S/4HANA 2023 Summit: What are the top drivers for S/4HANA adoption?

As organizations drive towards S/4HANA adoption, there are 3 drivers that stood out above others in SAPInsiders' research.

1. SAP's end of maintenance for ECC in 2027.
2. Business demands to keep competitive and modern via updated processes, regulatory requirements, and leverage new technology.
3. Improve end-user experience and business satisfaction of SAP

The most important factor behind the move to S/4HANA is still the end of maintenance of ECC at 42%. Then followed equally at 31% by the need to meet business demands with updated processes, meet regulatory requirements, and improve the end-user experience.

Just below these top three reasons is the pressure to digitally transform existing ERP solutions to create a harmonized and centralized model and structure (30%) and pressure to reduce costs in existing systems and infrastructure and provide additional flexibility and scalability (30%).

So there's a duality at play here with the driving forces. On one side you have the need to IT to modernize to reduce cost, be flexible, and avoid technical debt via the end of ECC support. These are all categorically IT-area concerns. The other side is business-area concerns. These forces are the end-user experience, modernizing and optimizing business processes, and the need to keep up with changing business demands like regulatory requirements.

These dual driving forces should highlight the fact that this is both a business and IT transformation, not just one or the other. Therefore in order to best position for success is to get buy-in from both IT and the business.

Another interesting thought is that as we tick closer to the 2027 deadline for ECC maintenance we're seeing a year-over-year decrease as a driving factor. Still very important, but it might become less of a major concern. These Business-area factors are playing a more important role as companies look to gain competitive advantages and take advantage of newer technologies such as AI.

Does Size Matter?

As with Part 1 of this blog series, there's some interesting data when you delineate the size of a company. For example, Large Organizations were more likely to need updated processes that better fit current needs (39%) than small organizations (23%). Reducing existing infrastructure costs was also a much bigger factor for large organizations (43%) versus smaller organizations (24%).

However, small organizations were under greater pressure to digitally transform existing ERP solutions to create a harmonized and centralized model and structure (36%) than large organizations (26%).

In Part 3 of this series, we'll look into the deployment method for S/4HANA. Do organizations plan to do a greenfield, brownfield, or selective migration?

References:

• SAPinsider's S/4HANA 2023 Summit (Oct 2023)
• Deployment Approaches to SAP S/4HANA 2023 research study sponsored by SAP, published by SAPInsider (July 2023)