Decisions, decisions, decisions! Is complexity stalling your transition to SAP S/4HANA on Cloud? (Part 1)

transition to SAP S/4HANA on Cloud

SAP’s 2027 support deadline is well-established. However, the launch of RISE with SAP in January 2021 introduced a new and wider set of considerations for those yet to fully determine their SAP S/4HANA and Cloud strategies.

For companies that have been using SAP for a long time, the evaluation and planning for transitioning to SAP S/4HANA on Cloud have even greater complexities – systems typically have grown organically and been developed by a wide array of internal and external resources. Whilst simplification is a much-sought-after but utopian goal for many of these organizations, the pressures to achieve it by upgrading are intensified.

And to add further layers of consideration and evaluation, there are integrations to non-SAP applications, the adoption of automation for both SAP and Cloud, plus adapting to new Cloud ways of working to ensure you are going to achieve the greatest value from operating SAP workloads on Cloud.

In terms of choice for how to progress to SAP S/4HANA and Cloud, SAP already has several options open to its customers:

  • You can stay on ECC for another 5 years and do nothing
  • You can move your landscape to Cloud-Native hyperscaler platforms
  • You can move to SAP S/4HANA on any platform
  • You can select from a number of different SAP hosting options (S/4 Public Cloud, Private Cloud Extended, etc)
  • Or you can opt for RISE with SAP

RISE with SAP is essentially an offering to help customers to get to SAP S/4HANA and hyperscale cloud at the same time. Customers can choose which hyperscaler they want to be on, in line with whatever criteria or preference they may have.

But the question that we’re being asked most is “Which option should we go for?”. Well, sadly there’s no magical answer as there are a number of determining factors and considerations. If your company is early in its evaluation stage, then the key is to fully understand the options that are available and be clear on what you want (need) to achieve from operating SAP workloads in the Cloud. Only then will you be able to make a fully-informed decision on the way forward.

What’s the impact on your business case?

Developing a business case for SAP S/4HANA on Cloud can be complex, but it’s important not to let it become overly complex. You may have been dreaming of a flat white coffee this morning, but when you walked into the coffee shop, you were asked if you wanted a double shot of espresso, what size?, which milk?, take away or drink in? etc. SAP/4HANA and hyperscale Cloud both offer a wide variety of options and value, but that choice overload can leave companies feeling overwhelmed with their decision-making. Utilize the experience and data from SAP, the Cloud providers as well as partners to help you gain a complete picture of the possible, but also to be able to make well-informed decisions.

Because subscription contracts are very different to the classic permanent licensing, we’re seeing a lot of customers build their business case over a 7-year period. Sounds like a long time, right, but that’s important as if you leave a subscription deal to do a permanent deal, you would need to buy those licenses again. So, a longer view seems to be important to customers.
Also, consider what deals you already have in place with your hyperscaler. How would RISE with SAP on your cloud help you with your existing commits?

If you’re potentially looking at mergers and acquisitions, it’s that old answer – you need to talk to your SAP rep about what credit, if any, you get for legacy licenses when converting to RISE.

And finally, you want to make sure you achieve the “pay as you go” benefits from hyperscaler, to allow you to grow and ebb your spend as your business changes.
To what extent will it impact your business?

For many years, Enterprise SAP Cloud strategies have been heavily focused on the project requirements and expected cost savings of migrating from on-premise data centers. Although the well-documented benefits of increased business resilience, improved operational agility, higher performance and scalability have also been recognized in many cases, it is the organizations that have transformed their operating model, culture and mindset, while at the same time as reshaping their technology, that are generating significantly higher business value from the Cloud.

Determining that your business will operate SAP S/4HANA on Cloud can be compared to changing from a petrol-powered car to an electric one. The vehicles are similar in many respects, but the refuelling process is adapted, the typical acceleration speeds are hugely different, and in growing numbers, the vehicle has the built-in ability to drive itself. Electric cars require less expensive and less frequent maintenance, but mechanics have had to re-skill and adapt to working on these vehicles.

Making a technology infrastructure change is one part of a successful transition to operating SAP S/4HANA on Cloud. Aligning people, processes, technology and culture to new ways of working on an enterprise-scale are fundamental to delivering substantially higher benefits.

Is there a best (most effective) way to transition to SAP S/4HANA on Cloud?

The answer is “yes”, with the caveat that there is no one size that fits all. The best possible answer is that how you choose to transition should be the most effective approach for your company. It should minimize business disruption, minimize risk, bring simplification but also enable the greatest potential long-term benefits and value.

The widely-shared experiences of many organizations that were early adopters of SAP S/4HANA on Cloud is accelerating the decision-making process for many other companies. A solid strategy is essential for the successful transition of your company to SAP S/4HANA on Cloud, allowing you to evaluate and assess the expected benefits and risk exposure far before the migration begins. Clear evaluation criteria and decision-making frameworks are streamlining the planning phase.

We have seen the caution with which organizations treat their SAP migration projects. But with the right systems, processes and skills on hand, SAP S/4HANA on Cloud is nothing short of a playground for innovation and continuous improvement.

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