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Consider moving from ECC to S/4HANA sooner rather than later

Reinventing your business processes and revamping your ERP system is not as simple as pushing a button, but an S/4HANA conversion may not be as risky as you think. Here's why.

An S/4HANA conversion can help transform your enterprise by enabling greater agility through new digital processes and data insights.

Nearly seven in 10 companies using an SAP ERP are still running on SAP ECC, according to recent research by Ensono, an IT services company based in Downers Grove, Ill. Of those, only 58% intend to make the SAP S/4HANA move in the next three years.

Even with SAP's 2027 support deadline approaching, the hesitancy to migrate is somewhat understandable. Reinventing your business processes and revamping your ERP system are not as simple as pushing a button. An implementation, whether from scratch or not, requires great organizational focus, high-level strategic thinking and significant financial investment.

However, moving to S/4HANA sooner rather than later is worth considering. Here are a few aspects that make that prospect seem less risky:

  • SAP S/4HANA builds on the structure and capabilities of SAP ECC. SAP S/4HANA 2020 is actually the seventh edition of S/4HANA, and it's more capable and stable than ever.
  • Organizations typically complete a brownfield conversion to S/4HANA in about 12-20 weeks. Many organizations choose to embrace a part-time resource model so they can complete the project in a cost-effective manner.
  • Organizations can meter the impact. SAP GUI still operates effectively for nearly all SAP S/4HANA capabilities. The organization can determine when and how to roll out changes to users.

However you slice it, SAP S/4HANA is a highly mature application -- one built on and enhanced by SAP best practices and equipped with incredible extensibility.

An implementation requires great organizational focus, high-level strategic thinking and significant financial investment. However, moving to S/4HANA sooner rather than later is worth consideration.

Here's a comparison of how staying on ECC versus moving to S/4HANA affects various factors.

Cost

Staying

By staying on SAP ECC, your company will continue investing in and supporting software that is destined to become increasingly out-of-date. You may not have budget to move today, but you're not saving money in the long run by staying put. You should strongly consider a move -- and sooner rather than later.

Moving

Unquestionably, you need to understand and budget for cost. However, it's worth remembering that the price of an S/4HANA conversion will likely never be lower than it is now. As time goes on, pressure will mount, and so will expenses.

Roadmap building

Staying

SAP ECC does not inherently prohibit your organization from envisioning future enablements or embracing future enhancements. But building a future with a software that definitively doesn't have one -- that's an inherently prohibitive proposition.

Moving

SAP's latest offering, RISE with SAP, provides an all-encompassing vision of a total cloud service offering through S/4HANA, one that's designed to help achieve an intelligent enterprise. An increased number of tools also exist through S/4HANA that can support the construction of a roadmap or business case for your enterprise.

Realizing benefits

Staying

You likely already know the benefits you receive from SAP ECC. But there's an old adage I like to say when I think about this: "If you always do what you've always done, you will always get what you've always got."

Moving

Capitalizing on the new-and-improved digital business processes available in S/4HANA has the potential to enhance overall efficiencies, reduce total costs and increase bottom-line revenue. With SAP putting its heft behind continuously improving S/4HANA, related boosts will only continue.

User experience

Staying

If you like working with SAP GUI, you're probably familiar with its flow and transaction codes. However, SAP's GUI has been the subject of complaints from many for a long time. The benefits of moving may quickly outpace the drawbacks of orchestrating the change.

Moving

SAP's new user interface, SAP Fiori, carries a number of added benefits, including embedded analytics, user domain cockpits and proactive insights. It pushes information and alerts to users, which enables S/4HANA engagement.

Real-time mobile connectivity

Staying

Providing connectivity does carry an associated cost, and the required investments in laptops, tablets and smartphones is not insignificant. Neither is enabling web services to empower these devices. However, a modern ERP system can help make these investments meaningful.

Moving

The world is already quite mobile and connected, and the pandemic has only increased that. S/4HANA's cloud capabilities offer real-time insights and improved business process monitoring, no matter where you are.

Data access and predictive analytics

Staying

SAP ECC has been strong on collecting transactional data and providing operational reporting, but that may not be the best approach for the future.

Moving

S/4HANA's big differentiator is predictive analytics. Increased access and analysis give your company a competitive advantage that legacy systems cannot. Your business receives real-time insights that predict situations and conflicts before they even occur.

Decision-making

Staying

Information is king, but it's only as valuable as the resources you have to examine and interpret it. Many organizations today are built around delayed reporting data and firefighting. You can continue making decisions that way, but S/4HANA offers a better way.

Moving

The leaders of today can quickly become the laggards of tomorrow. Global leaders must demand to understand the options available to them so they can make informed decisions. SAP S/4HANA's suite of tools offer tangible insights that can improve operational decision-making.

The end of mainstream maintenance in 2027 is not just about how SAP itself factors into timing decisions. You should also consider the consulting companies and knowledgeable experts that will be in place to facilitate the SAP S/4HANA transition.

Brad Hiquet is an accomplished ERP strategist and skilled SAP integration architect with nearly four decades of business experience, including 29 years working with SAP. In his role at Dickinson + Associates, he is responsible for the company's SAP S/4HANA Movement program and works extensively with organizations ranging from small and medium enterprises to Fortune 500 companies in enabling strategic business models that embrace digital transformation and the Intelligent Enterprise.

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