McKinsey and SAP join forces to maximize business transformation value through cloud solutions

New supply-chain challenges, the growing threat of cyber attacks, and other geo-political factors are accelerating the shift to cloud services—a $1 trillion dollar market opportunity, as illustrated by recent McKinsey research. Historically, such uncertainty has catalyzed organizations to invest in modernizing the technology behind their business operating models. But traditional approaches to ERP modernization have too often fallen short in maximizing business value, leaving C-suite priorities like corporate strategy and organizational mindset as afterthoughts.

To address this, SAP and McKinsey have drawn on their individual strengths to create a strategic alliance that merges technology modernization with strategy execution, thereby driving business results and addressing critical business challenges. With an initial industry focus on consumer products, retail, automotive, and manufacturing, SAP and McKinsey will offer an end-to-end design for SAP S/4HANA migration.

Most recently, Merck KGaA, a world-leading life sciences company, worked with SAP and McKinsey to transform the company’s complex ERP system, moving from a collection of legacy platforms to a consolidated global system, complete with a new organizational structure and governance model.

“Every enterprise needs to develop new business models to avoid being disrupted, gain efficiencies to fund innovation, and transform mission-critical systems in a way that minimizes business risk,” SAP CEO Christian Klein told a Sapphire Orlando audience this week. “This alliance ensures that McKinsey and SAP can work side-by-side to focus on deploying the right ERP with the highest ROI and sustained value from technology investments, enabling clients to tap into numerous new value pools.”

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Alessandro de Luca, Group CIO at Merck, on McKinsey and SAP’s impact.

In addition to the Merck case, this alliance has already delivered compelling impact for a range of clients, including a renowned European grocer that was able to counteract increasing cost pressures from competitors while fulfilling the increasing digital demand of customers. Within the four-month initiation phase, the grocer set up a transformation management function that evaluated outside-in perspectives on current trends and future requirements for all business functions. This helped determine a target operating model for the future ERP landscape, and as a result, the grocer developed target operating models for retail, supply chain, category management, and finance, establishing a new future-proof business model.

“Technology enables speed, and it can play an outsized role in driving sustainable, inclusive growth,” said McKinsey global managing partner Bob Sternfels. “SAP and McKinsey’s relationship brings together strategic thinking with technical implementation, helping the boldest leaders find enduring solutions to our most urgent challenges.”