Are you preparing your roadmap for S/4HANA at the moment? On the one hand, SAP says that the old SAP enterprise maintenance is guaranteed until 2025. On the other, SAP is accelerating the shift of more and more processes over to HANA. Furthermore, SAP is eager for customers to adopt S/4HANA as soon as possible. Does this mean there’s a storm brewing?

Besides SAP’s promised performance improvements, what does S/4HANA bring with it that’s less frequently discussed?

The cost, obviously! If you want to use S/4HANA, review the hardware costs first, as these will surely rise. Essential spending on new applications, new licenses, and new package proposals will increase as well … who can keep track of all this?

What you should also know, is that the user license types will change. At the moment, there are four types of license classes that made the cut to S/4HANA. These are very similar to their pre-S/4 equivalents regarding price and functionalities. Unfortunately, some usage and line of business scenarios are not defined as accurately as customer hoped. This will likely lead to interpretation issues in the future, similar to the old debate of what distinguishes a Professional user from a Limited Professional users, which led SAP to eliminate the Limited Professional license altogether for new customers.

Other fine print that’s easy to miss concerning S/4HANA: It’s questionable, if it will be allowed to use third party applications with/ alongside S/4HANA. Please pay attention to that topic during negotiations with SAP. If you want to use your third party applications as before, you should ensure that this right is guaranteed in your contract.

However, the nature is that essential workflows within organizations are mostly embedded in and augmented by internal developments, add-ons, or third-party applications. You should keep this in mind, when taking a look at the next software iteration.

Beside the well documented risk of stepping into a S/4 money pit, a migration to S/4HANA can also enable an increase in efficiency and performance – if it’s well executed.

What should I take into account when considering S/4HANA?

1. Important: Figure out how valuable your S/4HANA migration would be for SAP. This gives you a good position in negotiations with SAP. At the moment, SAP is ready to bargain and give you goodies, if you are ready to launch this system.
2. Don’t plunge into a complete migration of all your mission critical systems. It’s better to tackle the task in stages.
3. Before migrating to S/4HANA, review and understand your License Position (our Quick Assessment can help you achieve this within hours)
4. Compare which third party applications might be affected by missing S/4HANA compatibility.
5. Clarify if you can still use your existing license portfolio in the S/4HANA systems, or if you must perform a swap and adopt new (often disadvantageous) metrics
6. Use license optimization software as support. You can’t handle these steps only with man power.