Why SAP S/4HANA is WORSE than Legacy ERP Software

Sap's S4 Hana is one of the leading Erp systems in the market but it turns out I hate that system I'm gonna talk about why today my name is Eric Kimberling I'm the CEO of third stage Consulting and we're an independent Tech agnostic consulting firm that helps clients throughout the world reached their digital transformation success and just to clarify I am not affiliated with sap or any of Sap's competitors but when I first started my career I started as an sap consultant I was taught Erp in sap one of the old versions of the product

and over the years I continue to work with sap among other Erp systems and what I've learned over the years is that I actually really dislike S4 Hana there's a lot of things I don't like about it now to be fair there's a lot of things I do like about it it's where I started my career it's one of the leading systems in the market place it's one of the most robust systems to handle the big complex needs of big organizations which most Erp systems can't do so there's a lot of good things that S4

Han is doing but there's a lot of things I don't like and a lot of things that customers don't realize until they've already implemented the solution so what I want to do today is talk about why I don't like S4 Hana and more importantly stay tuned to the end of the video because I'll teach you how to fall in love with S4 Hana all over again before I dive too far into the content though I'd love to encourage you to download our guide to successful S4 Hana implementations if you're in the middle of an sap

implementation you'd like to learn more about how to succeed and how to overcome some of the common challenges we see with our clients I encourage you to read this guide des4 hun you can find it by scanning the QR code right here or go to the links [Music] below it's no secret here in the 2020s that Erp software is slowly becoming obsolete just the whole category of Erp systems in general but then you add to the fact that sap and S4 hun in particular is such a big rigid product that drives standardization for organizations which

is what it's good at by the way but it's so rigid that it creates a lot of challenges organization from a change management perspective and an operational perspective most companies that come to third stage Consulting our team and I third stage Consulting they'll say to us hey we want a system like S4 because it's going to allow us to standardize it's going to bring to us best practices and ways that we can act like one company across the entire Enterprise and this all sounds good in theory and in theory S4 Hana can deliver this to

you but is such a rigid product that it's not good for companies that are very Diversified or value flexibility or value any sort of decentralization so it's important to recognize that you can take this whole concept of standard business processes and Core Business processes you can take that too far to the point where it can disrupt your business and create severe organizational change management issues and again Erp systems in general are relatively rigid would you compare them to other best of breed Solutions or AI or microservices or other composable technologies that are out there but

sap is sort of top of the list of being the most rigid among the rigid Erp systems that are out there so it's important to be careful and understand what you're getting into as it relates to this rigidity but that's one of the reasons why I hate S4 Hana another reason why I dislike S4 Hana is because sap is forcing its customers to upgrade to S4 Hana whether they want to or are ready to or not now the reasoning for this is because sap can't support ECC and R3 which are the two older sap products

they can't support these products forever they at some point have to cut off R&D with those Solutions and put all of their R&D money into S4 but the problem here is that a lot of these organizations that they're forcing to upgrade just implemented ECC 5 10 15 years ago so they haven't been using that software long enough to get a full Roi on the systems and they're still paying maintenance on the system yet sap is still telling them it doesn't matter they're paying maintenance they need to upgrade S4 Hana if they want to continue getting

maintenance in the meantime so there's a deadline of 2030 that they just announced at sap and if any Legacy customer isn't off their legacy product by 2030 they'll cut off support unless those customers agree to start paying for S4 Hana now they'll continue to support the older systems so this whole Force migration concept is something that I don't think works for the industry and I think sap will see a lot of long-term backlash and we're certainly seeing a lot of angry customers come to us asking for help on how to navigate that but this is

one of the other reasons why I dislike S4 Han [Music] now s is a very complex solution it's something that is inherent in the product because the product was built to solve the problems of some of the largest most complex organizations in the world so on the surface the complexity seems like it's appropriate for S4 Hana but it is such a complex product at times that most organizations just can't consume the product and they have trouble implementing it and they have trouble adapting to the software because it's so complex and you add to the fact

that not only is it comple but there's a lot of capabilities that S4 Honda doesn't yet have that some of the old products strangely enough did have so when you look at some of the outlying functions and capabilities of an Erp system like Advanced demand planning or product life cycle management some of those different areas S4 can't do that stuff as well as the old products could in some cases so what we're seeing with a lot of our clients is they're torn on whether or not they stick with an old system that they know they're

going to lose support on or if they move to a new system that doesn't have all the capability they need there's really no good option for a lot of customers so the complexity of their product combined with these limitations of the new product is another reason why I dislike S4 Hana one of the things that I've always liked about sap throughout my career 25 years doing this is that sap has historically been a single system that was built from the ground up they didn't have the strategy of going out and just piecing together a bunch

of systems and technologies that they bought from other people they they actually built most of these systems from the ground up but with S4 Hana on the other hand they've actually moved to more of a best of breed approach so now when you buy S4 Han you're probably not just buying sorana you're also buying AR Reba to help with procurement you're probably buying success factors to help with human Capital Management you might be buying concur to help with time and expense reporting and there's a host of other boltons thirdparty boltons that sap has acquired over

the years that they're now selling as a complete integrated solution the problem is is it is not a complete integrated solution it is a best of breed solution that just happens to be owned by sap so in other words you're no worse off if you just buy S4 Hana as your core and go buy third party systems from other vendors to do all the stuff that S4 Hana can't do but sap sells it as though it's one complete solution that can solve all the world's problems so this is a strategic mistake in my opinion because

I think this undermines one of the strengths that sap has always had which is it had always been one of the few Erp systems that was built from the ground up fully graded as a single solution but now that's simply not the case and that's another reason why I dislike S4 Hana I mentioned earlier about how sap is forcing its customers to upgrade to S4 Hana if they want to continue getting support and maintenance for the Legacy products essentially what they're trying to do is lock customers in for the next decade or more by basically

forcing them into a rush decision to just make the upgrade happen now commit for however long they commit to the solution knowing that it's going to be really hard to unwind that solution or that decision later on and that's creating this concept called vendor lockin this is so prevalent within sap that they've created a program called rise which is a program for existing sap customers to move over to S4 Hana and it gives you a bunch of incentives to do so in a quick fashion so this vendor lockin doesn't benefit customers forcing a customer to

the upgrade and then forcing them to probably stay on that system because it's so hard to get out of it is not something that benefits customers and I think this is something that's going to have a severe backlash for sap in years to come and I think we're just starting to see the tip of the iceberg with the clients that come to us that are angry with sap and they're dissatisfied with the way they're being treated and forced into a digital transformation that they may not be ready for every organization has their own priorities and

budgetary restraints and there shouldn't be outside third party essentially forcing an organization to upgrade the technology if they want to preserve the support and maintenance that they want have so this is another reason why I just like S4 the good news is that there are some ways to learn to love S4 Hana again there are ways to make sure that S4 Hana works for you and that you're doing what's right for your business the first thing you can and should do is do an independent and Tech agnostic assessment of the capabilities of S4 Hana before

you commit to upgrading this is really important to understand even if you know you're going to upgrade S4 Hana you still want to know where the gaps are you need to know what you're going to do to plug those gaps you need to know how you're going to address those risks and you need to know how that's going to affect your timeline in your overall budget and by the way independent third party providers like third stage Consulting can do that for you this is a service that we provide many of our sap customers and helping

them understand the path forward with s4a the second thing you can do is ensure that you define an s4a upgrade strategy on your terms one that makes sense for you if it just so happens that you can be live on S400 by 2030 in time for Sap's deadline then great there's no problem there but if you can't if you don't have the resource Commitment if you don't have the budget and it just doesn't make sense for you to do right now then wait do it when it makes sense for your organization recognizing that the risk

of sap cutting off your support and manance for your old system might be a lot less than the operational disruption it could cause if that S4 implementation doesn't go well and then lastly the final way I can suggest to you to learn how to love S4 again and make S4 work for you is to read our guide to S4 implementations you can read that on our website by scan in the QR code right here or go to the links below but I'd love to hear from you what do you think about s4a do you like

the solution is it a good solution for your business if you work in the sap Community do you enjoy working with the product what are some of the strengths and weaknesses love to hear your feedback in the comments below hope you found this information useful and hope you have a great day