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Migrating to SAP S/4HANA

SAP

ERP implementation has changed and for companies facing the 2027 maintenance deadline for SAP ECC 6, that is good news.

SAP S/4HANA is leading a push to ‘protect the core’, advising companies to avoid customisation, use best practice scenarios to define processes and embrace six-monthly product enhancements.  But this is a significant cultural change for everyone involved.

“Companies need to look hard at their SAP consultants, ensure they are on board with standardised implementations and have the skills to support a different approach to innovation and competitive differentiation,” said Don Valentine, commercial director at Absoft.

Companies are gearing up for the move to SAP S/4HANA, with research from the UK & Ireland SAP User Group (UKISUG), revealing that 70 per cent of companies planning to move to S/4HANA will do so in the next 36 months. While the 2027 maintenance deadline for SAP ECC 6 is a key driver in migration plans companies are also looking hard at new functionality (49 per cent) and wider business transformation (47 per cent) were cited as the main drivers.

“SAP’s cloud-first model has fundamentally changed the approach to software implementation,” said Valentine. “Wherever possible, SAP is advocating a ‘no customisation’ strategy, pushing an ‘adopt not adapt’ model. With this approach, companies can not only fast track implementation but also avoid the costs and complexities associated with upgrading customised solutions.

“And yet, the SAP User Group survey revealed that almost three-quarters (72 per cent) of organisations say existing customisations present a challenge when moving to SAP S/4HANA. This is down on last year’s results (92 per cent) and nearly a quarter (24 per cent) of organisations plan to remove customisations entirely (replacing them with standard functionality) compared to 12 per cent in 2021. While this suggests the standard model is gaining traction, more clearly has to be done to provide SAP ECC users with understanding of what a move to S/4HANA in the cloud both offers and entails.”

S4/HANA is only available to companies in the cloud – but that doesn’t mean there is no choice. Businesses have a range of options to explore. The first option is software as a service (SaaS) S/4 HANA, where companies use the standard product in a public cloud. There is no need to think about customisation or choice of hosting location and product enhancements are automatically available with every new release, providing a route to continuous improvement.

The second is the private cloud edition (RISE) of S/4HANA, where companies can choose a hyperscale such as Google, AWS or Azure to provide the hosting service. This approach can appeal to companies with concerns about the security of a multi-tenanted cloud model – as well as those wanting to control when upgrades and enhancements are deployed.

The third option is to replicate an on-premise model, but in the cloud: where a business opts to maintain its own SAP system with complete customisation flexibility. 

“Growing numbers of businesses are embracing this cloud-first, ‘adopt not adapt’ approach,” said Valentine. “Very few are opting to convert their existing ECC systems, with their existing customisations and data, into S4/HANA. Instead, they are embracing the chance to simplify, to move away from complex and unnecessary customisations and achieve a streamlined, effective and manageable ERP deployment. They are embracing a standard model, in the cloud, to create the foundation for seamless, incremental change that should give a business confidence to innovate and achieve continuous improvement. Through partnering with the right SAP consultancy, they can ensure that they choose the most appropriate model with the best migration path to achieve the optimal results as quickly and cost-effectively as possible.”

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