Many say they are doing it, but not many have actually done it. Where are we with the mystique of S/4HANA?
According to SAP, by the end of last year roughly 4% of SAP customers were on S/4HANA in the productive environment. The remaining 96% need to move to S/4HANA until 2025. SAP has got roughly 100 go-lives a month. Based on those statements and research by Gartner, we expect the peak of the S/4HANA migration wave in 2021 but we see that more and more customers are already preparing for the transition.
We have heard stories about S/4HANA transformation done in three months. How much time do you really need to run a migration to S/4HANA, including all the preparation?
I haven’t seen any project delivered in under 12 months. This is the reasonable timespan that the customer should take into account, especially if they have a high SAP footprint – meaning that they have lots of data, including old or even corrupted data that need to be cleaned up prior to migration. I’ve also heard about S/4HANA implementations done in 3 months, but I personally believe those are marketing stories or net new customers that are introducing SAP from scratch.
Why is the S/4HANA topic is so challenging?
Because it is not clear to everyone what are the advantages of the new system. If you ask the business about the benefits of S/4HANA, the feedback is not overwhelming. It is a technical change, and that’s why it is difficult to build a business case. With S/4HANA you can make your system leaner, especially if you have a substantial footprint. You also have the chance to optimize processes and reduce the number of your productive systems. But on the other hand, the hardware needed is also more expensive, so it is difficult to make a good business case.
The other hurdle is the transformation itself. Customers are not sure which transformation path they should choose. You have three options, but during the SAPPHIRE NOW event happening in May in Orlando, SAP will announce that they will focus mainly on two scenarios: new implementation and system conversion.
Last but not least, most customers haven’t decided yet what should they do as part of their S/4HANA migration. Should they run it as a purely technical project or should they also work on data volume issues they have in the current system, or adapt the nomenclature? Many of those questions are being brought up, so the project scoping also poses a challenge.
What is the best way to approach those challenges?
Both SAP and their partners are more experienced now and there are more offerings available on the market on this topic. You can now get a good analysis of your system and guidance on the best course of action. For example, Datavard offers S/4HANA FitnessTest which analyzes data quality and archiving potential. This information helps you to identify your next tasks and it is a very solid foundation for further decisions.
Customers know that they need to tackle the transition topic soon, but who is really ready for the transition?
A perfect customer has a clear goal and reasonable scope of the project which can be properly managed by both IT and business. Unfortunately, it often happens that customers put too many topics into the project scope, and then they recognize at the start that they cannot handle it due to their current workload. It’s key to make a realistic project scope that can be managed by your team or have appropriate partners that can support you.
Does it mean that your resources and people are a key factor?
Absolutely. So far, when talking about transformation we have been going on about processes, data, hardware sizing and so on. But we shouldn’t forget that we also need to move to this new environment. This is a challenging topic, that’s why Datavard is providing services to prepare also the team for this journey to S/4HANA.
And when moving to S/4HANA, many customers need to decide whether to go with premise or cloud solution. What are your thoughts on that?
Often, customers choose to bring some of the systems (quality system, development system) directly to the cloud. Also, if you start with the projects and you would like to get the look and feel of your SAP system in S/4HANA, cloud offering helps you to get this without investing into hardware. In this area we have a very good collaboration with SUSE who help us to set this up.
About the author
Gerd Hagmaier is the Global VP S/4HANA at Datavard. Previously he worked at SAP where he was responsible for the development of the S/4HANA topic at the Enterprise Architect.