Question 1

Expanding Section: Curiosities Regarding the Case Studies

Shaun Snapp · Accepted Answer

The Number of Case Studies

SAP has really very few S/4HANA case studies as a percentage of all of the S/4HANA licenses that are in the hands of customers. ECC is one of the most widely implemented ERP systems, and therefore S/4HANA has a tremendous starting point in terms of the installed base that can be pitched S/4HANA. There are roughly several hundred S/4HANA implementations globally at the time of this study. Therefore it should not be surprising that the number of case studies for which there is much documentation is very The highest number of documented case studies, technically, is from SAP’s website. However, most contain so little information and are so biased, they cannot contribute to knowledge as far as S/4HANA implementations.

Inconsistencies in the S/4HANA Case Studies

Many if not most of the public stories regarding S/4HANA implementations have holes in them. Either the companies that implemented S/4HANA are insubstantial, or the scope of workflows the company possessed do not cover the functionality that is proposed to be implemented, or other statements contain inaccuracies or impossibilities that call into question the validity of the other parts of the case studies. Considering the size of the holes, it is perplexing that there is not more open questioning of them in the IT media. Yet is it not at all surprising. This is for the simple reason that the IT media system is strongly tilted in SAP’s favor. How and why is explained in the article IT Media and the Fake News Debate. SAP employs a media model where because of the control over SAP consulting companies and the funding of IT media, it is able to control the storylines that it wants to as is covered in the article The SAP IT Media Model. This allows it to exert influence over the IT media landscape, that due to its extensive partner network is unparalleled in the enterprise software space.

In addition to receiving positive coverage on newly introduced applications and narratives, SAP is also able to minimize the negative media that would ordinarily be caused by applications that have either a poor uptake or do not work as advertised.
This is because no media entity or consulting company has any financial incentive to either investigate or disclose this information.
It is jarring how great the gap is between the positive coverage of S/4HANA and both the public and private case studies. The money is almost entirely on the side of companies that promote S/4HANA. This can come in the form of receiving a commission for selling S/4HANA, or from selling an S/4HANA implementation project (the motivation of the SAP consulting partners), or from receiving funding to agree with or repeat information that is first released by SAP marketing. There is very little money on the other side of SAP. That is there is virtually no way to monetize any entity publishing accurate information about S/4HANA. However a functioning market requires information, and this means entities that will publish accurate, rather than purely promotional information.

Inconsistencies Between Sources on the Case Studies

The details of the published S/4HANA implementations show no consistency with the private and anonymous S/4HANA implementations. Secondly, the private S/4HANA implementations are much closer to what one would expect from implementing a new and immature application (along with a new database). One of the notable differences between the public and the private case studies is not only that all of the public implementations went live (while most of the private implementations did not), but the duration was vastly different. The durations posted for the public case studies are so much faster than has been the history with the far more mature ECC application that the stretch credulity. Other case studies, such as with Binderholz Nordic that have an unrealistic but longer timeline, make no sense when the individual tasks are evaluated. The shorter timeline case studies, if published, would make even less sense. Durations are the most elementary of information related to IT implementation. Areas such as what functionality was implemented, or the use of the functionality if far more difficult to verify without being on the actual account. However, the public case studies were not even able to provide convincingly false information on something as verifiable as project

Question 2

Expanding Section: Fit to Industry

Accepted Answer

ERP systems and S/4HANA, in particular, have a fit to industry. The less a company manufactures or distributes a physical product, the less the overlap between the application and the industry requirements.

Over 1/2 of the case studies have a low fit to the industry where they were implemented. There is an amusement park in the case study, a number of travel and transportation customers, professional services firms. Overall, there are a disproportionate percentage of customers that would receive a marginal value from implementing S/4HANA.

Question 3

Expanding Section: Interpreting the Public Case Studies

Shaun Snapp · Accepted Answer

The public case studies are by far the large percentage of the overall case studies. Several things stand out about the public case studies.

The Limited Scope of Functionality Implemented

In all cases, the implementations are small portions of the overall S/4HANA functionality. Yet, in several of the case studies, it is stated that S/4HANA Enterprise Management (EM) was implemented. S/4HANA EM is the overall suite. The WiPro implementation is clear that nothing outside of financial functionality was implemented. However, the Swiss Properties case study is not at all clear what was implemented, and the statement that S/4HANA EM was implemented seems misleading as Swiss Properties does not have the workflows as a real estate company to implement very much of S/4HANA outside of the financial suite. Secondly, when Swiss Properties implemented, even less of the S/4HANA functionality outside of finance was even ready to be implemented. Kurlon would have the workflow to implement more of S/4HANA than either WiPro or Swiss Properties. Yet, there is close to nothing available about the details of the Kurlon implementation. In case studies such as New York Life, there is a clear intent to make it appear as if more of S/4HANA was implemented than actually was, which I have not included in this document, but is covered in detail in the article The New York S/4HANA Life Case Study. Companies like New York Life which implemented only a sliver of the finance module (such as the ledger) will never be able to see any return on investment unless SAP waived all license costs, all maintenance costs, provided a great deal of free consulting etc. (And we don’t know the state of the New York Life Case Study after this point as I brought up in the case study write up) And that gets to the next point.

Special Treatment From SAP

It is clear that many of the companies that make up the public case studies received special treatment from SAP. This is undoubtedly the case with all the implementations at the SAP consulting partners. This is a relatively inexpensive way for SAP to “seed” the market with S/4HANA stories. This is not a guess or conjecture. I have been in contact with consulting companies that have been offered very low-cost access to S/4HANA if they would implement the software, and then announce the implementation. However, while the implementations may have made sense for companies that receive special treatment, they don’t generalize to the broader market. That is SAP is not offering the same deal to non-SAP consulting partners. SAP eventually intends to use S/4HANA to drive revenues and they can’t give special treatment to everyone.

Non-Typical Nature of the SAP Customers Used as Case Studies

It is rare for a services company to implement ECC or SAP R/3. I have worked for many consulting companies, and there is very little to the systems of these types of services companies. They bill hours and expenses to clients. They have to buy things like computers and office supplies. They have to maintain HR records for employees. And like everyone, they have to pay taxes. There are inexpensive cloud applications that do all of these things that are fast to use. Consulting companies do not have a supply chain (they do perform what is called indirect procurement for office supplies, computers, etc.). Therefore, services companies don't need ERP systems.

Question 4

Expanding Section: The Discrepancy Between the Public S/4HANA Case Studies and the Private S/4HANA Case Studies

Accepted Answer

There is a very considerable discrepancy between the public case studies and the private case studies. The first obvious difference is the implementation duration, with the public case studies not only being significantly shorter in duration than the public case studies, but suspiciously the implementation times for the public case studies being far shorter than the generally accepted duration of ERP implementations. These implementation durations to not match with experience implementing ECC and they are not realistic. ECC should be significantly faster to implement than S/4HANA as ECC is far more mature than S/4HANA. Secondly, experienced ECC resources are simple to find, whereas finding resources who have been through even one S/4HANA implementation is difficult. Secondly, and quite importantly, the public case studies all met customer expectations, while most of the private case studies did not. A number of private case studies did not complete the implementation. Complaints about how SAP supported the implementation exist in the private case studies, and interestingly in one public case study, but not in the official press release by SAP for this case study. Rather a single consultant published his experiences being on the same implementation that was published by SAP (and implemented by IBM), but the consultant offered realities not covered in the SAP press release. And these realities were not complementary to SAP in terms of their support for S/4HANA. With the Florida Crystals public case study, the CIO was effusive with his praise of SAP and pointed to SAP’s support as what allowed Florida Crystals to implement an “upgrade” of S/4HANA in “4 weeks.” Facts, which are quite verifiable, such as the lack of documentation for areas of S/4HANA, are not mentioned at all in the public case studies but are mentioned by implementers.

Question 5

Expanding Section: SAP's Claims Around S/4HANA

Accepted Answer

Frequently the claim will use a statistic regarding the success of an application. SAP will often have the word “number of customers” that it has. SAP has also taken this approach this with HANA and S/4HANA. SAP has announced roughly 500 new "customers" every quarter for S/4HANA. SAP will often follow the statement about the customer numbers with something quite optimistic about how the software is transforming the way their customers are doing XYZ. This again was stated in the 2017 Q1 analysts call.

“Driven by S/4HANA, our core innovations are growing really fast with software licenses up 13%. We now have more than 5,800 S/4HANA customers with global companies like Energy SE, choosing S/4 in the first quarter. Big brands like Citrix Systems selected S/4 cloud edition, the leading intelligent cloud ERP solution in the market by far." – Bill McDermott, SAP “Were we happy or disappointed with 400? I think the bigger topic is we have 5,800. We have a snowballing effect now that on the go-live customers and we have more and more projects ongoing that are more complete than just finance and logistics, so it's really a very, very good story for all of SAP.” – Ron Enslin, SAP

This is covered in the article How SAP Mislead Analyst Q1 2017 Earnings Call. One of the peculiar things about S/4HANA has been the discrepancy between the number of "customers," or companies that own S/4HANA versus the number of companies that are live on S/4HANA. And understanding this means getting into what the definition of a customer is to a software vendor.

SAP continues to show consistent growth in customers for S/4HANA (image from UpperEdge -- https://upperedge.com/sap/migrating-to-sap-s-4hana-could-get-you-fired-not-deciding-on-s-4hana-will-probably-get-you-fired/)

Question 6

Expanding Section: The Case Study Problem

Accepted Answer

SAP has published a number of case studies for S/4HANA that show it as live. However, in a study funded by SAP and published by Forrester, SAP was only able to come up with three customers for Forrester to use in the study. And the average implementation budget for what they called the "composite customer" was $877,000. We estimate the TCO of SAP and other projects, and the sub-million dollar SAP ERP implementation is unknown to us. This means that SAP completely lied to Forrester, and Forrester went ahead and published this ludicrous study anyway. We covered this topic in the article How to Understand Forrester's Fake S/4HANA TCO Study. This Forrester study is a complete joke, but it brings up interesting questions, and if SAP had thought it through, they probably would not have funded its publication. The biggest curiosity is how an application with 3,500 live customers (and with more than that currently in implementation), can result in SAP only giving Forrester three very small customers to use. It was easy money for Forrester. In their haste to publish the study, they forgot to include any listing for HANA, which means that either S/4HANA was implemented at all three customers without a database, or they made a reporting error. SAP resources, normally quite accepting of a study any quality as long as it reinforces their billability, tried to guess where that HANA budget may have gone. If it was included in the average $877,000 figure that is extra weird, as HANA is a very expensive database to buy and to implement.

Question 7

Expanding Section: What Is Going on with S/4HANA Failures?

Accepted Answer

It is our conclusion that there are a large number of S/4HANA implementations that have failed and are being kept quiet. Customers may classify the projects as "postponed" but they are failures. It would be difficult to evaluate every ERP system on the planet, but S/4HANA has to be one of the least mature ERP systems ever to have a broad and high profile introduction. Oracle bombed very heavily with its rollout of Fusion (now cloud) ERP, but the damage was far less extensive because most Oracle customers simply refused to try to implement it (but still ended up owning a copy and were thus counted as "customers.")

It is oddly difficult to get people on the record about their S/4HANA implementations.

The "buzz" around S/4HANA has actually decreased from 2017 when we published our study into S/4HANA go-lives.

Question 8

Expanding Section: The Implication of Implementing S/4HANA

Shaun Snapp · Accepted Answer

As S/4HANA uses a different database schema from ECC, S/4HANA is the first ERP system that will break all integrations and customizations that customers added to ECC. SAP has released information on these topics that indicates it prefers to obscure this issue as it would negatively impact S/4HANA purchases. SAP has instead performed a classic pivot and has said that S/4HANA represents an “opportunity” to SAP customers to evaluate all current customizations and to remove them. SAP is silent on the topic of integrations that will break and will need to be rewritten when S/4HANA is implemented. S/4HANA is charged as a new application even for customers that have been paying maintenance for years on ECC. SAP pulled S/4HANA out of the normal upgrade terms, where new versions are free, by declaring that S/4HANA is the “logical successor,” but not the “legal successor” to ECC. Therefore S/4HANA has been set up so that ECC customers will be charged twice, a topic which is covered in the Brightwork article Why S/4HANA Should be Free. S/4HANA means re-implementing the ERP system and doing so in a manner that is piecemeal. IT departments along with the SAP consulting companies are generally staffed analyze and to implement far more stable and simpler applications than S/4HANA. Consulting companies that are going after the S/4HANA implementation business are, from the information coming to us from accounts are, by in large, underplaying the complexity of S/4HANA to their accounts.

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