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The journey to S/4 and the dilemma with color theory

With S/4 Hana, SAP has the fourth ERP generation on the market. Most companies want to master the digital transformation with S/4. And I think they are right to do so, because the new solution is a technological and functional leader.
Gregor Stöckler, SNP
May 6, 2022
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This text has been automatically translated from German to English.

But what does the journey to S/4 and Hana look like in practice? According to a DSAG survey from 2021, only a quarter of German SAP users are currently using S/4. Why so few? I see two reasons for this: Most do not yet recognize the added value and the others are having a hard time with the question of the migration approach. There is a lack of clear decision-making support. Marco Lenk, the then DSAG board chairman, already warned of this in the DSAG Investment Report 2020. In my opinion, the color theory is one of the main reasons why companies find it so difficult to make the move to SAP S/4. It oversimplifies a decision that is as complex and individual as each company. Black-and-white thinking and a broad spectrum of objectives and individual challenges are at odds with each other.

Green-, Brown- and Bluefield

In order (and please read with a wink): Greenfield is the darling of all planners and engineers. After 20 years of optimization, rollouts and legislative changes, it's finally time for a real business and IT project. Old braids are mentally cut off and the transformation of the business is started on the greenfield. In theory, this sounds plausible and - at least initially - is also a reasonable alternative in terms of costs. Unfortunately, however, SAP customers ignore good and correct investments from the past. And they usually also learn that in reality only a small part of the processes need a real redesign. Last but not least, every new implementation also involves a significant change management component - and this has been underestimated for decades. 

So, cost-saving and simple with the brownfield approach in the direction of S/4? Technically proven with standard tools and disguised as "upgrade de luxe," this approach is attractive at first glance for the risk-conscious. In reality, however, it is more of a difficult compromise. After all, most SAP ECC systems have "put on a lot of flab" after more than 20 years of faithful service: 30 to 35 percent of the data is unused, as is more than half of the customizing and in-house developments. So existing SAP customers get the downside of two worlds: "old sins" and little added value. Brownfield is postponing digital transformation, and with it, business innovation. And for a fair comparison, various pre- and post-projects would have to be priced in.

Another aspect of the oversimplification of color theory is to reduce a company's digital agenda to the SAP S/4 migration. Real accelerators of digital transformation - cloud, analytics 2.0, artificial intelligence and hyperautomation - are thus left out.  

I advocate a different way of thinking along three leitmotifs: eliminate, renovate, innovate. They underlie our Bluefield approach and enable SAP users to freely decide which previous investments (processes, data, code, and reporting) are viable for their very own digital transformation roadmap. In this way, we create a highly precise and individual blueprint based on organizational units, time slices, or free criteria such as number ranges, which combines many upstream and downstream steps in a resource-optimized manner.

Value creation and success

Every day, I speak with mid-sized companies and corporations that want to proceed or have proceeded selectively for precisely this reason. They always ask themselves the same, actually simple question: How can our IT system landscape contribute faster and better to the company's success? Because one thing is clear: Some parts of the value creation or the digital infrastructure can be mapped much better by fast and agile cloud solutions. Accenture calls this approach "Digital Cloud Decoupling".

Without a doubt, SAP's ERP solutions are the digital heart of most IT system landscapes. And applications such as SuccessFactors, Ariba and Concur complement them in a meaningful way. But that also means that the digital core today is not just SAP S/4. That's why my mantra is: The future is hybrid. And the best approach to get there is Bluefield.

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Gregor Stöckler, SNP

Gregor Stöckler is Managing Director and COO at SNP


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Working on the SAP basis is crucial for successful S/4 conversion. 

This gives the Competence Center strategic importance for existing SAP customers. Regardless of the S/4 Hana operating model, topics such as Automation, Monitoring, Security, Application Lifecycle Management and Data Management the basis for S/4 operations.

For the second time, E3 magazine is organizing a summit for the SAP community in Salzburg to provide comprehensive information on all aspects of S/4 Hana groundwork. All information about the event can be found here:

SAP Competence Center Summit 2024

Venue

Event Room, FourSide Hotel Salzburg,
At the exhibition center 2,
A-5020 Salzburg

Event date

June 5 and 6, 2024

Regular ticket:

€ 590 excl. VAT

Venue

Event Room, Hotel Hilton Heidelberg,
Kurfürstenanlage 1,
69115 Heidelberg

Event date

28 and 29 February 2024

Tickets

Regular ticket
EUR 590 excl. VAT
The organizer is the E3 magazine of the publishing house B4Bmedia.net AG. The presentations will be accompanied by an exhibition of selected SAP partners. The ticket price includes the attendance of all lectures of the Steampunk and BTP Summit 2024, the visit of the exhibition area, the participation in the evening event as well as the catering during the official program. The lecture program and the list of exhibitors and sponsors (SAP partners) will be published on this website in due time.