How to Understand the Deloitte S/4HANA Case Study

Executive Summary

  • Deloitte released bizarre information regarding what appears to be a faux S/4HANA implementation.
  • Why S/4HANA is a strange choice for Deloitte’s business requirements.
  • Is Deloitte gearing up for even more than 33,000 customizations as with ECC?

Introduction

Deloitte offered the following information on its S/4HANA implementation.

“Deloitte was an early adopter of SAP’s R/3 ERP system back in 1995 despite it “not really being designed to be used by a professional services firm,” Bray said. “So guess what? We customized the hell out of it,” he added, with more than 33,000 SAP finance customizations made over 20 years.”

What Deloitte is both admitting to is that R/3 was never a good fit for its business requirements.

Using Software That is a Poor Fit For Business Requirements

Is this the type of advice that Deloitte gives to its customers? That they should purchase software that is such a poor fit for the business requirements that the customer will have to “customize the hell out if it?”

The number of customizations at 33,000 is so high that this is further evidence that Deloitte did not select S/4HANA for its match with business requirements. It was so many customizations it leads to the following quotation from Deloitte as an explanation:

“Namely, long run times, maintenance issues, little flexibility due to the number of customizations, and outages. Now it is looking to fully upgrade to the next-generation S/4HANA suite, which is built on the software vendor’s in-memory HANA database.”

What Deloitte is talking about is problems with SAP ECC. Would Deloitte have offered this information if they were not implementing S/4HANA?

Also, why does Deloitte have such long run times with ECC?

Deloitte Gearing Up for Even More than 33,000 Customizations

There are several major issues with Deloitte moving to S/4HANA that are not mentioned in the article:

  • S/4HANA has less functionality than ECC. Therefore, Deloitte will have to perform even more customizations in order to get S/4HANA to work.
  • Every one of the 33,000 customizations that Deloitte added to ECC will break, and they will have to rewrite the customization to address new tables in S/4HANA.
  • S/4HANA is never an upgrade from HANA. While the term upgrade may be accurate in a general sense as is moving from one system to the next, it is not technically accurate in the sense of what will have to happen on the implementation. Deloitte is engaging in a reimplementation, not an upgrade. No ECC systems can be upgraded to S/4HANA.

Taken from an implementation benefit perspective, what Deloitte is saying makes little sense. However, it makes a great deal of sense from a marketing, sales and skills development perspective. This emphasized the point made earlier that companies that implement SAP choose S/4HANA regardless of the real benefits.

This quotation is quite interesting as well.

More Promises on Moving Away from Microsoft Excel

“Deloitte hopes that a shift to a fit-for-purpose system like S/4, which comes with integrated analytics, planning and forecasting capabilities, will help its finance staff to move away from a cultural dependence on Microsoft Excel spreadsheets. Bray said that the company currently has a reporting catalogue of more than 6,000 spreadsheets in the USA alone, and “I know we have over 3,000 reports in the UK too”, he added.”

This has been promised on many occasions in the past. Yet Excel continues to be universally used at companies that have implemented SAP. Also, this same motivation was most likely used to promote the move to ECC. ECC promised to remove the reliance on spreadsheets quite some time ago. Why didn’t that happen? And this is not only an issue with SAP but in companies that have applications like Tableau and other BI tools. Excel is simply intractable.

The concept is that with HANA as the database that will allow reporting to be much faster to run reports. However, speed is of report running is not the primary reason that data is exported and analyzed in Excel. The reason is that Excel is normally much easier to develop both the views that one wants to see, as well as applying formulas to perform the analysis. One of SAP’s newest applications called IBP, actually works mostly in Excel, although in a structured manner. In the area of financial budgeting, a company called Excel4Apps also works with Excel instead of attempting to replace it.

“Ten key financial processes will be brought up to date: client-to-cash, procure-to-pay, planning, forecasting, analytics, taxation, partner accounting, time management, asset management and record-to-report.”

This provides a rough idea of the scope.

S/4HANA Maturity Issues

Bray said that the implementation is generally going to plan, but admits “one of the problems we have had is the release cycles of S/4. Particularly in terms of [version] 1610, which came out late and did cause us a problem. So we have been using up a lot of our time contingency because of those issues.”

This is a bit surprising for Deloitte to admit this. They are admitting to problems implementing 1610 in this quotation. Deloitte is not supposed to release any information that could be construed as negative regarding any SAP application. Remember that Deloitte is partially using this announcement to help sell S/4HANA implementations.

Deloitte probably should have gone with a financial best of breed. But you can’t make very much consulting money implementing a financial best of breed and Deloitte does not have many consultants staffed that provide non-SAP or non-Oracle consulting. In their IT practice, Deloitte makes its money implementing SAP or Oracle. Therefore, unless Deloitte slips up, as they did when they mistakenly described the 33,000 customizations they performed when they implemented ECC, which is explained in more detail in this S/4HANA Customizations and Deloitte.

In terms of applying this case study to a real implementing company, the previously listed issues laid out in the article The Problem with S/4HANA Consulting Company Case Studies.

Conclusion

Deloitte explanation for using S/4HANA does not make sense and matches the logic of other self-implemented S/4HANA case studies by SAP consulting companies.

This article is part of The S/4HANA Implementation Study. Please see that study for the overall conclusions.

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