Trend survey on S/4HANA switch: Migration strategy is the greatest challenge

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By MR BLUEFIELD - January 28, 2020

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pixabay | pete linforth 

The migration of existing ERP systems to the new SAP Business Suite S/4HANA is a challenge for corporations and medium-sized companies worldwide. A survey conducted by IT Onlinemagazin in cooperation with SAP partner SNP examines the goals that migrating companies are pursuing and discusses the challenges. MR BLUEFIELD summarizes the most important results. 

 

For 60 percent of the SAP user companies surveyed, the greatest challenge regarding the S/4HANA conversion is to find a suitable migration strategy.  After all, the commitment to one approach – whether Greenfield, Brownfield or Selective – is path-breaking for S/4HANA projects. Depending on the migration option, for example, the design scope and the downtimes of SAP systems required for the conversion vary.

The complexity of hybrid system landscapes (cloud, on-premises, SAP, non-SAP) causes headaches for 51 percent of the 106 survey participants, as it is associated with special requirements for the conversion. Almost one third of the companies (32 percent) surveyed name finding a suitable partner for the technical migration as another key challenge. Furthermore, 17 percent of respondents find it hard to evaluate tools that can minimize downtime for business operations.

A further obstacle is the involvement of specialist departments and the multiple burden it entails for them, as they usually manage the project parallel to day-to-day business, deal with technical issues and carry out function-, integration- and acceptance testings.

 

Goal of migration: Process optimization and harmonization

When asked about the primary objectives, 64 percent of survey participants stated that they were pursuing the harmonization and optimization of existing processes. At the same time, 62 percent would like to see a purely technical changeover. What initially appears to be a conflict of objectives indicates that while design scopes should be exploited, the actual implementation should be automated as much as possible.

25 percent of those surveyed would like to establish new functionalities, and approximately 20 percent of companies want to make massive changes to their SAP system landscape in the course of the S/4HANA conversion.

Accordingly, many users are primarily concerned with maintaining the status quo. A revolutionary change and the associated innovation potential currently seem to have a secondary importance. This is also evident in terms of the desired changes to the technical basis.

 

Desired changes when switching to S/4HANA

The trend survey was also intended to investigate whether SAP systems should be merged, centralized or split up in the context of S/4HANA transformations. 38 percent of those surveyed do not want to change their SAP system landscape in the course of S/4HANA activities. A quarter of the companies would like to make a few changes and 21 percent of the respondents are planning massive innovations. In those cases the motivation to change often derives from the complexity of hybrid system landscapes. For 16 percent of the companies, the nature and scope of changes to the SAP system landscapes are still unclear.

 

SAP Downtime: Requirements vary greatly

The conversion of an SAP system to S/4HANA is technically connected with a temporary unavailability. However, there are different opinions as to how much actual business downtime can be tolerated. While six percent of the companies surveyed would like to continue working just one hour after the S/4HANA conversion, 17 percent of respondents say they can work without the SAP system for eight hours. The vast majority, however, consider a downtime of up to 24 hours (19 percent), 48 hours (42 percent) or even more than 48 hours (6 percent) to be acceptable.

However, SAP downtime is a critical issue for around four out of ten companies. 54 percent state that temporary unavailability is not a problem for them. Achieving the downtime required by the specialist departments is difficult for 30 percent of the companies. 10 percent are even discussing a migration without data transfer because it would take too long to move the data to the new destination.  

 

Costs of more than 100,000 euros if the systems are not available

The companies were also asked what opportunity costs – such as lost revenues or contractual penalties in the event of an inability to deliver – they would expect if the accepted downtime maximum were exceeded. 55 percent of the companies cannot scale this, one third expect costs of less than 100,000 euros per hour of delay and 12 percent of the respondents calculate up to 500,000 euros per hour of delay. Against this background, downtime appears to be a decisive factor for the migration project.

 

Most of the migration projects are still pending

Only 8 percent of the survey participants have already completed the switch to S/4HANA. This year, 16 percent of the companies are planning the migration and 13 percent of the respondents would like to switch next year. In contrast, the vast majority (60 percent) do not plan to switch to S/4HANA until 2022 or later.

 

Further contributions to this topic

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MR BLUEFIELD SUMMARIZES

  • For 60 percent of the companies surveyed, the biggest challenge regarding the S/4HANA conversion is to find a suitable migration strategy.
  • Asked about the primary objectives, 64 percent of the survey participants stated that they were pursuing the harmonization and optimization of existing processes. At the same time, however, 62 percent would like to see a purely technical conversion.
  • 25 percent of those surveyed would like to establish new functionalities, and approximately 20 percent of companies want to make massive changes to their SAP system landscape as part of the S/4HANA conversion.
  • The vast majority consider a downtime during the changeover of up to 24 hours (19 percent), 48 hours (42 percent) or even more than 48 hours (6 percent) to be justifiable.
  • One third expect costs of less than 100,000 euros and 12 percent of those surveyed calculate up to 500,000 euros per hour of delay.
  • Against this background, downtime appears to be a decisive factor in the migration project.