 | Clean core Mantra: Keep competitiveness while reducing complexity. |
In this unit, we turn our attention to the individual principle of clean core. We briefly mentioned them in Unit 2 and now, we analyze each one more deeply. For each of them, we explore the specific outcomes that result in a clean core "outcome". The first principle we will look at is clean core processes.
Why Clean Processes?
A clean business process maintains competitiveness while reducing complexity by aligning closely with SAP standard. Enhancements are made only where processes are clearly differentiating and provide measurable value. This approach represents a fundamental shift in mindset: from asking "How do we force the system to match our historical ways of working?" to "How can we leverage standard, best-practice processes to become more agile and efficient?" It's about consciously choosing to adopt the streamlined, industry-proven workflows embedded within a modern ERP, rather than burying them under layers of custom code. This discipline not only simplifies the technology but, more importantly, empowers the business to innovate faster, adapt to market changes with ease, and focus its energy on the unique activities that create true competitive advantage.
Process Categorization
The right side of the graphic above illustrates the segmentation of the processes in systems in two states, "current" and "target". In both states the segmentation elements are illustrated as a stack.
The first element of the stack refers to standard processes as delivered by SAP, representing a foundational aspect. The next element above it involves enhanced processes, which expand upon standard processes via specific business requirements that necessitate additional configuration or development. Custom-developed processes comprising the next layer are uniquely created within SAP Cloud ERP and typically integrate loosely with SAP's standard processes. The majority of processes created by organizations fall into either the enhanced or custom-developed categories however innovative processes, leveraging the latest SAP capabilities or requiring custom development due to their novel characteristics are possible also.
The target state will vary depending on the organization. Some may have more innovative processes. Others more extended. Some an equal proportion of extended, custom and innovative.
Once processes are clean several immediate positive outcomes happen. One is the boosting of business value through the adoption of innovations via frequent and streamlined upgrades. Some additional positive outcomes are:
Achieving business agility by enabling organizations to tailor processes to their evolving business needs.
Lowering Total Cost of Ownership (TCO) by minimizing customization, development, and maintenance costs, along with system complexities.
Ensuring process efficiency by relying on SAP’s standard solution capabilities and deviating only for differentiating processes.
Reducing process deviations by aligning target enterprise architecture with SAP’s reference solution architecture.
Key Points About A Clean Business Process
A few of the key points to keep in mind about clean business processes are:
Fit To Standard: Adopt SAP standard processes using the Fit to Standard mindset and methodology.
Out-of-the-Box Approach: Leverage SAP Best Practices (configuration elements, test scripts, process diagrams) for initial setup; minimize customizations to core SAP objects when standard processes meet business needs.
Clean Extensibility: Enable flexibility through clean extensions (on-stack, side-by-side, embedded, SAP BTP, Key User Extensibility) to maintain core system stability and ensure seamless upgrades with minimal impact.
Documentation & Governance: Clearly document and map business processes; manage changes through structured governance to ensure quality and adherence.
Measurability & Continuous Improvement: Track KPIs (cycle time, compliance, automation rate, etc.) to support ongoing enhancements and optimizations.
A Discussion About Process Governance
Clean core means keeping the SAP system as close as possible to standard, avoiding custom code or changes that make future upgrades difficult. However organizations may need to invest significantly in addressing specific business process requirements, not only for unique or transformative processes but also in areas considered commodity processes. For example, a customer might develop a custom process for material creation, even though an equivalent SAP standard process exists. Luckily these goals are not mutually exclusive. Governance allows both goals to work together. Think of governance as the "process police"—not in a negative way, but as a guiding framework that ensures everyone follows the same road map. This includes how we define, change, and improve our business processes across departments. Good governance helps us avoid ad-hoc process changes that break the system or create data inconsistencies. It ensures that any change to a process is carefully reviewed, approved, and documented. It also helps maintain compliance with industry regulations or internal policies. In practical terms, governance for processes includes a process owner for every core process, standardized documentation, and a structured change management process. Without governance, organizations quickly fall into the trap of customizing too much, which is exactly what clean core is trying to avoid.
The foundation of a governance led approach rests on three pillars:
- Architecture Governance
- Process Governance
- Solution Governance
Architecture Governance
SAP employs Enterprise Architecture Methodology to align IT solutions with business needs, using the framework to define future business scope and target architecture. Key design decisions (KDD) help frame solution capabilities and assess extended solution design's suitability for the enterprise. While target architecture decisions are primarily needed before transformation initiatives commence, transparency and adherence to design principles remain crucial components of the KDD process. This is facilitated through the Solution Standardization Board, which requires ongoing architectural governance.
Process Governance
The goal of process governance is to drive standardization, harmonization, and optimization of end-to-end processes across business segments using a fit-to-standard approach. Deviations may arise due to internal process variants, industry compliance, or local regulations, necessitating analysis of their impact on downstream processes, integration, and data. Any deviation requires a business justification and alignment with SSB design principles, documented through a KDD to support decision-making. Process deviations should be considered only for:
Industry compliance requirements
Local regulatory requirements
Market-differentiating capabilities offering quantifiable business value
Alternatives to maintain a clean core and standardized processes, such as usability improvements, process automation, and leveraging new innovations like Business AI, can (and should) also be evaluated.
Solution Governance
Solution-specific governance aims to maintain a clean core by focusing on the extensibility, integration, and data principles. It is important to review the design specifics relevant to Solution Governance across these different principles.
Check the Clean core extensibility for SAP S/4HANA Cloud and SAP Integration Solution Advisory Methodology for design principles for Solution Governance
Why Is Fit To Standard So Important?
"Fit To Standard" is often mentioned in the context of clean core. Why is this so important? As just mentioned above while some processes inevitably will fall under the "extended", "custom" or "innovative" categories nevertheless the number of processes under the "standard" category should be as large as possible. Excessive customization of processes negates the primary benefits of the cloud model: speed, agility, and continuous innovation. Some additional benefits are:
Process Standardization: Commoditization of processes across the value chain and all process areas. Process and solution adoption go hand-in-hand rather than in isolation or in sequence.
Process & Data Harmonization: Data model and organizational structure simplification. Transformative process adoption, for e.g. shared services, sustainability, group IT management etc.
SAP Business Suite Adoption: Viewing of processes in the context of "End-to-End (E2E)" scenarios that go beyond just SAP Cloud ERP Private (i.e., Ariba, Concur, SuccessFactors, etc.). Apply the principles of standardization broadly across SAP Business Suite
Clean Core Achievement: Creating and capitalizing on opportunities for lower technical debt. Bringing predictability and optimization potential to upgrades and innovation adoption
How To Achieve Clean Business Processes
To be clean core Compliant, it is essential to establish a holistic approach that integrates tool-chains, organizational structures, and transformation methodologies. This involves:
End-to-End Tool-Chain and Organizational Framework:
Integrated Toolchain: Implement a connected suite across Enterprise Architecture Management (EAM), Business Process Management (BPM), and Application Lifecycle Management (ALM). This toolchain ensures seamless operation and communication across systems and functions within the organization.
Roles and Responsibilities: Clearly define roles and responsibilities to ensure efficient collaboration and accountability across all departments. This alignment helps in maximizing output and minimizing bottlenecks.
Governance Guidelines: Develop comprehensive governance guidelines to aid effective implementation, continuous enhancements, and sustained improvement of processes. These guidelines help maintain alignment with strategic goals.
Business Capabilities, Application Architecture, and Transformation Roadmap:
Capability Map: Construct a business capability map that outlines key value drivers and provides a blueprint for future growth and innovation.
Application Mapping: Correlate applications with business capabilities to architect a resilient and adaptable application infrastructure, ensuring future-proofing of technology investments.
Transformation Roadmap: Define a clear transformation roadmap, leading the organization from its current state to the envisioned target state, optimizing processes and capabilities along the way.
Set up a Prioritized and segmented Business Process Hierarchy:
Process Identification: Detect end-to-end and functional processes, linking them to strategic business value drivers to ensure they contribute to business objectives.
Process Classification: Utilize the concept of pace-layering to classify processes into standard, differentiating, and innovating layers, based on their importance and impact on business capabilities.
Fit-to-Standard Process Design and Realization: As just mentioned above The "Fit-to-Standard" approach is a mindset shift from the old way of doing things. Instead of asking, "How can we change the software to fit our unique process?", organizations now ask, "How can we adapt our process to align with the best practices built into the software?"
Check out the video on clean core Business Process guidelines
Conclusion
Clean core processes focus on how a company runs its business operations within SAP. Instead of customizing the system to fit legacy, and often inefficient, processes, the clean core approach encourages businesses to adapt their processes to the modern, standardized best practices embedded in SAP Cloud ERP. This is typically achieved through "Fit-to-Standard" workshops where gaps are identified and solved through other clean core principles, rather than by changing the core process logic itself.
| Adopt the industry best practices embedded in the software to improve and standardize business processes. Extend only when necessary. Innovate to remain competitive. |