Tax Partner Deloitte UK
Will every company using SAP today step up to SAP S/4HANA? This is a watershed moment for SAP customers. Among organisations sticking with SAP, four factors seem to be shaping their decisions.
The first factor is competitive risk. Companies already moving to SAP S/4HANA will get the benefits sooner, and those benefits can be substantial. There are some risks in waiting. SAP will end support of legacy versions at the end of 2027 under standard support (2030 for extended support).
A second factor is the degree of growth and business complexity companies foresee. If your future includes more acquisitions, divestitures, and evolving business models, SAP S/4HANA can help make life easier.
A third factor is the quality of your current SAP installation and other enterprise systems. Companies that have their SAP house in order and their systems fully integrated may not feel immediate pressure to get on board the SAP S/4HANA train.
A fourth factor is data quality. Many companies are still struggling to get their data acts together. For those with multiple instances of SAP or other ERP systems, SAP S/4HANA is an opportunity to pull the entire enterprise into financial alignment around a tested set of simplified processes.
Things you can do now
This is a unique opportunity to redesign processes across business functions given most organisations have been living with less than ideal processes since their last major IT implementation – which, for some, was 15 to 20 years ago. Their organisations and world has evolved a lot since then.
Whatever path you choose, make sure your leadership team is aligned and engaged.
1 Start building the business case
SAP S/4HANA is a great solution to many finance challenges, but a business case based only on cost reduction may not be enough. Ask yourself, what’s possible with all this power? Get those people involved in building the business case.
2 Plan ahead
SAP S/4HANA implementation and configuration processes are complex and time consuming. Your top talent could be tied up for years. Plus, you’ll need specialised integration knowledge that you may have to go outside for. As 2027 approaches, the best people will be in high demand.
SAP will end support of legacy versions at the end of 2027
3 Stay focused
SAP S/4HANA is designed to support integrated financial and management reporting. While it can also support other kinds of operational reports, the additional storage requirements for massive non-transactional data can get costly. Some companies are using other reporting warehouse systems for those kinds of needs and reserving SAP S/4HANA system performance where it’s needed most.
4 Know your options
Large enterprise clients currently tend to choose on-premise technology for their SAP S/4HANA implementations. A cloud-first deployment, on the other hand, could allow a faster implementation, but may not provide the flexibility to adapt the technology to your needs.
Companies committed to SAP will likely find themselves grappling with SAP S/4HANA decisions over the next five years. Making choices earlier — building in time for your teams to influence both the overall vision and the implementation options — should increase the odds of getting things right.
For many CFOs, deciding when and how to implement SAP S/4HANA could be the most significant technology investment choices of their career. It’s a big deal.