Untying the Knot of Complexity with SAP S/4HANA

Dania Fayyaz, in Digitalist, explains a key trend that businesses are moving towards. 

At SAPPHIRE NOW, a common theme that emerged from SAP S/4HANA customers was a desire to revert back to simple.

Customizations on top of customizations have led to an overly complicated IT landscape which makes integrating with external partners bumpier than it needs to be. Businesses today want, and perhaps even need, to be able to leverage the benefits of an open ecosystem. Nobody wants to get stuck in a prolonged IT project since it hinders productivity and likely will require big changes again in the future when the business changes course or enters new markets.

So what do businesses want today? The first is complete integration with their current and future systems and their external partners/networks. They want processes to be straightforward while automating the manual, time-consuming tasks. This automation not only saves time and money but it improves productivity in the long run, as these resources can instead be diverted to value creating activities.

Steve Singh promises “no complex integration processes, no hidden costs, just solutions that work together natively.” He goes on to say, “We recognize that our customers live in a heterogeneous world with solutions from a wide variety of different vendors. We need to allow others to deliver and add value on top of our solutions and we need to integrate into the other applications and services

[our customer’s] use.” The ultimate goal: allowing businesses to better leverage the investments they’ve already made. 

First, complexity snowballs. What may initially seem like a small quirk in a system can magnify over time as more processes are built around that complicated keystone process creating a convoluted system.

Jonathan Feinstein, VP Insurance Finance, Finance Transformation, New York Life Insurance Co. said, “If you bring forward a bad process then it’s just an automated bad process. You really want to make sure if there are pieces of your process you like, keep them. If there are pieces of your process you don’t like, don’t keep them.”

Second, businesses want speed and timely information delivered to decision makers at the right moment where it can lead to a win. “We can’t be agile if we’re complex,” said Niel Nickolaisen, CTO, O.C. Tanner. “Complexity killed our agility. You can’t achieve operational excellence if you’ve got to navigate through a hairball,” said Nickolaisen.

More so, companies want to see the impact of their decisions and they want to see it quickly. They want new products, enabled by new processes to reach new customers faster. For that, agility is paramount. You can’t win if you’re slow. Similarly, even if you’re winning now, you won’t be for long if you’re surrounded by nimbler, more responsive competitors.

Meijer wants you to think of them as your local grocer. “When you’re a small local chain it’s really easy to personalize your assortment. When you get up to millions and millions [of] transactions and tens of millions of customers it gets very difficult to maintain a personal experience,” said Terry Ledbetter, SVP/CIO,Meijer.

“In grocery it’s becoming increasingly difficult to understand where our customers want us to be. They want us to be online yet they don’t want to buy produce online. They want to do click and collect and yet they don’t want to stop by the store. Ultimately they want home delivery, yet they’re not home to pick it up, and our one problem is that what we sell spoils,” says Ledbetter. “While we’ve been trying to solve for all these things, our landscape has become increasingly complex.”

CIOs need to know what to look for and they need to be aware of what their competitors are doing. Moreover, it seems that every organization today, is slowly morphing into either a software company or a company centered in some way on technology – such as Under Armour, Sabre and O.C. Tanner.

Sure data is king, but every king can be checked. Thus, it is important to manage organizational complexity before it spirals out of control. Complexity needs to be pulled out of a system from the grassroots rather than be dealt with as an afterthought imposed by a hard deadline.