Digital transformation is changing the role of the ERP system in companies, especially manufacturing. The demands for managing company data, process integration, the speed of data processing, as well as the analysis of large quantities of data continue to grow. Migrating to SAP S/4HANA is the next step in achieving your digital transformation goals.
What is SAP S/4HANA?
S/4HANA is SAP’s next-generation ERP, designed to align businesses with the digital economy. Built on the in-memory SAP HANA platform, it delivers a simplified data model, real-time insights, and an intuitive SAP Fiori interface. When transitioning to S/4HANA, you will need to choose the best IT operating model for your company; either an On-Premise or Cloud-Based system.
- On-Premise: The company retains all control rights over the infrastructure and software. Data is stored on the company’s own hardware and servers and is also responsible for data security and data protection. Hardware and software are usually obtained via one-off costs, and an annual software maintenance fee is added. The operating costs for a support team required for infrastructure maintenance or software upgrades can drive up these costs in the long term.
- Cloud-Based: Both deployment and administration are the responsibility of an external service provider; the ERP system is hosted externally. With a model like this, the expenses are spread over ongoing operating costs; the investment costs are lower than on-premise. The external service provider takes complete care of all maintenance, software updates, and security precautions. A cloud ERP system can also be used anywhere.
Time is of the essence to migrate to S/4HANA
Mainstream maintenance for SAP ERP (SAP ECC 6.0) and the SAP Business Suite will expire in 2027. SAP will only guarantee a fee-based extended support service for companies through the end of 2030. Although 2027 may seem far off, 12–24 month implementations mean now is the time to start making decisions. Below are some topics you should take into consideration when thinking about migrating to SAP S/4HANA now.
The later you start, the more complex the project
SAP is continuously developing S/4HANA, producing quarterly updates with new functions for users. Delaying your S/4HANA project increases the technical and functional gap from your current ERP system. This will result in longer project timelines and higher costs during the transition.
Consultant availability will become scarce
Waiting too long to start your project risks migration delays due to limited SAP expert availability.
Start making “smarter” decisions sooner
Embedded analytics can help you simplify and optimize decision making considerably. The ready-made, efficient analysis models are no longer based on replicated data, instead they directly access business data in the ERP system in real-time.
Lack of user acceptance
The SAP Business Suite does not have the functionalities or user-friendly SAP FIORI interface concept that S/4HANA does. In this era of digitalization, employees expect a workplace equipped with the latest technology, which boosts the efficiency of users and counters a lack of acceptance.
Five Key Advantages of SAP S/4HANA
A timely switch strengthens competitiveness by allowing you to benefit from the solution’s advantages sooner.
- Advantage 1: SAP S/4HANA is built around end‑to‑end processes and a streamlined data model that uses far fewer aggregation tables (e.g., 3 instead of 30 for inventory). Following the “Principle of One,” functions are simplified and unified. Key capabilities from SAP EWM and SAP APO (PP/DS) are now embedded in the ERP core, eliminating the need for separate system instances.
- Advantage 2: Because SAP S/4HANA runs on the in‑memory SAP HANA platform, it can process and analyze large data volumes at high speed, enabling near real‑time connectivity and rapid execution of business processes.
- Advantage 3: SAP Fiori apps ensure a modern user experience with their intuitive interfaces. The apps are tailored to the respective users and bring relevant information directly to the desktop PC, tablet, or smartphone.
- Advantage 4: Embedded analytics in SAP S/4HANA enables real‑time queries, analyses, and what‑if simulations directly on operational data. These capabilities are enhanced by built‑in, ready‑to‑use artificial intelligence (AI), machine learning (ML), and robotic process automation (RPA) functions designed for specific business scenarios.
- Advantage 5: SAP S/4HANA provides flexible deployment options, running either on‑premise or in the cloud through the Rise with SAP offering, available as a public or private cloud via a hyperscaler or SAP’s own data centers. The Public Edition is a multi‑tenant, true SaaS ERP designed for rapid deployment, while the Private Edition is a single‑tenant, customizable version that also supports system conversion.
Implementation Approaches
In order to avoid pitfalls, it’s important to determine what strategy is best for your company. You can choose between three different implementation approaches: Greenfield, Brownfield, or Selective Data Transition. The Greenfield method is a fresh, new implementation of an SAP S/4HANA system from the ground up. On the other hand, the Brownfield method involves migrating existing SAP software to SAP S/4HANA. If you want a hybrid approach, you can choose a Selective Data Transition.
Regardless of the chosen approach, SAP S/4HANA migration and digital transformation come with challenges. The switch to SAP S/4HANA should therefore be started as soon as possible. But in many organizations the switch to SAP’s new ERP suite is still being delayed, which could take its toll. Amid digital change and supply chain volatility, companies must stay agile and flexible to adopt data-driven business models to compete. Mastering these decisions requires in-depth know-how that is usually not available internally. This makes support from an experienced partner essential. As a trusted advisor, they offer technical guidance while considering existing processes, functions, and the appropriate operating model for digital transformation.
In the upcoming blogs in this series, we’ll take a deeper dive into each implementation approach for migrating to SAP S/4HANA.
