What to consider for S/4 and Hana implementation

More flexibility and agility is desired, see also E-3 cover story March this year. This is the result of a trend study conducted in Germany last year by IT specialist Arvato and market research company PAC.

In the following, some of the results of this study are presented and there are also tips on how to successfully make the switch to S/4 and Hana.

The majority of respondents are positive about the new SAP system. Around two-thirds expect S/4 to significantly accelerate their processes and data analyses, and more than half expect the software implementation to provide a kind of initial spark for modernizing existing SAP applications and infrastructures.

Still, 48 percent of the study participants trust that S/4 is more user-friendly, more flexible, and more customizable than the previous versions.

Five percent of companies have already completed implementation on S/4, while nine percent were in the rollout phase during the survey period. (Editor's note: These figures differ significantly from the DSAG Investment Report from this year, see DSAG graphic and detailed report in E-3 March 2019, page 21).

For a further 18 percent, the switch to S/4 and Hana is firmly planned, so that overall almost a third of the companies surveyed are already using the new S/4 or are about to do so. 54 percent have not yet decided.

Once the decision has been made to introduce the new system, the next challenge is to develop the appropriate strategy, including costs and schedule.

An S/4 implementation always requires thorough preparation. After all, it is about converting holistic, business-critical business process systems. The conversion to S/4 and Hana is a highly complex project with a large number of affected users and usually tight time and budget constraints.

In addition, it usually runs in parallel with ongoing operations, but must not interfere with day-to-day business and should require only a small amount of downtime, setup time and changeover time. The following eight recommendations for action should help.

For 68 percent of the companies surveyed, the most important requirement for S/4 is to improve existing SAP-supported processes. The co-authors of the PAC study favor the greenfield approach, since S/4 and Hana are oriented to the lines of business and only in this way can the advantages of S/4 in terms of business processes, such as the performance of data analyses and the user-friendly handling of the analytics functions, be fully exploited.

Reinstalling SAP systems along best-practice lines allows processes to be restructured from the ground up and better adapted to changing business requirements. According to this study, however, only 33 percent of the companies that have decided to implement the new SAP system intend to go down this route.

Two-thirds, on the other hand, choose the brownfield approach. Here, the change to S/4 is analogous to an upgrade or migration. Among these participants, a majority of 73 percent prefer a system conversion, i.e., a purely technical changeover of the SAP systems.

The other 27 percent are in favor of a migration process in which they consolidate and harmonize their SAP processes. In the run-up to the migration, it is important to analyze very carefully whether the specific objectives of the migration to S/4 and Hana - for example, more extensive use of the SAP standard - can be achieved with a simple system conversion.

Check on the simulator

It is advisable to complete comprehensive tests in a test client in advance of going live. The test users should represent all later user groups - from controlling to logistics to production planning. During testing, typical process flows and application scenarios should be run through.

39 percent of respondents advocate bringing external IT consultants on board in connection with the S/4 implementation. 27 percent of all study participants focus on process consulting for the optimization of existing business processes, while 15 percent primarily want consulting with regard to the implementation of new business processes or models.

Making the hardware fit

For more than 80 percent of the study participants, the external service provider must have the technical expertise to advise them on the transformation of their business processes. However, they should not only be familiar with SAP, but also look beyond the IT horizon.

They have to know what makes the company tick and what special features there are in its business processes, and have a professional understanding of the industry. Around 70 percent of respondents share this view and demand appropriate industry expertise from their service provider.

It is advisable to take a close look at a new partner in advance and find out about references to successful S/4 projects, a recommendation shared by three quarters of the study participants.

As with any project, someone has to wear the hat. His or her decisions are then binding for all levels. The ideal project manager is technically competent, assertive and trustworthy. In addition, personal authority as well as social and communication skills are required to consistently resolve conflicts and drive the software conversion forward.

Those who want to operate the new ERP suite in their own data center need server hardware that is also designed for SAP S/4 and Hana. In addition, you should check in advance to what extent your own active developments are compatible with the Hana database, and take this opportunity to streamline your company's own IT landscape.

You can choose between the on-premises solution and the cloud variant. IT service providers such as Arvato Systems can provide support for both scenarios.

One of the main reasons for switching to S/4 is the demand for more flexibility and agility. Other reasons cited by respondents included easier handling and much faster data analysis.

More on users' expectations of the new application suite, on the topic of on-premises versus cloud, and on the reasons why some companies have not yet opted for S/4 can be found in the full version of the study. Readers can also find out which departments expect the most benefits from S/4 and which additional SAP products are most in demand.

SAP S/4 Hana in Germany

Around one hundred executives and SAP managers from German companies with at least 1,000 employees were interviewed by telephone.

More than a quarter of respondents already use the SAP Hana platform, for example as a database for the data warehouse (SAP BW). The survey took place in May and June 2018. Fifty-seven percent of the companies belong to the service, trade and transport sectors, while the other 43 percent are in the manufacturing/production sector.