ERP giant SAP, like many legacy vendors, has introduced new offerings to its product line to modernize its portfolio....
One of the company's top priorities is to see widespread adoption of its S/4HANA ERP suite, which runs on SAP's proprietary database, HANA.
SAP executives have said they aim to have SAP's entire customer base converted to S/4HANA by 2025. But while there is interest in S/4HANA among new customers, for some veteran SAP partners, getting customers to migrate their existing SAP systems may be a challenge -- at least in the near term.
SAP is offering partner training so they can learn different ways to move customers from its ERP Central Component (ECC) release to S4/HANA, whether they're doing a greenfield installation, a preconfigured approach or a conversion from another system, said Bobby Vetter, senior vice president of global partner operations for S/4HANA.
Right now, about 900 SAP partners are taking the training, he said.
"We do more deals with new customers than existing customers," Vetter said. "Not all customers might convert to S/4HANA" and may wait for S/4HANA in the cloud, he said.
A report earlier this year by Rimini Street, an independent support supplier of SAP and Oracle, stated that nearly half of SAP users in the U.K. and Ireland had no S/4HANA migration plans.
Vetter dismissed the report as "completely nonsense."
"We have different data. We have a lot of existing customers who are moving from ECC to S/4," he said.
He acknowledged that customers normally "don't want to touch the [ERP] system every year and will wait a few years" before migrating. "We need to discuss plans with customers when is the best time for them to move to S/4HANA, and that's what we're doing."
In October, the company will put out a methodology called Adoption Starter, which will help explain to customers why they should do an S/4HANA migration and what is involved, Vetter said.
SAP partners develop customized offerings
SAP partners, meanwhile, remain cautiously optimistic about getting customers to adopt S/4HANA.
Presence of IT, an SAP partner that implements HR, payroll and workforce management software on SAP platforms, is finding its customers are receptive to an S/4HANA migration. The company, however, currently doesn't have any projects in the works, said Gordon Laverock, Presence of IT's managing partner for North America.
Gordon Laverockmanaging partner for North America, Presence of IT
"A lot of them have this idea of transitioning the on-premises system to the cloud-based S/4 environment on a roadmap," he said. "Some [migrations] could be immediate, some could be pushed out," and people are interested. "We're seeing momentum building now."
Since SAP S/4HANA does not have a native HR module, the firm has developed offerings for midmarket companies.
SAP is providing standard integrations between S/4HANA and SAP SuccessFactors, its cloud-based human capital management (HCM) software system, for SAP partners and customers. Laverock said Presence of IT has a few S/4HANA-related opportunities with customers looking to put in a new end-to-end cloud ERP system and some are interested in deploying SuccessFactors. "I think it's growing, but it's in the early stages," he said. He predicts more organizations will migrate in the next two years.
"If you want to leverage a lot more of the newer processes and functions of things like machine learning and internet of things, then moving to the S/4HANA platform is going to provide companies with the ability to do that far more than what they have today," he maintained. It will depend on how aggressively customers want to deploy S/4HANA and how quickly they want to move to cloud.
"There's always going to be a business case in the boardroom that says, 'If it isn't broken, don't fix it.' But if companies want to take their business to the next level and transform digitally, then an S/4 migration will be accelerated," he said.
S/4HANA affects SAP partners' strategies
Symmetry, an SAP managed and cloud service provider, is seeing "significant adoption" in greenfield S/4HANA implementations and conversion from ECC, said Matt Lonstine, director of delivery at Symmetry. "For many of our clients, the move to S/4HANA is made in conjunction with cloud adoption, either by way of a move to Symmetry's specialized platform or to public clouds like AWS and Azure."
Many of Symmetry's clients are "actively assessing S/4HANA capabilities and evaluating the timing of an implementation [or] conversion project," he added, calling S/4HANA "the modern face of SAP's ERP offering."
Lonstine and Laverock said SAP's S/4HANA strategy has impacted their business' strategies and goals.
"Symmetry has purpose-built our platform and service offerings to maximize the latest technologies from SAP, including HANA and S/4," Lonstine said. "This focus and experience help us to ease the cost and complexity concerns around planning, staffing, migrating and operating SAP HANA and S/4 in the cloud for our customers."
Symmetry's "lock-step alignment with SAP's strategy" lets its consultants continue expanding their knowledge base around cutting-edge technologies and ensures their clients benefit from expert-level support, he added.
Laverock, meanwhile, said Presence of IT has shifted to aligning with SAP partners that are working on S/4HANA transformations.
"We're creating strategic alliances and saying, 'You do the S/4 side of house and we'll do the SuccessFactors side and we'll bring the best of both to the customer.' So the shift to S/4, together with the shift to SuccessFactors, is creating a stronger consolidation and alliance within the SAP partner ecosystem."
He said all partners want to specialize and have a point of differentiation. Presence of IT explored the idea of broadening its business to offer S/4 implementations and move away from its core HCM focus. However, Laverock said, "Our strategic decision is to stick with what we know and create alliances."