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DEPLOYMENT APPROACHES FOR SAP S/4HANAcustomization to the core ERP, and set up and implementSAP S/4HANA in a flexible way to adapt to unpredictablemarket conditions in the long-term future.In order to succeed in their SAP S/4HANA deployments,respondents know that they need to minimally disruptoperations, implement a fully compliant system thatsupports both local and global regulations, improve datacleansing, management, and governance, ensure that theirERP is harmonized and centralized throughout theenterprise, and provide a detailed impact analysis onexisting custom code, business processes, and operationscosts. Respondents use or plan to use a wide range of SAPand partner tools and platforms to support theserequirements approaching their SAP S/4HANA deployment.Respondents’ answers to our survey and interviewquestions revealed clear trends, which are summarized inTable 1 and will be examined throughout this report.Table 1: DART model framework for deployment approachesfor SAP S/4HANADriversActions The move to SAP S/4HANA Implementing standardized end-toopens new opportunities toend processes for core ERP usersoptimize processes (61%)(51%)Requirements Minimal disruption tooperations (69%)Technologies Tools and services to analyzecustom code (82%) Pressure to lower TCO and Deploying SAP S/4HANA with theIT maintenance costs (30%)approach that minimizes cost (51%) Fully compliant system thatsupports both local andglobal regulations (48%) Advanced, predictive, andembedded analytics (81%) The need to harmonize Preserving only operationallyregional processes into onenecessary customization to the coreglobal template (22%)ERP (40%) Improved data cleansing,management, andgovernance (43%) Setting up and implementing SAPS/4HANA in a flexible way to adapt tounpredictable market conditions inthe long-term future (33%)6 SAPinsider Benchmark Report Virtualization or hyperconverged infrastructure(77%) Automated SAP S/4HANA Harmonized and centralizedtesting solution (75%)throughout the enterprise SAP S/4HANA architectural(40%)modeling tools (73%) Detailed impact analysis on Robotic process automationexisting custom code,(RPA) for data migrationbusiness processes, and(70%)operations costs (37%) Open sourceplatform/operating system(68%)

DEPLOYMENT APPROACHES FOR SAP S/4HANAWhat Drives SAP S/4HANADeployment Approaches?Nearly two thirds (61%) or respondents indicated that theprimary driver for SAP S/4HANA deployment was that thetransition opened new opportunities to optimize processeswith a business focus on digital transformation.Approximately half as many respondents (30%) said that thepressure to lower total cost of ownership (TCO) and ITmaintenance costs was the second most important driver(see Figure 3). The third factor driving the SAP S/4HANAdeployment was respondents’ need to harmonize regionalprocesses into one global template (22%).Figure 3: Top drivers for deploying SAP S/4HANA70%60%50%40%30%20%10%With SAP S/4HANA it ispossible to use an activemethodology andidentify the industrybest practices. Movingaway from what wasused previously, thisdefines what optimalprocesses are using astandard methodologyand framework. Insteadof doing fit-to-gap, usea fit-to-standardapproach which can beadopted very quickly bythe business teams whocan immediately seethe value.0%The move to SAP S/4HANA Pressure to lower totalopens new opportunities cost of ownership (TCO)to optimize processes and IT maintenance costsThe need to harmonizeregional processes intoone global templateSource: SAPinsider, June 2020Having the opportunity to redesign and optimize existingbusiness processes can offer significant performance andcost benefits for organizations. Respondents indicated thatthe primary measurements they will use to determine thesuccess of their SAP S/4HANA deployment include theincreased productivity (64%) and increased businessprocess efficiency (67%) of their business processes.To achieve improvements in these areas, organizationsneed to optimize their processes, an exercise that canimpact another factor driving SAP S/4HANA deployment—7 SAPinsider Benchmark Report Ajit Attavar,Global Program Director,Neptune Products &Services

DEPLOYMENT APPROACHES FOR SAP S/4HANAlowering TCO and IT maintenance costs. Existing ERPsystems can be expensive to maintain from aninfrastructure perspective due to aging hardware and as aresult of customized systems and processes that requirededicated administrative and support resources. Outdatedhardware and customized systems represent a technicaldebt that contributes to increased operating and ITmaintenance costs. Moving to a new infrastructure,particularly in the cloud, can reduce those costs, while amove to optimized standardized systems can contribute toreducing the cost of ongoing code maintenance.How Do Customers Meet TheirBusiness Drivers?Just over half of survey respondents (51%) indicated that themain action they are taking to address their drivers is toimplement standardized end-to-end processes for core ERPusers (as seen in Figure 4). Implementing standardizedprocesses will open more opportunities to optimize thoseprocesses and will also allow organizations to more readilyharmonize those processes into a global template. This isbecause it is much easier to create a template fromstandardized processes than customized ones.Figure 4: Top strategies prioritized to address the topdrivers of change60%50%40%30%20%10%0%ImplementingDeploying SAPPreserving onlySetting up andstandardized end-to- S/4HANA with theoperationallyimplementing SAPend processes forapproach thatnecessaryS/4HANA in a flexiblecore ERP usersminimizes cost customization to the way to adapt tocore ERPunpredictablemarket conditions inthe long-term futureSource: SAPinsider, June 20208 SAPinsider Benchmark Report

DEPLOYMENT APPROACHES FOR SAP S/4HANAAdditionally, 50.5% of respondents said that they areworking to deploy SAP S/4HANA with an approach thatminimizes cost. This cost-saving approach directly connectsto the pressure to lower TCO and IT maintenance costs anddemonstrates that organizations understand the expenseassociated with an SAP S/4HANA deployment. It makessense, then, that these organizations are looking for ways tooffset such a significant investment by minimizingexpenses across the board as they approach thedeployment itself, including costs associated with softwarelicenses, infrastructure, operations, and staffing.Survey respondents are also seeking every opportunity tooptimize processes, as evidenced by 40% saying they arepreserving only customizations that are operationallynecessary to their core ERP. Reducing the number ofcustomizations in the system by eliminating all but themost critical will help organizations meet their businessobjectives in multiple ways, including reducing TCO and ITmaintenance costs for SAP S/4HANA once it is deployed,and making it easier to turn the system into a harmonizedglobal template when additional instances of SAP S/4HANAare deployed across the organization.The final top strategy, selected by a third of respondents(33%), is that of setting up and implementing SAP S/4HANAin a flexible way so the system can adapt to unpredictablemarket conditions in the long-term future. Looking foropportunities to move away from the technical debt of theirolder systems has always been a reason to transition to SAPS/4HANA. As a result of the current global pandemic,however, large proportions of respondents are reexaminingtheir infrastructure, high availability, and disaster recoverystrategies. This reexamination supports all the main driversfor deployment, as well as the focus on digitaltransformation, which 53% of respondents say is the majordriver behind their SAP S/4HANA business case.Key TakeawaysBased on our research with respect to deploying SAPS/4HANA, the following takeaways are clear: 9Leverage opportunities for process optimization.Deploying SAP S/4HANA offers the SAPinsiderCommunity the opportunity to re-evaluate and SAPinsider Benchmark ReportAs part of the migrationwe needed to decide ifit was easier to revert tostandards, or better tomigrate the as-isprocess. Even though,from a technical designperspective, the tablesdon’t exist in SAPS/4HANA anymore it isstill possible to makethe minimal changes toget the processesworking and then dothe simplificationproject later. Team Lead, SAP CCoE,Global Retailer

DEPLOYMENT APPROACHES FOR SAP S/4HANAredesign processes that may have gone unchangedsince their current ERP system was originallyimplemented. While the largest proportion ofrespondents are planning a system conversion,simply having to adapt to standardized processesavailable in SAP S/4HANA offers the potential tooptimize processes and demonstrate value quickly.10 Focus on a system that harmonizes and centralizesregional processes. When building a financialsystem, 42% of respondents in our SAP S/4HANAFinance report said they are taking action to create asingle source of truth for their financial data, and 59%have a requirement for a centralized financial systemthat delivers visibility and control over all financialdata and processes. These requirements have carriedover to organizations’ planned deployment of SAPS/4HANA as they are looking to combine data frommultiple legacy systems to leverage the features andbenefits of the solution. Utilize tools to determine the most used andcritical processes and customizations. SAP and SAPS/4HANA implementation partners offer tools thathelp monitor code and business process use andperformance. Leverage these tools to understandusage levels and ensure that only the most neededprocesses and customizations are moved into thenew deployment. Set up a standardized system to provide moreflexibility. The SAPinsider Community has beenforced to make significant adjustments to systems,operations, personnel, procedures, and more in orderto adjust to the impacts caused by the COVID-19outbreak. Using cloud-based deployments orvirtualization solutions to provide infrastructureflexibility when deploying SAP S/4HANA, and limitingprocess customizations to create processstandardization, will allow for changes to operationalmodels to be made more easily and will provide asystem that has greater capabilities to adapt tofluctuating and unpredictable business demands. SAPinsider Benchmark Report

DEPLOYMENT APPROACHES FOR SAP S/4HANAChapter Two: How Do SAPCustomers Approach their SAPS/4HANA Deployment?Deploying SAP S/4HANA requires not only IT teamsmanaging the technical aspects of the deployment (eitherinternally or with the assistance of deployment partners),but also necessitates a commitment from business teamsto verify data, provide input on new or refined processes,and determine whether the system is providing accuratedata. This chapter explores how respondents prioritized thedifferent requirements and capabilities that theirorganizations needed to deploy SAP S/4HANA, and thetools that they used to support those requirements.Top Requirements forSAP S/4HANA DeploymentRespondents to the survey selected minimal disruption tooperations as the top requirement for their SAP S/4HANAdeployment, with 69% indicating that this was mostimportant to their success (see Figure 5).Figure 5: Top requirements for SAP S/4HANAdeployment successHaving business teamsactively engaged in theprocess is critical asthey are able to providevery detailed feedbackon each step and gap asit comes up so that itcan be addressedquickly. They need to bebatting for the IT anddeployment teams tomake the process gosmoothly. But it can alsobe really exciting for thebusiness as they can seethe minimal viableproduct very quicklyand see the benefits itbrings.80%70% Ajit Attavar,Global Program Director,Neptune Products &Services60%50%40%30%20%10%0%Minimaldisruption tooperationsFully compliant Improved data Harmonized and Detailed impactsystem thatcleansing,centralizedanalysis onsupports both management, throughout the existing customlocal and global and governanceenterprisecode, businessregulationsprocesses, andoperations costsSource: SAPinsider, June 202011 SAPinsider Benchmark Report

DEPLOYMENT APPROACHES FOR SAP S/4HANABusiness interruptions were identified as one of the top fivecost drivers impacting those who were putting together thebusiness case for SAP S/4HANA, and this requirement iscritical for the deployment phase as well. Ensuring thatthere are minimal disruptions to operations supports thedrivers for increased business process efficiency and thepressure to lower total cost of ownership (TCO). It alsosupports the action of deploying SAP S/4HANA with anapproach that minimizes cost, because businessinterruptions have cost implications beyond deployment.The second most important requirement selected byrespondents was that of having a fully compliant systemthat supports both local and global regulations (48%). Whilemany organizations have benefited from the flexibility thatthe customizations to their existing ERP systems haveoffered, this has frequently prohibited them fromperforming regular version and system upgrades, which inturn has prevented them from having a fully compliantsystem. Deploying SAP S/4HANA and minimizingcustomizations will help organizations meet compliance.Other top requirements include the need for improved datacleansing, management, and governance (43%), having asystem that is centralized and harmonized throughout theenterprise (40%), and performing a detailed impact analysison existing custom code, business processes, andoperations costs (37%). Data harmonization has come upregularly as a topic of concern for those transitioning to SAPS/4HANA, particularly because of the table structurechanges required from existing ERP systems, but alsobecause many organizations plan on integrating data frommultiple existing systems into a single SAP S/4HANAinstance. Additionally, data harmonization is required ifSAPinsiders are to have a centralized and harmonizedERP system.12 SAPinsider Benchmark ReportWe are still running anECC 6.0 systemimplemented in themid-2000s, and haveoften had to implementbespoke functionality tosupport processchanges that werestandard in laterproduct versionsbecause the cost of theupgrade was too highto be justified. Nowthere is a much betterway of doing things andwe can have newfunctionality like Aribaintegration andprocure-to-pay as agoal. Team Lead, SAP CCoE,Global Retailer

DEPLOYMENT APPROACHES FOR SAP S/4HANAWhich Tools Do Respondents Use inTheir SAP S/4HANA Deployment?A majority of respondents (82%) said they either use or planto use tools and services to analyze custom code (seeFigure 6). This feedback supports the requirement thatdeployment teams need to completely understand existingcode customizations and how those customizations mightbe migrated. Whether the tools being used are like SAPReadiness Check or those provided by partners specializingin SAP S/4HANA transitions, they help SAPinsidersunderstand what is needed to move their existing code intoan SAP S/4HANA deployment. Being able to analyze customcode also enables organizations to fully define theirdeployment roadmaps and avoid operational disruption byensuring they do no miss any steps in the process.Figure 6: Popular technologies included in deploymentapproaches for SAP S/4HANA90%80%70%60%50%40%30%20%10%0%Tools andAdvanced,Virtualization or Automated SAP SAP S/4HANAservices topredictive and hyper-converged S/4HANA testing architecturalanalyze customembeddedinfrastructuresolutionmodeling toolscodeanalyticsCurrently useImplementingEvaluating/Aware of needSource: SAPinsider, June 2020As they move to SAP S/4HANA, most respondents (81%) arelooking to use advanced, predictive, and embeddedanalytics. Having tools and technologies that provide insightinto data in their ERP systems is critical to be able to steer apath through disruptions caused by the COVID-19 crisis.Gaining these data insights is also something that cannotbe successfully achieved without meeting the requirement13 SAPinsider Benchmark ReportRPA for DataMigration

DEPLOYMENT APPROACHES FOR SAP S/4HANAfor improved data cleansing, management, andgovernance, as well as implementing standardized end-toend processes for core ERP users. This is because predictiveanalytics work best in standardized systems.Nearly one-third of respondents (29%) said they are alreadyusing virtualized infrastructures, which provide greaterenvironmental flexibility, whether implementing onpremise or in the cloud. An additional 48% of respondentssaid they are either implementing virtualization solutions orare aware of the need to do so. Virtualization solutions alloworganizations to potentially lower TCO and IT maintenancecosts by providing scalability even on existing infrastructure,as well as providing adaptability for future unpredictability.Survey responses demonstrated that those deploying onpremise are most likely to be using VMware vSphere (54%),and those using cloud-based virtualization options mostlyplan to use Microsoft Azure/VMware Services (53.5%).In order to accelerate their migration, 75% of respondentssaid they are using, installing, or are aware of the need forautomated SAP S/4HANA testing solutions. Many SAPpartners offer solutions in this space, and SAP S/4HANACloud offers a test automation tool that is available inquality environments. The biggest advantage of automatedtesting tools is that they can be configured to performchecks at each step of the process following the installationand configuration, such as data load, period close, andmonthly report generation, relieving the need for theseitems to be manually reviewed.Other key technologies that respondents plan to use as partof their SAP S/4HANA deployment include architecturalmodeling tools (73%), robotic process automation (RPA) fordata migration (70%), and open source platforms andoperating systems (68%).14 SAPinsider Benchmark ReportAutomated testingsolutions save us a lot oftime as they haveparameters already setup so that we don’thave to build themmanually. We use themfor normal scenariotesting like bookingentries, and to makesure that everythingrequired by connectedsystems is present. Weare also planning to usethem to create massiveentries automatically. Senior Project Manager,Global Manufacturer

DEPLOYMENT APPROACHES FOR SAP S/4HANAKey TakeawaysWhen it comes to equipping organizations with thecapabilities and technologies required for an effective SAPS/4HANA deployment:15 Work to minimize operational disruptions duringthe transition. Respondents ranked avoidingdisruptions to operations as the m

Figure 1: Planned deployment model for SAP S/4HANA Source: SAPinsider, June 2020 New implementation 41% Selective data transition 12% System conversion 47% D SAP S/4HANA and BW/4HANA provide the next gen platform to build new, more efficient processes that we simply can't deliver with