How To Build a Compelling Business Case For Your SAP S/4HANA Transition

Author: William Sherry | March 31st, 2023

Today’s business landscape is volatile, fast-moving and highly competitive. To stay ahead of the competition, enterprises must be agile and equipped with the latest technologies and processes. This means that businesses must be prepared to make the most of their resources and invest in the most advanced business solutions to increase productivity, profitability, and customer satisfaction. This is where SAP S/4HANA comes in.

SAP S/4HANA is an ERP (enterprise resource planning) solution designed to enable businesses to be more agile, efficient, and profitable. From advanced analytics and artificial intelligence to comprehensive automation, S/4HANA helps organizations drive innovation, scale operations and meet customer expectations.

In this blog post, we will outline why S/4HANA is worth investing in and how to build a compelling business case to show why adopting this powerful ERP solution makes sense for your organization.

The Benefits of SAP S/4HANA
First, let’s look at the advantages of SAP S/4HANA. This comprehensive ERP solution offers businesses access to digital-first capabilities and features such as:

Real-time analytics: Turning complex data into clear insights so businesses can make better and faster decisions
Automation: Simplifying and streamlining manual and repetitive tasks
Adaptable to fit your company’s specific needs: Leverage built-in models, templates and guided processes
Machine-learning powered solutions: Improve accuracy and speed of operations
In Memory Database (HANA 2.0) for faster processing time and day to day operations performance
SAP Fiori user experience: Boost productivity and collaboration with a visual, interactive and user-friendly environment

These benefits alone are enough to demonstrate the clear value of S/4HANA for any organization. Still, it’s not enough to simply list out the advantages and suggest “Go ahead and invest in SAP S/4HANA”. To be successful in convincing your leadership team and other stakeholders, you will need to put together a compelling business case for the implementation of SAP S/4HANA.

SAP S/4HANA Objectives & KPIs
When building a business case for SAP S/4HANA, you will need to consider your company’s unique objectives and key performance indicators. The business case should also include the following elements:

Goals: What do you hope to accomplish with S/4HANA? What problems will it solve and what new opportunities will it open up?
Cost/Benefit Analysis: How much will it cost to deploy and run SAP S/4HANA? Are there any financial incentives or discounts? How much time and money will be saved with the new ERP solution?
Implementation Plan: What is the timeline for the implementation? What skills and resources are needed to set up and maintain S/4HANA?
Qualitative Benefits: What other advantages will you get from S/4HANA? For example, improved customer experience or better employee engagement.

A compelling business case for SAP S/4HANA needs to be tailored to your organization’s strategy, objectives, and resources. It should highlight the cost savings, improved efficiency and customer service, greater productivity, and less manual labor. Ultimately, you want to be able to demonstrate that investing in SAP S/4HANA is better than any other option and will boost your enterprise’s performance.

If you’d like to learn more about how SAP S/4HANA could help improve your business, please contact Savantis today!

Measure the Benefits & Cost Areas
The subsequent phase involves assessing the benefit areas and cost components of SAP S/4HANA over a designated period to showcase cash inflows and outflows. The timeline is contingent upon the proposed roadmap for SAP S/4HANA. It is crucial to comprehend that not all advantages will be immediately realized, thus identifying when potential enhancements can be achieved and understanding the reflection of tangible results is paramount. The “conservative” estimate model should be transformed into absolute dollar figures within the suggested timeframe.

Data gathered from SAP Blogs

SAP experts have provided the following ROI recommendations:

TCO (Total cost of ownership) reductions will account for 10-20% of the value of a HANA investment.
A 30-40% increase in productivity of business intelligence and application development will contribute to the value.
Enhanced business processes will make up 50-60% of the overall value.

Determine Cash Inflows & Outflows
It is crucial to forecast cash flow throughout the SAP S/4HANA transformation project’s lifecycle to assess its financial viability. The diagram below illustrates cash inflows and outflows over a specific time frame to determine the project’s payback period, NPV (net present value) and IRR (internal rate of return). These calculations are critical to securing internal funding and executive support.

Data gathered from SAP Blogs

In conclusion, it is crucial to combine qualitative and quantitative evaluations and present them in a format that is easily consumable for leadership. The emphasis should be on identifying business value drivers, current challenges, areas for improvement, and setting realistic and achievable targets for progress. The business owners must verify the business case before the leadership presentation.

We hope this blog post has helped to give you a better understanding of SAP S/4HANA and why it is worth investing in. With the right approach, this powerful ERP solution can help businesses save time, money, and effort while boosting productivity, customer satisfaction, and overall business performance.

If you’d like to learn more about how SAP S/4HANA could help improve your business, please contact us today. We’d be happy to discuss this with you and answer any questions you may have.

Written by:
William Sherry – Click To Visit LinkedIn
Global VP of Managed Services + Cloud
William.Sherry@savantis.com
Work Phone: +1 (610) 590-0132 *122

Sources used for building a compelling S/4HANA business case: SAP Blogs

Preview The Savantis S/4HANA Roadmap:

America’s SAP Users Group – ASUG National Series
SAP® S/4HANA Roadmap to the Intelligent Enterprise

This ASUG series has been performed across the country to rave reviews and feedback. Specifically geared to those that sponsor, lead and manage large SAP transitions, this session is highly pragmatic and full of learnings from years of S/4HANA migrations.

We’re only a few more years away from the SAP S/4HANA 2027 deadline, and that means you should be planning for your S/4 transition now. The looming 2027 deadline is not a futuristic date, its right around the corner. And when you consider the average S/4HANA transformation journey is 24+ months in duration, the time is now to begin planning. Here’s why. READ MORE