SAP S/4HANA – Don’t put off until tomorrow what you should be already doing today
SAP first announced that all existing users of SAP must upgrade to their new SAP S/4HANA application suite in 2025. Since then, multiple SAP S/4HANA migration deadlines have come, gone, been ignored, or been extended. The latest deadline of 2027 seems more certain this time and it’s not that far away once you consider the time required to build the business case, select a migration partner, complete the project (which for some could be many years) and allow for a bit of contingency.
The bottom line: Medium to large-scale users of SAP should really start planning for SAP S/4HANA – now!
SAP S/4HANA in the Cloud
Cloud has gone mainstream and is now the dominant infrastructure platform for SAP systems. For some, remaining on-premises is the only option for a variety of reasons, but for many, this presents the opportunity to migrate to a hyperscale Public Cloud.
It’s very important to realize from the start of this journey to the Cloud that it’s not just a business and application transformation that you need to plan thoroughly. Migrating to S/4 will require a re-provisioning of the underlying infrastructure so, it makes sense to do the technical transformation to the Public Cloud at the same time. This ensures you can reduce costs, improve service quality while enhancing both business flexibility and innovation.
So, “SAP S/4HANA + Cloud = SAP RISE”? Not necessarily
SAP launched their RISE initiative this year with the aim of both increasing their “Cloud” revenues and giving both new and existing users of SAP a convenient approach to get to SAP S4/HANA whether implementing a new system or migrating an existing system. The reality is that the benefits of SAP RISE may be limited for existing SAP users:
- For those with existing investments in perpetual licenses, the cost of ownership will increase
- Regardless of your choice of the underlying Cloud platform provider, you will be locked into an SAP service delivery model. This is the same service delivery model that had some Enterprises migrating away from HEC for reasons of cost and inflexibility
- SAP Charge Rates will apply which can be higher than other options
- It is not a Cloud-centric service so access to the cost savings, flexibility, and innovation inherent to a native Cloud model is not enabled
- After the term, you do not own the system
Our customers, who typically are existing, long-standing SAP users are looking to run SAP S/4HANA on a Cloud-native platform so they can manage it the way they want with the flexibility mandated by their business, not by their SI– which in this case, is SAP.
Most SAP customers are choosing “Brownfield”
According to some industry analysts, most SAP users are discarding their existing SAP systems– honed over 20 or 30 years — and choosing what is termed a Greenfield re-implementation. This means that they are essentially starting again with the aim of re-implementing and optimizing business processes as well as using the opportunity to discard decades of old data and legacy.
Our own research both confirms and contradicts this view. At the time when the adoption of SAP S/4HANA was beginning, most of the early adopters were new to SAP. As such their implementations had to be Greenfield. Our research, entitled “SAP on Cloud: Is it the Promised Land?”, reports that half of SAP users surveyed have been delaying the move to SAP S/4HANA presumably because they want to preserve the investments they have made in SAP. So, they are looking for a low-cost, low-impact migration to S/4, and will most likely adopt a Brownfield approach. Once migrated to SAP S/4HANA they can then pick and choose which SAP S/4HANA functional changes to make.
It’s a fact – Migrating to SAP S/4HANA is disruptive
Migrating to SAP S/4HANA is technically impactful. It will bring about significant changes in your infrastructure, databases, bespoke code, configuration, and user interface. More importantly, these changes will impact user experience and cause some level of business disruption in terms of downtime and user retraining. Disruption translates to cost and in most instances, a clear business case for the migration remains unclear.
A quick review of SAP’s own website reveals the benefits of SAP S/4HANA as:
- Simplified financial structures
- Simplified data models
- Fully in-memory databases (HANA)
- Better performance
- Advances in analytics
- Better user experience/interface
Our recent internal survey also found that most of our customers found these benefits at best esoteric and in some cases, irrelevant. For many of our respondents, the costs of a migration to SAP S/4HANA far outweighed the business benefits (financial and non-financial). For these SAP users, SAP S/4HANA is no more than a technical upgrade that must be done rather than a transformative business program.
Lemongrass’s Solution – A Minimal Viable Migration to SAP S/4HANA
With Lemongrass’s nominal viable migration, you will get to SAP S/4HANA:
- As quickly as possible (our migration projects typically take no more than 3-5 months)
- At the lowest cost
- With the least business disruption (including downtime and process impact)
- On native Cloud with all the benefits that come with that
- With substantial funding from us
How do we do this?
Lemongrass has invested in an SAP S/4HANA Brownfield migration factory and has developed specific Intellectual Property (IP) to make the migration as efficient as it can be. Our approach differs from that of the large SIs in that we do not re-build your SAP system from scratch– we migrate it and remediate it where necessary to ensure it still supports your business. Our comprehensive approach includes:
- SAP S/4HANA POC / Assessment Lab (Lemongrass IP)
- Bespoke SAP S/4HANA migration methodology (Lemongrass IP)
- SAP S/4HANA migration impact assessment tooling (includes Lemongrass IP)
- SAP S/4HANA migration costing tools (Lemongrass IP)
- SAP S/4HANA on Cloud build and management automation (Lemongrass IP)
- Offshore SAP S/4HANA code remediation (potentially “low code”)
- SAP S/4HANA migration-trained project managers
- Using our Near Zero Down Time tooling to migrate you to SAP S/4HANA with as little as 4-hours of technical downtime. (Lemongrass IP)
Most importantly, we do all the above in collaboration with your team. We recognize that you or your chosen functional SIs know your business and systems better than anyone. We also recognize this is a one-time process and resource accordingly including helping to up-skill your team in SAP S/4HANA.
Side note: If you prefer to re-implement, we can help you with that as well
For those of you that decide to re-build and start from scratch, Lemongrass also supports this approach. Our Greenfield Build automation tooling will build your SAP S/4HANA estate on the Cloud at a fraction of the cost and time. Our SAP S/4HANA Basis on Cloud team can support you through the re-implementation or build project and we will do this work with your chosen system integrator.
Where Have All the SAP Consultants Gone?
One final thought. There are over 100,000 SAP customers. These systems have been implemented for over 30 years. In recent years, the SAP consulting talent pool has declined as people have moved to exciting digital engagements or consultants have left the market through retirement. It’s an aging and expensive consulting group and their attrition has not been met with new recruits to the SAP consulting talent pool.
All these 100,000+ SAP systems need to be either re-implemented or migrated in the next 5 years and, as a result, there will be a massive capacity constraint. This is another good reason to start planning your migration or re-implementation now.
Take the next step
- Complete a complimentary SAP S/4HANA migration assessment with Lemongrass. This free service will define the project plan, identify the functional impacts, and assess the costs and risks of the migration project. Learn more >
- Complete a complimentary SAP S/4HANA migration POC with Lemongrass. We will build a Cloud-based SAP S/4HANA system and migrate your data into it at no cost to you. This is a great opportunity to see your data in a real SAP S/4HANA system so you can assess the impact and benefits for yourself. Learn more >
Contact us and let’s get started.