When to move to S/4HANA? I’ve mentioned in previous blogs that I began my career back in 1995 using SAP 2.2C. It was during the first SAP boom when the client-server version was flexing its dominance over the mainframe edition. After success in Europe and with global companies, the US began their own big boom of SAP adoption and expansion. Today we are seeing a similar growth path with the move from ECC to S/4HANA. Rapid growth in Germany has been followed by steady growth in other parts of Europe and Asia-Pacific, and like before, the US is taking more of a wait-and-see approach. This brings us back to the topic, when to move to S/4HANA, and my thoughts on this answer require you to think about three factors: your company’s purchasing approach, the value a move to S/4HANA can bring to your organization, and the costs associated with the move.
When to Move to S/4HANA – Three Factors to Consider
1. What kind of buyer is my company?
To speed up the buying process and understand how you should be working with SAP partners like itelligence, it is important to understand your company’s purchasing approach. I like to break this down into 3 areas.
Area 1: What is your company’s tolerance for risk?
In summary, do you find that your company is a Leader, Follower or Lagger? Understanding your company’s culture will help you determine its pace of change, and how hard and when you need to push to start a discussion around SAP S/4HANA. Oh, and just so you know…I believe that in the US we are entering the ‘Follower’ stage for adopting Suite on HANA, and that we are nearing the ‘Follower’ stage for companies ready to take a Greenfield approach to adopting S/4HANA Enterprise Management. The timing just feels right and I think the next two years will be full of activities.
Area 2: What is your company’s product/cloud/integration approach?
It is important to understand if your company looks for best of breed (niche) products, or a single vendor approach. This comes in handy as IT departments try to understand how to handle integration topics and how to build out hybrid clouds. While SAP may not win every niche product comparison, there is a cost to multiple vendors and integration of products. It is important to understand your company’s strategic direction on these topics before making a purchase or heading down a certain path that my not jive with the strategy. In addition, watch out for ‘Shadow IT’!
Area 3: How does your company build/support the technology strategy?
In simple terms, does your company leverage internal architects or have you found a partner that can really act as a trusted advisor? I’ve spent the last 2+ years (20+ years on SAP) focused on SAP HANA topics. The pace of change from SAP has caused itelligence to have a significant number of global resources coordinating efforts around the world to ensure that we have an understanding of the changes taking place in the SAP environment. Let me just say, that it is VERY important for our customers/prospects to find a trusted advisor early on in the process to help support the transformation process to SAP HANA (SoH or S/4HANA).
WATCH NOW – 8 Great Reasons to Make the Move to S/4HANA
2. What’s the value to my company?
The struggle for companies moving to SAP S/4HANA is knowing how to properly determine the value of moving to an in-memory ERP system that can deliver REAL-TIME information, up-to-date user experience, operational analytics and new innovations. It is difficult for people to wrap their minds around what it means to never have to run a batch job again. It is difficult for companies to understand the impact of hiring and retaining talent based on the user experience updates and speed to support the demands of their youthful sales force (thank you millennials). It is difficult to put a value on innovation….meaning SAP is ONLY investing in innovation on the S/4HANA Enterprise Management platform. So, there is value in being able to access and utilize those innovations when they become available….or the ability to upgrade/transform to the latest and greatest quickly. I’ll end the value discussion with one of my favorite sayings…be on the right side of the line…meaning, it is a competitive advantage to have S/4HANA ahead of your competitors…but, it is a competitive dis-advantage to be behind them in the process.
3. How much will it cost?
Here is my no-kidding statement…you must consider the costs as you will probably need to build out and get a budget approved. Here are things to consider that will have an impact on the costs:
- The final path takes us to S/4HANA Enterprise Management. The challenge is determining if this is a one-step migration directly to S/4HANA Enterprise Management, (btw, 1709 comes out soon) or a two-step migration/transformation with step one being a move to Suite on HANA (remember the different versions from the first post in this blog series). Oh, and don’t forget that it is possible to do a full Greenfield implementation (think re-implementation).
- Cloud vs on-premise…basically, do you want to buy a Service Level Agreement (SLA) or hardware?
- Support for new technology…again, purchase support from providers (like itelligence) or re-tool your staff. No matter what, you will need people that understand the Switch Framework (think enhancement pack upgrades for activating HANA functionality for SoH) or the new S/4HANA Enterprise Management structure.
- User Experience: FIORI has some hardware and integration requirements.
- Analytics: There is a cost to turning on operational reports…you need to understand what that looks like, and you need to consider a tool that will sit on top of the data for visualization (think BOBJ Lumira to consume Core Data Services/HANA Live/Virtual Data Models).
- Security: Don’t forget that with SAP HANA, not everything runs through the SAP Netweaver security model…there is HANA specific security requirements.
- Testing: Think full regression testing.
- HANA’zation of your custom code.
When to Move to S/4HANA – Conclusion
The list above doesn’t represent all cost components…but, there is enough there to give you an idea. So on the topic of when to move to S/4HANA my answer looks more like a consulting answer with my response being “it depends”. I’ve touched on three factors, but there may be other factors to consider for your company like a busy season or company projects that may be happening, (acquisitions, new product release, new integrations, etc.). You also need to think about your overall IT environment. For example, if you are running SAP BPC/BW, SAP PO, SAP BOBJ and/or SAP EWM environments you may have to consider when you would move/combine each of the environments and/or consider other options like moving to IBP in the cloud, Hybris, or SuccessFactors.
It may seem complicated, but itelligence is here to help. As one of the most experienced implementation partners for SAP S/4HANA, we at itelligence answer lots of questions from organizations who are searching for experts that can help them make the transition to S/4HANA. To get started I recommend you register for our SAP S/4HANA Migration Workshop or watch my video on Mapping Your Journey to SAP S/4HANA.
Check out the other posts in this series..