Understanding SAP customers’ S/4HANA migration strategies
SAP announced in February that it will extend mainstream maintenance of SAP ERP 6 and Business Suite 7 core applications until 2027, giving SAP customers two more years to migrate to SAP S/4HANA. The main reason for doing so is to allow customers more time to prepare for and execute the biggest IT project of the decade.
In Q1 of 2020, SAPInsider, the largest global SAP membership group, surveyed 650 SAP customers to learn about the status of their S/4HANA migrations and the strategies they are using to make the change. Here is a breakdown of the survey responses, including the capabilities and processes SAP customers need in place for a successful migration and tools customers can use to prepare.
For a more detailed version of the survey breakdown, watch the webinar with SAPInsider here.
S/4HANA migration survey overview
The 650 customers surveyed fell into three distinct camps: Many of them have already started working on a business case and still plan to launch S/4HANA in 2025. Most were relieved at the announced extension and now plan to launch in 2027. Only a few said that they still won’t be ready by 2027 and are hoping for another extension down the road.
17% of SAP customers are already using S/4HANA, which is double the adoption rate from a year ago. 85.5% have at least started the business case, which was cited as the biggest challenge throughout this process. The second biggest challenge was educating decision-makers about the benefits of S/4HANA and getting them on board with the change.
Customers belonged to one of four major sectors: industrial, software/technology, public services/healthcare, and financial services/insurance. Migration strategies vary and are completely dependent on a customer’s needs and current ERP system. Many are adopting a completely new implementation, while others are moving forward with a hybrid model combining S/4HANA with ECC or earlier version.
This survey was conducted using the DART methodology (drivers, actions, requirements, and technologies) to evaluate all of the factors at play in migrating to S/4HANA.
- Drivers: These are external pressures that shape the reasons customers are developing business strategies the way that they are. 40% to 45% of survey respondents are transitioning to S/4HANA due to the end of maintenance and support for core SAP ERP releases.
Another 40% are using it as an opportunity to re-engineer processes to better fit operational needs or correct poor processes and configurations from previous ERP implementation. This migration serves as a chance to start over for businesses that want to install more optimized processes.
- Actions: The strategies customers use to address the drivers mentioned above. 42% are centralizing and automating financial planning, accounting, and reconciliation activities on a global scale. 42% are also modernizing reporting and business intelligence. These two actions combined help centralize data company-wide, giving users access to better information.
The most expensive part of the migration process is the data footprint, so 41.5% of customers are cleaning, deleting, and archiving data to minimize that footprint prior to migration.
- Requirements: The people, processes, and capabilities needed for the actions to succeed. The most important requirement by far for customers is minimal disruption to operations. Unfortunately, the average downtime for an S/4HANA migration is 72 hours, which many enterprises simply can’t afford. SAP offers near-zero downtime service to cleanse data beforehand, which has been shown to reduce that time from 72 to 12 hours.
Cleansed and harmonized operational data is another critical requirement for a smooth migration, along with a proven partner and integrations between your ERP and line-of-business applications.
- Technologies: The tools customers use to fulfill requirements. 78% of customers use or plan to use SAP Readiness Check. This is a free-service tool for SAP maintenance contract users that helps customers assess what would be needed for a Brownfield system conversion.
In addition, 77% use SAP Business Scenario Recommendations, which analyzes current ERP setups and provides insight into how processes and systems could improve with S/4HANA. This technology also gives recommendations for building a business case, which is incredibly valuable for many customers.
Integrations also play a large role, especially when it comes to harmonized operational data. Integrating SAP with a front-end system, like Salesforce, creates one common source of true data so everyone within the organization can work more efficiently.
Preparing for migration
Although migrating to S/4HANA is likely the biggest project IT departments will face over the coming years, there are things organizations can do to prepare themselves to make the change easier.
The most important thing is to adapt and re-engineer business processes that need it, so the business case can be built on a solid foundation. Preparing data and analyzing existing custom code and processes can help minimize downtime and lessen the chances of operational disruptions during the migration.
Integrating S/4HANA with line-of-business tools is essential to harmonizing data and getting the most out of all applications post-migration. enosix is the next-generation platform for making your SAP data accessible in the modern front-end systems (including Salesforce Sales, CPQ, and Commerce Clouds) you need to run your business successfully. We accelerate your digital transformation efforts far faster and with far less investment than traditional approaches.
You get your data in real-time in the front-end applications your customers and employees want, all without the issues that come from syncing, replicating, and other middleware-mediated approaches.
Schedule a demo today to learn more about how enosix can fit into your S/4HANA migration strategy.