Article SAP S/4HANA is Growing: Why are Companies Still Waiting?
As we get further into 2018, it’s expected that the number of SAP S/4HANA customers will continue to increase.
By Michele Snead / 14 May 2018
By Michele Snead / 14 May 2018
One of Insight's partners has predicted that this is the year for S/4HANA to really take off for customers. But many large organizations using SAP are still hesitating to make the move. Here are three of the main reasons for the reluctance along with our recommendations for overcoming these obstacles:
Technology analysts believe that one of the main things SAP needs to do to drive the future success of S/4HANA is to make it as easy as possible to migrate to the system. Massimo Pezzini, vice president and fellow at Gartner, explained in this TechTarget article: “Paradoxically, we found that it’s easier for non-SAP ERP organizations to adopt S/4HANA… Most established SAP ERP clients, especially large and global organizations, are finding it difficult to justify the adoption to S/4 from a business case perspective and are concerned by the cost, complexity and time required by the migration project.”
We believe that it’s not a matter of if, but rather when, these organizations will end up moving to the cloud-based ERP system. Early adopters of the technology will likely come out ahead of the pack when the “new” becomes the “norm.” So how can organizations get past the complexity to begin taking advantage of the newest technology now?
According to ASUG, “While sales numbers are interesting, the number of customers using SAP S/4HANA to run their businesses is even more important. SAP reported that the number of customers live on its latest ERP topped 1,000 in the fall and now says there are nearly 1,500 companies with SAP S/4HANA implemented. Still, that’s at best 19% of customers who have purchased the software that are actually using it.”
Why such a discrepancy between the number of companies that bought the system and the number of companies that are actually using it? ASUG’s author explains that “it could be difficult to find trusted, experienced system integrators with such a new product.”
Important questions to ask of any system integrator are:
Just as it is currently a challenge to find experienced system integrators, it may be a challenge to find a training team with the right availability to support your project team and end users as they move to the new system. To minimize productivity losses while maximizing retention and sustainable learning, training and support needs to be relevant and occur at the point of need during the project and beyond.
To optimize your training program for S/4HANA, a blended approach to education with both proven off-the-shelf and custom learning will get the right information in front of end users without having to start from scratch. Ask training teams if they have the right experience with S/4HANA, if they have education developed that you can utilize, and if their teams will be able to scale and support the changing needs of the project team. As with system integrators, be wary of being billed a higher rate as inexperienced companies will charge more either upfront or in more lengthy engagements than would a vendor who is experienced in S/4HANA.
At its simplest, change management prepares people for change by successfully changing beliefs, actions, and behaviors from one way to another. Change management becomes more complicated when you have people in different roles (executives, managers, stakeholders, end users) who all are affected differently by the change. To be successful, you will need to map role and process changes, communicate what’s changing, align leadership, and ensure everyone has the same concept of the change. Everyone needs to be on board with the driving factors behind the change and accept that the sought-after end results will positively affect business results—benefiting everyone in the organization.
When you move to the cloud-based SAP S/4HANA, there is a greater burden of change on the SAP end users, as their daily processes will likely be modified to fit with new best practices. Executives will also likely be split between the benefits of staying the same and the benefits of moving forward. Debates among teams are common—and delay efforts, costing time and money in the project. Early OCM prevents costly turmoil that can occur in the middle of a project and helps to see it through to success.
It may seem like another paradox, but even though initial costs for S/4HANA are lower than with other earlier systems, the training costs will increase. To put it another way, organizations typically expect end-user training to cost around 10-15% of what implementation costs. But this would be dramatically underestimating the education needed for adequately preparing your teams for using S/4HANA. The new cloud technology affects most of a company’s critical ERP processes and even the most experienced SAP users or most tenured employees will need support and training to adapt.
Budgeting the right amount for training and support will help your organization to overcome the complexity and prevent productivity dips. Bring in experienced help to guide your internal learning and development teams. Establish a super user program for a sustainable network of in-house SAP support into the future.
There are certainly some compelling reasons to wait to fully implement S/4HANA, even after it is purchased. But these reasons are not insurmountable. Although S/4HANA is still relatively new, there are experienced vendors to help you on your journey to the cloud. Once there, your organization can enjoy the competitive advantages from streamlined processes and increased productivity and speed across teams and departments.