The findings of the research were presented at the company’s regular annual event, the SAP NOW Hungary conference in Siófok. The survey pointed out that postponing the transition is at least as dangerous as embarking on it as a sham without adequate internal resources and commitment. At the same time, those companies that carry out the change in time, with the right partner, with the organic involvement and motivation of their own employees, gain a significant competitive advantage by exploiting the values of the new system, and prepare their organization to accept artificial intelligence-based and other developments.
The biggest challenge facing the SAP ecosystem in the next three years is undoubtedly the transition to SAP S/4HANA, so this was also one of the central topics of the 25th anniversary SAP NOW Hungary conference. In addition, issues that directly affect and concern the actors of Hungarian economic life were also discussed, such as the latest areas of use of artificial intelligence or the security issues and new platforms of cloud-based solutions. More than 1,300 corporate and government decision-makers took part in the event again this year. More than 80 professional presentations, workshops and interactive demos enriched the conference, ensuring professional exchange of opinions, knowledge sharing and inspiration.
What can the new generation ERP system do?
SAP’s latest enterprise management system, SAP S/4HANA, covers a wide spectrum of business needs – from critical operations to business model innovation. It revolutionizes the management of databases, supports business decision-making with built-in business AI and advanced analysis capabilities, real-time forecasts. The system offers proven standards based on industry capabilities, a renewed user experience, which supports the simplification and cleaning of business processes, the avoidance of unique developments, and the cloud solution guarantees scalability, secure operation, automatic updates and AI functions. In order to exploit the innovation benefits, companies must switch to SAP S/4HANA by the end of 2027. It is unique in the market that support for SAP S/4HANA is guaranteed until 2040.
“We are aware that the success of the transition and that the companies receive all the support for this is our responsibility and our joint task with our partner companies. Sharing experiences and making knowledge public is one of the best ways to do this. We conducted this research in order to gather the insights of customers and introductory partner companies in a structured form about what they experienced during the SAP S/4HANA transition and to provide a status report on the state of the domestic market. Hesitants can draw motivation from this, and those who pass the exam can gain self-certification”
– pointed out Pintér Szabolcs, managing director of SAP Hungary, at the SAP NOW Hungary conference.
Various experiences from actors in the Hungarian economy
In the first half of 2024, the research examined the SAP S/4HANA experiences so far among 15 customers of SAP Hungary and 10 partner companies performing system implementations in the framework of in-depth interviews. Among the surveyed companies, companies of all sizes were represented, from classic SMEs to the largest domestic competitive market and state-owned companies, and the sample was also colorful in terms of industry: there were respondents from the logistics sector, telecommunications, the chemical industry, the banking and energy sectors, but also from classic manufacturing companies. Among the interviewees were companies in the thinking phase, companies preparing the process, and managers responsible for SAP of companies that have been using SAP S/4HANA for years. Among the partners interviewed in the research, consulting firms of various sizes were represented, from a small company of 20 employees to an international company of 5,000 employees with a strong Hungarian presence. they have customers in telecommunications, trade, the banking sector, transport and utilities, and all of them have SAP S/4HANA transition or implementation experience.
The transition process of Hungarian companies shows a significant deviation
According to our partners’ estimates, an average of 10-15% of companies have already made the switch, 20% are currently in the planning process, 25% are in the implementation process, while 40-45% have not yet taken concrete steps. The latter is currently the biggest challenge in terms of capacity planning. This may be related to one of the biggest misconceptions related to the transition, i.e. its duration: based on the research, customers typically significantly under-plan before the first assessment conversations, even though the transition of large companies is a complex process; it can take up to 2-3 years.
The research also pointed out that smaller companies are often more open to new technologies and see the business benefits of the transition faster. At the same time, large companies with more resources and dedicated teams are ahead in preparing for the transition.
Shrinking capacities, urgent deadline
Based on the unanimous opinion of the partners, consulting capacities may be significantly reduced in the next three years, just as the complex processes of larger companies require more and more resources. This lack of capacity may worsen due to the absorbing effect of international markets, as companies from neighboring countries also seek the help of Hungarian experts. It is therefore worth planning the transition in time and securing the necessary capacities.
Business renewal instead of technical transition
One of the remarkable lessons of the research is that successful transitions require thorough planning and preparation not only on a technical level, but also on a business level. Without rethinking and optimizing business processes, the implementation of SAP S/4HANA cannot reach its full potential.
As a characteristic difference of the SAP S/4HANA transition, many partners pointed out that new methodologies are necessary for successful implementation, which makes it much more necessary to involve customers in the planning, showing them the possible paths, methodologies, and the real opportunities inherent in the transition. This is not only a challenge for our partners, but also an excellent opportunity for customers to receive a system that, although it provides standard solutions, is much more in line with business and development. This closer cooperation is definitely required by some customers.
“Although every company believes that its processes are unique, our partners have confirmed that during the transition, the standards of the industry solutions of the SAP S/4HANA system cover 80-90% of the companies’ processes. It is important for companies to trust global industry standards, as we have developed these systems based on the operations and best solutions of tens of thousands of companies operating all over the world.”
– pointed out Szabolcs Pintér in connection with the research results.
Many of the customers participating in the research recognize the business benefits of implementing SAP S/4HANA and are committed to the success of the project. According to 80% of customers, IT decisions are primarily driven by business considerations, and they see the transition as more than just a mandatory task. Improving the user experience, optimizing business processes and increasing efficiency are all important objectives during the transition. And last but not least: those companies that manage the transition task in a complex manner and pay attention to change management, to compensate for the increased tasks of the participants in the transition project, will realize the transition more successfully.
Cloud solution: technology and financing
The acceptance of cloud solutions also shows a mixed picture. While small and medium-sized businesses prefer the more cost-effective public cloud solutions, large companies often stick to the private cloud. There is still some uncertainty among customers due to security issues related to the cloud and the perceived vulnerability associated with cloud construction, but with the help of consultants, more and more people are recognizing the benefits of cloud solutions.
During the research, it also became clear that the issue of cloud computing, which necessarily accompanies the transition to SAP S/4HANA, involves not only technical but also financing challenges. The CAPEX/OPEX dilemma makes it difficult for many companies to decide between cloud-based and on-premise solutions. Cloud-based SAP S/4HANA solutions appear as operational costs, while on-premise solutions are to be accounted for as capital costs. This decision has a significant impact on the financial planning and liquidity of companies.
Archiving vs. Transfer – the future of past data and processes
In relation to the SAP S/4HANA transition, an important decision is also what the companies will do with the data and processes of their previous systems during the transition. 45% of customers chose a greenfield solution, i.e. introduced a completely new system and processes, 30% switched over in the form of brownfield, i.e. keeping their previous data and processes, while 25% opted for the intermediate bluefield migration cast his vote.
It is interesting, however, that the details of the transition can be decided almost as soon as the partner is chosen. The previous experience of a partner also determines the solution it proposes to its customers. Partner companies that have predominantly conducted brownfield deployments in the past were more inclined to recommend them to future clients, and the same is true for greenfield deployments. In addition, the outcome of the cloud or own server decision-making situation is similarly based on experience.
Age groups at the dawn of renewal
To some extent, there is a similar correlation between the age group represented and technological openness, but at the same time, it cannot be called legal in any way.
The research therefore pointed out the importance of clients inviting a diverse range of partners for competitive negotiations and professional proposals, and properly representing their own interests and convictions, not being afraid to test the proposed protocol with an independent expert opinion, in order to really gain proof that all options for the transition have been thoroughly explored.
Advantages of S/4HANA according to partners and customers
Customers highlighted the advanced reporting capabilities of the system, the possibility of rethinking business processes and the incorporation of industry standards as positives, and agreed that S/4HANA proves to be a good tool for both increasing efficiency and reducing costs. The partners confirmed how much the presentation of good practices and positive examples strengthens confidence in SAP’s new generation solution. In addition, attention was drawn to the phenomenon that the SAP innovations channeled into the cloud solution and the latest AI developments do not yet determine the customers’ transition decisions – although domestic leaders are also monitoring the development of artificial intelligence and are open to these solutions, the its practical benefits will only be seen to be realistically integrated into the company’s operation after 1-2 years.
Overall, it can be said as a lesson learned from the research that there is no single saving solution: by considering the unique ideas and processes of the companies, as a result of a complex preparation project, possible solutions and their advantages and disadvantages can be presented. At the same time, SAP S/4HANA can handle most of the problems that could only be solved with individual development in the basic functions.
The main lessons of the research:
#1 – The larger a company, the more complex the SAP S/4HANA preparation and transition process.
#2 – Although smaller companies see more of the business benefits of transition, larger companies are ahead of the transition process.
#3 – Not only the 2027 deadline, but also the market will force the switch.
#4 – The available consulting capacity will be a key issue in the final.
#5 – Cloud computing is not only a technical issue, but also a financial one.
#6 – Those companies that place an appropriate emphasis on change management and motivating the involved colleagues are more successful in the transition.
#7 – The references of the chosen partner company can fundamentally influence the proposed methodology of the transition.
#8 – The implementation of the transition largely depends on the perception and generational attitude of the decision-makers.
#9 – Those transitions were the most successful where they connected the change with business transformation.
#10 – Although everyone is watching the progress of AI, it is not what determines the transition decisions for now.
Source: www.technokrata.hu
