Where are customers in their SAP S/4HANA migration journey?

Migration Journey

A major migration requires careful planning and testing, which take time. One the other hand, waiting longer doesn’t make the upgrade any easier. If you’re a systems engineer or IT specialist contemplating an upgrade to S/4HANA, you might be wondering how your peers in other organizations are navigating the upgrade path.

Between the months of February and March of 2019, SAPinsider ran a survey to understand where SAP customers are with SAP S/4HANA. The results of that survey found a majority of respondents (seventy percent) are, in some way, moving toward this new solution.

Adopter Categories

According to the SAPinsider survey, those who were early adopters were driven by digital transformation and competition. The early adopters reported that they:

• Prioritize analytics and data-driven strategies.
• Want to improve decision making and support digital transformation.
• Have a history of delivering value to a wide range of lines of business.

Those who hold off on adoption were driven by deadlines. The holdouts:

• Were technical and IT driven.
• Used technical measures to dictate success.
• Have plenty of experience with technical upgrades.
• Have a primary focus of immediate priorities.

What Drives Customers’ ERP Strategies?

The decision to migrate to a new enterprise solution such as SAP S/4HANA is primarily determined by a company’s ERP strategy. Organizations gave the following reasons for upgrading their ERP technology:

• High total cost of ownership.
• End of maintenance and support for core SAP ERP and SAP ECC releases.
• Pressure to increase business process efficiency and lower operational costs.
• Focus on innovation and digital transformation.

Just under 50% of the early adopters placed pressure to increase business process efficiency and lower operational costs as a primary driver, and more than 50% of the leaders pointed to a focus on innovation and digital transformation as a primary driver.

SAP S/4HANA Usage

The survey made it clear that those who are early adopters prioritize modernizing analytics and are looking to SAP S/4HANA to help them analyze data and deliver the insights to the business. Those who adopt early are looking to SAP S/4HANA to:

• Correct poor configurations and the setup of previous systems.
• Centralize and more tightly integrate disparate finance and accounting centers, so the company is better prepared to support organizational change.

As for those who hold off on adoption, a tight focus on technical upgrades and other technical considerations are the most common causes for caution. Eventually, however, those who hold off will have to move forward. According to the survey, most of those who hold off on innovation will continue to stabilize their core technology and accounting systems before making the gradual move to HANA-based in-memory technology.

What is Holding the Hold Offs Back?

Expense (46%) and competing priorities (54%) are the primary reasons preventing some organizations from migrating immediately, but some IT directors also report that they are restrained by lack of resources (41%) and insufficient knowledge of the S/4HANA environment (43%).

Because SAP S/4HANA is not an up front priority, most hold offs are spending little to no time getting up to speed on the potential impact it could have for their company. This issue is even more pronounced with a lack of resources becomes an issue. As a result, many people in this particular group will be holding off until the 2025 deadline to get started on the migration to SAP S/4HANA. By that time, those businesses will already be behind in the process and will have to spend considerable effort getting up to speed faster than necessary.

For a more detailed breakdown on where customers are in the SAP S/4HANA move, read the full report here.