S/4HANA pre-project: we did everything – so why are we still failing?

The switch to S/4HANA is no unknown topic for most companies in the German-speaking region. Nevertheless, according to a current Lünendonk study, fewer than 30% of companies have already completed their S/4HANA changeover, a further 35% are still in the transformation. By the end of 2025, about 85% of companies plan to have completed their S/4HANA transformation and ERP modernization.[1]

Given these figures, the assumption suggests itself that by now sufficient experience is available, proven models are established and transformations run largely successfully. Reality, however, shows a different picture. Again and again, failed projects are reported – be it in the media or through our own experiences as grandega. Often we're called in to rescue projects in trouble, to analyze the causes of the failure or to develop a reorientation. One of the most frequent statements we encounter in the process is: „We did everything right – how could it nevertheless come to this?“ 

In the following we illuminate some insights from our consulting practice and show measures with which companies can successfully shape their S/4HANA transformation.

Quality of the preliminary projects and assessments

An analysis of the documents created in preliminary projects and assessments frequently shows that the results aren't enough to start a transformation safely and validly. Often these preliminary projects are budgetarily restricted, based on standardized templates and don't sufficiently involve the business departments. As a result, the deceptive impression arises of going into the transformation well prepared. 

Frequently, assumptions are found in the documents that weren't examined or questioned more closely – in particular with regard to:

• Availability of internal resources
• Master data quality
• Organizational changes

If these factors aren't sufficiently taken into account, problems occur in the course of the transformation that have a grave effect on time, budget and quality. 

Our tip: An independent validation of the preliminary project results helps to recognize weak points early and to make improvements in good time.

From green to brown and then blue after all – change of the transformation strategy

It regularly happens that companies change the transformation strategy during their project. This almost
always leads to:

• Massive budget overruns
• Frustration in the project team
• Delayed schedules

How do these grave changes of course come about?

1. Underestimation of the complexity:
Frequently the S/4HANA transformation is viewed too technically – as a simple „system move“. But a transformation concerns far more than just technology. Lacking awareness of the actual challenges often leads to companies relying on the principle of hope, instead of using established methods for a realistic assessment of the complexity.

2. Insufficient coordination with other projects: 
Our analysis of more than 70 preliminary projects shows: In many project documents the reference to the overarching IT portfolio of the company is missing. Without a holistic consideration, bottlenecks arise with internal resources, scheduling dependencies remain unconsidered and the transformation stalls. 

Solution: A professional demand and portfolio management can avoid such problems and ensure that projects aren't viewed in isolation.

„What the farmer doesn't know…“ – fear of change

According to a current study by a leading consulting house, over 80% of companies with S/4HANA strive for a reduction back to the standard, while 65% expect an increase in process efficiency. Reality, however, often looks different:

• In workshops, areas are defined in which no process or organizational changes should happen – although this is the actual project mandate.
• The arguments against changes are often not conclusive, but nevertheless prevail.

The transformation strategy is increasingly watered down, with far-reaching consequences for the project success.

Here a lack of organizational change management (OCM) shows. Besides the technical implementation, the change in the organization has to be actively shaped – with special focus on:

• Leadership development
• Values of the company
• Shared goals

More on that: Further blog articles on our grandega deepen this topic in detail.

Conclusion

With nearly all projects that are shortly before failing or have already failed, although „everything“ was done „right“, this could have been avoided.

Our appeal: Early, targeted measures can decisively contribute to avoiding mistakes and ensuring the project success. Let's together not only do the right thing, but do things right.

Source list

[1] Lünendonk® study 2021: S/4HANA against the backdrop of Covid-19 and the maintenance extension