IT and SAP budgets in Germany, Austria and Switzerland (DACH) will continue to rise this year - this is a key finding of the Investment Report 2023 published by the German-speaking SAP User Group e. V. (DSAG). S/4HANA will also increase in terms of relevance for companies.
In the interim, SAP-using companies will therefore have to invest in both the existing Business Suite ("ECC") and the new S/4HANA solution. In this context, it can be assumed that all current investments in SAP ECC will have to be followed there after the conversion to S/4HANA.
AdEx Partners strives to support companies in times of competing IT projects and increasing maintenance efforts. The goal is to avoid duplicate or even throwaway efforts and to enable targeted planning, preparation, and implementation of a new SAP architecture.
Two-thirds of the companies surveyed plan to make high or medium investments in their SAP S/4HANA landscape in 2023:
Any transformation strategy to S/4HANA depends mainly on 3 dimensions in terms of time required, budget and flexibility:
- Required functional scope ("Scope")
- Planned deployment ("Hosting / Edition")
- Desired conversion method ("Transformation Path")
With the AdEx Partners S/4HANA-Strategy-Cube, we visualize the decision space and also indicate which combinations are not compatible (grayed-out areas):
Scope - Selection of the right components for the future ERP architecture.
In the "Scope" dimension, you decide which components should be used to implement the required functions in your future ERP architecture. SAP S/4HANA already covers essential business processes with the Digital Core. In addition, the Lines-of-Business solutions offer in-depth functions for individual cross-sectional areas (e.g., purchasing) and special Industry Solutions deliver preconfigured solutions for various industries in the standard scope. Based on our experience, we recommend evaluating these first and only then considering in-house developments (custom extensions) or third-party provided add-ons for specific processes if the standard extensions do not meet your requirements.
The right S/4HANA hosting model
Public Cloud Edition offers you a fully comprehensive, cloud-based ERP solution as software-as-a-service. This means you benefit from a reduced TCO and have continuous access to the latest developments and innovations. This is particularly suitable if your processes correspond to the standardized best-practice processes of SAP S/4HANA or if you are prepared to make adjustments. Furthermore, SAP also provides a private cloud version in addition to the conventional on-premise version. In our assessment, there are no significant functional differences between the two editions. Both offer optimal conditions for globally active companies by providing numerous country variants and industry-specific solutions - either independently hosted or externally hosted.
Deciding on the transformation path that's right for you
Quite a few companies opt for a complete redesign of ERP processes based on a clean ERP template of the latest generation as part of a greenfield approach to throw legacy processes overboard.
This contrasts with the purely technical conversion of your existing SAP system to S/4HANA as part of a brownfield approach. Here, the goal is to lift the existing business processes onto a new technical basis in order to technically update ("upgrade") a long-term compatible ERP system without a new implementation.
Organizational adjustments or only selective adoption of legacy data as part of the technical conversion are implemented using Selective Data Transformation ("Bluefield®") approaches, either by SAP SE itself or by third-party providers. These are used to be able to implement functional or organizational adjustments in addition to the technical upgrade to S/4HANA.
Consolidate your alternative courses of action
It should be noted that not all combinations are possible. The invalid decision alternatives are directly grayed out. Here are two examples:
Transformation Path: For the on-premise as well as private cloud version, all three transformation paths are possible. You can only get to the public cloud with the greenfield approach.
Custom Code: Custom developments are possible in the on-premise and private cloud editions, but you do not have this option in the public cloud.
You can also use the cube representation here to systematize the possible decision alternatives for your company in advance.
AdEx Partners uses a multi-level methodology to navigate business, technical, and planning assessments with roadmaps and clear outcome types:
The change to S/4HANA is a complex transformation of the SAP platform with simultaneous replacement or updating of the database, application and data.
This makes it all the more important to define a clear roadmap in order to efficiently tap into the benefits of S/4HANA. The transformation to SAP S/4HANA lays the foundation for a Sustainable Digital Core. It creates the platform for automation, advanced analytics and deep learning.
Simplify the project through appropriate pre-projects.
The complexity and implementation risk of S/4HANA can be reduced by appropriate pre-projects. AdEx Partners guides you through the analysis and definition of possible and mandatory pre-projects. This may include topics such as:
- Migration of customers and vendors to Business Partner (“Customer/Vendor Integration”)
- MRP - in S/4HANA the MRP logic was simplified. MRP area is active by default and cannot be deactivated
- Replacement of Foreign Trade by SAP Global Trade Services (GTS)
- New Asset Accounting / New General Ledger – Data conversion
- Replacement of Rebate Management by Settlement Management
- Introduction of new Cash Management and Credit Management with SAP S/4HANA
- Replacement of Revenue Recognition by RAR in SAP S/4HANA
- Material number field extension
- SAP S/4HANA on BW extractors
- Data consistency analysis of transactional data and totals. This is of particular interest in the finance
- The cleanup of custom code
- Business data cleanup and archiving in front of a system conversion, to reduce DB system size and expected business downtime during conversion
- The upgrade of existing SAP application server / The upgrade of an existing central Fiori Frontend Server
Switching to S/4HANA is a costly transformation, but it's worth it. We've listed the key benefits of the new SAP ERP architecture for you:
- Improved user experience:
- An intuitive user interface that is tailored to the needs of users
- Accessible anywhere and on any device
- Speed and agility:
- Fast in-memory computing for unprecedented efficiency
- Shorter process cycles and lead times
- Instant response and simulation capabilities
- Simplified objects:
- Reduced complexity through a simplified data object model
- Lower total cost of ownership
- Integrated analytics:
- Embedded predictive analytics for smarter business planning
- Machine learning and AI-powered automation
- Generating insights and contextual information for better decision making
- Foundation for sustainability:
- A solid foundation for measuring sustainability and carbon footprint
- Helps measure current status, define goals, and realize KPIs
- Organizations can adhere to key sustainability standards
At AdEx Partners, we help companies realize the benefits of S/4HANA quickly and without unnecessary repetition or effort. Our consulting services include planning, execution, and deployment of your new SAP infrastructure:
- Selecting the right ERP and developing a strategy
- Streamlining business processes
- Setting up a transformation office
- Preparation of resources and execution of RFPs
- Building an enterprise value case
- Promoting the empowerment of employees
At AdEx Partners, we assist in developing a thorough S/4HANA migration strategy based on your business objectives. We ensure proper evaluation of the current situation and take into account all necessary business capabilities. Collaboratively, we establish the essential ERP architecture and incorporate it into your strategic plan for the future SAP S/4HANA solution.
Don't hesitate to reach out to us! We're here to provide further assistance!