Where are customers in their SAP S/4HANA migration journey?

IT Directors have a particular interest in the migration to the newest iteration of SAP S/4HANA. They have to know the product will deliver a consistent, consumer-grade user experience across an organization, as well as availability and serviceability that satisfies the needs of the company and their end users.

With SAP S/4HANA starting to roll out, IT Directors are starting to consider the upgrade from a previous version of the tool. Between the months of February and March of 2019, SAPinsider ran a survey on SAP S/4HANA to understand where SAP customers are with SAP S/4HANA. The results of that survey found a majority of respondents (seventy percent) are, in some way, moving toward this new solution.

Adopter Categories

 The SAPinsider survey found two important categories of adopters:

• Early adopters.
• Those who hold off.

According to the survey, those who were early adopters were driven by digital transformation and competition and:

• Prioritized analytics and data-driven strategies to build on current use of SAP S/4HANA.
• Want to improve decision making and support digital transformation.
• Have a history of delivering value to a wide range of lines of business.

Those who hold off adoption were driven by deadlines and:

• Were technical and IT driven.
• Used technical measures to dictate success.
• Have plenty of experience with technical upgrades.
• Have a primary focus of immediate priorities.

What Drives Customers’ ERP Strategies?

 The decision to migrate to a new enterprise solution, such as SAP S/4HANA is primarily determined by a company’s ERP strategy. There were four primary drivers for ERP strategies:

• High total cost of ownership.
• End of maintenance and support for core SAP ERP and SAP ECC releases.
• Pressure to increase business process efficiency and lower operational costs.
• Focus on business and management on innovation and digital transformation.

Of those four drivers, the primary focus for IT Directors are:

• Pressure to increase business process efficiency and lower operational costs.
• Focus on business and management on innovation and digital transformation.

Of those two drivers, innovators lead the charge with:

• Just under 50% of leaders placed pressure to increase business process efficiency and lower operational costs as a primary driver.
• Over 50% of leaders placed focus on business and management on innovation and digital transformation as a primary driver.

As for those who hold off on migrations, the primary drivers are:

• Under 50% placed pressure to increase business process efficiency and lower operational costs as a primary driver.
• Under 40% placed focus on business and management on innovation and digital transformation as a primary driver.

SAP S/4HANA Usage

 The survey made it clear that those who are early adopters prioritize modernizing analytics and are looking to SAP S/4HANA to help them analyze data and deliver the insights to the business. Because IT Directors consider maintaining an agile, flexible plan to “keep the lights on”, those who adopt early are looking to SAP S/4HANA to:

• Correct poor configurations and the setup of previous systems.
• Centralize and more tightly integrate disparate finance and accounting centers, so the company is better prepared to support organizational change.

As for those who hold off on adoption, that tight focus on technical upgrades and measures for ERP has limited their ability to maximize business value from the ERP investment. Eventually, however, those who hold off will have to move forward. According to the survey, most of those who hold off on innovation will continue to stabilize their current core technology and finance and accounting systems before making the gradual move to in-memory technology.

What is Holding The Hold Offs Back?

 Expense (46%) and competing priorities (54%) are the primary reasons preventing some from migrating immediately. Clearly the expense isn’t a priority for the IT Directory. Competing priorities, however, does land in that particular wheelhouse. Two other issues rises to the fore for the IT Director—lack of resources (41%) and knowledge (43%).

Because SAP S/4HANA is not an up front priority, most hold offs are spending little to no time getting up to speed on the potential impact it could have for their company. This issue is even more pronounced with a lack of resources becomes an issue.

As a result, many people in this particular group will be holding off until the 2025 deadline to get started on the migration to SAP S/4HANA.

Read the Report

For a more detailed breakdown on where customers are in the SAP S/4HANA move, CLICK HERE for the full report.

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