Are you taking the cautious approach, given that the move to SAP S/4HANA is such a significant step, or are you objectively considering your future needs and requirements?
I am talking to a number of customers who are considering what they should do with their current SAP ECC instance. They have had it for many years and have seen SAP release both SAP Suite on HANA and SAP S/4HANA in the last few years. All of the fanfare seems to focus separately on the functionality benefits within SAP S/4HANA and the performance improvements within SAP Suite on HANA. There is a perception that moving to SAP Business Suite on HANA is a safe half way house on the journey to SAP S/4HANA and therefore this is seen as a less risky approach.
Moving to SAP Suite on HANA
If you have a current SAP ECC solution with a non-HANA database you can perform a technical migration to move to SAP Suite on HANA. You will need to perform an Enhancement Pack upgrade to Enhancement Pack 7 and then a database conversion to SAP HANA. This project will consist mainly of technical changes with various streams of functional testing to ensure all of the current processes and transactions work on the new system. All of the data you had within your SAP ECC system you will have in your SAP Suite on HANA system.
Moving to SAP S/4HANA
Again starting from the same point of SAP ECC you will also need to perform an Enhancement Pack upgrade to Enhancement Pack 7, perform a database conversion, and then you also need to perform a system conversion to the new SAP S/4HANA solution. Whilst there are some technical steps in the system conversion to SAP S/4HANA there are a number of functional changes that also occur. Finance, Sales, Materials Management and Inventory data need to be converted in to the new data models with SAP S/4HANA. There are also numerous transaction codes that are removed or no longer supported within SAP S/4HANA.
To ensure all of this change is managed efficiently business involvement in these stages is a must and the project becomes a functional project with technical steps.
The complexity of moving to SAP S/4HANA
Most of the customers I speak to ask to “upgrade to SAP S/4HANA”, which means they want to perform a system conversion. However when we map out the various stages they will need to go through and the level of change they will need to perform to get SAP S/4HANA to mirror their previous system, other routes to SAP S/4HANA are quickly considered.
Customers look at the new offerings within S/4HANA; be that SAP Fiori screens, SAP Embedded Analytics or some other new functionality and want to include one or more in their new solution. Therefore the majority of customers who are moving to S/4HANA are doing this as a Green-field implementation and not a system conversion to maximise the business benefit they achieve.
Is the half-way house that attractive?
If you are planning on breaking up the activities to move to S/4HANA into two projects you need to be clear that you know how you will deploy S/4HANA. If you are going to do a Green-field S/4HANA implementation then moving to Suite on HANA as a half-way house is not an effective or efficient move, as you will lose all of the initial work when you move to S4/HANA…not an attractive proposition. However, if you are confident that you can do a system conversion and this will provide the most benefit to your business then moving to Suite on HANA as a half-way house will provide value.
What are the benefits of the half-way house?
Moving to Suite on HANA enables discreet technical steps to be performed prior to the move to S/4HANA. It is quicker and therefore cheaper than the cost of moving direct to S/4HANA. The business’s involvement in moving to Suite on HANA is fairly limited compared to an S/4HANA project and you will also save yourself from going through an additional number of technical processes that are required to move to S/4HANA.
This enables the S/4HANA project to be a business lead project, which has a focus on new functionality, new data models, SAP Fiori and new reporting options.
The overall cost of moving to S/4HANA might be too big to swallow for some customers, and getting there in two steps will spread the risk, cost and effort aligning to financial and resource constraints.
When to review SAP S/4HANA?
If you are considering moving to Suite on HANA and then S/4HANA it is sensible to review S/4HANA prior to commencing your journey to Suite on HANA. Reviewing the functionality in S/4HANA will enable you to confirm the size of the change involved in the conversion. Most customers are looking at S/4HANA as a way to review their current business processes, organisational structure and unused code and data. Making changes to these areas is much harder to achieve in a simple conversion exercise. In turn, taking unwanted processes and data into a new system seems a waste as it will not be looked at after the conversion has been done.
SAP S/4HANA is a new product and some customers are a little too cautious to make the ‘leap of faith’, finding the safer approach of a technical conversion to Suite on HANA more attractive. This approach could be workable for you and your organisation. However before you start that journey you should honestly review and measure the changes that are required to move to SAP S/4HANA as they may make the system conversion to S/4HANA more complex and lacking in business benefit. It is best to take a longer term view than make a short term decision that might come back and bite you later on.