SAPonPower

An ongoing discussion about SAP infrastructure

What should you do when your LoBs say they are not ready for S/4HANA – part 1

A recent survey by ASUG revealed that over 60% of the surveyed SAP customers have yet to purchase S/4HANA.  Of those that did, only 8% were live.[i]  It did not ask whether those that had purchased it but were not live were actively pursuing a conversion or whether the software was sitting on a shelf, or for that matter, whether some might have been mistakenly speaking of some form of HANA but not S/4HANA.  I was surprised to see that the numbers were even that high as most of the large enterprises that I work with on a regular basis are either still on conventional Business Suite or, at best, moving to Suite on HANA.  Regardless, this means a lot of customers are waiting.  This should not be news to you and it certainly was not to me as I have had conversations with dozens of customers that said the same thing, i.e. that their business leaders were either unconvinced of the business value of S/4HANA or that they planned to move eventually, just were not ready now.  Unless those customers have other HANA plans, this is often the end of the discussion.

A few days ago, Bob Gagnon, a friend of mine and a brilliant consultant, but don’t tell him I said so, wrote a short piece on LinkedIn about this subject.[ii]  He makes a persuasive point that waiting has its costs.  Specifically, he writes about the “technical debt” your company creates because any customization you do to your current environment while you wait must either, at worst, be completely redone in S/4 or at least must be tested and qualified a second time when you do implement S/4.  He goes on to mention the increased complexity of your roadmap as you have to consider the institutional dependencies and impact on your future conversion.  Furthermore, you have no choice and must convert or move off of SAP at some point, so you can spend the money today or spend it tomorrow, but either way, you have to spend it.

As I thought about this, I realized there are additional factors to be considered.  As is now common knowledge, SAP has indicated that support for conventional database systems for SAP will end in 2025.  What may be a surprise to some, as Bob mentioned, is that SAP may withdraw support for Business Suite on HANA at the same time.  Compound this with SAP’s assertion that “customers typically migrate 10%-15% of their productive landscape per year, which means that customers that begin in early 2017 can fully migrate a complete traditional SAP Business Suite landscape to SAP S/4HANA by the end of maintenance for SAP Business Suite.”[iii]  This means that for each year that you wait, you have less time to get your entire landscape converted prior to end of support.  Rarely is rushing an advisable method of reliably achieving a desired outcome, as any of us with teenagers or young adults have, no doubt, shared countless times.

How about the availability of skilled resources?  Long before 2025 approaches, the pool of well qualified and trained S/4HANA developers and migration consultants will be stretched thinner and thinner.  When demand is high and supply is low prices go up meaning that those who delay will either see far higher costs to convert to S/4HANA.  Inevitably, a new crop of low skilled and potentially unqualified or at least not very experienced individuals will rush into the vacuum.  Those companies that hire systems integrators with these sorts of “low cost” resources may run into foreseeable problems, delays or failed conversions.

Other factors to consider include skills and innovation.  Even if your LoB executives have not concluded there is enough value in S/4HANA currently, since they have not made plans to move away from SAP, there is clearly some value there.  If you make plans to convert to S/4HANA now, you can get your personnel up to speed and educated and working toward innovations enabled by S/4HANA sooner than later.  If even 20% of what SAP says about business process improvements, concurrent analytics, geographical analysis, executive boardrooms and drill down detail are true, then that is value that you will get eventually, so why defer getting those benefits?

So, pay now or pay more tomorrow.  Plan carefully and thoroughly and execute that plan at a reasonable pace or rush and hope to avoid potentially catastrophic mistakes.  Incur a technical debt or leverage the inevitability of 2025 to enable innovation today.

Why, you might ask, is an SAP infrastructure subject matter expert talking about conversions to S/4HANA?  That is indeed a fine question and will be addressed in part two of this blog post at a later date.

 

[i] https://discuss.asug.com/docs/DOC-46613

[ii] https://www.linkedin.com/pulse/s4hana-waiting-has-negative-impact-robert-gagnon?trk=v-feed&lipi=urn%3Ali%3Apage%3Ad_flagship3_feed%3B%2BFCPwehGKCg0YU5uNYpKYA%3D%3D

[iii] http://sapinsider.wispubs.com/Assets/Articles/2017/January/SPI-Making-the-Move-to-SAP-S4HANA

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April 25, 2017 - Posted by | Uncategorized | , , , , , , , , ,

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