As the noise around SAP S/4HANA seems to grow and grow I have been reviewing the S/4HANA Cloud versions. The solution has now grown into a more robust offering and I feel it is now ready for customers to move to. Whilst the current SAP ECC customer base have been spoilt with the perceived flexibility to allow be-spoking a common theme of simplicity and moving back to standard is coming from a growing group of customers. I have identified 5 key benefits that an Organisation can achieve by moving to SAP S/4HANA Cloud.
- Quicker implementation times
- Reduction of support costs
- Ability to resort back to standard and provide control
- Aligning to SAP’s strategic direction
- Flexibility to integrate and enhance
Quicker implementation times – the benefits here are pretty simple to identify. The overall project duration is reduced due to the Cloud principles. The biggest time saving is during the build due to the reduced configuration and guided configuration process. However savings will occur during the testing phase due to the new testing tools and training will reduce due to the SAP Fiori screens being more intuitive and easier to train.For an existing SAP ECC client there is no code to copy and the system conversion is replaced with data migration. Within data migration SAP provides pre delivered data migration scripts and templates to reduce the effort of loading data into the new system. The reduction in the implementation times will reduce the overall effort of external consultants and the customer’s project team, which in turn will reduce the overall cost of the implementation which will always be welcomed.
Reduction of support costs – moving to SAP S/4HANA cloud will mean a new type of contract will be in place. An Annual subscription is used, and included in this are the core licences, the hosting of the solution and the box level support. Current jobs like back-ups and performance monitoring are all covered which will allow the customer to focus on their business rather than managing the system of record. Further to this, as the core SAP S/4HANA solution is not as customisable as a traditional SAP ECC on premise solutions,the application support costs will reduce as well due to the reduction of bespoke objects.
Revert back to standard – for many SAP ECC customers with a mature SAP ECC system the level of bespoke would have grown over time. Some of the bespoke code maybe required, some will not be required. The perception of what is REALLY required compared to what someone would actually WANT is often missed, leading to excessive additional coding. Being able to start from a clean and simple solution, based on SAP best practice will provide a number of customers the ability to work in a more lean and efficient manner. This in turn will reduce the overall cost of support and ensure the TCO will reduce. Customers who are looking at a Cloud solution will see efficiency as the key driver and moving to a fully customisable product will erode that benefit.
SAP’s strategic direction – the clear direction of SAP S/4HANA is for the product to be a Cloud first tool. This means all of the new functionality will be released first within the Cloud editions (a new release is planned 4 times a year for the Cloud version and only once for the on premise solution) and therefore before the on premise edition. The demand for Cloud based tools is rapidly growing and ERP is now firmly on this journey as well. With focus on the digital core and the ability to change quickly, Cloud has all of the attributes to help achieve this. SAP’s recent acquisitions have mainly been best of breed Cloud solutions such as Hybris, Success Factors and Concur, S/4HANA Cloud is now the best of breed ERP Cloud product.
Flexibility of integration – SAP S/4HANA Cloud edition is not a one stop shop for all enterprise tools. Within the product a number of API’s are available to link to other systems such as Success Factors, Hybris and others. HCP can be used to create specific bespoke applications that cannot be achieved within S/4HANA Cloud edition. This removes the need to bespoke in the core S/4HANA system. The out of the box integration between the SAP cloud products will reduce the time spent building and managing integration points.
Summary
SAP S/4HANA Cloud is a very attractive solution for customers wishing to implement a simplified ERP solution and gain the associated benefits. Being able to be agile and quick to change is a real competitive advantage for SAP S/4HANA Cloud. With “the cloud” the overall cost of the implementation, licences, hosting and support are much more competitive compared to an on premise implementation. Finally SAP S/4HANA is now market ready and growing in functionality with a true digital core, it is a product that will be attracting a lot of attention over the coming months and years.
