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S/4HANA: balancing ambitions, costs and constraints

Sameera Simjee

For some, the move to SAP S/4HANA will be a springboard for wide-ranging business transformation, while others may see it as an unwelcome distraction. But most will be somewhere in between as they seek out opportunities for optimisation in key areas such as procurement, finance or supply chain. So how can you best determine your appetite for change as you look to balance your organisation’s ambitions, costs and constraints?

S/4HANA is SAP’s current cloud platform and ECC6, as a result, is being phased out. Which leads to the question of how far organisations can leverage the opportunity for optimisation.

The benefits of S/4HANA

So, what are the potential benefits of switching to S/4HANA? Berkeley’s experience as ERP consultants shows us that the new platform offers the agility and versatility of a public or private cloud-based platform and a launchpad for embedding new capabilities such as generative artificial intelligence (GenAI) and ESG reporting

But what you get largely depends on your ambition for change, along with the trade-offs between costs, implementation time, organisational impact and operational risks this entails.

Exploring your S/4HANA options

At the most ambitious end of the spectrum are the ‘greenfield’ options of a new or fully re-implemented enterprise resource planning (ERP) system. The advantages of this fresh start approach are that industry best practice processes can be implemented, helping to drive efficiency. As a new implementation, the greenfield approach can also minimise the integration and operational risks. The trade-off is that this can be the most costly and time-consuming choice to implement, and drives the greatest business change adoption challenge.

At the other end of the spectrum is the ‘do nothing’ option. Conceivably, there is nothing to stop you from sticking with ECC6 if you want to go with what you know and avoid the inevitable complexities, challenges and SAP implementation costs of ERP transformation. But SAP is planning to scale back support for ECC6 from 2027 and withdraw it altogether by 2030. The results are likely to be higher maintenance costs and rising risks of functional disruption. As ECC6 heads towards obsolescence, it will also be harder to keep pace with new competitive business priorities and regulatory change. 

Crucially, there are also a number of other approaches, including a ‘hybrid’ approach, which is a technical upgrade which also allows you to optimise some areas of your business that adds the most value, while leaving other current processes intact. If you want to modernise manufacturing and logistics, for example, S/4HANA capabilities can help to boost efficiency and reduce costs in areas such as inventory management, route planning and product overheads. Similarly, if you’re planning to overhaul your finance function capabilities, S/4HANA offers improved visibility and speed of response over spending, while eliminating some of the process delays and workarounds that can lead to revenue leakage in areas such as collections. It can also reduce costs and free up time through quicker and more efficient budgeting, forecasting and scenario planning.

The best S/4HANA approach for you

So what’s the best way forward? There is no single route that works for all – the right choices are specific to each organisation and its ambitions, people and existing technical landscape. In our experience, five key considerations come into play when judging the right approach for your particular business: 

The organisational impact of any ERP software migration is always going to be significant. In return, you can usually offer compensatory benefits to help secure business buy-in. But the benefits of S/4HANA can be difficult to quantify and so ensuring you have identified the right migration approach for your business is fundamental. Identifying and targeting quick-wins to help build up momentum and support within your organisation are important ways to engage stakeholders and set you on the path for success.