Accelerating Business Transformation Enabled by Digital
Shinya Suda, Senior Vice President, Information Systems, Astellas Pharma Inc.
Shinya Suda, Senior Vice President, Information Systems, Astellas Pharma Inc.
Astellas Pharma, a global pharmaceutical company headquartered in Japan, implemented a global instance of SAP S/4 HANA on Azure with a combination of cloud applications such as Ariba, Concur, IBP, and Success Factors, replacing regional instances of SAP ECC systems for Finance, Procurement, Supply Chain, and Human Resources.
This project aims at a transformation of business processes to enable us to become a data-driven enterprise. It is not a project to replace or renew existing systems. It is a clear message that top management and senior executives keep stating throughout the project.
I assume that readers (CIOs) of this article are interested in IT aspects of this project (e.g., how migration from ECC to S/4 was going, how Azure is performing as a platform), but I will focus on business process transformation in this article.
Our business operating model was regional for many decades, and accordingly, we have had regional business processes, regional master data, and regional systems. However, this regional model becomes a bottleneck during the globalization of business and organizations to achieve our VISION “On the forefront of healthcare change, turn innovative science into VALUE for patients” as a truly global enterprise. We commenced this project aiming at (1) acceleration of globalization, (2) data-driven enterprise management and decision makings, and (3) pursuing operational excellence as quality and efficiency of business operations.
We invest on something because we expect larger return (positive ROI). And a simple system replacement won’t be able to make a large enough outcome to make the ROI positive. Additional value realization on business is essential to ensure positive ROI. I prefer to use RVOI (Returned Value on Investment), because quantifying return by dollars is not easy every time.
In these days, we are talking about Digital Transformation (DX) every day. But we should be clearer that “DX is a business transformation enabled by digital and data for value creation and delivery for customers.” The success of DX will come from successful business transformation, not from successful system replacement.
DX is a business transformation enabled by digital and data for value creation and delivery for customers.
When I compare business process transformation and system replacement, I would say “business process transformation is like a large ship changing its direction (round) and system replacement is like a car turning at a corner (sharp).”
In recent projects, system build and implementation require less effort, system integration and data migration require a similar level of effort, and business change management require lots more effort to make sure to be successful. And more importantly, business change management will continue after cutover of new system and will last months or years until the total balance of RVOI becomes positive after the project dissolved. We should not underestimate of the importance of business change management.
One of the key drivers of value realization is data-driven decision making. Under this uncertain circumstance, business performance depends upon how risks are quickly identified, and proper actions are taken to avoid losing opportunities. If race drivers have a good visibility, he/she can drive the car at maximum speed without slowing down the car to prepare for unexpected things. The single instance of system can provide a sole source of truth. And we should remove reports to be submitted to supervisors and replace them with dashboard that decision makers can directly access.
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