21 Dec Inside SAP’s S/4HANA Cloud: Who’s Buying Its Cloud ERP, and Why
Earlier this week, the head of SAP’s S/4HANA business, Franck Cohen, described the coming business revolution that will be triggered by cloud ERP and the interrelated advances in machine-learning algorithms (From Killer App to Killer Algorithms: SAP’s Franck Cohen on Cloud ERP’s Disruptive Innovation).
As a companion to that piece, I’ve compiled below some details provided by SAP in response to questions about who’s buying S/4HANA and why.
All of the insights are helpful in understanding the early stages of this dynamic upheaval in business operations and execution, but my favorites are these two: some greenfield implementations can be completed in just 8 weeks, and half of SAP’s S/4HANA customers are completely new to SAP.
Of course, with Oracle and Workday joining SAP in the wickedly aggressive competition for cloud ERP customers, every cloud vendor looking to succeed in this massive market will need to deliver incessant new business value to customers in ways that optimize the digital-business models unfolding across every industry.
So here’s a look inside the makeup and rationale of SAP’s S/4HANA customers.
Size of customers deploying S/4HANA: SAP said, “We are seeing companies with as few as 50 registered users to companies with more than 12,000 registered users.”
Implementation times: In greenfield situations (no legacy systems to move from), “We see as little as 8 weeks for Finance.” Where data migration and transitioning from legacy systems is involved, the implementation time ranges from 18 to 30 weeks.
Net-new customers for SAP versus its installed base: 50% of S/4HANA customers are net-new, SAP said: “The current perception is that we are only targeting our vast installed base—that is simply not true.” For existing customers, 3 types of cloud implementations are becoming more common among business units requiring agility, SAP said, citing the following examples:
- Fast-growing business units: for example, the African division of D&T
- Divestitures (for example, Mercedes Benz) and startups (SMA Solar)
Business objectives for moving to S/4HANA:
- Cloud will accelerate innovation and “frictionless scale”
- Opportunity to challenge status quo within an industry
- Ability to reallocate resources toward competitive differentiation
Business advantages customers have realized:
- Faster end-of-period closings coupled with less manual processing
- Higher on-time delivery rates, which boosts customer satisfaction
- Real-time insights to drive better decisions; no more batch processing
- Lower IT costs due to reduction in size of “data footprint”
- “The best thing about the cloud is it allows companies to reimagine next-generation business processes instead of re-implementing processes that are 15 or 20 years old and simply don’t work in today’s fast-paced world.”
Disclosure: at the time of this writing, SAP is a client of Evans Strategic Communications.