Strategic Choices in SAP S/4HANA Deployment
Have you ever wondered, “Where do I begin with S/4HANA?”
The chess grand master Savielly Tartakower said, “Tactics are what you do when there is something to do. Strategy is what you do when there is nothing to do.” Indeed, it is easy to act when faced with an acute problem—when there is something to do. What do you do, though, when your plans for S/4HANA are “somewhere out there” in the future?
I suggest four strategies you can begin now, even if you are unsure of your S/4HANA plans. These strategies will have benefits immediately while getting you ready for the tactics you will employ once the technical deployment of S/4HANA is underway. I will discuss these strategies in more detail in 2 interactive sessions at SAPPHIRE NOW conference May 16-18, 2017 in Orlando.
Prepare Users and Systems
Anyone who has successfully deployed S/4HANA will tell you that getting business user buy-in is as important as any technical aspect of the project. This is because S/4HANA is not merely a technical upgrade or enhancement pack. It transforms the way business works, and so you must get the business involved early. Two great ways to do this are with the Business Value Adviser and by running prototypes.
For the technical aspects, get started by running the S/4HANA Readiness Check. This free, cloud-based tool will give you specific guidance on your system, including HANA sizing, custom code adaption, add-on compatibility, Fiori applications, and more.
Adapt Custom Code (or get rid of it)
There is no reason you should wait to run Readiness Check and Custom Code Lifecycle Management. Our research shows that about two-thirds of custom code in SAP systems is no longer in use. Losing that weight will help you right away.
The more strategic decision, though, is whether you want to continue to maintain your customizations or return to standard SAP functionality. Most S/4HANA customers say they want to run a more standardized system because this is less costly to operate long term. This means asking a tough question: are those customizations a differentiator for your business? If not, take advantage of commoditization and go back to standard functionality.
Determine the Transition Path
There are basically two ways to deploy S/4HANA: as a new deployment or system conversion. Which one you choose depends largely on your custom code strategy. New deployments are fresh and clean, unencumbered by mostly obsolete customizations. But a system conversion might be faster for you since the data (and master data) are already in place, problems and all.
The strategic decision you need to make here is which path you will choose. Some customers have gone so far as to test it out with a sandbox system running inexpensively in the cloud. You could also deploy Central Finance to get S/4HANA in the door without touching your many ERP systems-of-record. It is not the full benefit of S/4HANA, but it could be a useful strategy nonetheless.
Choose the Deployment Destination
A recent ASUG Survey revealed that 38% of their membership plan to run S/4HANA on premise. A third don’t know where they will deploy. The good news is that S/4HANA offers a complete choice of deployment: on premise, in the cloud, or hybrid. Regardless of what you choose, you get the same simplified data model and improved user experience for consistency at every level of your organization. This is something our competitors cannot claim.
In any case, you will need to make the choice. And now is the time to start considering the options. Compare features and price it out. Maybe S/4HANA will be the impetus to move ERP to cloud. This means that IT must be willing to view infrastructure as a commodity to be outsourced, and in return, focusing resources on more strategic and differentiating work. You could use cloud for far-flung subsidiaries or specific business units, while HQ stays on premise. The good news is you will have consistency either way. But now is the time to plan.