Driving Digital Transformation with SAP S/4HANA

As we approach 2025, the date when SAP will de-support the extremely popular SAP ERP Central Component (ECC), customers are evaluating their future with the next generation release: SAP S/4HANA (S/4HANA). 

The transformation to S/4HANA represents a large and complex undertaking, and companies need time to build the necessary business cases and run targeted pilot projects. But as the deadline approaches companies should look at this as more than a new IT platform and consider how S/4HANA can act as the engine of their digital transformation. 

Recent surveys by the Americas SAP User Group (ASUG)1, SAPinsider2, and the German SAP User Group (DSAG)3, show that the first cohort of companies have already implemented or are in the process of implementing S/4HANA. The next cohort, which represents a larger group of companies (>50%), are currently evaluating their options. 

In all three surveys, respondents indicated that digital transformation is a top driver for moving to S/4HANA. They indicated that the move to S/4HANA will help them meet their digital transformation goals including 

• Increasing efficiency with process automation 
• Improving reporting and forecasting with advanced analytics 
• Enabling continuous improvement with enhanced processing using machine learning and artificial intelligence.

For companies that are already using SAP ECC, moving to S/4HANA will enable them to complete their digital transformation faster and with less upheaval than they could if they moved to another platform.

Companies, however, are still skeptical about being able to achieve their digital transformation goals. Respondents in the DSAG survey, for example, indicated that there is still a strong need for educational work on digitization within their companies and that they are looking for clear examples and best practices to understand how to proceed. 

At this year’s User Summits, Serrala discussed the most relevant trends regarding S/4HANA, evaluating ways to maximize the return on the investment. Below are three important lessons we uncovered while talking to our experts and customers this fall.

1. The Trend Towards Greenfield S/4HANA Implementations Favors Finance

Based on current surveys, the majority of companies using SAP systems are choosing to use a Greenfield approach  (a completely new SAP implementation) to move to S/4HANA. Similar to moving into a new house, companies using a Greenfield approach can benefit by moving their existing processes into a brand new system quickly. The move also lets companies take the opportunity to jettison their old, obsolete, or overly complex processes. Companies will need to make some process changes to take advantage of the new Universal Journal and Business Partner structures in S/4HANA, but these changes support the advanced capabilities and analytics available in the new system. This is great news for finance leaders, who, according to Dr. Werner Hopf, Senior Vice President, Data and Document Management, should focus on two things when moving their processes over to S/4HANA. First, move only high quality data that will fuel their business to the new platform. Second, archive any “business complete” information that needs to be retained to support the business, and then ensure users have seamless access to it from S/4HANA after the move is complete.
 

2. You Don’t Need to Postpone Process Improvements Until After Moving to S/4HANA 

We heard from several customers who had completed their migration to S/4HANA. A common theme was that you don’t need to postpone process improvements until after moving to the new platform. Serrala solutions are fully compatible with S/4HANA and incorporate many S/4HANA-ready capabilities (Fiori UI, advanced analytics, etc.) that can significantly improve a company‘s inbound and outbound payment processing. By implementing process improvements before the HANA transformation, these customers were able to benefit from end-to-end process automation and faster cash flows before, during and after the transition, ensuring they could stay ahead of their competition.
 

3. Put a Data Retention Plan in Place before Moving to S/4HANA to Save Time and Money

“Companies that have been using SAP systems for several years are likely holding on to large volumes of data and documents that do not meet current data retention requirements”, said Dr. Klaus Zimmer, Senior Solution Architect at Serrala. Companies that are moving to S/4HANA can use a data retention plan to help them identify the information that needs to be kept for legal, fiscal or regulatory reasons. Any business complete information that needs to be retained can be archived. But any data that exceeds data retention requirements must be purged. It is important that companies take the opportunity presented by the move to S/4HANA to separate the active information (the fuel) used by the company from information that needs to be retained to support the business (the ballast). A data retention plan can help them do that. With such a plan in place, companies can reduce the size of the SAP database by up to 90%, which will make the transition to S/4HANA faster and easier to complete at a lower cost. 

Want to know more? Request a copy of the presentations of the User Summit sessions by contacting us today!

Further reading: Download our whitepaper "Fast Path to SAP S/4HANA: 3 Approaches for an Optimal Transition" for an introduction to the most important issues for companies to consider when transitioning to SAP S/4HANA.
 

Infographic: http://info.asug.com/state-of-the-community-infographic-2019