The Decision of Upgrading SAP S/4HANA or Switching to Third-Party Maintenance

Title: The Decision of Upgrading SAP S/4HANA or Switching to Third-Party Maintenance

Introduction:

In the current business environment, companies are constantly looking for ways to improve their efficiency and productivity. One way to do this is to upgrade their enterprise resource planning (ERP) system. However, upgrading to a new ERP system can be a major undertaking, and companies must carefully consider their options before making a decision.

Body:

There are two main options for companies that are considering upgrading their ERP system: upgrading to SAP S/4HANA or switching to third-party maintenance.

Upgrading to SAP S/4HANA

SAP S/4HANA is the latest version of SAP's ERP system. It offers a number of advantages over older versions, including:

• Enhanced security: SAP S/4HANA is built on a secure, cloud-based platform that is protected from cyberattacks.

• Improved performance: SAP S/4HANA is designed to handle larger volumes of data and transactions more efficiently.

• Extended functionality: SAP S/4HANA includes a number of new features that can help companies improve their business processes.

However, upgrading to SAP S/4HANA can be a costly undertaking. Companies must factor in the cost of the software license, the cost of implementation, and the cost of training employees on the new system.

Switching to Third-Party Maintenance

Third-party maintenance is a service that allows companies to continue using their existing ERP system while receiving support from a third-party vendor. Third-party maintenance can be a cost-effective option for companies that are not ready to upgrade to a new ERP system. However, it is important to note that third-party maintenance providers may not be able to provide the same level of support as the original software vendor.

Decision-Making Factors

There are a number of factors that companies should consider when making a decision about whether to upgrade to SAP S/4HANA or switch to third-party maintenance. These factors include:

• Business needs: Companies should consider their current business needs and how upgrading or switching to third-party maintenance would meet those needs.

• System health: Companies should assess the health of their current system and determine if it is capable of supporting their needs for the foreseeable future.

• Total cost of ownership (TCO): Companies should compare the TCO of both options to determine which is the most cost-effective.

• Customization complexity: Companies should assess the complexity of their customizations and determine if they can be migrated to a new system.

Conclusion:

The decision of whether to upgrade to SAP S/4HANA or switch to third-party maintenance is a complex one. There is no right or wrong answer, and the best decision for one company may not be the best decision for another. Companies should carefully consider all of their options before making a decision.

Lessons Learned:

• A comprehensive analysis of business needs, system health, and TCO is crucial for making informed decisions.

• Customization complexity can significantly impact upgrade costs and feasibility.

• Independent consultation from experts can provide valuable insights and mitigate risks.

• Upgrading can be costly, but long-term benefits like security, performance, and future-proofing can outweigh the short-term financial burden.

Additional Information:

In addition to the factors discussed above, companies should also consider the following when making their decision:

• The support of their business partners: Companies should consider whether their business partners are using SAP S/4HANA. If they are, upgrading to SAP S/4HANA will make it easier to integrate with their partners' systems.

• The availability of resources: Companies should assess their internal resources to determine if they have the capacity to upgrade to SAP S/4HANA. If they do not, they may need to outsource the implementation to a third party.

• The company's risk tolerance: Companies should consider their risk tolerance when making a decision about whether to upgrade to SAP S/4HANA. Upgrading involves a certain amount of risk, and companies should be prepared to mitigate that risk.

Companies should carefully consider all of these factors when making their decision about whether to upgrade to SAP S/4HANA or switch to third-party maintenance.