SAPinsider Benchmark Report

Benchmarking the
Business Case for
SAP S/4HANA
Pierce Owen
Rizal Ahmed
August 2019

Research Partner
BENCHMARKING THE BUSINESS CASE
FOR SAP S/4HANA

Research Partner
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Contents
Executive Summary ............................................................................................................. 1
Competitive Maturity Assessment ....................................................................... 1
Required Actions ............................................................................................................. 2
Chapter One: SAP S/4HANA Overview ................................................................... 3
What Do Leaders Do Differently with SAP S/4HANA? ........................... 6
How Are Industry Average Respondents and Laggards Planning
to Move Forward? ........................................................................................................... 7
What Holds Back Laggards? ................................................................................... 8
Key Takeaways .................................................................................................................. 9
Chapter Two: How Do Customers Approach the SAP S/4HANA
Business Case? ..................................................................................................................... 10
Top Requirements for Building the SAP S/4HANA Business
Case........................................................................................................................................ 10
How Will Respondents Use Technology to Support Their
Strategies and Accelerate Growth? ...................................................................13
Key Takeaways .................................................................................................................13
Chapter Three: Required Actions ..............................................................................15
Leader Steps to Success ............................................................................................15
Industry Average Steps to Success ................................................................... 16
Laggard Steps to Success ....................................................................................... 16
Key Takeaways ................................................................................................................ 17
Methodology ......................................................................................................................... 19
Appendix A: The DARTTM Methodology ............................................................... 20

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Executive Summary
SAP S/4HANA is unlike any previous release of SAP ERP and must not be
looked at as a typical upgrade project. SAP S/4HANA offers organizations the
potential to deliver significant business value, but it also brings significant
deployment decisions and technical migration challenges. When building the The challenge we’re
business case for SAP S/4HANA, SAP customers should consider a variety of
seeing with customers
important factors and potential impacts on digital transformation, business
in terms of building the
processes, and technical landscapes.
business case is that
In August 2019, SAPinsider surveyed 338 members of our audience to sometimes they
understand the progress SAP customers have made in building the business struggle to fully
case for SAP S/4HANA. We found that the majority (77%) have at least started quantify the cost of
fact-finding and trying to understand SAP S/4HANA to begin building their inaction.
business case, while 17% have already succeeded in completing the business
case. This report takes an in-depth look at the data behind this finding,
including how and why companies undertake such projects, the outcomes ~ Amr El Meleegy,
they’ve seen thus far, and the actions they can take to ensure successful Value Advisory and
results going forward. Customer Success, SAP

Competitive Maturity Assessment

Based on the answers to the survey questions and our in-depth conversations
with respondents, SAPinsider identified three categories of SAP customers
when it comes to building the business case for SAP S/4HANA: Respondent Groups

• Leaders: These early adopters have already completed their business Laggards Leaders
cases. This group represents 17% of the survey respondents. 23% 17%

• Industry average: These companies are fact-finding and trying to

understand SAP S/4HANA, are analyzing deployment impact, have
made some progress and got stuck, or have modified their approach
due to a rejected plan. This group represents 60% of the survey
respondents.
Industry average
• Laggards: These companies do not yet have plans or have not yet 60%
started to try to understand SAP S/4HANA. This group represents 23%
of the survey respondents.

The survey results show that leaders in building the SAP S/4HANA business
case share several common characteristics:

• A majority (74%) of leaders plan to measure the impact of SAP S/4HANA

by the efficiency gains of processes versus only 42% of laggards.

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• Leaders also plan to measure the impact of SAP S/4HANA by the

support it provides for digital transformation: 53% of leaders use this
metric versus 35% of laggards.

• Most leaders currently use business process performance analysis

solutions: 53% of leaders analyze their processes with these solutions
versus 4% of laggards. It’s not a typical
upgrade, but it is a
• Leaders have already invested in the high-end hardware and
significant investment.
infrastructure necessary to host SAP S/4HANA: 58% of leaders use this
hardware and infrastructure versus 23% of laggards. Performing the
migration will mean
Required Actions putting other
investments on hold.
In addition to the actions detailed later in this report (see chapter three), to
ensure a successful SAP S/4HANA business case, SAP customers must:

• Form a committee with the CIO and high-level representatives from ~ Director,
International Agricultural
every major functional area or LoB (such as finance, operations, supply
Commodities Company
chain management, production, and HR). SAP S/4HANA requires an
immense investment, but it can also hold a massive payoff. To unlock
that payoff, every major LoB must not only identify siloed areas of
improvement but also exchange ideas and find synergies.

• Identify all processes that the SAP S/4HANA migration could affect.
This migration provides an opportunity to reinvent, restart, and
reengineer almost every business process according to best practices.
SAP customers will have to go through their systems and pick out each
process that can leverage SAP S/4HANA.

• Perform a multilevel impact analysis on business strategy,

innovation, transformation, process efficiency, custom code, and
infrastructure. Any organization that does not understand the full
impact will fail to build this business case either because they will not
see all the potential benefits or because they will miss a pitfall of an
unforeseen impact.

• Run detailed sensitivity analyses for every deployment scenario

(such as greenfield, brownfield, hybrid, hyperscale cloud, and
private cloud) across every function and LoB, both with and without
a trusted partner. Again, this migration does not follow the rules of a
normal ERP upgrade. It involves decisions that the organization has
never made before, such as whether to select cloud or greenfield
deployments. These decisions can make or break the business case.

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Chapter One:
SAP S/4HANA Overview
SAP customers must start building or at least assessing the business case for
SAP S/4HANA sooner rather than later. If they do not migrate soon, they will
Some existing SAP
run up against the deadline for maintenance support for SAP ERP Central
customers might be
Component (SAP ECC). At that point, they will either lose support for their ERP
system or have to implement SAP S/4HANA without a fleshed-out plan or
under the impression
business case. Fortunately, 77% of survey respondents have at least started that an SAP S/4HANA
their fact-finding missions to understand SAP S/4HANA (see Figure 1). project follows the same
traditional classical ERP
Figure 1: Organizations’ business case status project approach and
methodology that
34%
involves heavy blue
printing, custom
development, and
waterfall approach. That
20%
17% 17%
approach was
traditionally lengthy
and costly.

4% 5% 4%

~ Amr El Meleegy,
We are not Have not Early fact In the middle We are stuck Modifying Business case Value Advisory and
doing a started yet finding and of doing and having approach or is complete Customer Success, SAP
business case trying to analysis difficulty rejected
understand making the
SAP S/4HANA case

Source: SAPinsider, August 2019

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Respondents’ answers to our survey and interview questions revealed clear

trends within each of the three groups — leaders, the industry average, and
laggards — which are summarized in Figure 2 and will be examined over the
course of the rest of the report. While all groups showed a relative tendency to
choose a business focus on digital transformation and the end of maintenance
for SAP ECC as priorities, leaders consider the digital transformation more than
the other groups and the end of maintenance less than the other groups.
Leaders’ executives differentiate by putting pressure on LoBs to rethink
existing business processes, technical architectures, and deployment models.

Figure 2: DART model framework for benchmarking the business case

for SAP S/4HANA

Category Drivers Actions Requirements Technologies

• Leaders’ LoBs feel the • This group has • Leaders are • Leaders already have high-end
pressure to rethink examined focused on hardware and infrastructure
existing technical deployment options understanding and business process
architectures and due to the pressure the potential performance analysis solutions
deployment models to do so on LoBs services and • Within a year, most companies
• This group also • Leaders are learning consulting cost in this group will use tools and
responds to a how SAP S/4HANA and impact services to analyze custom
Leader business focus on will affect specific more than code, migration tools for SAP
digital transformation key performance anything or S/4HANA Finance and
(more than the other indicators (KPIs) and anyone else as accounting, SAP S/4HANA
groups) and the end business processes they examine architectural modelling tools,
of maintenance for such as mergers and digital business KPI dashboards and
SAP ECC (slightly less acquisitions as a transformation reporting solutions, financial
than the other result of their focus and deployment and operational planning
groups) on digital models solutions, and security tools for
transformation 24x7 protection
• The industry average • Unlike the leaders, • The industry • Over the next year, most of the
group focuses more the industry average average group industry average group will
on reducing the costs group is much more focuses most on adopt tools and services to
of customized focused on the costs a delta analysis analyze custom code, SAP
environments and of the migration and an S/4HANA architectural
Industry older technologies understanding modelling tools, business
Average • This group has also
rather than rethinking started examining of license costs process performance analysis
best practices deployment options and impact, solutions, business KPI
showing a more dashboards and reporting
traditional way solutions, and high-end
of thinking hardware and infrastructure
• Laggards respond at • Laggards want to • Laggards want • Over the next two years,
the highest rate to learn how SAP to understand laggards plan to invest in
the end of S/4HANA can be potential migration tools for SAP
maintenance for SAP used to consolidate services and S/4HANA Finance and
ECC and the growing ERP landscapes and consulting costs, accounting, SAP S/4HANA
number of competing to explore the effects but this does architectural modelling tools,
technology projects of industry best not appear to business process performance
Laggard and investments practices align with their analysis solutions, ROI
actions calculators and analysis tools,
financial and operational
planning solutions, high-end
hardware and infrastructure,
and security tools for 24x7
protection
Source: SAPinsider, August 2019

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Leaders have examined the different deployment options for SAP S/4HANA
and how they will affect key performance indicators (KPIs) and business
processes such as mergers and acquisitions (M&As) in response to the drivers
for digital transformation and the pressure on their LoBs. This has also led
them to focus more on understanding the potential services and consulting There is widespread
costs and impact and invest earlier in technologies such as business process confusion about the
performance analysis solutions. Much of what the leaders do builds on
business case for SAP
commonalities between the three groups.
S/4HANA. Everyone
Figure 3 illustrates how capabilities build on each other for organizations knows that they have to
trying to build a business case for SAP S/4HANA. go there, but not
everyone is clear about
ROI. They are struggling
Figure 3: Building capabilities for the business case with having to think
about this project in a
completely different
way.

~ Winni Hesel,
SAP Expert and Partner,
Enowa LLC

Source: SAPinsider, August 2019

What Drives Customers’ SAP S/4HANA Business Cases?

Organizations realize that, to justify the SAP S/4HANA project, they must
establish a strong link between the business case and their digital
transformation initiatives. Survey respondents identified the “business focus on
digital transformation” (selected by 49% of respondents overall) and “2025 end

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of maintenance for SAP ECC” (cited by 41% of respondents overall) as the main
drivers for their SAP S/4HANA business cases.

A closer look at the top drivers by respondent group reveals that leaders
respond to business and executive pressure to rethink existing technical
architectures and deployment models (32%), while the industry average group
and laggards focus more on reducing the costs of customized environments From a technical
and older technologies (32% and 31%, respectively) rather than rethinking best standpoint, SAP
practices (see Figure 4). All three groups also responded at a relatively S/4HANA will benefit
significant rate (each greater than 25%) to the growing number of technology me. Product lifecycle
projects and investments that need to be considered and prioritized.
management (PLM)
Figure 4: Business drivers for the SAP S/4HANA business case by tools don’t run as
respondent group quickly as I would like.
That will be vastly
70% improved.
60%
50%
40%
30% ~ Director PLM/Engineering
20% Services, American Food &
10% Beverage Company
0%
Business focus on 2025 end of Business and Growing number Increasing cost of
digital maintenance for executive pressure of technology maintaining highly
transformation SAP ECC to rethink existing projects and customized
technical investments that environments and
architectures and need to be older technology
deployment considered and
models prioritized

Leaders Industry average Laggards

Source: SAPinsider, August 2019

When it comes to cost, leaders focus on transformation change, competition,

and implementation, while the industry average and laggards look at cost in
the simpler and more traditional way of maintaining what they already have.
This dichotomy shows a stark difference between those who view technology
as an accelerant to growth and those who view it as a necessary cost.

What Do Leaders Do Differently with SAP S/4HANA?

As leaders have felt the pressure to rethink existing technical architectures
and deployment models, they have responded by examining the different
deployment models such as brownfield vs. greenfield and cloud vs. on
premise or hybrid. For the purposes of this report, it does not matter what
deployment option they choose as much as the fact that they actually

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examine the different options in detail. Going deeper still, leaders have
learned how SAP S/4HANA will affect specific KPIs and business processes
(such as M&As) in response to their business focus on digital transformation.
As shown in Figure 5, 47% of leaders — versus less than 31% of each of the
other groups — chose learning how SAP S/4HANA will affect specific
business processes and KPIs and understanding how SAP S/4HANA can SAP S/4HANA delivers
support current and future organizational change (such as M&As and
high-performance in-
divestitures) as top strategies.
memory technology.
Figure 5: Top strategies prioritized to address the top drivers of change The columnized SAP
HANA database
includes a certain level
50% of efficiency.
40%
30%
20% ~ Consultant,
10% Pakistani Chemicals
Company
0%
Understand how SAP Learn how SAP Examine deploying SAP Learn how SAP
S/4HANA can support S/4HANA will affect S/4HANA on cloud S/4HANA can
organizational change specific business environments consolidate and simplify
processes and KPIs ERP landscapes

Leaders Industry average Laggards

Source: SAPinsider, August 2019

How Are Industry Average Respondents and Laggards

Planning to Move Forward?
Based on our findings, members of the industry average group, over the next
year or two, will be actively in the evaluation phase adopting technologies,
tools, and services to analyze custom code, SAP S/4HANA architectural
modelling tools, business process performance analysis solutions, business KPI
dashboards and reporting solutions, and high-end hardware and
infrastructure. Adopting these technologies shows a shift in strategy from
simply adding up the costs to possibly learning how SAP S/4HANA can affect
specific business processes.

Of course, making this shift requires a certain amount of humility in admitting

they might find a better way to reengineer some of the processes and custom
code that the organization has spent years building. Currently, of that industry
average group, only 24% use tools and services to analyze custom code, but
63% will do so within 12 months. Similarly, only 17% currently use business
process performance analysis solutions, but 59% will do so within 12 months.

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Laggards remain at least one year behind the industry average group with
only 4% currently using business process performance analysis solutions, but
62% expect to do so within two years. Using this type of solution or tool, such
as SAP’s business scenario recommendations for SAP S/4HANA report, often
constitutes the first step in changing how an organization views SAP S/4HANA SAP has plugged many
from a necessary cost to an opportunity for digital transformation with new capabilities into the
measurable business impact and accelerated growth. new platform. This
These findings show that most of the industry average group and the
concept of the
laggards at least have an idea of the first steps they need to take to intelligent enterprise is
develop their business cases for SAP S/4HANA, but they do not yet feel intriguing, but few truly
the urgency to accelerate through these initial steps. Additionally, most understand what it
members of these groups have not yet aligned the rest of their means. Executives are
strategies with the right drivers in a way that will ultimately lead to a turning to IT saying,
successful business case for digital transformation with SAP S/4HANA. please help me connect
the dots, but IT isn’t
What Holds Back Laggards? used to advising on
Many organizations find it difficult to accurately estimate the total cost of an such a thing and
SAP S/4HANA implementation, but in general, it can require millions of dollars. creating the link
More than one third (34%) of laggards find it difficult to justify that cost (see between SAP and
Figure 6). Beyond that, more than a quarter (26%) of laggards find the amount business process
of information out there overwhelming and don’t understand the total
transformation; so, they
business impact or justification for SAP S/4HANA. The only way to develop this
are struggling.
understanding involves in-depth cross-functional internal meetings with
different LoBs and external meetings with partners and consultants because
every customer can leverage the capabilities differently. Again, the business
~ Winni Hesel,
scenario recommendations report provides a decent place to start.
SAP Expert and Partner,
Enowa LLC
Figure 6: Challenges preventing laggards from building a business case for
an SAP S/4HANA implementation

34%
30% 26%
19%

We are having trouble We don’t understand the Too much information We are having trouble
justifying the overall cost business impact of SAP and we’re trying to justifying why we should
and investment S/4HANA organize it all into a be doing this project now
compelling case

Source: SAPinsider, August 2019

An additional 19% does not feel the urgency to build a business case for SAP
S/4HANA. Many of these companies have undergone an ERP implementation
recently or have spent years customizing their ERP systems and related

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products and do not want to see those years of work go to waste. In some
cases, it may make sense to wait. In all cases, the potential benefits of SAP
S/4HANA deserve a fair analysis.

Key Takeaways
Based on our research, when it comes to the progress SAP customers have SAP S/4HANA could
made in building their SAP S/4HANA business cases, the following takeaways
have a giant impact, but
are clear:
we are seven years into
• Those that have not yet started building their business case have an SAP Product
already fallen behind. Some customers have good reason for it. Some Lifecycle Management
have cited expectations that SAP will push back the deadline or provide (SAP PLM)
further discounts. No matter the reason, others have moved ahead, and implementation. We’ve
laggards should at least evaluate the potential benefits. gone through a series of
• The business case for SAP S/4HANA requires customers to change from
sprints over that time to
thinking about the project as another ERP upgrade to viewing it as a implement and
catalyst for business process optimization and digital transformation. customize SAP ECC and
SAP customers cannot think about SAP S/4HANA as the latest version of SAP PLM. Migrating to
SAP ECC and expect the price tag to make sense. Only by digging deeper SAP S/4HANA would
into the potential impact of SAP S/4HANA into every LoB will customers mean re-doing much of
find tangible benefits that might help them justify the sticker price. that work.
• All groups say they respond to a business focus on digital
transformation, but leaders chose this as a driver at a higher rate than
~ Director PLM/Engineering
the other groups. Also, only the leaders align their entire strategy around
Services, American Food &
that driver by learning how SAP S/4HANA will affect specific business Beverage Company
processes.

• Leaders have taken steps to examine deployment models such as

greenfield, brownfield, and hybrid. The deployment method will likely not
make or break a business case, but it still constitutes an important decision
and could easily affect the bottom line significantly.

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Chapter Two:
How Do Customers Approach the
SAP S/4HANA Business Case?
As suggested above, SAP customers typically approach the challenge of One of the ways we’re
assessing a business case for SAP S/4HANA in one of two ways: accelerating innovative
thinking and
• Develop a delta analysis on traditional functional and technical areas and collaboration between
overall cost as they have done with traditional ERP upgrades in the past IT and the business is
• Start with the assumption that SAP S/4HANA will have a measurable through design
impact on the processes and growth of every LoB as part of a digital thinking workshops. We
transformation start our workshops, not
by focusing on SAP
Although the industry average group and the laggards say they feel the
S/4HANA, but by
pressure to focus their businesses on digital transformation, they have not
engaging them in a
aligned their SAP S/4HANA business case strategies with that driver. Instead
discussion about their
they have tended to view it as a traditional ERP upgrade. Leaders, on the other
hand, bring IT and the LoBs together to reflect and imagine the possibilities of business pain points
a digital transformation based on SAP S/4HANA, and then they carve a path and how to think about
forward to building the business case. new ways to drive the
business processes
The next section dives into how these strategies align with the requirements
within the organization.
survey respondents need to succeed, the progress they have made thus far,
and the technologies in which they intend to invest.
~ Amr El Meleegy,
Top Requirements for Building the SAP S/4HANA Value Advisory and
Business Case Customer Success, SAP

Survey respondents identified several requirements to support their strategies,

with a few emerging as top priorities.

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The responses indicated that the vast majority (84%) of SAP customers
recognize the need for a delta analysis on existing business functionality (see
Figure 7). This largely represents the first step in evaluating an ERP system.

Figure 7: Relevant or very relevant capabilities required for building the

SAP S/4HANA business case
We have not reached
the stage where we can
84% relate the business case
or business growth to
83%
SAP S/4HANA. We
would need to tie the
capabilities to our
81%
specific industry, which
we have not been able
to do yet.
79%

~ Director,
International Agricultural
Commodities Company
Delta analysis on existing Understanding of SAP Understanding of Understanding of license
business functionality S/4HANA deployment potential services and costs and impact
scenarios with associated consulting cost and
costs of support and impact
maintenance

Source: SAPinsider, August 2019

As a close second for most relevant requirement, respondents chose an

understanding of SAP S/4HANA deployment scenarios with associated costs of
support and maintenance. At 81%, understanding of potential services and
consulting cost and impact came out as the third most relevant requirement.
Respondents chose understanding of license costs and impact as fourth most
relevant with 79% choosing this as a necessity. Some SAP customers have said
they found the license costs for SAP S/4HANA more difficult to estimate than
originally expected.

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A closer look at the data by respondent group reveals a few notable

differences among the groups (see Figure 8). Leaders place a slightly higher
priority on understanding potential services and consulting costs with 89%
choosing this requirement, which mostly shows they have made more
progress in fleshing out the business case. Both the leaders and the industry The cloud discussion is
average group responded at a higher level to delta analysis on existing also a brand-new topic
business functionality, while the leaders responded at the highest level to all together when it
industry-specific templates for process best practices. The delta analysis on
comes to evaluating
business functionality shows a certain level of depth in learning how SAP
SAP S/4HANA. Everyone
S/4HANA will affect business processes while the industry-specific templates
reveal an attitude of trying to maximize the improvement to business
is starting to hear that
processes as part of a larger digital transformation. cloud is beginning to
mature. Many are
Figure 8: Relevant or very relevant capabilities required for building the saying that cloud is the
SAP S/4HANA business case by respondent group next megatrend, and if I
have to bring all of my
100%
90% applications to the
80% cloud in the next 5
70%
60% years, why am I even
50%
40% entertaining an on-
30% premise option? I need
20%
10% to seriously consider
0%
Understanding of Delta analysis on Industry-specific Detailed impact Understanding of
bringing SAP S/4HANA
potential services existing business templates for analysis on license costs and to the cloud.
and consulting functionality process best existing custom impact
cost and impact practices code,
configuration, and
data models ~ Winni Hesel,
SAP Expert and Partner,
Leaders Industry average Laggards Enowa LLC

Source: SAPinsider, August 2019

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How Will Respondents Use Technology to Support Their

Strategies and Accelerate Growth?
As illustrated in Figure 9, as SAP customers mature, they will invest more time
and money in business process performance analysis solutions, high-end
hardware and infrastructure, business KPI dashboards, and tools to analyze There’s a number of
custom code. Only 20% of respondents currently use business process tools that customers
performance analysis solutions, but 52% will do so within one year. SAP can start using right
provides a free basic service with its business scenario recommendations away to start to assess
report, which can get SAP customers thinking about the business impact
their current
scenarios with a relatively sophisticated delta analysis of SAP S/4HANA vs. SAP
environments and build
ECC that highlights how SAP S/4HANA can drive digital transformation.
their business case for
Figure 9: Technologies drawing investment SAP S/4HANA. They can
run the business
90% scenario
80%
70% recommendation tool
60% (BSR) to understand
50%
40% some of the impact
30% scenarios between ECC
20%
10% and SAP S/4HANA
0% based on your current
High-end Financial and Business KPI Business Migration Tools and SAP S/4HANA
hardware and operational dashboards process tools to full services to architectural usage. The
infrastructure planning and reporting performance SAP S/4HANA analyze modelling Transformation
solutions solutions analysis Finance and custom code tools
Navigator can you build
solutions accounting
a comprehensive
Currently use Planning to use within 12 months Planning to use within 24 months
roadmap for your
landscape and
Source: SAPinsider, August 2019 understand SAP’s future
Of course, this data confirms that companies invest in the high-end hardware strategy. The Readiness
and infrastructure necessary to host SAP systems first because even SAP’s Check tool will analyze
older products have required high-end hardware to a certain extent. custom reports and
objects and let you
Key Takeaways know what will be
Our findings reveal the following key takeaways when it comes to how to impacted and what
approach building the SAP S/4HANA business case: needs to be remediated.

• You need to link your SAP S/4HANA business case to digital

transformation. All three groups agree that a business focus on digital ~ Amr El Meleegy,
transformation drives the SAP S/4HANA business case strategy, but Value Advisory and
only the leaders have a comprehensive strategy to improve business Customer Success, SAP
processes with best practices with SAP S/4HANA.

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• Leaders place the highest priority on understanding the potential

services and consulting cost and impact. This reflects their progress
and the comprehensiveness of their business cases.

• SAP customers can use the business scenario recommendations

report for a relatively sophisticated delta analysis. This represents the
most relevant requirement for all respondents and one of the most
popular technology areas.

• Infrastructure decisions are an important part of the business case.

Whether you decide to go with the cloud or on premise, there are
several important technology and deployment decisions that are
critical to understanding your overall cost and impact.

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Chapter Three:
Required Actions
To help ensure a successful SAP S/4HANA business case, companies need to
start the process now and, critically, bring IT and every LoB together to reflect,
imagine the possible, and carve a path forward that addresses the KPIs and
bottom lines of every LoB. The following actions will help leaders, the industry
average group, and laggards navigate the pitfalls of building a business case
for SAP S/4HANA and maximize the value of this massive investment.

Leader Steps to Success

Our research reveals that leaders should follow several key steps to ensure a
successful SAP S/4HANA business case:

• Consult with trusted partners to get their take on your business

case — but challenge their assumptions. SAP partners have done this
before. They know what works. Ask them questions, but keep in mind
that they make money on each project and must preserve their
relationships with SAP. Therefore, build your own projections and full
business case first; then ask their advice — and challenge every
assumption.

• Follow through, track, and realize the added value. Leaders have
their business cases. They should have the support of every LoB. Now,
go forth and execute. Expand on initial focus areas and document and
track your results and lessons learned. Deliver on the promises and hold
internal and external stakeholders accountable for the results.

• Constantly evaluate new apps, add-ons, plug-ins, and innovations

that could add more value. SAP has many products and applications
that can leverage the capabilities of SAP S/4HANA to deliver value, and
it continues to execute on its roadmap to deliver more. Look to
continuously improve by developing more business cases for SAP
products — such as SAP Integrated Business Planning and SAP
Analytics Cloud as well as artificial intelligence- and machine learning-
based solutions. Also, talk to your partners, and continue to read LoB-
specific reports from SAPinsider to learn more about other
technologies that can accelerate growth.

• Keep the cross-functional committee that developed the SAP

S/4HANA business case running and collaborating for continuous
improvement. Both for SAP S/4HANA-related improvements and for

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other technologies, this type of committee should continue to drive

digital transformation with real business benefits.

Industry Average Steps to Success

Based on what we have learned from leaders, the following guidelines can
help those in the industry average group complete a successful business case
for SAP S/4HANA:

• Reevaluate processes to find and develop best practices. SAP

customers cannot approach this upgrade the same way they have
approached previous upgrades. To justify the cost, which they can and
should at least attempt to do, they need to focus on a holistic digital
transformation while diving deep into the potential impact of
improving business process with an eye on developing best practices.

• Create an executive committee that will put pressure on LoBs and

IT to rethink existing technical architectures and deployment
models. This should provide an organized and focused way to get the
time and attention necessary to identify how SAP S/4HANA can deliver
value to the LoBs. It should also help build consensus about how to
deploy the system.

• Ensure the organization looks at SAP S/4HANA as an opportunity to

holistically improve enterprise operations. This ties back to the digital
transformation. Leaders have focused their business case this way while
the industry average group has largely struggled to minimize or justify
the cost in a traditional way before the deadline.

• Learn more about how SAP S/4HANA will affect specific business
processes and KPIs. It helps to use that cross-functional executive SAP
S/4HANA business case committee to identify your KPIs. But before
SAP customers even form their committee, they can use the business
scenario recommendations report to identify some digital
transformation opportunities with SAP S/4HANA.

Laggard Steps to Success

Laggards can set themselves on a path toward success by following the
example of those who have already moved forward:

• Reexamine existing technical architectures. Does the enterprise

really structure its technical systems the best way possible? If not,
consider SAP S/4HANA as an opportunity to modernize and reinvent
systems. With this level of investment, SAP customers might as well
make sure everything runs as effectively as possible.

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• Rethink best practices and focus on your current sources of pain.

Does your organization really operate the best way possible? Conduct
internal audits of every LoB potentially affected by SAP S/4HANA and
read research on industry best practices. If the LoB does not operate
among the best in class, find out if an SAP S/4HANA implementation
might help them get there.

• Leverage existing analytics tools to help both IT and LoBs to

imagine the possible. Run the free business scenario
recommendations report to get some early thoughts. Even creating
this business case properly will require approval from senior
management because the analysis will require significant resources.
Someone will have to take the initiative with the first steps and
essentially create the business case for creating the SAP S/4HANA
business case.

• Move from reducing upgrade costs and preserving old processes to

planning how to transform your business. SAP S/4HANA should not
simply support existing business processes better. It should help
customers recreate those processes. Leaders analyze SAP S/4HANA as
part of a digital transformation, not yet another upgrade.

Key Takeaways
Going forward, leaders, industry average organizations, and laggards should
keep the following in mind:

• Now that they have the business case, leaders need to execute and
continue to innovate. Leaders should support the LoBs with the
promises made in the business case and continue to work with the LoB
executives to continuously find tools and technologies that deliver
better results.

• Industry average organizations should put pressure on LoBs to both

develop a holistic digital transformation focus while also diving
deep into how SAP S/4HANA will affect specific business processes.
Leaders used this approach to complete successful business cases.
Industry average companies can follow the blazed trail while adapting
to their individual situations.

• Laggards need to dream bigger and cut loose the technical upgrade
mentality. Many laggards have spent years customizing their ERP
environments or have recently invested in an ERP upgrade. To build
this business case and put themselves in the best position to grow, they
must invest in analyzing the current environment and image future
states and possibilities. They should, at the very least, conduct research

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to discover if they could improve operational KPIs by investing in SAP

S/4HANA. Perhaps not, but they will not know until they have tried to
evaluate SAP S/4HANA from an enterprise-wide digital transformation
perspective.

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Methodology
In August 2019, SAPinsider examined the issues, intentions, and experiences of
business and technology professionals related to their plans to develop a
business case for SAP S/4HANA. Our survey generated 338 responses.

Responding professionals completed online surveys that questioned them on

topics such as the following:

• The progress their organization has made when it comes to developing

a business case for SAP S/4HANA

• The main business and technology drivers that influenced their plans
for their SAP S/4HANA business case

• The strategies they prioritize to address their top drivers of change

• The capabilities they require to implement their top strategies

• The technologies they are currently using or planning to use

• The inhibitors and challenges to creating a business case

SAPinsider supplemented the online survey responses with in-depth

telephone interviews and in-person conversations to better understand the
context and reasoning behind the responses, trends, and patterns within the
survey data.

Demographic information on the respondents included the following:

• Job title: The job titles of the survey respondents included CXO (3%),
VPs and directors (16%), managers (27%), consultants (17%), architects
(22%), project managers (12%), and analysts (18%).

• Industry: The survey respondents represented a range of industries,

with industrial manufacturing and consumer goods representing the
highest percentage. The top industries represented were industrial
manufacturing (11%), consumer goods (11%), government (9%), solution
providers (8%), high tech (7%), chemicals (6%), automotive (6%),
healthcare (5%), financial services (5%), energy (5%), and biotech and
pharmaceuticals (5%).

• Company size: A majority of responding companies were larger

organizations — with 21% reporting revenue of over $10 billion, 25%
between $1-$10 billion, 14% between $500 million and $1 billion, another
14% between $200-$500 million, and 25% less than $200 million.

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Appendix A:
The DARTTM Methodology
SAPinsider has rewritten the rules of research to provide actionable
deliverables from its fact-based approach. The DART methodology serves as
the very foundation on which SAPinsider educates end users to act, creates
market awareness, drives demand, empowers sales forces, and validates
return on investments. It’s no wonder that organizations worldwide turn to
SAPinsider for research with results.

The DART methodology provides practical insights, including:

Drivers: These are macro-level events that are affecting an organization. They
can be both external and internal and require the implementation of strategic
plans, people, processes, and systems.

Actions: These are strategies that companies can implement to address the
effects of drivers on the business. These are the integration of people,
processes, and technology. These should be business-based actions first, but
they should fully leverage technology-enabled solutions to be relevant for our
focus.

Requirements: These are business- and process-level requirements that

support the strategies. These tend to be end-to-end for a business process.

Technology: These are technology- and systems-related requirements that

enable the business requirements and support the company’s overall
strategies. The requirements must consider the current technology
architecture and provide for the adoption of new and innovative technology-
enabled capabilities.

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SAPinsider comprises the largest and fastest-growing SAP

membership group worldwide. It provides SAP professionals
with invaluable information, strategic guidance, and road-
tested advice through events, magazine articles, blogs,
podcasts, interactive Q&As, white papers, and webinars.
SAPinsider is committed to delivering the latest and most
useful content to help SAP users maximize their investment
and leading the global discussion on optimizing technology.

For more information, visit SAPinsider online.

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