolution”. It’s a bit like offering new car models – when a new model of a particular brand comes out, it’s initially offered only as a hatchback – in the RISE version, a base version. But we see that it sells well, that it is good, so we put in a station wagon, a sedan, maybe we turn it into a multivan, and a family of these cars is created. The same thing happens with SAP’s product offering. First there was RISE, which was actually available in two models, later it expanded to four. Some of the enterprise clients, large corporations, said: we want to have our own physical equipment. And SAP said – okay, no problem, you can have your physical hardware. We can buy it and deploy it. This service also exists, even though no one was really thinking about it, but it’s there. If somebody asks if it’s possible, yes, it’s possible. Together with trusted partners. And again, it’s a constant evolution and adaptation. This is an ever-expanding portfolio for an ever-expanding audience. There is something for everyone.

The most important advantages of the fit-to-standard model: time

Hanka Dziubińska-Kopka: From what you’re saying, Kamil, it seems that, on the one hand, the standard that SAP offers makes companies try to adapt their processes to fit that standard. On the other, SAP also adapts to the companies, develops its standard, and tries to accommodate as many companies as possible that come to them. Tell me, if we were to summarize in 3 to 5 points the Fit-to-standard approach, Alena, what would be the main, strong advantages of this phenomenon?

Alena Sysoi: From the business side – quick implementation. Quick implementation, quick delivery of innovation, and saving a lot of money by standardizing processes and using the latest technologies that SAP provides in upgrades at no cost to the client. To me, those are the key things for business.

The most important advantages of the fit-to-standard model: cost

Hanka Dziubińska-Kopka: Kamil, from your side?

Kamil Suszko: I would put it in a slightly different way, I would draw a map that shows time above all else. When we talk about time, time is money. The money we save, we can invest in the development of technology. The development of technology causes – at least theoretically, because not everyone succeeds – business growth, expansion, and increased revenue. Increasing revenue makes it necessary to adapt to changes. This in turn leads to investment in new technology. And at some point, the cycle begins to turn. But where do we start? We start with time. I would say it’s not 5 points, it’s 1 – time.

Hanka Dziubińska-Kopka: For my part, listening to you, I recalled the title of a movie which probably sums up what you said about Fit-to-Standard – “Everything Everywhere All at Once”. And I also hope that this will be an Oscar-winning solution. Thank you very much for today’s conversation.

Kamil Suszko: Thank you very much.

Alena Sysoi: Thanks.