Future of SAP S/4HANA

A DataIntelo market study SAP S/4HANA Application Market Report predicts the growth of S/4HANA application to touch $6.8 bn in 2030 from $2.5 bn in 2022, at a compound annual growth rate (CAGR) of 20%.

Reasons ascribed to the predicted scale of growth:

1. An ever increasing demand for smart and agile business systems across businesses and industries of all sizes
2. An increasing adoption of S/4HANA globally
3. A growing popularity of digitalization and cloud-based deployments
   Growth of big data and related analytics solutions backed up by emerging technologies like AI and ML
   A surging number of SAP S/4HANA certified professionals.

One of the biggest reasons for the increasing popularity of SAP/4HANA is its immense capabilities to integrate with any business regardless of its industry, size and location. Powered by emerging technologies like AI and ML, the suite offers highly flexible, adaptable and scalable solutions to render your business operations smarter and competitive. Saying ‘no’ to S/4HANA would hence limit your strategic digital transformation, leaving your business operations at a competitive disadvantage. Valantic’s SAP S/4HANA Study 2022 says that 94% of the polled experts consider switching to S/4HANA suite as a high priority.

Types of S/4HANA Conversions
When it comes to SAP S/4HANA conversions, businesses can go for:

1. a system conversion or brownfield implementation, wherein an existing SAP environment is transferred into an S/4HANA environment,
2. a new or greenfield implementation wherein the current business data is migrated to an entirely new SAP S4/HANA system,
3. a bluefield approach which combines the elements of both greenfield and brownfield, or
4. a selective data transition wherein the current ERP processes are reused in the new system through shell conversion.

A few future trends in SAP/4HANA conversion

1. Increasing digitization of business processes
   Companies worldwide are increasingly digitizing their business processes, thanks to the global pandemic. The malady made it imperative for businesses to go for solutions that ensured seamless integration of business processes and sharing of data across geographic boundaries to warrant uninterrupted workflows. SAP S/4HANA suite is highly sought-after for its capabilities to provide advanced real-time analytics, by integrating and analyzing data from multiple sources like traditional documents; UX and user interface (UI); mobile devices; and IoT. This next-generation ERP suite can provide deep insights into your business operations by offering high-speed, in-memory processing and instant analytics to fast-track real-time decision making.

2. Hyper automation powered by AI and ML spearheads decision intelligence
   ML is an integral part of AI which analyzes data to help users arrive at a well informed and optimized decision. Hyper automation of business processes enables scalability and remote operation, thus redefining the process of organizational decision making. The intelligent capabilities of S/4HANA combine AI and business intelligence (BI) to provide actionable decision intelligence to enhance human decision making.

3. Increased cloud-based conversions
   The scalability, flexibility and cost-effectiveness of cloud based solutions have caused a growing adoption of cloud technologies worldwide, post pandemic. There is a clear trend to move out of on-premises system operations for enabling increased collaboration and communication. The cloud storage services offered by S/4HANA enables hassle-free storage of data in real-time, thus banishing physical distances, enforcing flexibility and promoting an increase in cloud-based conversions.

4. More customized solutions
   The multiple features and functionalities of S/4HANA offer a high level of customization to enable businesses to tailor the platform to meet their specific needs. As more businesses adopt S/4HANA, vendors will likely develop more customized solutions to meet industry- or business-specific requirements.

5. Increased need for skilled professionals
   Since the maintenance for the older versions of SAP ERP systems are going to be wound up by 2027, companies will need to invest in training and development to ensure that their employees have the necessary skills to work with S/4HANA.
   S/4HANA has been found to add value to processes other than Finance and Controlling like logistics, purchasing and production, causing a further increase in its adoption.

Brownfield migration is expected to gain more momentum, according to Valantic’s SAP S/4HANA Study 2022 report.
The general market trend towards SAP S/4HANA stems from a growing need to have more transparent, intelligent and standardized business processes in place to leverage and reap the benefits of automation. Overall, the future of SAP S/4HANA conversion is bright, and the businesses that adopt the suite will definitely have the competitive advantage of future-proofing their operations.