The ‘why’ of digital transformation is the key to unlocking value

Too many leadership teams focus on the ‘how’ or ‘what’ of their digitalization projects – which makes the destination less clear and can lead to negative ROI.

SAP’s 2027 deadline extension on S/4HANA migration has lit a fire under many businesses that had long put it off. Now it’s a priority.

However, S/4HANA is only as good as the value you get out of it, and too often businesses are choosing to make the jump for a simple technology upgrade without thinking through how that upgrade may or may not actually serve up new value. This is a major problem, because for all the new benefits and innovations that S/4HANA brings to the table, these simply cannot be attained by technology updates alone. Worse still, an S/4HANA migration can actually result in a negative ROI if you haven’t done the careful upfront analysis on what exactly you need and want to get out of it.

Enterprises can’t let the tail wag the dog. The end goal isn’t to migrate to S/4HANA simply for migration’s sake; the end goal is to unlock new business value. That means step one for this, and any digital transformation project, is to identify the “why” – why you’re transforming. Identifying the “why” informs every other decision in the process, but so many enterprises skip this step, focusing more on the “how” or “what” of their digitalization project, and arrive at a destination where it’s not clear to them what that transformation actually delivered.

So many enterprises struggle with digital transformations because their projects are plagued with uncertainty from the outset. That uncertainty largely stems from a lack of information and upfront analysis going into the project. Key decisions that need to be asked and answered – like whether to execute a combined cloud migration, a simultaneous OS/DB modernization, and a Greenfield, Brownfield, or Bluefield implementation – aren’t given the due diligence they need.

Without that reflection and analysis, many organizations end up defaulting to what they consider the lowest risk and easiest-to-defend choice. In other words, they may default to a Brownfield technical upgrade or a brand-new Greenfield implementation because it seems like the path of least resistance, not because they did a thorough self-evaluation of their needs and business goals and came to that conclusion. As a result, they end up going through a long digitalization process and come out the other end confused about what benefit, if any, they have to show for it.

For example, nine times out of 10, whenever we talk to a business about their No. 1 reason for wanting to migrate to S/4HANA, it’s because they want to take advantage of the platform’s advanced analytics. That analytics capability is a huge draw for enterprises. Then we’ll hear these same businesses chose a Greenfield approach for migrating to S/4HANA, because that clean-slate implementation seemed like the easiest and lowest-risk path. But a Greenfield migration naturally means not carrying forward any historical data – data you need to fully reap the benefits of S/4HANA’s advanced analytics functionality. So in these scenarios, choosing the path of least resistance was tantamount to choosing the path of least value.