Rimini Street: SAP S/4 Hana Survey

From the perspective of a computer science professor, the in-memory computing database Hana appears to be a paradigm shift. Hasso Plattner and his students at the HPI in Potsdam (Hasso Plattner Institute) are constantly setting new records.

At the same time, the SAP community is wondering whether this effort is necessary and is waiting for a validated roadmap. "ERP/4 Customer: More than just quick and easy?" This is the motto of the German-speaking SAP User Group (DSAG) for the upcoming annual congress.

DSAG Chairman Marco Lenck explains what this means:

"For S/4 Hana to become an ERP/4 customer and be accepted by the market, customers first need the business cases based on it, which then result in the use of S/4 Hana. Speed alone does not motivate companies to introduce a new product."

This means that the question mark set by DSAG will take on a very special meaning in the upcoming discussion about the successor to S/7 (SAP Business Suite 7). The S/4 discussion that has now been initiated is based on the well-known consideration that not every company currently sees the need to map new business models.

SAP customers are sticking to tried-and-tested business processes and want to see them improved using existing ERP systems, according to DSAG's survey of the community.

However, there are also pioneers who are willing to take risks and implement the first digitalization projects, the association rightly points out. However, if SAP's figures are to be believed, there are only very few existing customers.

The latest Rimini Street survey comes to similar conclusions and clearly shows that 85 percent of respondents do not see any benefits for their business from the new S/4 Hana applications.

Overall, 68 percent cannot see a clear business case for themselves and are unable to calculate the ROI for using the new software to justify the investment.

A full 72 percent of the companies surveyed intend to remain on their existing stable and mature ERP/ECC 6.0 platform. Only three percent of current ECC users use a small proportion of their own Hana solutions to accelerate their evaluations and reporting.

The survey also revealed that three quarters of companies are using their ECC 6.0 system with an Enhancement Pack 6 or previous EhP versions. Only a few companies are planning to use and upgrade to the latest Enhancement Pack 7.

"Rimini Street conducted this survey to better understand the primary application strategies of SAP users around the world"

said David Rowe, Senior Vice President and Chief Marketing Officer, Rimini Street.

"The results of this study are highly congruent with numerous comments from analysts at international level and comparable industry surveys on this topic.

All results describe Hana and S/4 Hana as discontinuous and speculative with little or little added value in relation to the high costs and risks for practical use.

According to many respondents, the Hana in-memory computing database and S/4 Hana represent an unnecessary risk without clear business benefits."

Existing SAP customers prefer proven solutions such as ERP/ECC 6.0 and R/3 4.x applications for their company. The vast majority of the companies surveyed have clearly decided to remain on the existing mature SAP application platforms instead of replacing them with S/4.

Almost half, 43 percent, do not want to replace the proven ECC and 4.x systems because the existing systems are optimally aligned with the company's respective business requirements.

For as many as 37 percent, setting up a new solution is not affordable and 23 percent want to wait and see and decide later whether to switch to a new solution.

"With its S/4 Hana product approach, SAP is trying to further advance its primary goal of positioning itself as a player in the cloud market. Representing tens of thousands of companies worldwide, this study confirms the path of SAP Business Suite users who want to continue to receive their benefits and added value from the stable and mature ECC 6.0 and 4.x SAP applications in the future"

summarizes Dave Rowe.

"Rimini Street is dedicated to helping organizations meet today's challenges with difficult and changing software landscapes.

Targeted services for innovation and service roadmaps as well as a first-class support model enable existing SAP customers to maintain and optimize the benefits of their current SAP systems. This includes freeing up financial resources for new innovations that build on business success.

On the other hand, we want to safeguard existing investments without the risk of waiting and with increasing maintenance fees over an indefinite period of time until the new products are available and mature."

S/4 Hana is a topic that has been occupying the SAP market and existing customers since February 3 of this year. The companies surveyed rate Hana and S/4 Hana as a "young" and "speculative" product with little to no convincing added value to date. In addition, the upcoming expenses and unmanageable costs are estimated to be very high.

For many existing SAP customers, the Hana and S/4 strategies represent an unnecessary risk with no clear business benefit. The DSAG Annual Congress will address this topic. Rimini Street is not alone in being convinced that SAP needs to work on this and provide its customers with valid business cases for a changeover.