What Companies Underestimate About S/4 Transformation

Usually, migration projects have very different starting points and objectives. Personal experience in implementation projects has shown that many common denominators are implemented accordingly, but some work packages are still underestimated.

A central topic for most existing customers is the new system architecture. The focus is naturally on hardware, meaning the Hana technology. The provision for an unplanned hybrid system architecture due to cloud solutions shoehorned in by the business departments often comes too late. A critical part of the hybrid approach is to ensure and verify the necessary integration, which is itself a prerequisite for successful cloud deployment. SAP has not yet fully integrated some cloud acquisitions.

One of the most underestimated topics is certainly data management. Not only is it very extensive and complex, but it also involves a lot of costs in the project and subsequent operation. The complexity makes it a necessity to clarify which data can be kept in the core system and which can be outsourced to upstream systems. Data archiving should also be dealt with at the same time.

The European General Data Protection Regulation is part of comprehensive data management. SAP’s data simplification has extensive effects on data structure and in-house developments. To that end, the new SAP Mater Data Governance also needs to be evaluated.

Change management is also an important factor. In my view, some HR areas are misjudged and thus some effects are underestimated. This concerns the topics of training, succession planning, and knowledge transfer. For example, poorly trained users use the software too little or incorrectly, and therefore take longer or make mistakes, which costs a lot of time and money.

The massive shortage of IT and SAP specialists is top priority for most companies. Therefore, as a result of uncertainties caused by massive changes in the transformation project, special attention should be paid to the affected human resources. Any change in personnel has long-lasting effects and is expensive. The transfer of knowledge from external consultants to internal staff must also be ensured. Dependence on consultants after project completion is a risk and associated with financial disadvantages.

The S/4 transformation also brings new SAP licenses. Compared to R/3 license acquisitions, the following less-considered measures are recommendable for successful relicensing during the license negotiations: The executives responsible for SAP or IT strategy should be involved, and it should be ensured that lawyers with SAP-specific knowledge are on hand, too. When converting on-prem licenses to the cloud, there is currently no way back, so your company needs to make sure that this is where it wants to go.

Finally, you should also be aware that with the transformation from R/3 to S/4 Hana, you will be even more tied to SAP in the future. This is firstly because more and more logic is being placed in Hana, making it almost impossible to switch databases, and secondly because you are at the mercy of SAP’s pricing strategy.