How Do Customers Support SAP S/4HANA Deployment Decisions?

Between September and October of 2019, SAPinsider surveyed 217 members of their audience to help understand the progress SAP customers have made with the different types of SAP S/4HANA deployments. The results of that survey found a majority of respondents (90 percent) have at least started to evaluate the case for migration or are running pilot projects. At the same time, 34 percent have already begun the rollout of SAP S/4HANA.

But how do the deployment strategies align with the requirements needed to succeed and the technologies for which the respondents intend to invest?

Let’s look at the data and answer those questions.

Common Characteristics

Before we dive in, look at what the respondents have in common. First, the results of the survey discovered there were three types of respondents:

• Early adopters
• Average adopters
• Late adopters

The survey concludes that early adopters share a few common characteristics. For example, 58 percent of all early adopters viewed the SAP S/4HANA deployment as an opportunity to re-engineer their business processes to better fit operational needs and/or correct poorly developed/deployed processes and configurations.

The survey also concludes that organizations can choose from three different approaches to deploy SAP S/4HANA:

• New implementation
• Selective data transition
• System conversion

Now, let’s look at some data.

Requirements for Deployment

The first issue to examine is the requirements for deploying SAP S/4HANA. Immediately, the respondents made it clear that one of the top requirements was that deployment should not disrupt business operations. Specifically, 83 percent of respondents placed this issue at the top, with 50 percent saying it’s extremely important and 33 percent placing it as very important.

One business analyst, from a Canadian media company, stated, “We are evaluating which of the three options is best, but are leaning towards a selective data transition to diminish operational disruptions.”

Beyond minimal disruptions to operations, survey respondents reported the following issues as relevant capabilities required for deploying SAP S/4HANA:

• Detailed impact analysis on existing custom code, business processes, and operations costs (43 percent found this very important, while 20 percent found it extremely important). This provides value, no matter what type of deployment approach you choose.
• A fully compliant system that supports both global and local regulations (32 percent found this very important, while 32 percent found it extremely important). This approach can present a challenge to global companies in certain highly regulated industries, such as pharmaceuticals or finance.
• Harmonized and centralized processes throughout the enterprise (42 percent found this very important, while 21 percent found it extremely important). Those same companies that are concerned about regulations will also need harmonized and centralized processes throughout the enterprise.

Additional insight from the survey is that regardless of how an organization deploys SAP S/4HANA, at least some employees will need training for the new system. At the same time, respondents made it clear that a system conversion would minimize the distractions for the line of business (LOB), as all of their configurations and processes would seamlessly convert. The one caveat to the system conversion is that it doesn’t provide the same level of opportunity to improve operations outside of the mandatory changes.

But how do early adopters differentiate themselves from average and late adopters? Most importantly, early adopters place the highest emphasis on data cleansing.

Carl Dubler, Global Head of SAP S/4HANA Activation Management at SAP said this:

“If the business has a mandate to change processes, for example, they are taking on new business models, that is more conducive to a new implementation. If they want to return to standard SAP functionality, that is also a better choice for new implementation. But if they want to preserve existing configuration and customization, that is more conducive to a system conversion.”

Capabilities Required for Deploying SAP S/4HANA

There were four different capabilities required for deploying SAP S/4HANA that the survey brought to light. Those capabilities are:

• Improved data cleansing, management, and governance
• Minimal disruption to operations
• A fully compliant system that supports both global and local regulations
• Harmonized and centralized processes throughout the enterprise

How did these requirements break down by each type of adopter?

Early adopters responses are ordered as follows:

• Improved data cleansing, management, and governance (83 percent)
• Minimal disruption to operations (78 percent)
• A fully compliant system that supports both global and local regulations (78 percent)
• Harmonized and centralized processes throughout the enterprise (78 percent)

Average adopters ordered the capabilities as follows:

• Minimal disruption to operations (83 percent)
• A fully compliant system that supports both global and local regulations (63 percent)
• Harmonized and centralized processes throughout the enterprise (61 percent)
• Improved data cleansing, management, and governance (53 percent)

Late adopters offered the following order:

• Minimal disruption to operations (78 percent)
• Harmonized and centralized processes throughout the enterprise (68 percent)
• A fully compliant system that supports both global and local regulations (63 percent)
• Improved data cleansing, management, and governance (40 percent)

All three groups placed minimal disruption to operations at or near the top of the list. The biggest surprise is that early adopters put improved data cleansing, management, and governance at the top, while average and late adopters placed it at the bottom.

How Is Technology Used to Support Strategies and Accelerate Growth?

As SAP customers mature, they invest more time and money in the following:

• Modern conversational user interfaces
• Business process analytics
• SAP Solution Manager
• Custom code analysis tools
• Advanced, predictive, and embedded analytics

The breakdown of how the above falls into place is telling. Of those surveyed, over 70 percent currently use SAP Solution Manager, whereas less than 20 percent currently use advanced, predictive, and embedded analytics. In fact, of the three types of analytics to come out of the survey, only custom code analysis tools reached over 30 percent currently in use. The full breakdown looks like this:

• Modern conversational user interfaces – 39 percent currently use, 30 percent planning to use within 12 months, and 15 percent planning to use within 24 months.
• Business process analytics – 20 percent currently use, 35 percent planning to use within 12 months, and 15 percent planning to use within 24 months.
• SAP Solution Manager – 70 percent currently use, 10 percent planning to use within 12 months, 5 percent planning to use within 24 months.
• Custom code analysis tool – 35 percent currently use, 25 percent planning to use within 12 months, and 10 percent planning to use within 24 months.
• Advanced, predictive, and embedded analytics – 15 percent currently use, 25 percent planning to use within 12 months, and 30 percent planning to use within 24 months.

The data also confirms that the deeper companies get into their SAP S/4HANA implementation, the more they will use these technologies to support their strategies.

Read the Report

To find out more of what the SAPinsider report uncovered about SAP S/4HANA deployments, Click Here to read the entire report. You’ll find plenty of information to help guide you and your business to the future of ERP.

As always, you can follow me on Twitter @MichaelDTabron.