Initial experience has been gained from successful S/4HANA introductory projects – enabling a better assessment of SAP’s future solution. What findings are there, and how should S/4HANA be evaluated?
In the current SAP press release entitled “SAP Leads in the Database and Data Management Solutions Industry Based on Market Share Revenue Growth in Gartner Report”, reference is made to the strong growth recorded in the HANA segment. With its current figures, HANA is well above the market average and is thus ahead of the top three providers. How can we interpret this statement?
This statement is understandable if we consider the further development of the S/4HANA business suite in the HANA segment, and the fact that the year 2025 – when support will no longer be provided for Business Suite 7 – is getting ever closer. SAP, which has always been a heavyweight when it comes to ERP systems, is starting to change the balance of power in the database sector too, and is also pushing its solution into the cloud (SAP Cloud Platform, HANA Enabled Cloud). The questions that many companies are asking revolve around how best to change over to the S/4HANA business suite and how to potentially optimize costs.
S/4HANA as a business enabler, and its significance for the markets Germany, Switzerland and Austria
In Germany, S/4HANA projects are either in the pipeline or just getting off the ground in many industries. Some changeover processes are already complete, and follow-up questions concerning the further development of business intelligence solutions, for example, are being examined based on the new capabilities enabled by S/4HANA. But it isn’t just the different dimensions of the S/4HANA introductory process that are driving this development; it is the result of financial and regulatory requirements too.
In Switzerland, S/4HANA is a key issue which many companies are devoting a great deal of their energies to. Hasan Tekin, CEO of Q_PERIOR Switzerland, paints the following picture: “It’s difficult for many companies to keep pace with the digital world, because the existing technology isn’t designed for the digital transformation. Many of our clients from an extremely wide range of industries have recognized that the S/4HANA and SAP Cloud Platform solutions support the transformation and play a key role in simplifying both structures and processes. Large Swiss enterprises are more open to the new solutions compared to their counterparts in neighboring countries.” Q_PERIOR has thus already implemented a few S/4HANA projects in Switzerland for clients such as BKW.
In Austria, the response to S/4HANA varies in the different sectors. Indeed, in industry, numerous corporations have already changed over to the SAP HANA application platform. Many of these companies are therefore carefully considering switching to S/4HANA too. The situation is different in the financial sector, however. Many Austrian insurance companies are tied up with changing over to New GL – in other words, merging their general ledger and their subsidiary ledger. As a result, they are only at the S/4HANA observation or preliminary study stage. They tend to wait for the early adopters’ results and critically examine the benefits that an extensive changeover to S/4HANA would bring.
Dimensions of an S/4HANA introductory process
“Based on our successful production arrangements in Central Europe and the experience we have acquired, there are four dimensions which must be taken into consideration when introducing S/4HANA – technology, business, organization and innovation.“
Roland Roudny, a partner in the business and IT consultancy firm Q_PERIOR
Evaluating new functionalities and processes is essential if S/4HANA is to be used. Some further developments requiring evaluation are being created particularly in logistics, but also in finance too. While most of the SAP business suite’s specialist functions will be taken over by S/4HANA, simplifications and new capabilities such as real-time business process simulations will be integrated. Aspects of standardizing and changing user interfaces are becoming particularly important.
The SAP support tools have been developed further from a technological standpoint and provide a sound basis for the fundamental “greenfield vs. brownfield” decision. The SAP ecosystem also features additional solutions which enable evaluation of the processes currently used or the pieces of code actually used with additional analyses and monitoring. Pure database conversions (incl. Unicode) or operating issues are also part and parcel of purely technically based changeovers in order to acquire initial experience. From an organizational standpoint, not only does the project to introduce S/4HANA require independent set-up. The new functionalities and the “relaunched” standardization mean that changes in an organization’s task assignment operations are also commonplace. This change management process is very much dependent on the processes and the company’s structure / procedural organization, and is a result of the functionality used. And, ultimately, the key issue is using S/4HANA’s new technological capabilities to speed up innovation. In addition to specific industry extensions, SAP Fiori including mobility and potential cloud extensions is certainly a new field. “A multitude of new innovative solutions is supported by the S/4HANA functionality in the digital core, and can be redeveloped in the context of digitization solutions,” explains Lars Erdmann, a technology expert and partner at Q_PERIOR.
These four dimensions are distinct and customized to a varying extent in the S/4HANA and HANA introductory projects. We recommend that our customers consciously make a decision to this end and perform an evaluation by conducting a preliminary study. This preliminary study should also take the operational added value and the ROI into consideration.
“Within the member companies of the German-Speaking SAP User Group (DSAG), the previous reservations were based on a lack of evidence with regard to the business benefits and the specific functionality of the new SAP products on offer,” explains Walter Kuhlmann, who has accompanied a number of SAP projects in insurance companies for Q_PERIOR. “Nevertheless, companies address the issues and, in so doing, also examine the use of HANA for regulatory requirements.” In this regard, new functionalities with high economic value and competitive advantages can be used together with the S/4HANA and HANA introductory process.
Projects lasting 25 man days until complete introduction in a power plant operator!
With our wealth of experience that ranges from the swift standard introduction of S/4HANA to the more complex implementation of S/4HANA Finance and Logistics, we consider the issue of “the S/4HANA introduction” in a different light. While a greenfield approach with a strong standard alignment once allowed for swift implementation, the challenge is very different during extensive implementation despite the standard alignment. What, ultimately, are the reasons behind this? The functionality used, the desire to establish standards and the stringency of the project. Essentially, the challenges are no different to those in other IT projects.
S/4HANA – what now?
With S/4HANA or the digital core, SAP has formed a foundation which provides a strong basis for further development. Additional functionalities, new technological features and innovative approaches are being brought onto the market. The connection to the IoT (Internet of Things), machine learning, robotics and other digital capabilities enable swift responses to changing market conditions. If a conscious decision is made concerning the four dimensions of an S/4HANA changeover process mentioned previously, both the S/4HANA project and the use of S/4HANA are understandable from a business standpoint. The flexibility gained with regard to the additional capabilities creates a mix in each company – of first followers and early adopters in subdivisions.