S/4HANA’s Growing Momentum

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ByClub Freelance

Published05 March 2020at15:10, updated on18 March 2020at08:56

S/4HANA’s Growing Momentum cover

German ERP vendor SAP has kick-started the new decade with renewed strength. After undergoing a series of leadership changes in the past year, the company appears set on re-examining its product and strategy roadmaps based on customer feedback and more realistic self-assessment. Not surprisingly, it is S/4HANA – the new iteration of SAP’s core ERP system — the one leading the charge.

The firm was originally scheduled to discontinue support for its current ECC Business Suite in 2025, hoping the deadline would prompt a critical mass of its customers to transition to S/4HANA. However, after sluggish early adoption rates and mounting stakeholder pressure, the new leadership team decided back in February to give customers a much-needed extension.

Under the new roadmap, SAP ensures first-party support for ECC until 2030 – albeit free, general-access maintenance will be discontinued in 2027. At the same time, the company is future-proofing its customers’ investment in S/4HANA by promising platform support until the end of 2040.  

Although it is still early to tell the extent to which this new policy will impact adoption in the coming months, the measures have been well-received among the community. Additionally, the migration to S/4HANA is only poised to keep gaining momentum as digital transformation initiatives across the globe enter a more mature phase.  

Okay, but what exactly is S/4HANA?

In a way, S/4HANA is SAP’s response to the enterprise’s move to the cloud and its need for faster data processing. Half of all business data is estimated to be already in the cloud. More and more companies are taking business-critical applications off-premises, and few applications are more critical than ERP systems. Whereas ECC is exclusively on-premise, S/4HANA comes in both on-premise and cloud editions.

But the differences between the two are way deeper than that. While ECC is built to run on a variety of databases from vendors such as Oracle or IBM, S/4HANA – as its name suggests – can only operate on SAP HANA. Launched in 2015, SAP’s in-memory database allows for increase data access speed and greater live data analysis capabilities. This is a key advantage in the era of the connected enterprise and data insights. This SAP whitepaper offers a complete overview of HANA and its main differentiators.

Additionally, S/4HANA comes with significant module updates. Among the most immediately noticeable ones is the system’s reliance on the SAP Fiori 3 UX. The new user experience streamlines day-to-day use of the platform for both developers and end users.       

Accelerating S/4HANA adoption

A few factors have been holding up widespread adoption of S/4HANA. First of all, there seems to be a generalised confusion around the benefits and specifics capabilities of S/4HANA. A recent study by Resulting IT revealed that SAP consultants are only marginally more knowledgeable in the platform than their clients.

The insight is pretty telling and suggests that SAP could have failed in its past efforts to communicate with its stakeholders and manage change. Thankfully, that problem has a relatively easy solution. The latest changes in leadership and the extension of ECC support signal the company’s awareness of this issue and increase confidence that it will be addressed.

Understanding S/4HANA is crucial for its adoption. This might sound like an obvious requirement for buying into a new product, but it is especially important in S/4HANA. This is not a simple software update that can be installed over the weekend. The next-generation ERP suite implies a profound redesign in terms of architecture that requires companies to invest a lot of resources and re-evaluate internal processes to carry out the migration. On top of that, existing customers who have already invested a lot of money in ECC customizations will have to start from scratch.

Therefore, it is paramount that the decision to embark on a migration project stems from a solid business case if it wants to succeed. It is never easy to convince entire teams and organisations to change their processes, but trying to do so without strong arguments and a clear roadmap can be dangerous. Moving to S/4HANA is not exclusively an IT call. It requires that business leaders across the organisation are involved in the decision-making and willing to implement changes.

Time will tell how SAP’s renewed focus on S/4HANA translates into client adoption. However, recent announcements make us think the company is on the right track and the S/4HANA will only gain momentum from now on.

Is your company planning to move to S/4HANA but is still not sure when? You might want to hurry things up.

If you are a specialist in SAP technologies but still haven’t gotten your feet wet with S/4HANA, here is why and how you should do it.      

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By Club Freelance

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