SAP: Why enterprises should soon upgrade to SAP S/4HANA

Windows Update[German]In the coronavirus pandemic, projects to switch to a new IT solution are often postponed. SAP's R/3 system is not due to be phased out until 2027. CNT Management Consulting GmbH has shown me some aspects why enterprises should soon upgrade to the new S/4HANA software generation despite the coronavirus pandemic. I do not want to withhold this from the readers who are involved in this area.


Information about SAP S/4HANA

SAP launched the S/4HANA software generation five years ago. Its programs can be used to control everything from materials management to human resources and finances in the company. Anyone who wants to push ahead with digitization will not be able to avoid it. The predecessor version R/3, on the other hand, is scheduled to be phased out in 2027 and taken out of maintenance.

This means: Since the launch of the latest SAP generation S/4HANA 2015, the conversion of the discontinued R/3 systems is on the table. This changeover must be completed by 2027 at the latest, because then the old SAP systems will no longer be maintained. For companies all over the world, a changeover to the new system will be virtually mandatory. Nevertheless, many companies are still hesitant. A mistake, as Andreas Lechner from the consulting firm CNT Management Consulting explains.

This upgrade requires external consultants

However, most companies need support from external consultants and IT service providers for the update. Without years of experience, the integration of the various solutions is hardly feasible for companies without external expertise. This could now lead to bottlenecks, as a study Mit S/4HANA in die digitale Zukunft: Status, Ziele und Trends bei der Einführung von S/4HANA im deutschsprachigen Raum underlines. For example, 52 percent of companies are currently only doing a preliminary study on S/4HANA, while 30 percent are working on an initial strategy.

"We are in an exceptional situation and the demand for consulting firms will increase very strongly in the near future," Andreas Lechner, Partner at CNT Management Consulting, is certain. On the one hand, the entire consulting market is currently being shaken up by the obligation to update, as many companies are dependent on the service providers at the same time. On the other hand, the changeover to the new system requires many times the usual consulting days.

Roadmap to SAP S/4HANA

Andreas Lechner, Partner at CNT Management Consulting, has put together some information that companies should consider. I'll just post it here without comment. You can read through the arguments and the study linked above and take what fits or leave the information as not relevant.


Corona should not slow down the move to digitalization

According to Lechner, companies do not have to completely rebuild their existing system landscape to introduce the new SAP software generation. With the so-called brownfield approach, business processes that have been optimized over many years can be brought up to the latest state of digitalization. "We want to support our customers in maintaining their processes that have functioned smoothly up to now and further optimizing them with S/4HANA," explains Lechner.

To this end, the consulting firm has developed its own package solution that brings the company's existing central ERP (Enterprise Resource Planning) system to S/4HANA. In addition, a basis for subsequent smaller and larger innovation projects will be created. Due to the corona crisis, he is critical of waiting with the changeover: "Companies should not remain in a corona shock for too long. In the foreseeable future, the consulting market will be as empty as a house, because many service providers are simply not able to meet the high demand for consulting services".

Certified packages should help with the selection

To provide additional support to companies during the changeover, SAP certifies qualified partner package solutions. The packages, which are put together in cooperation with experienced consultants, serve quasi as standard tools. This is intended above all to keep risk and price low for the companies. At the same time, companies can rely on the expertise and the respective industry know-how. "With our standardized run2S4 package, we can plan the system changeover much better," Lechner continues. "We define the goal, the time frame and the exact price right at the start," the professional emphasizes.

Faster profit from innovations

Thanks to standardization, processes can generally be transferred to the new SAP system more quickly and without long shutdown times, and the innovative functions of S/4HANA can be used directly. Since this is a pure "conversion", i.e. an update, the schedule is extremely compact, but still offers sufficient space for necessary corrections, testing and training units. Lechner points out: "The earlier the change, which is obligatory anyway, is made, the sooner companies can also benefit from the digital innovations and possibly gain an advantage over their competitors".

About CNT Management Consulting GmbH

CNT Management Consulting GmbH is an award-winning international consulting firm with a focus on digitization. For more than 20 years CNT has been supporting companies from various sectors in the development and implementation of SAP solutions. From 10 locations such as Mainz and Munich, the service provider serves over 180 customers worldwide.

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