Why Mature SAP Customers unwilling to move S/4HANA?
I have just selected as SAP Community Hero for year 2018, many thanks to everyone who nominated and supported me and again many thanks to Community selection board that selected me.
I believe my most important duty is to bring real community problems to discuss with all related parties. That is why I selected this blog to share after being a SAP community hero. I am not trying to address or blame any party, I am just bringing what it has been told.
Unstoppable S/4HANA versions and Innovations
Once S/4HANA is first announced in year 2014, all of us excited about the offerings that have been shared and showed. We have spent first year about to understand the real benefit and disruptive improvements brought by S/4HANA. Then in 2015 real S/4HANA is released which is called version 1508 that contains new code set and Logistics Simplifications. This has new core component called S4CORE.
Each and every year SAP improved functionality and released new versions. Every version brought new possibilities, for example embedded TM was brought by version 1709.
Now we have latest version 1809, embedded Customer Management 2.0 is available with this version.
Why I have listed all these details, because one of the main barriers is all these bunch of S/4HANA versions and unstoppable SAP innovations 🙂 You might say why are you complaining about continuous innovations, this what we need in this new digital economy era. I am totally agree with you, however, mature SAP customers could not get into moving S/4HANA train. Once they decide a version/roadmap, Oops SAP has releases a new version and new functionality, all discussions start from beginning.
So Customers needs a S/4HANA stop, to get into S/4HANA train.
Fast Changing Deployment and Licencing Options
Early stages of S/4HANA product there were 2 main products and so called options: On-premise and cloud. Customers who have complex business scenarios gone with on-premise, lean ones has selected cloud versions, however today on-premise versions can be deployed on SAP cloud (HEC), with all functionality. Licence can be purchased/converted on subscription bases, including one time/year free upgrade. If you are a new customer this sounds great, however what will happen to existing SAP products which can not be moved to HEC(because of Legal or private reasons), from technical point of view it is possible and recommended by SAP architects. If you have MII or ME of course you need to run them locally even if your S/4HANA in running on HEC.
But how will licence BOM will look like? Customers needs a clear licence policy, what will be the final destination, will all products be on subscription base? Even if they run on-premise and managed by own.
SAP Product Offerings and Names Changing too Fast
As I have written beginning of this blog, S/4HANA has changed the known ERP rules and approaches. Disruptive innovations both in UX and DB side re-shaped everything, this is fare, however, it shattered SAP as well, what will happen to SRM? CRM?Hybris?VM?Payroll?SNC?APO?…all of them has own replacement it is ok, but how, when, transition period? How long can I use my SRM with S/4HANA? will the be an extension?
All these questions are slowing S/4HANA conversion decisions.
Finally Mature SAP customers need a clear stop or method to get into S/4HANA train. Each and every customer want to get into as fast as it is possible, however today’s circumstances are not too safe to get into moving train.
Thanks for sharing! All valid points. I might as well just copy-paste the good old Y U No Love HANA, add “S4” and it’ll be as good as new. ?
Not sure if the assessment that “each and every customer want” is correct though. Or rather the question is not about “want” but “need”. Change is driven from two sides. Not only there should be a suitable offering of something new but there has to be some driving force to take that offering.
At TechEd in LV, I had an interesting brief conversation with other speakers at a breakfast table. As usual, some car analogies came up and one speaker said something like: “well, the car’s purpose does not really change but the ERP purpose does”. This is a good point. Does it though? For some companies it might. For others SAP continues to be merely an accounting system.
So I guess when there is a convergence of a suitable offering and a change in ERP purpose that’s where we’ll start to see some movement among the mature SAP customers. But will this movement be towards S4/HANA or another vendor’s offering altogether? Time will tell, I guess.
You are totally right about correcting my expression from 'want' to 'need', many thanks for this. SAP need to consider it's strategy about being transparent, if they really have ! Otherwise your last sentence contains the most important question of near future.
Mhh.. I don’t see the ongoing innovation the major barrier. It is more the unclear roadmap what’s next. You named it under the ongoing change of names, but I see the problem more to the core.
The message how to stay clean inside the core and what are the benefits from it is named. But the gap is how to become a clean core. Technical view a lot is unchanged or “compatible” to the new world. So why should a business invest into refactoring solutions which work again…
So in my opinion there must be more than the big picture of what is all possible with S/4 (<–put a name what you want)
There is a need to have a picture to show the business why you should have all the innovation, then a jump on the train is possible, because the stop would push us back and not moving anywhere.
Great point Florian, as you told capabilities of S/4 Core need to be well defined and understood before going to peripheral / satellite solutions.
This brought to mind another analogy. Every supermarket usually has several checkout lanes. Naturally, every one wants to be done and get out as soon as possible. So you look at who else is in the lane, what items and how many do they have, is cashier working fast, etc. Based on that quick analysis, you make a decision to get into one of the lanes. But then, of course, suddenly someone in front of you gets out a stack of coupons or a checkbook or some item doesn't scan. Meanwhile someone who was right behind you but now is getting out of another lane. Bwahaha.
I think many SAP customers are either in this situation or will be sometime soon. Being in the right lane and then getting through it swiftly and smoothly will be vital.
By the way, I somehow always end up in the slowest lane. If you see me at a store, never get in the same lane. If there is not even one person ahead of me, then the cashiers start changing shifts or the universe finds some other way to delay me. 🙂
Interesting point of view. I too have met with many customers confused with versions, naming, and moving targets. This applies to S/4HANA, but also the "satellite" solutions like BPC (replaced with Analytics Cloud and Group Reporting), EWM / WM (core or separate), PLM, etc. They end up in analysis paralysis, drowning in the 650+ pages of the "simplification list".
I believe there's also too much focus on the 2025 deadline.
Feels like SAP's Y2K challenge.