How ready are you to upgrade your SAP landscape?
Few of us would argue that frequent updates and upgrades of new versions of SAP products, especially those that are cloud-based, empower users with advanced analytics and enable increased efficiency and productivity. Yet, there are some inhibitions and challenges in adopting more advanced versions of SAP ERP, as the inaugural SAP Business Assurance Study produced by Capgemini, Sogeti and Tricentis reveals.
Despite these inhibitions, however, it appears that organizations’ preparedness for changes to their SAP environment is well advanced, with more than 91% of the organizations that had not yet upgraded to SAP S/4 HANA saying they had either already begun the migration or planned to do so in the next 24 months. Our in-depth assessment of the SAP environment provides a clear view of the developments/changes that are taking place currently and are likely to continue in future.
Balancing cost and benefits
The study of 759 respondents from large-scale organizations found that SAP ECC is still the most popular SAP version with 43.2% of surveyed organizations currently using it, followed by SAP S/4 HANA with an adoption rate of 33.1%. This is interesting when you consider that S/4HANA (launched in 2015) is touted to hold multiple benefits over its predecessors.
So, a deeper look at the underlying reasons for the lower-than-expected adoption rate of SAP S/4 HANA suggests that organizations are struggling to justify the overall costs involved in moving to SAP S/4 HANA, compared with the expected benefits from this change. Our discussions with industry experts also suggest that substantial change management requirements, differences in data structure, and need for considerable knowledge and skills (to work on SAP S/4HANA) are some of the common obstacles slowing its adoption.
Further, we found that integrating a new update or moving to a new version can be a highly complex process and requires proper planning, resource allocation, and assessment. Indeed, lack of extensive evaluation and understanding may result in multiple challenges and business risks. Data migration (43.5%) and data security (42.8%) are the two most prominent challenges cited by organizations as they move to advanced versions/updates.
That’s not all. In today’s connected world, a large number of IoT devices, external supplier/vendor portals, and third-party applications are integrated or are required to be integrated with organizations’ internal SAP systems and this too adds to the challenges. Integrating SAP applications with non-SAP counterparts requires substantial system/application customization on virtual or physical infrastructure. Moreover, using traditional integration tools, such as an integration platform-as-a-service (iPaaS) or an API management system, involves considerable complexity, especially in the event of an extension of workflows to cloud or their scaling to support third-party applications and systems such as IoT, AI, machine learning, or industry 4.0. Despite several advancements in the SAP ecosystem, organizations face many challenges in securing the requisite integration.
Expert help is the answer
If all of this sounds somewhat daunting, our study reveals that, overwhelmingly, organizations now realize the importance of engaging a specialized service provider to overcome the challenges faced in implementing advanced SAP versions/updates, with ~91% of respondents citing this. Specialized service providers bring both functional and technical expertise, which organizations’ internal staff may lack and is required to deal with various challenges.
Overall, the ongoing digital disruptions paving the way for further changes, both technological and functional, offer new opportunities, while also requiring organizations to take focused and strategic steps to mitigate the risks/challenges emerging from them. Our study asserts that robust/end-to-end testing or SAP business assurance practices will be core to these steps as they play an instrumental role in ensuring the smooth integration and optimization of upgrades and new releases
Find out more
The SAP Business Assurance Study considers the trends and preparedness of organizations in terms of their strategies and expectations related to SAP implementation and testing. To benchmark your own preparedness, including the measures taken to overcome integration challenges, download the study.
Download SAP Business Assurance Study here