By 2025, companies will need to switch their systems from SAP ECC to S/4HANA. But even if upgrading or migrating to S/4HANA is one of the most burning issues at industry events, change is progressing slowly. MR BLUEFIELD spoke with Ben McGrail, Managing Director of SNP UK, about the reasons for the slow pace of change and innovative approaches to accelerating S/4HANA deployments.
Mr McGrail, it appears that S/4HANA has not yet found its way into practice. What is the status quo?
That's correct. The much conjured and expected S/4HANA wave has been slow to set in. Our experience at SNP shows, however, that it is picking up pace: By now, many SAP customers are in the middle of implementing assessments, roadmaps, proofs of concept and pilot projects for an SAP S/4HANA implementation or have just started to do so – some are already in the process of implementing a transformation project.
Among the very "big ones", however, there has been little progress so far with regard to the S/4HANA transition: The percentage of the world's 500 leading SAP customers who have fully migrated to S/4HANA by now is almost zero.
In your opinion – what are the reasons for the transformation’s slow progress?
Some of the reasons for the slow introduction of S/4HANA are obvious: lethargy, economic uncertainty, costs and competing priorities make it a seemingly easy option to do nothing.
What are the challenges facing companies that have not yet become active or whose transformation is still in its infancy?
The low migration rate to S/4HANA has indeed brought with it a major problem: human resources. The general estimates given for the number of SAP customers worldwide who will switch from existing ERP systems to S/4HANA come up to approximately 30,000 to 50,000 companies. Based on these estimates, if we calculate the required migration rate by 2025, we see a totally untenable (and growing) rate of 100 companies per week over the next six and a half years. Since we are not currently achieving this rate for S/4HANA rollouts, the lack of human resources regarding S/4HANA consultants has not yet occurred, but it will happen.
Against this background, what do you advise companies to do against? Is a prompt migration to S/4HANA even possible at this point?
Companies should indeed initiate the transformation promptly so that they do not lose out in the end. The restriction to two migration options – technical upgrade (brownfield) or complete re-implementation (Greenfield) – has reduced the willingness to switch in the past.
We at SNP have developed an alternative for the transition to S/4HANA – which we call the BLUEFIELD approach. With the BLUEFIELD approach, customers can carry out business and technological transformations in a time-saving manner that, at the same time, minimizes costs and risks.
Can you elaborate on that?
Gladly. With the BLUEFIELD approach, companies are able to combine the benefits of Greenfield – and thus the opportunity to realize the transition to S/4HANA for business change and IT innovation, such as the move into the cloud, in a single go-live – with Brownfield, and therefore the retaining and integration of all previous investments in solutions and data. At the same time, the consulting effort and duration of the project are halved – hence, the BLUEFIELD approach offers companies significant advantages with respect to their transformation to S/4HANA.
Let's take a look into the future: What potential for change do you see?
There is general agreement throughout the enterprise application industry about the reasons for the initially sluggish acceptance of S/4HANA, but also about the need for change.
Transformation companies such as SNP, important consulting partners and SAP are therefore jointly developing innovative solutions that enable customers to drive business transformation via S/4HANA. Discussions with industry analysts and market observers show that we are just at the beginning of a major wave of S/4HANA transformation. This will not only change our customers, but also the consulting industry itself.
Ben McGrail, Managing Director of SNP UK
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