In the last quarter of 2016, SAP released the SAP S/4 HANA 1610 on premise enterprise management software for its customers. With this, and pardon my Apple product launch inspiration, SAP released its best ever SAP S/4 HANA software for an enterprise. SAP made a very important announcement that customers can now run all their ERP processes on SAP S/4 HANA even if the product does not support a specific functional area.
SAP S/4 HANA is not a legal successor of the existing SAP Business Suite application and is a different product line altogether. SAP is promoting it as digital core to help customers reinvent their business, create new categories of services, leverage social channels to service stakeholders, and lead their journey in today’s digitalized world.
Existing SAP customers can adopt SAP S/4 HANA through new installation, landscape transformation, and system conversion. Deciding which option is the best will vary from customer to customer. Customers should not look at SAP S/4 HANA as an incremental advantage over their current system. However, it is very important for each customer to envision the entire decision journey in order to identify the value of SAP S/4 HANA adoption and finalize the best possible adoption strategy.
Customers have already invested millions of dollars and years in implementing their existing SAP solution. At the outset, it almost seems counter-intuitive to embark on a similar journey just because there is a new version of SAP software. It is imperative that a customer undergoes a business value assessment exercise in order to identify the gaps in their current solution vis-à-vis the enterprise’s digitalization. As part of this assessment, the customer needs to draw a roadmap for digital innovation and perform a detailed analysis of SAP S/4 HANA capabilities in order to identify and derive specific value from its implementation.
While building the business case, customers should also evaluate SAP S/4 HANA for its simplification capabilities and find out the impact it has on their existing landscape. Integrating several standalone solutions such as PPDS, EWM, and BPC into the SAP S/4 HANA core will simplify a customer’s landscape and result in consequential savings. Additionally, customers can explore whether or not they want to use SAP S/4 HANA as a centralized function for their enterprise. Applying this capability to central finances, for example, could simplify the entire finance operations landscape and be an important driver for your business case to adopt SAP S/4 HANA.
Once a business case is declared suitable for SAP S/4 HANA, it is time to figure out the best adoption strategy. New installation offers the flexibility of building everything from scratch. This results in eradicating complexities built in the existing system over a period of time, but it will definitely lead to higher costs and increased effort for implementation. With the landscape transformation approach, you can either install the new SAP S/4 HANA instance or convert an existing SAP instance to SAP S/4 HANA and then go for the consolidation of other systems in your landscape. System conversion looks to be an easy option which can help customer adopt SAP S/4 HANA in quickest possible time and leverage most of their existing investments but it is important to check if your existing system is ready for conversion. Before you finalize any of the three available options, it is very important to see where your existing system fits into the plan with respect to SAP S/4 HANA. A readiness assessment will help you find out whether your existing SAP system is eligible for SAP S/4 HANA conversion, and has all the add-ons, business functions, and industry solutions supported on the target SAP S/4 HANA system. Performing a pre-check—part of readiness assessment—will outline all the tasks you need to complete before you can embark on your conversion journey. Analyzing your custom developments for an SAP S/4 HANA conversion against simplification list of target SAP S/4 HANA will definitely provide the necessary information to decide if you can leverage your investments regardless of your adoption approach.
Depending on the outcome of your readiness assessment, you may encounter findings that cannot be resolved in a reasonable time frame. These include issues such as unsupported add-ons and business functions, among others. That said, you could choose a new installation as your adoption strategy and still leverage your existing investment by reusing custom developments in your new environment after necessary adaptations.
Business value assessment will help customers to see the SAP S/4 HANA adoption in reference to their digital roadmap while answering queries around the very purpose of adopting SAP S/4 HANA. A readiness assessment will provide the much needed transparency to select the best adoption strategy that will leverage existing investments.