Move to SAP S/4HANA: The why & how – Straight from the horse’s mouth!

In the previous blog, we mentioned SAP’s announcement to limit providing maintenance support for some of SAP’s core applications (SAP Business Suite 7) at end of 2027. SAP is encouraging its existing customers to move to SAP S/4HANA, either through a greenfield, brownfield or hybrid implementation. 

With currently over 8,700 customers live on SAP S/4HANA & hundreds going live every month, what benefits is SAP stating that your organisation will gain, & what options do you have to make the switch to SAP S/4HANA?

What does SAP say?

To help organisations thrive as they face the changing dynamics & volatility in the market, SAP proposed a framework – Intelligent Enterprise – that is supported by technological offerings (applications & platforms), experience management & collaboration network. This will also help organisations meet the increasing & varying demands of their investors for disruptive business models, customers for richer experiences, employees for meaningful workplaces and society for cleaner & greener companies.

The Intelligent Suite is an integrated suite of applications that supports end-to-end business processes & manages every part of the organisation and is the core of the Intelligent Enterprise. SAP says that SAP S/4HANA, with its AI, machine learning & IoT capabilities is an ideal candidate for the Intelligent Suite.

SAP enlists various benefits for organisations based on the domain they are operating in, but it majorly touches upon the below benefits. Also included are some benefits widely accepted by various experts within the SAP community:

  1. Business Process Improvement:
    With the in-built memory database SAP HANA, that is used in SAP S/4HANA, customers can eliminate redundancies & batch processing, to improve & speed up existing business processes. This can in turn help people make better & effective decisions aiding the growth of the business.
  2. Gain competitive advantage:
    The in-built AI/ML capabilities of SAP S/4HANA can be leveraged to automate key business processes, improve performance & provide real-time BI & predictive insights to employees, enabling them to take decisions in close to real-time. This provides an agility to the business to look out for new avenues for growth. By doing this, companies can innovate to become the leader, instead of keeping up with their competitors.
  3. Future proof your investment:
    SAP has announced maintenance support for S/4HANA to at least 2040. Organisations can plan their long-term strategy with SAP S/4HANA as the core, considering the latest technological capabilities like AI/ML & IoT that it possesses, as well as the flexibility to transition to cloud. 
  4. Cost Effective & Better Options:
    The existing features & single-platform-for-all-tasks provides customers with a cost-effective option wherein they will have to just pay for one platform, instead of paying for maintaining various platforms. Also, for its existing legacy apps install-base, SAP is offering better licensing options to migrate to SAP S/4HANA.
  5. Ease of Use:
    With the Fiori 2.0, SAP provides an improved user interface for an improved & innovative user experience. By leveraging the inbuilt capabilities, the users will have the flexibility to access details on-the-go irrespective of the device and help drive effective decision-making.

Options to move to SAP S/4HANA

In the earlier blog, we spoke about the three options that are there for the existing install base of SAP Business Suite 7:

  1. Migrate existing systems to SAP S/4HANA
  2. Implement altogether new systems with SAP S/4HANA
  3. Stick to existing SAP Business Suite 7 with customer-based licensing options

For organisations wishing to move/migrate to SAP S/4HANA, SAP has provided various options that include a mix of free, low-cost & fixed-price offerings, but has suggested the below framework/steps:

  1. Define business needs & objectives and align vision & strategy for the move accordingly.
  2. Build business cases & create transformation plan either through consultation and/or by using planning tools.
  3. Work with SAP experts to identify the right future landscape or deployment strategy: greenfield, brownfield or hybrid.
  4. Implement/Deploy with support of SAP to deliver business value.

All through these steps, SAP offers enablement teams, experts & tools to help in the move to SAP S/4HANA & its adoption.

Deployment Strategy

As outlined in point 2 above, based on the business case & viability, there can be three deployment strategies that a company can undertake:

  1. Greenfield (New Implementation)
    This deployment strategy talks about re-implementing your existing solution through re-engineering & simplification and applying innovative business processes, to return to standard functionality & industry best practices. 
  2. Brownfield (System Conversion)
    This strategy brings (migrates) the existing business processes directly onto the new platform. This will be the fastest way to get onto the new platform, and then customers can innovate leveraging the in-built capabilities based on their comfort/speed.
  3. Hybrid (Selective Data Transition)
    This strategy allows for both a greenfield & brownfield deployment where some of the existing processes can be retained on existing platforms where as the others can be migrated, preferably (business/organisational) units wise.

But do they work?

The deployment strategy varies from organisation to organisation, but it is essential that the strategy is right. Despite all the features & strategies used, there have been a few well documented cases of SAP S/4HANA upgrades failing, leading to huge business & financial losses. Also, SAP S/4HANA has its limitations in some cases.  

While working with our customers, we realised that, in most of the cases, the upgrade/migration strategy is SAP-centric & sometimes limited to SAP systems, and there is significantly less support to integrate the changes with other third-party applications in their ecosystem which are also crucial like EDI management, commerce & warehouse management systems. Customers are incurring higher costs in integrating & testing these third-party applications. 

An example would be the bar-code scanners in a warehouse, a crucial part of the warehouse operations. If the scanners are not considered while creating the transformation plan & the impact on them is not studied, there is a risk that they’ll fail after the upgrade & hamper the operations. 

Based on our experience of working with our customers to handle such cases, we will discuss in our next blogs the areas where customers will have to keep a watch on while integrating the changes into their third-party applications in their ecosystem, while also discussing the pros & cons of moving to SAP S/4HANA, as well as the top SAP S/4HANA failures & learnings. 

Still any confusion? Feel free to drop your queries, comments, or feedback in the section below or shoot an email to info@coliance.co, and we will get back to you.

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