Study shows: SAP S/4HANA migration is highly relevant for 85 percent of companies

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By MR BLUEFIELD - September 26, 2019

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The conversion to S/4HANA is of great concern for the SAP community: Eight out of ten German companies rate the importance of the new real-time ERP solution for their own digitization as „high“ or „very hig“h. This is confirmed by a recent study conducted by the University of Koblenz in cooperation with DSAG (Deutschsprachige SAP-Anwendergruppe e. V.), Computerwoche and process-and-project.net. MR BLUEFIELD presents the key findings.

 

The majority of companies worldwide work with SAP business software. In the coming years, they will be faced with the task of migrating complex system landscapes to S/4HANA. For many companies, however, this is a real feat. As one of the most modern ERP systems, S/4HANA provides the technological basis for the digitization of business processes – yet, it differs fundamentally from the previous SAP core product. The study "Positioning S/4HANA", in the course of which 184 participants working mainly in large organizations were surveyed, shows where companies currently stand in terms of implementation, which obstacles still need to be overcome and to what extent the necessary change is seen as an opportunity for reorientation.

 

Mastering digitization with S/4HANA

85 percent of executives surveyed (mostly mid- top level) rate the importance of S/4HANA for their company as „high“ or „very high“. Accordingly, they deem the migration to the new SAP S/4HANA system very important. For 80 percent of the participants, the introduction of S/4HANA is one of the Top 3 trending topics. Nearly one third (29 percent) describe the project as the largest that has recently arrived on the executive floor. For the majority of respondents (71 percent),the degree to which top management is involved in S/4HANA planning is considered „intense“ to „very intense“.

 

Status quo: Where companies stand today

The number of projects that have been fully implemented to date is quite manageable: 8 percent of study participants state that they have already completed the switch to SAP S/4HANA. Another 15 percent are in the introductory phase. Further, a quarter of the respondents are currently preparing for the introduction of S/4HANA and the majority of companies are still discussing the introduction.

 

Drivers of the transition

More than two thirds of the respondents (74 percent) cite the announced end of support and maintenance of the current ERP systems in December 2025 as the primary reason for the conversion to S/4HANA. Other important goals include: Future security (59 percent), modernization of the user experience (50 percent) and the transformation of business processes (43 per cent), as well as a necessary renewal of the IT infrastructure (39 percent) and improved performance and response times (35 percent). In summary, the conversion project is used as an opportunity to question established processes within the company.

 

Cloud or on-premises? Preferred operating models

A fundamental question regarding the introduction of SAP S/4HANA is the choice of the best operating model. The on-premises scenario is preferred: Almost two thirds of the survey participants (65 percent) operate S/4HANA on their own servers. Pro arguments for this choice include data protection and a better adaptation to individual business processes.

15 percent of the study participants state that they operate SAP S/4HANA in a cloud environment – 6 percent use the SAP S/4HANA Public Cloud and 9 percent rely on a SAP HANA Enterprise Cloud (Private Cloud). The main reasons for this type of cloud use include future security and scalability. A further 6 percent rely on a hybrid solution.

 

Risks and challenges of transformation

There are several uncertainties among companies as to which currently used applications and solutions should be migrated to S/4HANA – and which not. 61 percent of survey respondents do not yet have an answer to this question.

The majority of study participants regard the availability of an experienced service provider who accompanies migration projects and offers corresponding software solutions as a critical factor. Only 4 percent believe that they already have such experts at hand. Therefore, companies should organize a technical consulting at an early stage: The specialists at the software and consulting company SNP Schneider-Neureither & Partner SE are glad to assist with IT and business transformation projects.

 

Related articles:

Migration to SAP S/4HANA: Here`s why companies should migrate

SAP S/4HANA: How companies can optimally approach migration

Your path to SAP S/4HANA: Greenfield? Brownfield? BLUEFIELD!

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MR BLUEFIELD SUMMARIZES

  • Eight out of ten German companies rate the significance of the new real-time ERP solution for their own digitization as „high“ or „very high“.
  • Only 8 percent of the respondents have already completed the switch to SAP S/4HANA.
  • The main drivers for the conversion include the end of support and maintenance for the current ERP systems in December 2025, future security and the changeover of business processes.
  • The transformation project is being used as an opportunity to question established processes.
  • An on-premises operating model is preferred: Almost two thirds of the survey participants (65 percent) operate S/4HANA on their own servers.
  • 61 percent of respondents have not yet decided which applications and solutions currently in use should be migrated to S/4HANA.
  • Only 4 percent see the availability of experienced service providers as an uncritical factor. Thus, companies should organize technical advice at an early stage.