How to perform an S4 HANA cost-benefit analysis?

How to perform an S4 HANA cost-benefit analysis
Most of the current SAP ECC customers have not decided their S4 HANA strategy. With fast changing business models and digital transformation being a business reality essential, it is nice to have SAP ECC customers looking into S4 HANA as the logical upgrade path. But, not all SAP ECC customers are at this stage. Most of them are kicking investment down the road or waiting for the product to mature. It is important for IT leaders to start creating S4 HANA cost-benefit analysis when the conversion does happen.

Based on our experience, we consider the following to be the major factors which help a firm derive maximum benefit from S/4HANA.

Performance Improvements

The underlying HANA in-memory platform in S/4HANA along with the optimized application code allows existing application processes to run faster. In some cases like MRP, the performance improvements can be stunning. The application runtime may even go down from two weeks to 30 minutes.

Real-time Analytics

The combining of OLAP and OLTP into a hybrid transactional/analytical processing architecture (HTAP) enables analytics to be performed in real time. Along with the embedded analytics concept of S/4HANA, real-time decisions can be made with analytics provided directly next to the transactions.

Simplified Table Architecture & Fiori apps

The architectural changes in S/4HANA simplify the data and change the usage of existing functionalities. For example, the Universal Journal Table in SAP financials has removed the need for reconciliation between the ledgers. This simplifies the month-end financial close processes. S/4HANA also includes 10,000+ Fiori applications which work with the simplified architecture. They deliver good improvements in how users process transactions and access information.

Benefits of New S/4HANA Functionality

SAP has released several new functional capabilities which are unique to S/4HANA like SAP Cash Management, Central Finance etc. These new provide exciting new benefits and provide good ROI if used in the right fashion.

Potential for new ways of doing business

The combination of performance improvements, real-time analytics & new functionality provides significant process innovation. However, this depends on the CXO mindset and the ability for the organization to manage change.

While the above provides qualitative parameters for building a cost benefits framework, bringing in quantitative aspects requires the work of seasoned experts.

You can read about the real-life benefits of one of our clients from the American Mid-west and download the case study from this link.

If you would like a cost-benefit analysis for your organization or want a free technical assessment to check your S/4HANA transition readiness, you can message us here.

Alphonse Raj David

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Comment ( 1 )
  1. How are SAP ERP customers defining their SAP HANA adoption strategy?
    May 28, 2018 at 1:32 pm

    […] will provide for your organization, you can have a look at this article. Also, keep in mind that a cost-benefit analysis must be done before adopting a HANA […]

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