S/4HANA: Implementation gains momentum with SAP customers

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By MR BLUEFIELD - August 11, 2020

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How far have companies come with regard to introducing S/4HANA? What kind of obstacles remain - and what advantages does the new ERP real-time solution offer? We summarize the key findings of a recent survey conducted by the German-speaking SAP User Group (DSAG) and the American SAP User Group (ASUG).

 

The conversion of existing IT systems to S/4HANA is much discussed in the business world. However, only a small percentage of SAP users have already migrated to the new ERP real-time solution. Twelve or 16 percent of companies belonging to the German or American SAP user group have yet completed the implementation. But the introduction of S/4HANA has gained momentum: Almost one quarter of DSAG members (23 percent) are currently commencing with the migration. On the US side, the figure is quite similar (22 percent). Every other German and one in three US companies finds itself in the planning phase of the complex transformation project, which is far more than an upgrade. Twelve percent of the German and 18 percent of the US companies surveyed have not yet decided whether they will introduce S/4HANA. This is the result of a recent survey, for which a total of 483 SAP users have been questioned.

 

S/4HANA migration: Reasons for hesitation

But why have many companies not yet realized their S/4HANA project? For the members of the American SAP user group, the costs are a decisive factor: They assume that a large budget must be provided for the changeover – even though cost-minimized migration procedures are available. Other reasons mentioned by the US companies surveyed include the lack of a business case and ongoing SAP ECC projects.

In contrast, DSAG members do not yet see the need to convert their systems. It appears that the end of standard maintenance for Business Suite 7 in 2027, which increases the risk of weaknesses and sources of error, is still a long way off for these companies. However, they would be well advised to use the remaining time effectively to plan the migration, including the preparatory work, without time pressure. Some German companies also shy away from the migration, as there are still uncertainties regarding the functionalities – and likewise, they still lack a concrete business case.

 

S/4HANA: SAP customers see clear advantages for their company

Organizations that have already implemented S/4HANA list many benefits. In both SAP user groups, improved performance is emphasized above all. Furthermore, the new Business Suite is seen as a strategic basis for further innovations. After all, S/4HANA is meant to enable a faster access to analyses and simplify the provision of data throughout the entire company – all of which are important factors in expanding one's own competitive advantage.

There are major differences between the two user groups with regard to the optimization of existing business processes. This advantage is seen by almost two-thirds of DSAG members (63 percent) – but only by just over one-third of ASUG members (38 percent).

There is a similar priorization with regard to the removal of unnecessary codes: Only 19 percent of ASUG members see an advantage in this, but 41 percent of DSAG members do. "Perhaps ASUG members focussed more strongly on the purely technical conversion to S/4HANA," says Marco Lenck, DSAG CEO, commenting on the survey results. "Among DSAG members, on the other hand, a new implementation or a migration is often used to clean up the system at the same time.”

 

Analytics Cloud supports further digitization and forecasting

The importance of the SAP Analytics Cloud for the digital future of companies is assessed quite similarly: 36 percent of DSAG members and 34 percent of ASUG members are interested in the technology. However, only 13 percent of DSAG members actually use the business intelligence solution for advanced and predictive corporate planning. In the U.S. user group, one in five companies already relies on the SAP Analytics Cloud. One in three DSAG members is planning to use the Analytics Cloud in the future – in the American user group, this is only true for one in five companies. "These products support digitization efforts and the need for forecasting," knows Lenck. Facing the current pandemic, companies have realized that they need to plan more flexibly and with greater foresight.

 

S/4HANA conversion: Business units with highest priority

Among the business areas that are primarily expected to benefit from S/4HANA, the financial area ranks highest for both DSAG (76 percent) and ASUG (80 percent). Further, sales and distribution are assigned high priorities: more than half of the DSAG and ASUG members agree.

According to the survey, major differences are found in supply chain management. The specialist area is regarded as highly relevant in terms of S/4HANA benefits for half of the ASUG members, yet only for just over a third of the DSAG members.

 

Consequences of the ERP real-time suite on business processes

Furthermore, the question of whether S/4HANA has an impact on existing business processes is evaluated differently. The majority of the DSAG members (74 percent) assume that this is the case – yet in contrast, only 13 percent of the US companies surveyed agree with this statement. Change management and standardization are cited as the main effects. "The business processes of the members from both user groups should not differ fundamentally," says Lenck. The DSAG CEO therefore believes that the difference in the survey results is rather due to a differing corporate culture. According to Ann Marie Gray, vice president of content strategy and research at ASUG, it seems to be a lower priority for the US companies surveyed to redesign their processes as part of their migrations. "We know from the 'ASUG Pulse of the SAP Customer Study 2020' that business process standardization is one of the three most important reasons why ASUG members are migrating to SAP S/4HANA.”

 

SAP Fiori: Increased use of the intuitive user interface

The participating companies were also asked about SAP Fiori, the new user experience for mobile applications. About half of the ASUG members (57 percent) and DSAG members (47 percent) already use the intuitive user interface. Another 44 percent of DSAG members can imagine using it in the future, compared to one quarter of the U.S. companies surveyed.

Ann Marie Gray expects this trend to increase "as our members continue to use S/4HANA and undertake projects to deliver the full value of the data in their new ERP system to business users.”

 

Please click here for the full study report.

 

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MR BLUEFIELD SUMMARIZES

  • Only a small percentage of companies already use S/4HANA. But the introduction of the new ERP real-time solution has gained momentum: According to a recent survey conducted by the German and American SAP user group, many companies find themselves in a planning or implementation phase.
  • For US companies, the reasons for the hesitant approach include: costs, ongoing SAP ECC projects and the lack of a business case. German companies are uncertain about the functionalities, and sometimes there seems to be no need to convert the system right now.
  • S/4HANA users witness clear advantages in use, ranging from a better performance and faster access to analyses to simplified data provision within the company.
  • For both groups, departments that are primarily intended to benefit from S/4HANA are the finance department and sales or distribution – and, in the case of US companies, supply chain management.
  • The significance of the SAP Analytics Cloud for the digital future of companies is being assessed quite similarly: 36 percent of DSAG members and 34 percent of ASUG members are interested in the technology.