A key reason why companies are not migrating to SAP S/4HANA is the lack of a Business case, according to the America’s SAP Users’ Group (ASUG). It’s not surprising when you think about it. Transitioning an organization to SAP S/4HANA is no small undertaking. It requires a considerable investment in effort, time, and money, so it needs to be well thought-out and managed. And while most SAP customers know they will make the move at some point, over the next one to five years, they are still stymied by questions about when and how they should start, how much will it will cost, and when and where they will start to see the benefits. These are all valid and important questions – but they shouldn’t paralyze an organization from moving forward – so let’s address these issues head-on.

Real and perceived barriers to implementation

There are currently 3,200 SAP S/4HANA customers, but ASUG estimates there are only 146 live SAP customers. Why the hesitation in migrating to SAP’s greatest innovation since SAP R/3? Based on our 20⁺ years of experience as an SAP consulting and implementation partner and our work with global businesses specifically around SAP S/4HANA, we see the following issues causing much of the trepidation:

• Investment fatigue. After huge investments in platform implementations of all types – not just SAP – many companies want a break before embarking on their next big spend (no matter what the benefits).
• A wait and see attitude. First released in 2015, SAP S/4HANA’s functionality is still evolving (only finance and logistics are available today). It’s understandable that customers are waiting to learn more about the complete offering before moving forward.
• An incomplete understanding of SAP S/4HANA’s value to their organization. In other words, it’s the big issue illuminated in the ASUG report: lack of a business case.

Business benefits trump implementation hurdles

Once customers begin the process of building the case for their own organizations, they will quickly see that the benefits of transitioning to SAP S/4HANA— which span companies’ strategic, operational and IT goals— are much greater than the obstacles.

Strategic: As your company embraces digital, transitioning to SAP S/4HANA is a strategic imperative for your company. Traditional ERP platforms are not flexible enough to rapidly adapt to change or process volumes of data to provide insights on consumer preferences, business opportunities or operational efficiencies. SAP S/4HANA is designed to address these issues with agility and speed, providing a digital platform that fosters business growth instead of hindering it.

Operational: These benefits are perhaps the most well-known to SAP customers, but SAP S/4HANA is designed to help you significantly reduce your data footprint, rein in development costs, and shrink your total cost of ownership.

IT: There is an overlooked and underappreciated benefit that SAP S/4HANA brings to IT departments. Customers typically have legacy systems that include massive and costly customizations. Based on our work with clients, TCS believes that perhaps as much as 70 percent of these customizations can be avoided with SAP S/4HANA, freeing up administrative and IT resources for other strategic uses.

SAP S/4HANA in action

So how do these advantages come together in practice? Consider the experience of one of TCS’ clients, a global leader in imaging solutions. The company is adopting SAP S/4HANA software to enhance the critical financial operations that drive its business. As an early adopter of this technology, our client is enabling real-time month-end reporting, speeding the allocation process, and providing enhanced visibility into cash flow—all of which empowers more rapid, responsive, and intelligent decision making. Essentially, the company has digitally empowered the office of the CFO with its move to SAP S/4HANA.

It goes to show there is much to be gained by bellying up to the starting gate. Companies that continue to delay building their transition roadmap risk missing out on the above-mentioned business benefits, hampering their digital business objectives, and accumulating customization and maintenance costs in the meantime.

Getting started: building the business case and roadmap

Regardless of your starting point and systems, building a roadmap is the first step to ensure the transition to SAP S/4HANA is a smooth and beneficial one. A strategic roadmap helps you realistically manage this large, complex technology and business process transformation in a series of well-defined phases. Start by looking at your organization’s business objectives and outlining a technology transition that gets you from your current state to full implementation in the required time period. Stakeholders can see at any point along the timeline what costs will be involved, and the expected financial and business returns delivered as the system is implemented.

In our experience, a roadmap is critical to not only getting the initiative off the ground, but also to budget planning and ongoing cost control — which, as we discussed, is a key barrier to SAP S/4HANA migration. In many cases, a “big bang” deployment is too pricey and unrealistic. It’s essential to design a phased approach that makes a full implementation achievable, breaks down overall costs into more palatable chunks, and can front-load quick wins and pay-offs earlier in the implementation cycle.

Take the road ahead

As more and more companies take the SAP S/4HANA plunge, we’re excited about its potential to change the way they do business. Like any major business transformation, the move requires stakeholder buy-in, exhaustive planning and diligent oversight. However, we know from the early results of our clients’ implementations that once you take the first step forward, your business will never look back.