With over 8,700 customers of SAP on S/4HANA and many hundreds going live every month, organisations see S/4HANA as a game changer. Designed to work with its inbuilt memory database HANA to reduce redundancies and speed up processes, S/4HANA also provides AI/ML, BI and real-time analytics capabilities to automate processes and assist real-time decision making.
However, there are downsides, not necessarily in the technology. SAP systems, for many companies, have become the beating heart of the organisation. Thus, making an upgrade needs proper planning and roll-out, along with user training. Any oversight at any step can lead to organisations not reaping the benefits of the upgrade from day one. There have also been cases where the upgrade had to be rolled-back due to mistakes in the planning and implementation phases. In this blog, we will look at some high-profile failures and what organisations can learn from them. Before that, let us look at the pros and cons of moving to SAP S/4HANA.
In our previous blog, we covered the various benefits an organisation can gain in adopting SAP S/4HANA. To touch upon a few:
SAP provides industry-specific customisations and solutions which are tailor-made based on best practices available for the industry.
Every technology, new or old, will have its downsides. Similarly, S/4HANA is not free from this. With customers, some large, having built their enterprise systems and processes on earlier versions of SAP as the base, a few are finding it difficult, complex and time consuming to move to S/4HANA. Many SAP installations are highly customized which adds unique complexity for each client when planning a move to S/4HANA. Considering these issues, numerous organisations have held back from moving to S/4HANA. Let us look at some other downsides, that are being widely discussed:
Being built on SAP HANA gives S/4HANA an advantage of faster processing, however lack of features to work with other databases is seen as a downside. Since many organisations use multiple databases for their processes, having to move away from them requires a lot of time and effort (more on that later)
S/4HANA is a relatively new technology but it is being adopted at a rapid pace. Being a young technology, the number of experts available in the market is limited. This means that an organisation might end up spending more time with the SAP teams to build the use cases and implement them, who may or may not align with the larger business goals, or the organisation may shell out extra money to hire an S/4HANA expert.
Setting up S4/HANA with other databases is complex, and the existing processes and systems might have to be re-engineered and revamped. It will require an investment of time and resources, and the complexity increases with customizations.
Based on our experience, we have seen some of our customers having to modify their business processes based on the available features in S/4HANA. Whether small or large, analysis of the existing business processes will need to be undertaken to understand how they may be impacted by the way S4/HANA operates.
Do not assume that an existing user of SAP will be able to walk straight into using SAP S4/HANA. Training on new features and functions is almost inevitable in any organisation, and it might take longer in the case of S/4HANA.
Moving away from legacy SAP systems (e.g. SAP ECC) to S/4HANA is a considerable financial investment for any organisation. Companies must factor in re-engineer processes and systems, re-engineering of data, and business planning, training, before they can even get to the implementation costs. New systems will take time to mature to the level of the existing systems with users probably showing the biggest impact in terms of lost productivity. Careful attention must be given to the Return-on-Investment case before undertaking the migration.
The above-mentioned drawbacks are primarily non-technical. SAP provides great assistance in the migration by providing specific tools and expertise. Even with these drawbacks, the pros of S/4HANA outweigh the cons and given the right migration and implementation strategy, any organisation can reap the benefits of adopting S/4HANA. The focus is on the RIGHT strategy there are some notable failures and lessons to be learnt.
Most of the issues mentioned above are usual challenges in any project implementation. But since SAP systems are the core for the organisations and their usage is widespread; the effect is amplified. Like any other project implementation, it is important to have the right strategy in place to avoid failure. Some other common trends that can be observed are lack of proper roadmap, lack of change management plan, misalignment of digital strategy with business goals, and not factoring in for operational disruptions. While thinking about making a move to S/4HANA and drawing up the plan, organisations need to factor in the below:
In our experience, SAP implementations are too SAP-centric, and they fail to take sufficient account of integrated systems, sometimes built around third-party applications, and the knock-on effect changes can have. One classic case is the exchange of files between an organisation and its suppliers. The supplier systems are designed to receive files in a specific format and type from the SAP based systems. Due to re-engineering of these systems or the default file format being changed in the SAP system, the format/type of the file flowing-in through the new upgraded system might be different from what the supplier system is configured with, and hence the system might fail. This will lead to a disruption in the file transfer and will have further knock-on effects on the system.
Proper testing and inclusion of partners in the planning strategy is essential to avoid this issue.
There are a few more such examples where the upgrades can fail in the dependent systems within the ecosystem (both upstream and downstream) that we will see in our next blogs. Want some advice or consultation on this topic? Feel free to drop your queries in the section below or shoot an email to info@coliance.co. We are here to help you.
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