In February 2015 SAP rolled out S/4 HANA, the next generation business suite. Businesses everywhere are making decisions on how and when to implement this new platform and its various product offerings.
The key changes in S/4 HANA versus the previous version ECC 6 involves simplifications and considerably increased efficiencies. SAP was able to spot redundancies within its old platform and streamline them via S/4 HANA.
"SAP S/4HANA signals a move away from the transactional system that merely records data toward giving end users active decision support in real time that is based on data from both internal and external sources," explains SAP.
What are the business considerations when implementing S/4 HANA?
There are three main factors that play into consideration when businesses decide whether or not to migrate to S/4: Cost, usability and implementation model.
For starters, the platform is a considerable financial investment. The cost of purchase and implementation can be a hefty undertaking for any organisation.
From a user and training perspective, businesses with ECC 6 need to decide if they are going to be implementing S/4 HANA across the entirety of their system or in increments. There is a fair amount of scoping and planning involved here, especially considering the fact that ECC 6 has been taken out of life - with all resources being taken offline by 2025. Businesses need to decide how they are going to approach this change.
Perhaps the most important consideration for businesses looking to take on SAP S/4 HANA is the way in which they will put together a model. There are three options:
1.On-premise: This is the more traditional approach for businesses. With this model the organisation is in charge of deployment and maintenance. The benefit here is that the business is in complete control of the solution - from how it will be designed to what it will look like when implemented. However, this same freedom can be a huge pain point. When you choose to work outside of the SAP framework costs can quickly increase.
2.Cloud deployment: As the name suggests, this option involves full deployment in the SAP cloud. This option is particularly appealing in terms of cost. Unlike the on-premise option where deployments can become costly pretty quickly, the cloud deployment option is a lot more manageable in terms of cost. However, because this version is privately deployed on SAP's cloud it is managed externally by SAP, leaving businesses with less flexibility in terms of customisation.
3.Hybrid: Hybrid is the fusion of the two models mentioned above. A mix of both on-premise and cloud based systems allows companies to lessen the risk associated with both sides. However, this also means weakening the benefits.
The variety of choice in how to implement a model means that S/4 HANA is available to more businesses than the previous ECC 6 platform. While SAP used to be a platform primarily used by larger organisations, the flexibility in implementation options (combined with the more affordable price point of cloud deployment) opens the door for SMEs to start leveraging these tools.
What are some of the challenges SAP are facing with adoption of the platform?
While over 2,700 businesses have bought licenses since January 1st, 2016 only a small portion of these have gone through implementations or migrations. This presents a considerable concern because SAP are not able to identify beginner problems, which usually occur in new software releases.
As with any new platform, SAP S/4HANA is going through a teething period. SAP are actively trying to drive implementations so that they can pinpoint and address early problems before more businesses begin deployment.
SAP has struggled to encourage businesses to move forward with adoptions quickly. This is a problem for developers and early implementers as they have a limited number of reference points to spot early issues. Additionally, SAP runs the risk of businesses looking towards cheaper ERP competitors in the interim.
SAP has been, and continues to be, one of the world leaders in enterprise applications for business software. This next generation business suite has a lot to offer businesses of all sizes that go through implementation.
Interested in learning more? Reach out to Alex Brown from Progressive Australia at [email protected] with any questions.