SAP S/4 Hana: Users eye migration, but roadmap and migration path lack clarity

S/4 Hana is continuing to generate interest among SAP users, but existing Business Suite customers have raised concerns over a lack of clarity over the migration path and product roadmap.

SAP announced its ‘next generation’ suite of ERP applications in February. The promise of S/4 Hana is to allow core SAP applications to run faster, simpler and more efficiently, with its Hana in-memory database at the centre of the platform.

The vendor has focused on its core ERP functionality to begin, with the launch of Simple Finance to be followed by Simple Logistics.

However, some Business Suite customers have highlighted uncertainty around how the product will take shape.

“What is S/4 Hana, and how do you know when you arrived there? I think there is a lot of ambiguity out there - some intentional and some unintentional,” says Julian Bond, head of ICT at Hillarys Blinds.

“It is still difficult for medium-sized businesses to see what the business case is that gets me over the line with this shift to S/4 Hana.

“People are wanting to know 'how did you pay for it, where are you seeing the benefits, how do we do that'. There is still a lot of uncertainty there.”

SAP UK and Ireland User Group chairman, Phillip Adams, adds: “There is some concern with our members that they don’t know the full product yet. We have heard about the finance, we are starting to hear about the logistics - what is next? What is the release strategy and plan?

“If we are going to start making this journey, the roadmap needs to be quite clear and we need to have confidence around that roadmap that it doesn't change.”

S/4 Hana: Platform not yet mature

Of course with the product less than a year old, and support for existing ERP systems set to continue until 2025, many customers - other than those at the leading edge, including SAP itself - are unlikely to rush into adopting S/4 Hana.

One customer which has taken its first steps towards S/4 by starting to move away from Oracle and onto Hana is Newcastle University. (See also: Newcastle University speeds up student application and clearing processes with SAP Hana)

The university's SAP development manager, Alan Cecchini, expects it will be “three or four years” before transitioning to the next version of its Business Suite, as the product has not yet matured to meet its needs.

“There is a lot of talk about S/4 Hana and it is on the roadmap - it will be a step that I am sure we will take in a few years time,” says Cechinni.

He said that - in its current form - S/4 Hana is not a product that is “fully built and ready for all aspects of our solution”.

“At the moment today there is Simple Finance and Simple Logistics is coming out in this quarter. But we have student lifecycle management, CRM, SRM, HR etcetera. All of this isn't ready on S/4.”

“So the way we see the transition now to Suite on Hana gives us a lot of benefits in the near term, and we can leverage that benefit over the next couple of years while S/4 matures to a level that we feel we are ready to make that step.”

S/4 Hana: Licence costs

Migration from Oracle or IBM databases onto Hana can be a substantial task for businesses, not to mention the investment required in new hardware such as Hana appliances.

But, aside from the upgrade process, perhaps a more pressing concern for customers is around licence cost. Earlier this year, SAP announced that S/4 Hana would be made available for free until the end of the year as a trial promotion. (See also: SAP offers S/4HANA for free)

What the situation after this period will be is less certain. For example, many SAP customers typically pay large maintenance costs which supports product development, but it is not clear whether these users will have to pay again to move to S/4 Hana in future.

“All we know at the moment with S/4 Hana is that you can upgrade for your existing ERP application to S/4 Hana today without any licence costs because there is a promotion,” says User Group chairman, Adams. “That promotion ends on the 31st of December 2015 and yet we don't know what happens on the 1st January.”

“That could be a barrier. So as well as the roadmap and where it is going, what about the licence?”

Copyright © 2015 IDG Communications, Inc.

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