A few days ago I met up with some fellow SAP Architects at a lunch arranged by ERP Today. Now being in a room full of SAP Architects might not be everyone’s cup of tea – but I really enjoyed it.
As well as some great food we had a great discussion about how and when customers are adopting S/4HANA. It reminded me of a blog I wrote 2 years ago called “SAP S/4HANA Cloud: It’s not a matter of if, but when” – in this blog I outlined why I thought S/4HANA Cloud should be the ultimate destination for the existing SAP ECC install base – and I still passionately believe that to be true. Only this option aligns with the need to radically reduce the cost of ERP and deliver continuous innovation. Imagine a world with no upgrade costs, no hardware obsolescence and latest software trends baked in month on month on month.
So that sounds great doesn’t it ? but getting there is a journey and not one that can be boiled down to Greenfield or Brownfield – but also one that doesn’t need weeks pondering for most customers as you will find out if you read on.
The discussions over lunch did identify a few things that are holding companies back which need to be baked into your journey. Obviously the circumstances for each customer is going to be a bit different but below are some of the big rocks in the road.
- ECC is Good : SAP ECC is really pretty good which makes creating a business case to move to S/4HANA more difficult – especially if you have moved it to run on SAP HANA and moved it to run on a hyper-scale cloud provider.
- The Core Isn’t the Focus : Completing business priorities means that other areas of the IT landscape are getting investment instead of the “Core”. In many cases SAP ECC has done such a good job of “just doing its thing” that the line of business heads just take it for granted.
- Belief the Conversion is Hard : The simplicity of the SAP ECC to SAP S/4HANA on premise conversion process isn’t understood by many people and is often cheaper than expected especially if it is combined with a move to SAP HANA as a database and a move to a hyper-scalers.
- Lack of Knowledge about S/4HANA Cloud : A large number of people don’t understand the functional scope of S/4HANA Cloud and do not understand how the Best Practice Process Configuration radically reduces implementation times and on going TCO. They also miss how quickly it is evolving – the latest Feature Scope Description document is 212 pages long and the What’s New in S/4HANA Cloud 1908 is 614 pages long. Some people say “it isn’t ready” – some even say it doesn’t exist – these document suggest otherwise.
So what to do next ?
With a bit of digging in an organisation, you can soon find places where “work rounds” are being used and the SAP ECC system isn’t quite cutting the mustard. Look for places where DUMMY is used in master data, “adjustments” need to be made, things don’t reconcile or reports are done “offline”. Each of these “bottlenecks” should have a business case associated with it. The next place to look is versions of operating systems / databases and the age of the hardware – when do these need replacing / upgrading ? Perhaps these compelling events can be used to drive the move to S/4HANA ? That should cover points 1 and 2, and you should have the skeleton of a business case.
Now you can decide if you need an intermediate destination before finally being on S/4HANA Cloud. For this you need to understand the Feature Scope Document. A quick Fit to Standard exercise will show any gaps and you can decide if these are show stoppers for S/4HANA Cloud. If they are you can consider converting your existing system to S/4HANA On Premise or going S/4HANA Cloud – Single Tenant as an interim step. This decision will probably be driven by how well your SAP ECC system covers your current business processes – a good fit would probably lead to doing a conversion, a poor fit would probably drive a move to S/4HANA Cloud. – Single Tenant and the associated Best Practice Processes.
So there you have it – 4 things to investigate and 3 options (well 4 if you do nothing and 5 if you include a pre-conversion clean up).
S/4HANA is Simple – what’s holding you back ?