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APAC enterprises warm to S/4 Hana

SAP customers in Asia-Pacific are assessing migration options in the run-up to 2025, when the German software giant will stop supporting older ERP applications

With the clock ticking for SAP customers to migrate to the S/4 Hana enterprise resource planning (ERP) suite by 2025, more enterprises are now evaluating migration options and strategies, says Scott Russell, SAP president for Asia-Pacific and Japan.

Noting that SAP has had “open conversations” with customers about the move to S/4 Hana, Russell said that although some have asked for some flexibility with the 2025 deadline, many are convinced of the need to migrate to a newer platform with the latest innovations.

“This isn’t a new story or journey for SAP,” said Russell. “When you think about all the different applications that we run and the thousands of products we offer, most companies have a very clear understanding that innovation is essential.”

A recent survey of 300 SAP customers conducted by IDC showed that 73% of businesses were planning to deploy S/4 Hana and 18% were currently deploying the next-generation business applications suite.

In the SAP-sponsored study, 9% said they already had S/4 Hana in production, and when asked about the planned timeline for their transition to the software, 54% of SAP customers said they would make the switch within three years.

With 43% of the polled SAP customers planning to consolidate several ERP systems into one, IDC found that S/4 Hana optimises their digital transformation strategy, improves agility, visibility and innovation, and reduces cost and the time to process information.

Russell said most SAP customers want a digital platform that they can innovate on top of, pointing out that they may not be able to do so as easily or flexibly with the older SAP ECC 6.0.

“It's not just about the change [to S/4 Hana], but what that change enables through technologies like machine learning, blockchain and robotics,” he said. “That's often the catalyst because they’re undertaking those initiatives.”

The move to S/4 Hana requires the use of SAP’s Hana in-memory database, however, and SAP claims to have sold more than 50,000 Hana licences to businesses, including Asia-Pacific’s Asahi Beverage.

While running an in-memory database enables enterprises to run real-time analytics and artificial intelligence-infused applications for quicker decision-making, it is not simply a matter of replacing one database system with another.

“It was by no means easy,” said Daniel Laverick, head of SAP and IT solutions at Zuellig Pharma, who joined the regional pharmaceutical giant to oversee its migration from IBM Db2 to Hana.

Read more about SAP S/4 Hana projects

In a “big bang” migration that took just nine months, Laverick’s team deployed Hana on Microsoft Azure. “The testing process was the same regardless of where Hana was hosted, so we might as well move to the cloud,” he said.

But being new to Hana, Laverick’s team had to grapple with infrastructure challenges that affected the database. “In the first two weeks, we had performance issues that caused us headaches,” he said.

Those kinks have since been ironed out, with Zuellig Pharma enjoying the flexibility that Hana offers, such as spinning a virtual machine (VM) up and down to perform upgrades.

“We could literally turn it off, double its size within minutes, and carry on,” said Laverick. “The flexibility of running Hana on a public cloud cannot be underestimated.”

With 12TB of production data, Laverick said Zuellig Pharma’s roll-out of Hana on Azure, which also involved moving VMs from Australia to Singapore, is the largest of its kind in Southeast Asia.

Zuellig now plans to migrate to S/4 Hana, but Laverick said the company will work on a more conservative two-year implementation schedule because it had hugely underestimated the amount of custom code in its existing systems.

Read more on Enterprise resource planning (ERP) software

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