Posted on 31 July 2022

To be successful with SAP S/4HANA adoption, technology leaders responsible for SAP should address their business and application strategy, application architecture, software licensing, service provider experience and infrastructure options.

How it's all shaping up?

SAP Business Suite 4 SAP HANA (S/4HANA) is SAP’s fourth-generation ERP business application. It is fully optimized for the SAP HANA in-memory computing platform.

Since its release was announced in February 2015, SAP has attracted well over 11,000 licensed S/4HANA customers, mainly for the on-premises edition (see Figure 1). This number does not include the addition of 600 more cloud customers (40% net new) announced in SAP’s 2Q18 earnings, which brings the estimated number of S/4HANA Cloud licensed customers to around 750.

It is estimated that there are at least 200 customers currently running live on S/4HANA Cloud as multi-tenants at the beginning of 2019.

S/4HANA Adoption: Slow Progress as 2025 Inches Closer

Percentage of SAP’s 35,000 + ERP Customers Buying, Implementing, or Live on S/4HANA

Figure 1. S/4HANA Adoption Trend


All SAP Business Suite users need to analyze the impact of S/4HANA on their ERP strategies and exiting SAP investments. Many CIOs and application leaders are tempted to ignore evaluating SAP S/4HANA until the solution matures, and because understanding its impact is complex. In addition, SAP customers have questioned the amount of time and effort required to evaluate the solution properly.

It is advised not to wait to perform this analysis based on the maturity (or otherwise) of S/4HANA. Planning for this critical conversion requires significant effort, not least to evaluate justifiable business cases, but future innovations in data analytics and AI/ML will greatly benefit many organizations.

In order to collect the right data, and piece together a new S/4HANA adoption roadmap that is best-suited to an organization, CIOs and application leaders must:

  • Determine if SAP is the right strategic vendor and partner for their organization.

  • Identify if and how S/4HANA fits their postmodern ERP strategy.

  • Evaluate the business impacts and benefits of S/4HANA, and build these into a convincing business case.

  • Evaluate current SAP and third-party licenses (including digital access that addresses indirect use rights) to identify potential policy opportunities and cost implications.

If the organization decides to move forward with S/4HANA, the next steps are:

  • Select expert consulting service providers with proven experience delivering S/4HANA projects.

  • Secure the necessary internal business and IT resources.

  • Build a roadmap and implementation plan.

  • Choose a delivery model and vendor for the HANA infrastructure.


Application Strategy

SAP S/4HANA offers many enhancements over SAP ECC, including simplified business processes and data architecture (for example, Universal Journal in S/4HANA Finance). S/4HANA enhances the user experience with SAP Fiori. There are different delivery options including on-premises, hosted or potentially as a software as a service (SaaS) cloud solution. SAP further exploits HANA platform technology to include artificial intelligence and machine learning, as well as advanced analytics for modeling, simulation and forecasting on the same real-time system.


Strategy and Best Practices for Software Licensing

Navigating the world of SAP software licensing — especially in the hybrid world of on-premises, IaaS and SaaS — continues to pose a challenge. Each contractual scenario has its own complexities.

S/4HANA boasts a single-metric license program (as opposed to the two-metric, Named User and Product, ECC license structure). This significant change both simplifies future licensing and complicates the planning and conversion process.


Evaluating the Business Case

CIOs and application leaders at many organizations with major investments in SAP Business Suite will perceive a transition to S/4HANA as inevitable, and just a question of timing. This being the case, a business case may not be a prerequisite. Other organizations may justify an investment in S/4HANA as an enabler of a business transformation.

For most organizations, a solid business case will have to be signed off by business executives before the funds for a full S/4HANA implementation project can be released.


S/4HANA Implementation and Migration Project Planning

Implementing SAP S/4HANA will drive the SAP service market through 2022 at least. In addition to implementation and migration services, many of SAP’s consulting partners have an impressive track record in helping SAP customers build a business case for adoption.

The SAP services ecosystems is large, with more than 3,000 service partners and more than 4,000 channel partners.


HANA Infrastructure Strategy

CIOs and information management leaders now have a key choice to make: source, own and run the HANA infrastructure within their own data centers, or pay for a monthly HANA infrastructure as a service (IaaS) instead.

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