Understand the importance of data in a Selective Data Transition and what dangers exist for companies who make the move to SAP S/4HANA too quickly
2022 Trends: Data Transformation Comes to the Fore, Finally
In reading SAPInsiders’ excellent benchmark report on RISE with SAP, Data Transformation stood out as a topic among the surveyed business leaders.
In reading SAPInsiders’ excellent benchmark report on the topic of RISE with SAP, a few of the customer responses really delivered food for thought.
The first of which was the higher weight placed on Data Transformation among the surveyed business leaders. In response to the question “What role will RISE play in S/4HANA projects?” data transformation came out as the second most popular response, only a few percentage points short of Process Transformation. This provides real clarity into how and why the industry increasingly recognizes the importance of data.
The report contains community responses to a swath of questions about SAP, SAP S/4HANA, RISE, and digital transformation at large, and recommendations from the expert analyst team over at SAP Insider.
The Overall Lack of Trust in Enterprise Data
Instead of spoiling the report for you here, I wanted first to take a look at the problem which data transformation seeks to solve. Obviously, that’s data quality on a technical and functional level, but data transformation also seeks to remedy a massive organizational distrust in data. In a recent article by Thomas Redman at MIT Sloan, titled “What’s Holding Your Data Program Back?” Redman said:
“…only 3% of companies’ data meets even the most basic standards. The cost is enormous, not just from a financial perspective – think about throwing out 20% of company revenue per year – but also from a culture perspective, as about only 1 in 6 managers trusts the data they use every day.”
Further looking into the costs of bad data, an Insight for Professionals’ article "5 Data Quality Problems and Their Solutions,” said:
"As the old saying goes, 'garbage in, garbage out.’ Indeed, Gartner estimates that around 40 percent of enterprise data is either inaccurate, incomplete, or unavailable, and this poor data quality costs the average business around $14 million a year.“
It seems though that the tide is turning, and businesses are no longer treating data as an afterthought. As the COVID-19 pandemic has accelerated the change to remote working and the need for cloud access, it seems data has taken its rightful place at the head of the table. In "Perception Isn't Always Reality,” HFS found that only about half think 60% of their data can be operationalized.
Let’s face it, a new ERP like SAP S/4HANA is nothing without the data fuelling it. And like an engine running on polluted oil, an ERP operating with bad data is not going to run smoothly.
It’s this realization I feel, as organizations begin to flirt more and more with S/4HANA, that’s driving this change in agenda. Data isn’t an afterthought anymore (thankfully), and in 2022, it’s the organizations that realize this and put investment behind their data in the wider transformation program that will seize the competitive advantage.
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