IDC Study: Seven Insights into SAP S/4HANA

Customers that have already migrated to SAP S/4HANA are beginning to see the added value, and putting their reservations aside. Tips from these forerunners include staying close to the standard system and using real-time information.

1. SAP S/4HANA: Two-Thirds of SAP Users

Two-thirds of SAP customers are planning their company’s future with SAP S/4HANA. According to the findings of the latest global survey conducted by market researcher IDC involving 300 SAP users, the question isn’t if  users plan to implement SAP’s latest enterprise resource planning (ERP) software and upgrade or replace the existing ERP system, but rather when.

2. Added Value: SAP S/4HANA Increased Employee Productivity and Reduces Costs

Expectations and concerns vary according to SAP users’ prior experience with the software. Customers already familiar with SAP S/4HANA are more than convinced that the software creates tangible added value. Are employees more productive, does the system really provide information in real time, does it reduce costs? While almost one in three SAP S/4HANA users recognize it as a driver and see the concrete added value, only one in five companies without any first-hand experience are convinced of the benefits.

3. Legacy Code Migration: Fewer Concerns from SAP S/4HANA Customers

When it comes to deploying modern software, users with prior SAP S/4HANA experience are finding it easier to put their reservations aside. Among these reservations are concerns about Legacy Code migration.Thirty-eight percent of companies that are still in the deliberation phase have expressed these concerns, yet for companies that have already used the software in practice, the percentage is only 17%.

4. Modern UX: Software Training is Vital

While 20% of companies currently considering a transition to SAP S/4HANA do not always feel the need to offer their employees seminars and training courses to educate them about the new software, this percentage is twice as large among companies that already have experience with SAP S/4HANA. Although the new SAP user experience provides users with a more intuitive user interface, this is still a transitional phase for employees who have been long used to the traditional SAP GUI, and must be closely supported.

5. On-Premise and Private Cloud Proving Popular: Public Cloud Deployment Model Still in the Minority

According to the survey, when companies implement SAP S/4HANA, most of them integrate their own systems, which can either be run or run independently. The majority — more than 40% of companies planning to transition to SAP S/4HANA or already use it — use the software in a private cloud or in the SAP HANA Enterprise Cloud. Just like the more than 20% of companies that have opted for the on-premise operating model, companies can also make customized adjustments. According to the IDC survey, among companies already deploying SAP S/4HANA, 15% have opted for the public cloud. Only the minority have streamlined their processes to allow them to follow the greenfield approach, and remain close to the standard.

6. In Practice: Majority use SAP S/4HANA Finance

Simplifying processes with support from SAP S/4HANA all started in finance. Even today, SAP S/4HANA Finance is right at the top in the SAP S/4HANA functions ranking. Forty percent of companies using SAP S/4HANA have already migrated their financial systems. Of the companies currently planning an SAP S/4HANA migration, 38% have also opted for SAP S/4HANA Finance. SAP S/4HANA for project management (37%), for HR (36%), and for ERP core processes (35%) are also proving popular among current SAP S/4HANA users. In contrast, functionalities for marketing (19%), procurement (22%), and supply chain management (23%) are currently proving less popular.

7. Implementation Tips: Stick to the Standard, Start out With Clean Data, Real-Time Information for Process Improvements

IDC conducted a web-based survey and face-to-face interviews with nine companies using SAP S/4HANA to find out what tips they would give to other companies that are thinking about migrating to SAP S/4HANA. According to the users, the most important technical hurdle in the run up to migration is to thoroughly prepare the master data. Cleaning up the data to ensure that it’s of high quality is an important requirement for a successful implementation. Another key tip from the users: instead of customer-specific processes, always stick to standard processes defined by SAP. The benefit lies in the fact that companies whose systems were implemented in accordance with the greenfield approach can install all future SAP innovations with ease. Findings from SAP S/4HANA forerunners: Ideally no more customer-specific adjustments, “zero customization.” Based on their experiences, the users also say its important to ensure that the real-time information does not only provide new insights, but that processes are triggered directly and automatically. Failure to do so is wasted potential.