Why SAP S/4HANA is more important now than ever?

As businesses emerge from the COVID-19 crisis and pursue to reduce operational risk while enriching digital capabilities, migration to SAP S/4HANA is a great opportunity to adopt newer, more resilient technologies that can help to achieve those objectives.

Resiliency: The pandemic highlights the need to reduce reliance on individuals and other resources that are susceptible to unavailability or disruption during pandemics, natural disasters, and more. Migration to S/4HANA offers an opportunity for business running on SAP to reduce the level of customization and complexity in their current ECC system, consequently reducing the need for specific resources to maintain and support the application. For businesses with on-premises delivery models for their legacy SAP ECC software, migrating to S/4HANA also provides an opportunity to move ERP into the cloud, either by subscribing to S/4HANA Cloud1 or hosting on a cloud platform provider like AWS. Cloud platforms of prominent providers are normally more automated and robust, and less human resource-dependent, than conventional on-premises solutions, providing a higher level of resiliency during a crisis.

Digital Capabilities: The emphasis over the past decade on enriching digital capabilities, particularly automation, analytics, AI, and ML will accelerate in a post COVID-19 world. The significance of real-time enterprise data and an enhanced ability to analyze it becomes more important than ever in the face of a major calamity. S/4HANA offers machine learning and in-depth predictive analysis to enable improved performance and an intuitive user experience. In addition, HANA being an “in-memory” platform, data is always stored in the RAM. SAP S/4HANA handles analytics and reporting an incredible 1800 times faster.

User Experience: Digital transformation is all about enhancing user experience. Investing in UX early on saves costs and significantly reduces TCO. In spite of this, many companies forget UX design the moment they hit the system implementation phase. Fiori based interfaces are simpler to use than previous SAP UIs, so they enable greater productivity. With customizable and cleaner menus and tiles, as well as fewer clicks, Fiori can reduce time spent on tasks of up to 64%. The mobile workforce is estimated to reach 42% of all workers by 2022. Fiori’s adaptive design is well affiliated with this trend. Mobile workers can leverage the Fiori client to stay efficient while on the road. Fiori’s intuitive interface allows users work with touch screens with ease. Coherent UI behavior and design provides users with a similar experience regardless of device.

Resource Scarcity: As we get closer to the EOL of SAP ECC support, there will be a significant shortage of experienced SAP consultants to support S/4HANA migrations. The shortage of qualified SAP resources may become more severe as the 2027 deadline approaches and will substantially increase implementation or migration costs. The scarcity may be alleviated to some extent in the short term as some businesses push the pause button on their S/4HANA migrations due to COVID-19 and the extended deadline from SAP. However, this will present an opportunity for businesses to take benefit of a reduction in demand to aggressively move ahead with implementations.

Financial Considerations: The capital investment in migrating to S/4HANA is substantial. This cost is mitigated to some extent, however, by the following:

• Adopting a “greenfield” implementation which decreases the level of customization and intricacy of the ERP solution should lower the current applications maintenance and support expenses.
• Implementing a cloud-based solution for S/4HANA has the possibility of reducing operating expenses and transform fixed costs of on-premises solutions to elastic cloud pricing based on actual consumption.
• The enhanced digital capabilities of S/4HANA will enable businesses to achieve greater productivity and monetize their data.
• SAP offers credits for switching existing investments in legacy ECC licenses to S/4HANA.
• Migrating to S/4HANA eliminates any impending risk of unexpected costs and liability associated with indirect access to SAP ECC software, as named user licenses are not necessary for S/4HANA.