SAP S/4HANA is a full scale ERP suite utilizing SAP’s core in-memory database SAP HANA, and it is used by companies of all sizes as the central component to their ERP system. In each case, the reasons for implementing S/4HANA is different, according to their existing technology landscape and their business goals.
Some corporations upgrade their central database and associated ERP to SAP S/4HANA to help them meet changes in their business environment and provide a basis from which they can develop into the future. These customers may be already using non-SAP products, earlier versions of S/4HANA, its predecessor SAP ECC, or even SAP R/3, SAP’s earlier database solution which dates back to 1992.
Here IgniteSAP will provide a comprehensive guide for enterprises considering embarking on SAP S/4HANA upgrades and/or implementation projects, including:
SAP S/4HANA is the latest generation of SAP’s ERP, built on a central in-memory realtime database called SAP HANA. SAP HANA allows users realtime access to business data and analytics, bringing together transactional and analytical systems. The newest version, SAP S/4HANA 2023 was released earlier this year.
Many customers use SAP S/4HANA as the main component in their ERP system. It includes functionality for finance, sales, sourcing and procurement, manufacturing, supply chain management and asset management, as well as embedded extended warehouse management and production planning. More recently it has been augmented with machine learning capabilities and automation, predictive accounting, transport and HR management, and new technologies such as AI, blockchain and IoT.
The innovative SAP HANA database, along with newer innovations are now available in various packages, and also can be deployed in the cloud, which brings further benefits.
The fundamental benefit of S/4HANA is that it simplifies IT and business process administration for enterprises. As the core of an ERP system, S/4HANA can centralize data access from both SAP and non-SAP sources, providing end-to-end transparency for business managers and executives.
Bringing together various ERP systems under one umbrella means that the total cost of ownership is far less than those seeking to run multiple ERP systems simultaneously.
An easy to understand user interface called SAP Fiori makes interaction with S/4HANA intuitive and personalized, simplifying basic administrative tasks.
S/4HANA, and particularly S/4HANA Cloud, is future-oriented and makes the process of innovation and updates easier and less disruptive.
It also increases the speed of business processes like planning, analytics and financial functions: saving time and enabling team members to work on value-added tasks, reducing the overall workload.
The need for businesses to migrate to S/4HANA soon from legacy SAP products is becoming crucial as the support and maintenance deadline for these has been set at 2027. Beyond this point all customers using SAP ERP must have some form of S/4HANA deployment.
SAP user groups such as ASUG (in the US), DSAG (German-speaking) and UKISUG (UK and Ireland) have conducted studies which show that the majority of their members are intending to upgrade to S/4HANA or S/4HANA Cloud soon in order to meet the deadline, but many have yet to start.
It is important that businesses begin the process of assessing their requirements and scoping their SAP S/4HANA upgrade projects, in order that they are able to find the SAP consulting talent (during the current spike in demand) to carry out deployments and go-live with these new systems before the 2027 deadline.
This is because, for the largest global enterprises, migrating systems to SAP S/4HANA can take anywhere between 6 months and 2 years.
SAP has created packages which can simplify, accelerate and facilitate the deployment process, called Rise with SAP (for larger corporations) and Grow with SAP (for SMEs). Smaller implementations of S/4HANA using Grow with SAP can be completed and at the Go-Live stage within a few months.
Further reading: S/4HANA Deadline
The transformation of business IT to a S/4HANA system can be a very complicated process, depending on the current architecture of the business’s IT systems, and their choice of deployment. Careful assessment of existing business processes and project planning will minimize the cost, and length of the project, and the subsequent downtime and disruption to enterprise activity.
It is important to note that implementation of SAP S/4HANA is not just an overhaul of IT but will fundamental reshape the IT architecture and consequently will change the way that business processes work across the entire company. The project will therefore affect stakeholders from all departments and the deployment strategy should reflect this.
The project will also require a large investment of time, finance and human resources.
Greenfield – This route is taken by companies who have outdated systems and want to entirely redesign their business process architecture.
Brownfield – For companies with comparatively new systems that are functioning well but want to ensure they can take advantage of new innovations in business technology like AI and machine learning, automation and cloud computing.
Hybrid – This route is for companies who want to integrate S/4HANA into their existing IT landscape.
While SAP are encouraging most customers to adopt the most recent SAP S/4HANA Cloud Public Edition in order to be as agile as possible, there are several ways in which businesses can deploy S/4HANA that may be more in line with their requirements.
The primary categories of S/4HANA deployment are On-Premise or Cloud-based, though in practice many on-premise systems now have a cloud component.
SAP offers S/4HANA as Software-as-a-Service (SaaS) based in the cloud. With this option customers have a contract with SAP, who host the software and run the operating system. SAP also manages periodical upgrades to the software. Extensions, automation and access to innovative technologies like AI is available using SAP endorsed modules on the SAP Business Technology Platform. Because it requires a redesign of the existing IT landscape this can be considered a Greenfield deployment.
With S/4HANA On-Premise the customer or a third-party manages the software, or alternatively it can be managed by a third-party Infrastructure-as-a-Service (IaaS) provider like Microsoft Azure, Amazon Web Services, or Google Cloud. Customers manage their own annual upgrades and use SAP Solution Manager to assist in their project design.
These two primary categories include further options (editions) which are distinct from each other.
SAP S/4HANA Cloud Public Edition is the deployment option fully operated and maintained by SAP.
SAP S/4HANA Cloud Extended Edition offers customers a more flexible option so they have more control over the deployment of S/4HANA.
SAP S/4HANA Private Edition offers customer cloud services that are not shared with others.
SAP S/4HANA On-Premise managed by SAP is hosted by SAP.
SAP S/4HANA Any-Premise is managed by other cloud service providers (Azure, AWS, or Google Cloud and others).
In order to accelerate customer journeys to cloud-based ERP, SAP introduced Rise with SAP: a Business Transformation-as-a-Service package which includes S/4HANA Cloud Suite. This also includes multiple SAP products which leverage cloud technology for efficient and agile business processes, access to the SAP Business Network, and SAP Business Technology Platform.
Rise with SAP is available with S/4HANA Cloud Public or Private Edition, and can be deployed with a Greenfield or Brownfield approach.
One important feature of the package is that it also provides access to these services under one contract, which simplifies the management of cloud services licenses for customers.
Similar to Rise with SAP, but for smaller organizations, Grow with SAP offers many of the benefits of Rise, such as streamlined operations, embedded analytics and machine learning, automation and scalability so the company has the resources to support its growth.
Grow with SAP comes with SAP S/4HANA Cloud Public Edition and is deployed with a Greenfield approach as it is targeted towards net-new SAP customers with smaller businesses.
Both Grow and Rise are designed with a modular approach so customers in specific lines of business can extend their S/4HANA Cloud core ERP with business applications relevant to their industries.
These packages use the SAP Service Delivery Model in which SAP delivers and manages the software, support, infrastructure and technical services, and SAP partners deliver implementation and application management services.
Further reading: Read more about Grow with SAP
S/4HANA implementations can fundamentally restructure the business IT landscape so it is important for customers to appoint project managers who throughly understand the process before the project commences.
SAP provides several software tools and methodologies to guide the assessment of the business’s needs and the implementation process so that the project leads to successful outcomes, but it is essential for everyone involved to have a good grasp of the scope and nature of the project.
Many of these are covered in the SAP Activate methodology and SAP Best Practices, which have been created after analysis of countless S/4HANA projects in various contexts, to provide a clear route for deployment for all customers.
Expectations should be defined carefully from the outset in terms of the time and cost involved in completing the implementation, and time should be spent planning how to manage the extent of change to the organization necessary in the process.
The business should be ready for change and team members should have SAP training for end-users ahead of the start of the implementation. At least one team member should have far more intensive SAP training in order to help other colleagues. This will help beyond the handover after the Go-Live stage.
Other workers should be made aware of the extent of the project and it should be championed by a member of the higher executive levels.
Project planners should ask: What are the desired business outcomes? Are they realistic? Are internal resources and teams allocated to help external SAP consulting teams operate effectively? Who will take on which responsibilities during the project?
Another piece of general advice to bear in mind when devising a strategy for S/4HANA implementation is to ensure the business gets the maximum benefit from the implementation of S/4HANA with dedicated IT staff and a clear plan for S/4HANA support and upgrades in the future.
The first stage of planning is to decide whether the business needs a Greenfield, Brownfield or Hybrid deployment. Then, with reference to the desired business outcomes and the current architecture, establish which edition of S/4HANA is most appropriate.
SAP has created a way to assess a business’s needs from S/4HANA implementation to help in the sales process to recommend the correct edition of S/4HANA. It is called the SAP Digital Discovery Assessment. It helps customers and sales teams to define business priorities and the scope of the project, along with the specific points of integration.
Scoping is also the first stage of the implementation process, but project planners can carry out a preliminary scoping of the project even before interacting with SAP or partner sales teams.
Another preparatory activity that should be carried out once the approach, specific edition of SAP S/4HANA, and the scope of the project is established is to decide who will be doing the work of implementation: for large projects its is recommended to use SAP partner organizations, but for smaller projects a team of freelance SAP consultants can be engaged.
IgniteSAP has summarized the best practices for finding SAP talent here
SAP has a large number of officially recognized partners with teams who can carry out an implementation project on your behalf. These include globally recognized professional services companies such as Accenture, PwC and Deloitte, but also smaller consultancies who cater for particular lines of business, or specialize in particular solutions like S/4HANA Cloud.
There are many benefits of working with an SAP implementation partner: They have a great deal of combined experience with S/4HANA implementation and highly skilled and qualified staff. This means that the business need not be concerned with onboarding the right SAP consultants for the project as their employment by large SAP services providers shows that they are supremely competent for the task in hand.
For those looking to employ SAP consultants themselves instead of engaging a SAP partner organization, then the recommended route is to work with an established SAP recruitment consultancy as these organizations have huge resources to draw on when selecting and assessing candidates: ensuring you get the right consultants for your S/4HANA implementation.
IgniteSAP has built up a network of highly skilled SAP consultants over many years. If you would like access to hire from this SAP community reach out to us. We will help you source qualified S/4HANA consultants with years of valuable experience.
Though there is extensive embedded support for end users of S/4HANA, part of the S/4HANA implementation project involves training for end-users in order that the business maximizes its investment, so it is important to have designated members of the business as S/4HANA users ahead of the implementation.
These employees will be required to understand enough about S/4HANA to use it in the course of the working day and to help others understand the solution after the implementation is complete and has reached the Go-Live stage.
A selection of options available for training end users of SAP S/4HANA can be found here.
SAP also has modules available for S/4HANA in the SAP Training Shop. The SAP S/4HANA Overview (S4H00) is a valuable introduction for employees who want to take their first steps towards understanding S/4HANA. Participants can learn the principles of navigating, system-wide concepts, and the basics of logistics, accounting, HCM, and analytics within the S/4HANA environment. It also includes an introduction to SAP Activate and Best Practices, and SAP Services.
By virtually attending this course business users will be able to help themselves and their peers to get the most out of the S/4HANA system from the day that the implementation team hands over to them.
Although no business is the same and their requirements from an S/4HANA implementation will be different in each case there are some aspects of the process which are common to all.
In order to get a return on the investment of time and money businesses seeking to upgrade to SAP S/4HANA need to follow these basic steps:
If you follow these steps you will not only reduce disruption during the implementation to a minimum, but also maximize your business’s return on investment in S/4HANA, regardless of which edition you have implemented.
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