The previous blog in this series gave a general introduction to S/4HANA, and talked about some of the reasons businesses should be considering migration. Now, it’s time to turn our gaze outwards and examine the perception of S/4HANA in the wider business community.
Fujitsu recently sponsored a survey by IDC that aimed to gain an understanding of organizations’ perceptions and plans with regards to S/4HANA. The survey took the form of phone interviews, where the leaders of businesses with 1000+ employees were asked various questions relating to migration.
All interviewees were SAP customers, and represented an even spread across a variety of industries across the globe.
Here, I’ll examine the key findings and look at the drivers propelling businesses towards S/4HANA.
Digital transformation pressure
As previously discussed, businesses have been investing in innovative technology for some time. However, as CEOs come under greater pressuring to deliver digital transformation, the focus is now on ensuring those investments bear fruit with quick returns.
Central to all this is core IT modernization. IDC’s research shows those with a modernized core are 40% more likely to monetize their digital investments.
Within the core itself, the survey showed businesses are seeing ERP as a key focus for modernization. This includes moving from a typical on premise system to a sophisticated, cloud-based application – commonly known as iERP.
In fact, 60% of organizations said ERP modernization was an essential or high priority part of their 2020 digital strategy. Their SAP estates remain at the heart of their organization and the overall IT landscape, but the challenge remains in developing a strategy that combining ERP applications with new digital technologies.
Work to be done
Given the extension of the S/4HANA support date to 2027, the report gives an interesting insight into the current readiness to move.
Only 12% of the respondents that are committed to migrating to S/4HANA are already live with at least one element. That means 86% of the businesses we surveyed have barely started on their journey.
Despite businesses claiming S/4HANA migration is a priority, there remains a lot more work still needs to be done. It should be remembered that, in business terms, seven years is not a huge amount of time.
Another interesting find was who takes ownership of back-office system transformation and ERP modernizations.
ERP is collaborative. It pulls data tentacles from all across an organization, requiring input and expertise from a variety of stakeholders to ensure its value can be felt. However, our results show 53% of organizations have the CIO as the chief driver.
While migration should of course have the CIO’s involvement, it needs to be a collective effort. iERP requires diverse, multidisciplinary teams with stakeholders from IT, finance, operations, and other areas. This will enable a much clearer roadmap of implementation and innovation.
Overall, the report shows awareness is high, if not as high as it once was. But the real problem comes in turning these good intentions into action.
All this on the back of the Coronavirus outbreak. Businesses across the world have felt its devastating economic impact, meaning many purely focused on survival - let alone transformation. Whilst in the short term this is true, many organizations will need to accelerate their transformations in order to survive and grow in the future.
To read the full findings from the survey, have a look at IDC’s report here.
In the next few blogs in this series, I’ll be discussing what implementation means for specific industries and exploring the opportunities S/4HANA could unlock in your sector.