s4 hana budget value [shutterstock: 1495944443, Roman Samborskyi]
[shutterstock: 1495944443, Roman Samborskyi]
Blog Nomen Nescio

What Is Your S/4 Hana Budget?

I now have a final S/4 roadmap and budget for our headquarters. When I presented them to the CFO, he remained surprisingly calm. His only question: What do we get in return?

It’s the same old discussion we’ve been having since the dawn of technological release changes in the SAP community. RISE with SAP is more of a marketing promise than a roadmap to the cloud, but I’ve seen promising presentations on process mining, and everyone’s been talking about digital transformation lately, anyway. The day-to-day reality in companies looks entirely different, though.

CFOs are notoriously stingy when it comes to budgets. In my case, however, he told me that the upcoming IT budget could be a little higher than usual – if the countervalue checks out. This is where I’m having trouble: What value do S/4 and Hana add? How can I guarantee a future-proof platform with this release change?

The challenge is to find a balance between price and performance for the S/4 conversion. If given enough budget to pay ever-higher daily rates, I could hire enough consultants to be done with the release change by 2027. However, the budget it would take for this approach would be insane. My company may have a comprehensive S/4 system with an excellent database platform by 2027, but at what cost?

SAP doesn’t seem to be aware of this challenge that customers are facing. In fifty years, it never learned how to think holistically. I’m a CIO through and through, but even I had to acquire a basic understanding of business economics throughout my career. SAP systems can ever only be truly successful if there’s a healthy balance between business, organization, technology, and software licenses.

To customize a not-so-state-of-the-art technology with such high daily rates for consultants doesn’t seem advisable to me. I don’t know what will happen with S/4 and Hana in the not-so-distant future, which is why I am not exactly jumping at the chance to spend large sums on the S/4 release change. To put it simply: Asking my CFO for millions of dollars to spend until 2027/2030 seems irresponsible to me.

The S/4 conversion adds not enough value to justify the high cost. Lower daily rates and cost-effective SAP licenses would serve to reduce the inherent risk and answer the question of what companies get in return. However, SAP is not most developers and consultants’ favorite topic. It’s hard finding ones that fit into my budgetary plan.

My current S/4 roadmap: stall and wait. We are making the necessary preparations for a database version change and are testing S/4 in countless proof of concepts. This tactic will serve us well for the next eighteen months or so. After that, I will either need to bite the bullet and switch to S/4 no matter the cost, or SAP will have to tell us what will happen once S/4 has run its course.

E-3 Magazine April 2022 (German)

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N. N. (Nomen Nescio)

Nomen nescio, abbreviated to N.N., is used to signify an anonymous or unnamed person.

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