2020, 2027 or 2030: Key considerations for S/4HANA migration
Just 18%. That’s the proportion of members who recently told DSAG they either won’t adopt SAP S/4HANA or are undecided.
It’s therefore no surprise that less than two weeks after the DSAG report was published, SAP announced an extension of ECC support until 2027 (or 2030 if you’re prepared to pay more). It’s a big move but one that experienced SAP-watchers have been expecting. So what does this mean for those companies who have not yet made the leap?
Mitigating first-mover advantage
Despite the slow pace of S/4HANA adoption many firms have already decided to move to S/4HANA because they see competitive advantage in doing so.
That means those who stay on legacy SAP platforms must be able to keep up with those ‘first movers’. One way to do that is to implement automation that unlocks more value from existing SAP systems by making them much more agile. Never mind the benefits of S/4HANA - what would it mean for your business if you simply had the means to change your production systems on-demand, every day, during working hours, without risk – as many Basis Technologies customers do?
Building a more compelling business case
In our conversations with SAP users we often find that the perceived benefits of S/4HANA are outweighed in ROI analysis by the cost, effort and risk of getting there. Gartner recognized this in a recent 'Magic Quadrant for SAP S/4HANA Application Services’ report, stating that ‘cost of [S/4HANA] implementation continues to be a challenge for clients’.
Automation can also help to reinforce the business justification for adoption of S/4HANA. A faster, more efficient, safer migration means less cost, less risk of business disruption and a more positive ROI calculation. But it’s also important to factor future value into your business case.
Not a one-off
Some perceive the investment in moving to S/4HANA as one-off ‘sunk cost’ which cannot be recouped. Whilst this may be true for certain elements of the process it’s not necessarily the case for automation.
For example, a perhaps under-appreciated fact is the impact of SAP’s annual S/4HANA releases. They’re likely to contain necessary functionality but even if you don’t choose to implement every release, each one comes with only five years of official support. It’s unavoidable that upgrades will become more frequent, so the same automation that accelerated your S/4HANA transition will continue to deliver value by accelerating and alleviating the pain of those projects.
Getting it done
The sheer amount of resources needed for a successful S/4HANA transition is also holding firms back. The recent DSAG survey noted that 77% of respondents said, “a lack of resources such as employees and consultants is considered ‘important’ or ‘very important’”.
The first reason for this is financial. Putting it bluntly, a lot of bodies means a lot of cost. But it’s also true that there simply aren’t enough people with the necessary skills. Automation alleviates both these pain points by significantly reducing the amount of manual effort - and therefore people - required, and commensurately reducing cost.
The value of automation
No doubt many factors are contributing to the reluctance of firms to invest in SAP’s S/4HANA vision, but those who have yet to migrate should keep in mind a number of factors. These include how the initial advantage of ‘first-movers’ can be mitigated, whether there’s a way to build a more effective business case, and the risk and implications of a skills shortage. Automation - like Basis Technologies DevOps and test platform - can help to address many of these issues, delivering value not only during the S/4HANA transition period but also in the years before and after.