September 23, 2016

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What's Stopping SAP S/4HANA from Winning Over Reluctant Organizations?

Obstacles and Adversities – Roadblocks to Universal Acceptance

While SAP S/4HANA is recognized for its ability to create refined user experiences, drive simplification, and assist in digitization, the application has met with a degree of uncertainty from some organizations.

Findings from a HCL-commissioned insiderRESEARCH survey of SAP end users (with a minimum of $1 billion in revenues) reveal that indecision persists among several companies, with 60% of respondents still not committed to an S/4HANA roadmap within the next 12 months. Only 16% indicated their intention to embark on a S/4HANA journey in the next 6 months. In companies with no intention to adopt SAP S/4HANA, the primary road blocks are incremental deployment costs (46%) and resource constraints (41%). Other challenges include the lack of a compelling business case for SAP S/4HANA (37%) migration, the fear of business disruption (31%), an ambiguous migration flowchart (29%), and an unclear product roadmap (28%).

In building a business case for SAP S/4HANA, companies specifically consider quantifying benefits of the product a key challenge (51%), while 47% find it difficult to completely understand the solution’s capabilities, and 42% believe it is a challenge to prove cost reduction through adoption. It is no surprise, then, that cost and resource constraints top the list of challenges to SAP S/4HANA uptake.

Interestingly however, when it comes to establishing a business case, only 25% of respondents claimed that a dearth of proof of product performance was a roadblock. This reinforces the likelihood that Most customers are aware of SAP S/4HANA’s features and capabilities but might not quite know how to integrate it into their business and unlock the associated benefits.

Many of the aforementioned challenges are related to customers not yet agreeing with SAP’s message of SAP S/4HANA as a non-disruptive, cost-effective solution that could assist in an end-to-end digital roadmap.

Summary of Challenges Associated with SAP S/4HANA adoption:

The Way Forward – Response to Adoption Challenges

Highlighting the business case for SAP S/4HANA to the business community will remove any obstacles that are delaying adoption of the new technology. A clear case that highlights the business value and illustrates the non-disruptible nature of the deployment will bridge the gap between business and IT to support the creation of a S/4HANA roadmap.

More than half the respondent companies contemplating the implementation of SAP S/4HANA claimed their decision to deploy the product would be positively affected if there was surety that the transition would be non-disruptive to their businesses.

Service providers must target the key decision-makers of such purchases. According to the insiderRESEARCH survey, this would largely mean the CIO segment (45%) and the IT department (39%). The CFO group (19%) and line of business (11%) are also considered key decision-makers in several cases.

HCL's focus is to help key decision makers to build a business case for migration to S/4HANA, creating a non disruptive migration path, and completing a comprehensive impact assessment to understand the risks and impact of the migration. We also offer assistance with integrating SAP S/4HANA deployment with the organization’s digital transformation strategy and bundling the product into an as-a-service solution will also need to feature among service provider’s attempts to increase buy-in.

HCL’s proactive Agile Benefits Creation (ABC) approach will help answering some critical questions that may delay a commitment to a S/4HANA roadmap. The approach goes beyond product implementation to monitor and evaluate the real benefits generated for the client.