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SAP S/4HANA for the next 20 years?

Why you should believe this SAP promise

SAP users are clear on one thing: their conversion to SAP's latest ERP generation, SAP S/4HANA Enterprise Management, from their SAP ERP 6.0 systems must be completed by the end of 2027. Our blog post will explain how this ERP system will be kept up to date for at least 15-20 years. 

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An unusually large number of enterprises and organisations in Switzerland, in particular, use SAP products. In addition to large industrial corporations and major retailers, this also includes many mid-sized companies and small businesses, as well as government administration and public sector organisations. The appointment calendars of most SAP customers are currently filling up with meetings, with subject lines containing project names such as Move to SAP S/4HANA, SAP Greenfield, SAP S/4HANA@xyz and the like. 

 

They all involve planning the transition from the existing SAP ERP 6.0 systems and even the migration of individual SAP R/3 systems to the latest ERP version from the Germany-based global market leader. SAP users have known for some time that as of 1 January 2028, SAP S/4HANA will be the only version of the major SAP ERP systems going forward (SAP BusinessOne and SAP Business ByDesign are not subject to this arrangement). 

31 December 2027 is the deadline for the predecessor to SAP S/4HANA

At nearly every initial meeting involving SAP S/4HANA migration, customers are critical at first. First of all, their current solutions have often proven themselves over time and continue to run error-free. Secondly, they are bothered by SAP’s fixed expiration date, which downright forces them to take action. 

When we prepare for such appointments, we make sure to note the history of the existing system landscape in advance. It often reads like this:

 

«... aha, Release 3.1I of SAP R/3 implemented in 1998. Release upgrade to 4.6C in autumn 2001 and then to 4.7 in winter 2003, followed by licensing adjustment with a release upgrade to ERP 6.0 in spring 2006. Continued with Enhancement Packages since then, currently on ERP 6.0 EHP7...»

 

As soon as we follow up on this history in a presentation, it often results in surprised faces. Why? Because countless SAP ERP 6.0 systems have already been used in their current form for 20 years or more – thanks primarily to several release upgrades. When comparing this with the organisational development of the customer over this period of time, it usually reflects the enormous changes that we have undergone over the past two and a half decades from the social, economic and technical perspectives.

SAP S/4HANA: the ERP system for the next 20 years?

When we then explain how SAP S/4HANA will remain the administrative centre of all business activities within the organisation over the next 15 to 20 years, it seems nearly utopian. In light of the rapid development, who can say what the real and digital worlds will look like in the year 2040?

This trend is already becoming apparent for SAP S/4HANA systems, however. This is not only confirmed by the durability of the current SAP systems, some of which – as mentioned above – have been with us for decades. It also shows that SAP has strong, dynamic potential for innovation as well as providing impressive planning security. 

For Innflow, as well: regardless of how and with what content digital innovations will be brought into our lives in future, the deciding factor, ultimately, for the success of our companies and their administration is to bring together information, processes and people in the digital core in a reliable and economical way. 

Current SAP systems illustrate the long-term nature of SAP products

Based on the past two and a half decades of SAP R/3 and SAP ERP 6.0, we can therefore conclude that SAP will still be where your company and its administration are 20 years from now. We always emphasise this when we develop concepts, deadlines, methods, the operating model and their roadmap to SAP S/4HANA together with our customers. 

It is therefore important to not see SAP S/4HANA as a system change that is being forced upon you, but instead as an extremely valuable basis for your own business development over the coming decades. Ultimately, SAP S/4HANA is not only the organisational ‘system of record’. It is also a ‘system of innovation’ that is already enabling and inspiring digital innovation and efficiency today, in a way that hardly any other ERP system achieves.

Many roads lead to SAP S/4HANA

The project-related costs of a changeover from SAP ERP 6.0 to SAP S/4HANA can now be clearly calculable in most cases. For SAP ERP 6.0 we are still prioritising continuity and the further development of the product through Enhancement Packages. When it comes SAP S/4HANA, however, there are several options.

Aside from a brownfield migration of the existing system, there is also the option of a greenfield implementation: a completely initial installation carried out in accordance with the SAP Activate project methodology. 

Once more: many of the SAP ERP systems currently used have already been in operation for two decades or more. As a result, they possess an extensive legacy of processes and data elements that are no longer needed in the current and future organisation. As such, a greenfield approach to SAP S/4HANA migration gives you the opportunity to get rid of such legacy burdens and configure your new ERP system according to current requirements, without having to make any compromises regarding functionality, stability or user-friendliness.

What’s more, the question as to which operating model will be used is decisive at the start of planning. A greenfield project could be set up as a customer-specific system (internal systems or a hosting partner), for example. Alternatively, cloud technology could also be used to meet the requirements for functionality and integration. 

Brownfield or greenfield? On premise or cloud? The earlier the clarification, the better

We recommend that our customers tackle these questions as early as possible. Once you get used to this idea, you’ll learn about the benefits that SAP S/4HANA can provide and the opportunities for your company or organisation. You can then pursue the plans with the necessary aplomb and reserve the necessary resources in due course. 

 

Whether a cloud solution or independent system, as expected, SAP S/4HANA will again become the business management, digital core of numerous companies and organisations in the public sector for a long time to come. 

SAP Consulting Company ©Innflow AG 2021

Innflow AG, Blegistrasse 1, 6343 Rotkreuz, T +41 58 705 07 05