To S/4 or not to S/4? That is the Question

SAP

Before COVID-19 reared its head and unleashed chaos on a largely unprepared world, business people were already grappling with another challenge in their midst, the move to SAP S/4HANA. Various forums, ASUG, DSUG you name it, have had this as a standing topic on their agenda for some time. Viewpoints are as variable as the emotive response the topic elicits when spoken of. So what about the move to SAP S/4? Yes we are working remotely, pivoting business/operating models, changing to new demands etc. But all of this depends on the trusty Enterprise Platform.

I hope to share some themes and learnings with you that will help your decision making in a clinical, non-sales driven approach. To date I have done dozens of ECC implementations and ten (10) SAP S/4 projects. The majority of them are under some Transformational banner so have a wider audience than the pure play SAP solution stack. But SAP is a broad church so to say it touches nearly every corner of the business kingdom is a fair summation.

Righto, let’s get into it.

 

SAP Extends Support from 2025 to 2027

“That means I can put my planning on the backburner for another two years at least. Right?” Actually not so much. SAP have extended their support for their products, but you need to check every little 3rd party add-on/bolt-on, tacked on code and app etc for continued support. In many cases these bits, the DB, OS etc. version is not supported in various version permutations and you are going to be forced to upgrade the ECC stack and everything it touches yet still not get full assurance.

So if you need to throw money at ECC, why not save it for the S/4 business case?

And let’s be honest, hands up, who out there has a fully documented, up to date set of specifications for that Z code widget written in 2002…Yip, most of us do not. Therein lies the risk in part. Sure, if it works today and it aint broke no need to fix it, but can you quantify the risk and mitigate? If not, chalk one up the side for a move to S/4.

In essence, the additional time is really similar to JobKeeper, great and thanks but don’t build around or on it. ECC is essentially on life support, S/4 is not.

 

SAP ECC and S/4 Gap

When S/4 launched a few years back, there was nothing fundamental in difference between ECC and S/4 – not enough for me to advise clients to make a move. Certainly no clients in essential services, retail etc not because it was unstable but because of the lack of skills, experience, support and the unknown. S/4 now is nicely bedded down, stable, high-performing and should surely feature on your list of things to in the next 24 months. Having now been involved with almost a dozen SAP S/4 projects, I can put my hand on my heart and say that S/4 today is a VERY different beast from ECC.

Here is the main problem we will face: The gap in code line (Functionality) is growing at such a rate that in my estimation, if you are not on a journey in the next 24 months, you face an almost completely new implementation. Remember although there is a lot of “ECC code” still in S/4 and there will always be, the User Experience, the data, tables, access methods, integration etc are all changing at a rate of knots.

Here is one example, in ECC you have the old CVI (Customer Vendor Interface and yes BP in later versions) and in S/4 you have BP (Business Partner) and the entire solution is now driven from this. SAP acquisitions over the years (Ariba, Success Factors etc) are now pivoting to using BP and this will all conform in time to the common data model. This is big medicine.

S/4 has gone from 1503 to 1909 (at the time of writing and the last time SAP will use MM/YY) so in a few short years the changes are astounding. This brings us neatly to the next topic, changes to the solution.

Key Theme/Take Away:

  • Be planning your move now, even if you don’t execute right away.
  • Get the business ready for the jump.

 

New Change Cadence

Historically, many clients would skip a year or two, some even more between SAP versions. (I had a client skip five years and they paid for that lack of investment dearly, but that’s another story) No issues right, SAP will still support me?

Well, things are changing. Not only are SAP tightening up on the version compliance, the volume rate of changes are increasing. I have seen more and more cases of SAP Support telling clients to upgrade to a newer version to solve issues rather than spot fixing issues as may have been the case historically.

Given your cloud investments by and large already change every quarter without your intervention, it’s a great time to get the business used to quarterly or annual drops.

Key Theme/Take Away:

  • Stay close to n or n-1.
  • Get the business adapted to smaller, more frequent changes.

 

Core Design Evolution

Just a short note on this, the fundamentals of SAP are changing. The execution is being pushed down into the DB. SAP now require compliance with Extensibility Framework, Fiori Design, and Solution Manager CCoE. (All very good things!)

You need to prepare for these changes, they are all HIGHLY beneficial to you as an SAP client, but for many of you will require a major step shift in thinking, design and execution. By the way, that goes for your internal and vendor teams. If they cannot demonstrate how they will do this, this will need to be resolved. All totally fixable, but early action will save millions in pain later.

Key Theme/Take Away:

  • Start tooling/governance changes now, gently.
  • Get the business to adopt the new way of working, the benefits to them are profound.
  • Get that CCoE up and running. If you already have one, make sure it complies with the new way.
  • Solution Manager is NOT A TOOL, it is a suite of capabilities. Repeat – Solution Manager is my friend.

 

Strategic Investment vs Traditional ROI

In many cases the traditional business case ROI will not stack up for a client. “Give us X million to implement/Upgrade SAP and we will deliver Y million benefits over Z years.” You are making a strategic investment in a technology, benefits do not always line up to dollars saved. I am not saying there are none, just be aware that you are forking out to keep up with the changes in the technology, so many of the benefits will be qualitative not quantitative.

Do not be swayed by hype, “competitive intelligence/advantage this, intelligent that.” If all your peers implemented it, then by definition there is no advantage as you are all the same.

The true value is derived from how you wield what you have. That is driven by people, but enabled by technology. See the difference?

 

Key Theme/Take Away:

  • You are investing in the present to stay relevant to the future.
  • Don’t just look at dollars, this is not a just product purchase, this is a strategic investment.

 

What should I be doing Next?

  • Early Identification of key stakeholders. Without them, your project will fail. That simple.
  • OCM impact assessment – internal and external, do not underestimate the amount of change. And take your business partners into your confidence for the journey.
  • Clean Data. Nobody’s data is where it should be, take this opportunity to CLEAN it and keep it clean. Once it’s in, it’s too late.
  • Assess Custom Code. Take this chance to offload a generation’s worth of bad and ugly. (Keep the good)
  • Assess 3rd party add-ons etc. This is the clanger, not all the bits will play nice in the new world, make sure you plan for them.
  • Operating Model Changes. Make the change needed to accommodate CCoE if not already done, start finding and appointing process and data owners etc.

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