SAP S/4HANA Movement: Forgotten Questions When Considering Strategic Options

Whether deploying SAP S/4HANA across many locations or within one business area, a team must ask the right questions to prepare and set the right expectations. The answers may not come at a snap of your fingers, but they can guide a faster, more-straightforward deployment experience.

As technology evolves in intelligence and processing speed, business leaders are increasingly investing in, and planning their moves to, a next-generation foundational suite such as SAP S/4HANA. Such a strategic project certainly brings tremendous opportunity and advantage – but only when decision-makers fully consider their options throughout the process.

Many SAP customers believe that planning a transition to SAP S/4HANA begins with a debate on existing system functionality or coverage of current business processes, and ends with a discussion on vision, readiness to change, and change management. While these deliberations are essential, they are indicative of a more extensive analysis of the following pivotal questions.

What is the Deployment Strategy and Which Operations Model Meets Its Needs?

The first thing businesses need to know about the implementation approach is that there are no right or wrong answers. Furthermore, this decision will not happen in one day because there are many different aspects decision consider.

If flexible, company-specific configuration for all line-of-business processes, system customization, and full control over software updates and infrastructure are desirable, an on-premise deployment may seem like the right option. Customers can choose between the following operation models:

  • Owning infrastructure and platform: The business must assume responsibility for data security, basis work, etc.
  • Infrastructure as a Service: Companies decide to move forward with the on-premise application stack but prefer to choose another provider for infrastructure services. Infrastructure as a Service is offered by SAP and partners as well.
  • Platform as a Service: Companies decide to move forward with on-premise application stack but prefer to choose another provider for infrastructure services and platform services. SAP offers those services through SAP HANA Enterprise Cloud, and there are partner offerings.

In contrast, some businesses may prefer to consume SAP S/4HANA as a pure cloud solution with the Software-as-a-Service (SaaS) operating model. By choosing SaaS, customers can benefit from pre-configured content, which limits the configuration possibilities but allows for fast and low-risk consumption of innovations in a quarterly cycle. Furthermore, customers are neither responsible for IT operations nor application management. Therefore, they benefit above all from the fact that innovations can be consumed faster than before. This option also allows for shifting costs related to hardware, maintenance, and software upgrades from upfront investment (CAPEX) to ongoing subscription fee (OPEX).

The third option SAP offers is reflected by SAP S/4HANA as subscription supplemented by  SAP application management services. This serves customers that would like to make the first step into the cloud without giving up company-specific configurations. SAP recommends customers establish clear guardrails around custom code and move such developments to the extensibility framework, SAP Cloud Platform, or other supported cloud platforms.

The latest digital capabilities are not only available in the cloud. By developing on one code-line, SAP makes sure that all new functions are available in both cloud and on-premise environments. SAP also offers customers the opportunity to combine cloud and on-premise products to create a hybrid landscape that reflects exactly what they need to be successful.

Some of the options above come with an assigned implementation strategy, such as SAP S/4HANA Cloud, while others leave it up to customers to choose their preferred approach.

What is the Implementation Strategy?

Implementation strategies are substantially influenced by the different scenarios, such as new enterprise core, extended enterprise core, and enterprise transformation, as introduced previously here.

Take a new implementation of SAP S/4HANA. Businesses can deploy a new instance of SAP S/4HANA and migrate their data from their old enterprise resource planning (ERP) systems. This approach is best suited for organizations that want a fresh start with their ERP capabilities to re-evaluate their business processes and business models or leverage the latest capabilities and prepare for new capabilities provided by SAP S/4HANA.

Another option is a system conversion, where the existing ERP system is turned into SAP S/4HANA. In this process, with a single downtime companies can simplify their existing business and IT processes by converting an earlier ERP application from SAP to SAP S/4HANA and convert data as part of that process. This method preserves existing configurations and customizations if they can be adapted or work with SAP S/4HANA.

Companies that require the mix of both strategies can be supported through SAP S/4HANA Selective Data Transition Engagement.

Each strategy offers a unique set of opportunities that can make adoption of SAP S/4HANA successful. In practice, the choice among a new implementation, a system conversion, or the selective data transition should be guided by eight critical considerations available in SAP’s manifesto, a practical, condensed, down-to-earth handbook that helps senior IT leaders make decisions easily. By going through the line of questions, decision-makers can understand the essential trade-offs they need to make when moving to SAP S/4HANA.

Finding the Right Strategy for Long-Term, Sustainable Outcomes

SAP also offers expert guidance to help businesses successfully plan their migrations to SAP S/4HANA. SAP S/4HANA Adoption Starter Engagement provides technical and best practice guidance to enable technical and non-technical decision-makers to understand the advantages of cloud and on-premise deployments, system conversions, and new implementations.

No matter which deployment and implementation strategy customers choose to make their move to SAP S/4HANA, the SAP S/4HANA Movement program offers a wide array of the latest best practices, services, tools, and guidance. The program helps companies accelerate business visions, outplay competition, wow customers, and keep the workforce empowered and engaged – today, tomorrow, and for years to come.

Bjoern Braemer is the head of the SAP S/4HANA Movement at SAP.

This article first appeared on the SAP News Center.