Are you ready for SAP S/4 HANA in 2018?
- March 28, 2018
This post is co-authored by Carla Riley, Sr. Director for the SAP Practice, NTT DATA Services.
With 3+ years of continued enhancements to S/4HANA platform, SAP has strategically invested to build the digital platform of choice. To maintain and attract new customers, SAP has focused on critical elements such as lower TCO, improved user interface, easier maintenance, better integration with other applications (especially cloud apps), faster reporting, real-time analytics, new business processes and business models, deeper customer interaction and improved customer service.
Customers embracing the S/4HANA journey seek the following benefits (as determined by SAP Value Engineering):
- A savings of 400 working hours for each quarterly closing
- 86% faster reporting
- 26% faster year-end closings with a 61% cost reduction
- 24% revenue growth through new customer acquisition
- 30% increased market share
- 22% reduction in human effort
- 50% production acceleration
- > 90% increase in speed of processes
Key S/4HANA enabling technologies include:
- Database: S/4HANA requires SAP HANA as a database, a fundamentally different architecture to your classic relational database. It runs in-memory, meaning data is stored in columns instead of rows, allowing for faster, near to real-time analytics and compute capabilities.
- Architecture: Can be delivered as a software-as-a-service (SaaS) solution, on premise, in a private cloud, or as a hybrid deployment, running on HANA approved hardware.
- User Experience: Improved and personalizes user experience with SAP Fiori.
- Business Processes: First of 4 scheduled releases in 2018, S/4HANA release 1802 includes enhancements across finance, sourcing/procurement, sales, asset management, manufacturing/supply chain, enterprise portfolio and project management.
A lot to consider…
S/4HANA has been available as a standalone product since November 2015 with over 7,900 customers purchasing licenses, making it the fastest selling product in SAP's history, according to SAP. Yet only 1,000 customers are currently live on S/4 HANA as of 2017.
Why the difference?
Answer: Adopting S/4HANA is not a traditional upgrade or a mere technical project; it is a full-scale digital transformation initiative.
Every S/4HANA migration is unique. Each organization starts with a different system configuration and has different goals – so there is no one right way to go through the process. Companies need to consider deployment models, transition scenarios, greenfield vs. brownfield implementations, functional scope, S/4 training, master data changes and change management requirements.
A few key decisions facing S/4 HANA customers include the following:
- Deployment model (On-premise, IaaS (e.g., NTT DATA, SAP HANA Enterprise Cloud” or SaaS (NTT DATA Private Managed Cloud or S/4HANA Cloud Edition)
- Transition scenario (New Implementation, System Conversion, Landscape Transformation)?
- Approach: Implement S/4HANA from scratch and migrate your existing data (Greenfield) or transition your existing ECC to S/4HANA including all its customizations and data (Brownfield)?
- Move straight from SAP ECC to S/4HANA or to choose Business Suite on HANA?
- Functional scope (S/4HANA Finance or full S/4HANA Suite)?
- Data migration: Tools and strategy?
- Change management requirements?
- S/4HANA training (functional to technical) requirements?
- Is there a valid business case for S/4HANA?
Not a trivial undertaking, especially when you consider a company’s existing project and production support backlog. Companies quickly realize this is a major initiative, requiring cross team collaboration and a formalized assessment approach.
Starting your S/4HANA journey…
There are several free tools from SAP that can help assess S/4HANA readiness and make your journey forward easier. Here’s a small SAP selection:
- The SAP Readiness Check for S/4HANA is a program that you can run in Solution Manager or directly in your current SAP ERP system. The Readiness Check analyzes five critical areas, including custom code analysis, sizing assessment, Fiori UX recommendations, simplification item check and business process analytics.
- The Business Scenarios Recommendation Report (BSR) uses your current ERP system usage to review the applicability of moving to S/4HANA, highlighting specific areas of change or improvement, identifying where your organization will realize the greatest benefits from a transition, and ranking each area based on its relevance to your business needs.
- SAP Transformation Navigator is designed to answer questions SAP customers have about which innovations they need to bring into their organization, in what order, during what timeframes, and the business value and outcomes they can expect. Transformation Navigator helps customers understand how to incorporate the latest solutions, including SAP S/4HANA, across their organization for faster innovation. The tool shows them how to add new capabilities and measure the business value potential in their live system using business process analytics.
- Another crucial task before implementation begins is to analyze all custom code within the existing SAP system. SAP offers a selection of useful tools and resources for this task, including the Custom Code Adaption document and the Custom Code Lifecycle Management application.
- Also, for system conversion, running the Maintenance Planner is essential. This application analyzes the current environment and all business functions, industry solutions and add-ons that are part of it. Organizations can then see which will be supported by SAP S/4HANA and which will have to be changed.
To compliment SAP, NTT DATA provides a broad set of offerings to support your S/4HANA journey, from S/4HANA Assessments all the way to full execution. Our comprehensive approach includes:
- Strategic planning and business case preparation to accelerate your implementation roadmap
- Evaluate and recommend best S/4HANA deployment approach, from on-premise, hybrid or cloud-based solutions
- Assets and tools such as our Uptimizer to highlight potential fit-gap issues, identified in your current SAP environment
- Balanced delivery – onshore, near shore & offshore, enabling cost and timing efficiencies
- Change management – NTT consultants partner with you to ensure maximized adoption for your organization
In addition, proprietary tools and accelerators commonly used by NTT DATA include:
- SAP Lifecycle Management – Uptimizer, ArchivePac, HotPac Analyzer and SAP Health Check
- Business Process – HCM Pro Solution, IFRS Assessment framework and numerous SAP Certified Business All-In-One (BAIO) solutions
- Execution/Delivery – Request tracking, project management, reusable framework, test script library, and knowledge management
- Co-innovation, Solution & Tool Development with SAP – Partner Delivered Enterprise Services (PDES), COIL participation, ALM accelerator development
Why S/4HANA now?
In today’s fast-paced, fiercely competitive digital world, hesitancy or failure to transform can be a business killer. And few, if any, industries are exempt, particularly if your industry has a low barrier of entry and/or your business relies on a large, legacy business model to generate and manage most of your revenue.
Contrary to popular opinion, your greatest digital threat comes not from “Unicorns” — private companies (mostly startups) valued a $1 billion and above — but from established competitors:
- As reported in Business2Community:
- 57% of executives have experienced “moderate” or “severe” competitive pressure from established competitors’ digital products and services.
- 69% of executives anticipate threats from existing firms in the next three years, compared to 58% who expect challenges from startups.
Business leaders need only consider the following facts for a clear-headed perspective on the pace and scope of digital disruption:
- According to WSJ, “the topple rate, a measure of how rapidly companies lose their leadership position, has increased by almost 40% since 1965. The tenure of companies on the S&P 500 was 61 years in 1958; it's now 18 years. If these trends continue, 75% of the S&P 500 companies will have changed over the next 15 years.”
- According to Digitalist Magazine, 50% of Fortune 500 companies have dropped off the list in the last 12 years and 96% of the companies on the FTSE 100 when it was created in 1984 are no longer there.
- Also reported in Digitalist, former Cisco CEO John Chambers predicts that 40% of companies will crumble when they fail to complete a successful digital transformation.
S/4HANA is SAP's platform to move companies into the digital era, providing a nimble approach to continuously transform your business. As the S/4HANA platform has matured, through successful implementations, more customers are looking to embrace the journey.
Partner experience is vital to S/4HANA success
Strategic migration to S/4HANA will be an extensive journey that necessitates the support of a leading IT service provider such as NTT DATA with proven S/4 HANA experience. NTT DATA continues to be a trusted advisor to our current and future clients. Through our S/4HANA Assessment approach, our core team will guide your organization through the journey, providing deep technical and business-process expertise, proven industry experience and a structured migration methodology. Combined with an ample repertoire of proprietary tools and accelerators that mitigate risk, reduce project cost and duration and speed time-to-value throughout all phases of your S/4HANA migration.
Contact NTT DATA today to begin or advance your S/4HANA journey.