S/4HANA – Why Companies Shouldn’t Wait To Make The Switch

SAP launched the software generation S/4HANA five years ago. Since the start of the latest SAP generation in 2015, companies worldwide have had to deal with the conversion of the expiring R/3 systems. With the new software, everything can be controlled in the company, from materials management to human resources and finances. If you want to advance your digitization, there is no way around it.

The changeover must be completed by 2027 because there will only be a limited and more expensive maintenance option for the old systems. Switching to the new system will become a virtual obligation for companies worldwide. However, most companies need the support of external consultants and IT service providers for the update because the integration of the various solutions is hardly feasible without years of experience.

Bottlenecks could now arise, as a study underlines. Fifty-two per cent of the companies are currently only doing preliminary research on S/4HANA, while 30 per cent are working on an initial strategy. This creates an exceptional situation. On the one hand, due to the obligation to update, the entire consultant market is currently being mixed up since many companies are simultaneously dependent on service providers. On the other hand, switching to the new system requires multiple usual consulting days.

Corona Should Not Slow Down The Digitization

Companies do not have to completely rebuild their existing system landscape to introduce the new SAP software generation. With the so-called brownfield approach, business processes that have been optimised over many years can be brought up to date with digitization. The existing R/3 system is brought to S/4 HANA as it is. The brownfield approach can be compared to a traditional software upgrade. The software is updated, data is transformed, and business processes are adjusted.

On the other hand, the greenfield approach pursues a complete system re-implementation. It offers the opportunity to redefine processes and bring outdated systems back to the SAP standard. This approach is disruptive and expensive, but it also provides an opportunity to completely clean up the system and only provide the needed functions. Which direction is the right one for a company depends largely on corporate strategy, the initial IT situation, or the company’s size?

Above all, consulting firms try to support their customers in maintaining previously smoothly functioning processes and further optimising them with S/4HANA. To this end, proprietary package solutions are being developed that bring the company’s already running central ERP system (Enterprise Resource Planning) to S/4HANA. In addition, this creates a basis for subsequent smaller and larger innovation projects.

Waiting to make the changeover due to the Corona crisis is critical: companies should not remain in a Corona shock state for too long. The consulting market will be empty in the foreseeable future because many service providers cannot cover the high demand for consulting services. In addition to SAP Basis experts, consultants are also needed in finance and logistics and developers who are proficient in the SAP programming language ABAP and SAP Fiori. ABAP stands for Advanced Business Application Programming. The in-house programming language developed by SAP for commercial programming applications in the SAP environment is used to create customer-specific solutions. SAP Fiori is used to creating a whole new user experience, no matter what device,

Certified Packages Should Help With The Selection

To give companies additional support during the changeover, SAP certified qualified partner package solutions. The packages put together in cooperation with experienced consultants serve as standard tools. Above all, the risk and price for the company should be kept low. At the same time, companies can rely on specialist knowledge and the respective industry know-how, and system conversions can be planned more efficiently. Because the goal, time frame and exact price are defined right from the start. An example of such a standardised package is “runS24”.

The duration of the projects ranges from four months for simple updates, so-called “conversions”, to two years or more for really complex projects. Companies can check in their preliminary projects whether the requirements for S/4HANA are met and thus reduce the complexity of the conversion. In addition to creating the right conditions for transformation, companies must ask themselves a few other questions in advance, such as what the transition is intended to achieve. At the same time, companies should be prepared for the fact that switching to the S/4HANA database will increase the need for hardware and increase it accordingly in advance. With the “Readiness Check” tool, the need for hardware can be determined precisely, and companies can also use the check to check

Benefit Faster From Innovations

Due to the standardisation, processes can be transferred to the new SAP system faster and without long downtimes, and the innovative functions of S/4HANA can be used directly. Since this is a pure conversion, the schedule is highly compact but still offers enough space for necessary corrections, tests and training units. It is nevertheless advisable for companies to create the prerequisites in their preliminary projects to reduce the complexity of the conversion. The sooner the mandatory change happens, the sooner companies can benefit from digital.