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S/4HANA attracts interest, but users remain cautious

Despite the newness of SAP's S/4HANA, some companies are wasting no time to implement the product. Others are taking a wait-and-see attitude.

After SAP's February announcement of an on-premises edition of S/4HANA, the company followed up by announcing the...

availability of S/4HANA in the cloud at its annual Sapphire Now conference. Although SAP executives touted S/4HANA's simplicity, panelists offered varied opinions. Some gave insight into the value they had gleaned from using Simple Finance, currently the only offering with S/4HANA. Some have already started an on-premises implementation, but others were more skeptical, expressing concerns about time to deployment and migration.

For most users, moving to S/4HANA will take three steps: 1) ensure that SAP Enhancement Package 7 (EHP7) is installed; 2) migrate to HANA; 3) and after database and coding cleanup, move to S/4HANA.

There is value in migrating to S/4HANA, according to attendee Troy Bohanon, supply chain IT director at Newell Rubbermaid. The company is considering S/4HANA to "take advantage of the technology to drive business value and make faster decisions with the data we already have," he said.

S/4HANA's speed provides business value

The business value for Newell Rubbermaid is in the speed of S/4HANA, according to Bohanon. The company runs available-to-promise reports three times a day for different business segments. Currently, the reports take one to two hours to complete, but with S/4HANA the reports will take minutes and can be run more on-demand, he said. The company plans to begin using Simple Finance after EHP7  is installed and the database migration is complete; it will implement Simple Logistics when it is available next year. 

Other attendees have adopted a wait-and-see approach, particularly with the advent of Simple Logistics. "We'll probably wait until Logistics is in, then look at [S/4HANA] comprehensively," said John Blomquist, senior director at McKesson Corporation.

As is the case with most companies, migration is a concern due to custom objects as well as the added challenge of moving existing tables to the simplified S/4HANA version, Blomquist said. "I like the idea of more simplified reporting … but I haven't heard a solid value proposition," he added. The company has no immediate plans to move to the new platform, although it is progressing as suggested with plans to move to HANA first.

For some, S/4HANA implementations may be year or more away

Other attendees agree that implementing S/4HANA would not happen for at least a year or more. It would take at least a month to go live on EHP7 from EHP6. But if a company is several versions behind, about four months would be added to the timeline -- and that's without even going into S/4HANA, according to Russ Kadziolka, business intelligence manager at United Technologies BIS. His company is not yet on EHP7, he added.

Moving to HANA would take at least a year and require several changes to custom programming and massive user testing, Kadziolka noted. "The fact that Simple Finance doesn't have to be used and you can go to ERP on HANA saves time there," meaning it's possible to reach that point in about eight months if a company is already running EHP7, he said.

United Technologies may consider S/4HANA and Simple Finance due to the complexity of the user interface on its current SAP ERP system. As an aerospace company, United Technologies has many partners, as well as government employees, that need to view subsets of information. Simple Finance, according to Kadziolka, would allow United Technologies to use a Fiori user interface and present only the information needed to the appropriate party.

Despite newness, some users going full speed ahead

However, despite the newness of S/4HANA, some Sapphire Now attendees are going full speed ahead with an on-premises implementation. Belgian public works support company Farys, a spinoff of the utilities company TMVW, needed a separate finance system due to regulatory changes.  The system also needed to be one that finance and other departments would adopt, according to Inge Opreel, head of the IT department.

Opreel said Farys turned to its implementation partner, Capgemini, for a proof of concept that Simple Finance could turn the complexity of its new multi-company existence into a straightforward way for non-technical end users to access the information they needed. The company is currently moving to SAP business warehouse and customer relationship management on HANA and plans to go live at the end of June -- with SAP Enterprise Central Component following in September. The only concern Opreel has about Simple Finance is Simple Finance 2.0, because as a utility company, Farys uses SAP Financial Accounting and Controlling, which may pose integration issues, she said.

Implementation partner eases concerns about move to S/4HANA

Yet the platform is attractive to Farys because of the dashboards that let users drill down and the Fiori interface, which is more intuitive and will help bring management into finance, Opreel said. "By doing the proof of concept, we … saw the advantages: reconciliation, getting one truth, drilling down to where everything originated."

One reason Farys is confident about moving to S/4HANA is its long-standing relationship with Capgemini, according to Opreel. Farys was able to discuss the benefits and drawbacks of moving to S/4HANA with Capgemini and create a strict timeline to keep the project on track, she said.

It remains to be seen how many other SAP implementations will turn to S/4HANA, especially given the steps involved. If the sentiment at Sapphire Now is any indication, many users are cautious about moving ahead.

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