Should We Upgrade from SAP ECC to SAP S/4HANA?

Making the decision to embark on major changes to a business-critical enterprise system such as your ERP solution should not be taken lightly. It’s no wonder companies are hesitant, therefore, to make the shift from SAP’s ECC to the new S/4HANA ERP suite.

In this article, we look at the differences between ECC and S/4HANA, the benefits of S/4HANA and how companies can overcome the hesitation to upgrade. We also outline the route to a successful upgrade.

What’s the Rationale Behind S/4HANA?

The technology world has moved forward since SAP’s ECC suite of enterprise applications was released in 2004, a follow up on SAP R/3. SAP S/4HANA was released to replace ECC and utilises an SAP technology called HANA which is intended to accelerate SAP applications and the business processes SAP software supports.

S/4HANA resolves several issues that are typical of large ERP implementations, including data sprawl and batch latency. The result is that technology costs are lower, applications are more stable and that future upgrades will be less disruptive.

The Benefits of S/4HANA

In supporting a changing business and technology world SAP has made several improvements to its ERP flagship product to keep up with other vendors. Though S/4HANA is relatively new on the market is has proven to be the most successful of SAP’s ERP systems, in part because it offers very clear benefits:

  • Improved performance. HANA is what drives S/4HANA. It’s an in-memory computing database that offers excellent transaction speeds, with faster processing and reporting too. In practice it means that routines that previously took minutes can now be performed within seconds.
  • Streamlined software. SAP has a reputation for complexity, and S/4HANA is an attempt to make SAP as simple to use as a social media feed. SAP’s new ERP suit makes for easier behind-the-scenes management too with more centralised control and more efficient use of resources.
  • Agile applications. As businesses need to be more responsive to their clients and their markets, the software that supports businesses also needs to be more agile. With S/4HANA businesses can tap into real-time insights from any location, while enjoying wider opportunities to rapidly customise the system to their needs.

Simply put, S/4HANA harnesses the latest software innovations in a cloud-centric technology landscape to offer businesses a wider, easier to use software platform that shakes off some of the more staid practices that SAP ERP is known for.

Should Businesses Upgrade to S/4HANA?

In short, yes. Aside from the clear benefits to SAP’s newest ERP release, there is also the fact that SAP will cease supporting SAP ECC by 2025. In effect, SAP is forcing customers to upgrade, but it is certainly not the only software vendor to have taken this road.

The only question then is whether a business should rush to adopt S/4HANA, or whether there is still some time for companies to make a switch. It is a question of pace, really. Technology leaders should decide whether they want to trigger the process now, and switch at their own pace, or wait until they are forced to do so. It is easy to argue that leaving plenty of time to switch is the best route.

In switching, companies have a couple of options. First, a “greenfield” approach can be taken where a company opts to re-implement SAP from the ground up. This is viable for the moment as there is plenty of time to make the switch. Likewise with the “selective” process where a company slowly switches selected areas of its application estate in a step by step process.

However, companies that wait too long will have to opt for a “brownfield” approach which involves upgrading or, as SAP calls it, “converting” from SAP ECC to S/4HANA in a process which can hardly be described as formal or easy.

Steps for a Successful S/4HANA Upgrade

Companies that are hesitant about upgrading should rest assured that the process has been attempted before, and successfully so. Though warning cases litter the SAP landscape, a few important points are worth considering:

  • A thorough technical analysis and functional assessment should be performed to scope out how SAP ECC is currently in use, including all factors such as the databases and operating systems powering the platform.
  • Companies should develop a strategic roadmap to outline how S/4HANA can provide wider benefits. The suite offers a large upgrade and can likely eliminate many other business pain points that SAP ECC could not. It’s worth exploring what S/4HANA can do, in-depth, before undertaking the upgrade process.
  • Follow a well-planned migration process. Haphazard ECC to S/4HANA migrations will not go smoothly. Instead, changes should be clearly communicated, and businesses should plan the entire upgrade process in detail.

Software upgrades and migration is simply part and parcel of the technology world. There is rarely much choice in doing so, the only choice being how long a company waits before pulling the trigger. S/4HANA offers clear benefits above SAP ECC, and companies should consider starting the upgrade process sooner rather than later. And certainly not after the end of support in 2025.

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