Much like Peter Pan’s ticking crocodile, the migration to S/4HANA is inevitable and time is chasing after all of us.
Businesses using SAP are faced with the decision of when, not if. Even more importantly, how?
If you feel dread and indecision at the prospect of this mammoth project, you’re not alone. The gap between the reality of companies that have already moved versus the 8,900 SAP customers that have bought licenses for S/4, because they were offered such a good license deal, is vast.
The challenge customers face is that SAP hasn’t divulged how many of these are actually live on S/4, despite claims that some of these customers are live with large HANA databases, proving the scalability of S/4 for large projects.
At RED, we are now starting to see the expected acceleration of demand in the market for expert S/4 skills.
2025 is on the horizon and let’s face it, the clock gets faster as the deadline gets closer. Even if you can’t always hear it, you know it’s counting down. Smaller companies can get away with waiting a couple of years but for larger companies, the time to act is now.
There are multiple SAP S/4 transition journey options but whichever way you slice it, moving and upgrading your ERP is a major project, particularly for large, established organisations that trust their current and robust landscape.
To get the most benefit from the journey to S/4HANA, companies need to understand what’s involved in this complex and strategic upgrade. What are the options, the costs and time constraints and who are the right partners to secure the resources required to succeed?
Now that scalability seems less of an issue, there are still some significant challenges to overcome that only expert SAP consultants can really help you to address, namely;
- S4 is so different to ECC6 that your business users and experts must spend a lot of time understanding how to adapt to it, so when and how can you justify this investment in their valuable time and who in your business is going to do it?
- 41% of organisations agree that estimating the cost of transition is the main challenge for moving to SAP S/4HANA (S/4HANA Market Study, PAC)
- Compiling an overall business case to justify this move to S/4 can be difficult
- But, let’s not forget the elephant in the room…
The focus of this discussion is SAP S/4HANA on-premise edition and not the heavily promoted SAP S/4HANA Cloud edition which is full Software-as-a-Service (SaaS) and slow to take off.
The low adoption of the latter is because most SAP ERP customers need to retain control of the application configuration to handle their process differences and complex interfaces, in spite of the trend towards standardisation. SAP ERP systems are often considered mission-critical, which is even more reason to tightly control them.
Customers need to decide whether the S/4 infrastructure they will use will remain on-premise or move to the Cloud—and whether this will be private, public, or hybrid. There is currently big interest in Cloud Infrastructure-as-a-Service (IaaS) delivery models.
So far, around 40% of S/4 software sales have been to brand new customers of SAP, i.e. “Greenfield” or S/4 implementations starting from scratch.
They have the easiest task, as they have no SAP-based systems to worry about converting. Their biggest skills need is for senior SAP application architects, both financial and logistics, depending on the S/4 modules involved.
Existing SAP installed base customers have more work to do. They could decide to start again with their S/4 ERP system and re-implement from scratch, just taking some basic data from the old system.
If their current ERP system is too customised, or out of date, re-implementing back on vanilla software could be best.
But most installed base customers will want to do some sort of system conversion in their transition to S/4. This is complex and involves;
84% of SAP HANA migration projects in the next 12 months will be S/4HANA-related (according to the Centiq report).
Anticipating this spike in demand, RED has been developing relationships with this new wave of functional and technical S/4 talent, adding to our already established network of over 220,000 SAP professionals.
Unlike the ticking crocodile, migration to S/4HANA shouldn’t be feared. It’s inevitable yes but, with strategic planning, opportunity knocks.
Don’t be Hook, living in fear of the ticking crocodile. Be Peter Pan and use this inevitability to support your successful migration – albeit perhaps, earlier than planned.