Be brave in your SAP S/4HANA conversion

Here are the key reasons why you should keep the core cleaner in order to keep innovating when needed

Enjoy our interview-style blog post that was published based on a fireside chat between Matthias Steiner [MS], Chief Product Officer, and Christoph Garms [CHG], Managing Director at Neptune Software Germany. Both discuss how a low code app factory approach supports and eases your SAP S/4HANA journey…

[MS]: Thanks for tuning into today’s conversation about how Rapid Application Development (RAD) platforms can support your journey to SAP S/4HANA. My name is Matthias Steiner, and I’m in charge of product management here at Neptune Software. Today, I’m talking with Christoph Garms, Managing Director of Neptune Software Germany. I’d say, “let’s save the broader topic of digital transformation for another day” and let’s now zoom in on today’s topic. From your point of view: what’s top of mind for SAP’s customer base right now?

[CHG]: One of the dominating topics in recent years has been the SAP S/4HANA conversion of course. Based on user group feedback the vast majority of SAP customers are actively looking into how to move to SAP S/4HANA. If you consider the official statistics published by SAP, an estimated 14,000 companies are live or currently implementing SAP S/4HANA. Even though those are undoubtedly impressive figures, considering the global install base of SAP, there is still a huge market out there of customers who have not started their journey yet. In my opinion, despite the extended maintenance deadline until 2027* we can expect a high demand for skilled SAP S/4HANA consultants and all major SIs have been proactive in creating best-practice models and programs for the move to SAP S/4HANA. It is almost a no-brainer for all SAP partners to position your services and solutions in and around the SAP S/4HANA context.

What strategic direction should be taken in your S4 conversion?

[MS]: Speaking of the SIs and their SAP S/4HANA methodologies, what’s their role in this?

[CHG]: The large SIs play a key role, and frankly, for anyone selling consulting services this move to SAP S/4HANA is a golden opportunity, especially when it comes to large clients that have extensively customized their SAP backends and have accumulated lots of custom code over time. For those kinds of projects, this “move” to SAP S/4HANA is anything but trivial. I have been part of customer meetings where SAP architects summarized their SAP landscape of having more custom code lines than what SAP’s codebase ships out-of-the-box! One of the fundamental challenges of SAP S/4HANA conversion projects will be to manage the existing amount of custom code.

[MS]: Good point. I see multiple aspects here, such as – Is all of this custom coding still needed? And if so, would it still work “as-is” in SAP S/4HANA? And even if it would run “as-is”, does it make any sense to “drag along old code” or is that just “increasing the technical debt”? If this custom code is still needed but needs to be adjusted to ‘max out’ the underlying technology stack of SAP S/4HANA, how-to best renovate this custom-code­?

How are these aspects generally being addressed?

[CHG]: The direction greatly depends on the overall target direction of your company from an IT landscape point of view. What is your CIO’s cloud strategy? What does the long-term digital transformation agenda dictate? In general, SAP itself has been very vocal about endorsing a “keep the core clean” approach and is encouraging customers to take the conversion to SAP S/4HANA as an opportunity to cut down technical debt and establish a stricter “separation of concerns” (SoC) for smoother SAP operations from here onwards. But to answer your question – Of course, every project lead who has been given the task to move to SAP S/4HANA is well advised to do a thorough “gap analysis” as part of the initial project waves and luckily all SIs have embedded this in their methodologies by now.

[MS]: You mentioned “keeping the core clean”, “separation of concerns”, and the importance of taking into account the future IT landscape. Let me add “developer skillsets” and “technology advancements” to that mix, and then we see how complex this topic is. And that’s just from the “custom development” perspective, of course, there’s also a broader topic of “build vs buy” in there. Well, “build vs buy” is non-sense of course, as these two are not mutually exclusive and should be complementary.

In a nutshell, that’s the whole extensibility story that SAP has been propagating – to benefit from the rapid deployment and standardization of SaaS solutions orbiting the digital core and build extensions in areas where you want to differentiate for good reasons.

I think that still makes lots of sense and addresses the problem space holistically. One needs both, standard solutions AND a strategic platform for custom development of new apps and extensions.

[CHG]: This sounds like the classic SAP Cloud Platform pitch to me Matthias, or am I missing something?

[MS]: <laughs> Sort of, yes. It’s a complex topic and more nuanced. For customers that start greenfield or with SAP S/4HANA Cloud, embracing SAP Cloud Platform as the designated development and extension platform makes perfect sense. Especially if the customer in question is targeting a cloud-centric or hybrid IT landscape. It boils down to the combination of “strategic direction” and “skillset.”

See, any customer with a lot of custom code AND in-house ABAP development teams will most likely move to SAP S/4HANA on-prem. Their employees know ABAP, and they know ERP, that’s a powerful combination and it makes a lot of sense to utilize these people in the process of moving to SAP S/4HANA. Especially if you conclude that some of your custom code is still relevant and needs to be moved over!

Does it make sense to move your “custom-code”? 

[CHG]: When you say “moving over code”, and you mentioned this earlier, it makes little sense to move the code as-is, right?

[MS]: Right. And this is one area where I truly believe that Neptune Software and our DX Platform can support SAP’s customers in their journey to SAP S/4HANA in a unique way – given that our SAP-centric module sits embedded within the ABAP stack, our toolset blends seamlessly into the known environment. I’ve started referring to this fact as “the most-native rapid app development platform for ABAPers.” It comes with zero footprint from an IT landscape perspective and allows you to port and renovate existing custom-code.

Let me explain… DXP allows you to expose any type of business functionality in a secure, reliable, and automated fashion as APIs from function modules, to ALVs, to classes, etc. – all that is second nature for ABAPers. Plus, we facilitate the model-driven UI development for Fiori and UI5 apps and we do it in a way that does not require a lot of know-how about Javascript or HTML5 etc. It’s super simple to package that up as mobile apps as well. In essence, ABAP developers can develop custom apps using SAP’s strategic technology stack right from “within” the digital core, without needing any additional platform, tools or skillset.

At the same time, these APIs act as a sort of façade. Meaning, you can develop apps now – in parallel to the ongoing SAP S/4HANA conversion project – within ECC and then renovate the underlying implementation in SAP S/4HANA. Neptune DXP offers frameworks to automate these things to a large degree.

Simply speaking, you can develop apps in a future-proof way utilizing the existing skillset of your workforce and you can do that in parallel to the ongoing SAP S/4HANA conversion project.

Neptune Software’s ‘App Factory’ approach

[CHG]: At Neptune Software, we believe in the ‘App Factory’ approach – the more custom and innovative the apps being produced are, the cheaper your cost per application will become.

[MS]: Yes, and that’s where our rapid application development (RAD) platform nicely supports the business case IF you consider it as a strategic development platform for multiple apps, sort of as an app factory!

[CHG]: If we circle back to the common denominator of SAP transitions for a moment… The common goal for every stakeholder is to ensure a smooth transition to SAP S/4HANA without losing competitive advantages along the way and equally important, without stopping innovation while moving to SAP S/4HANA on this year-long journey.

[MS]: Yes, no business can afford to idle during this conversion, no matter how bright the future may be. Modern IT transformation projects do not happen with a big bang, and project leads must understand how to convince key stakeholders and ensure executive sponsors buy-in. The best way to get trust by executive management (and peace of mind for yourself!) is to constantly deliver tangible and innovative digital solutions along the way.

The need for a rapid application development platform

[CHG]: What we are also hearing quite frequently in the market is the challenging question: “Why do I need a development platform when SAP S/4HANA is taking care of everything?”

[MS]: And I am happy to debunk this misconception. In today’s world, where everything is powered by software, the software is a key driver to streamline business processes and to differentiate from the competition. There are areas where standardization is the right approach, and there are areas where the ‘prior art’ doesn’t cut it. It’s this combination of SAP S/4HANA and a strategic rapid app development platform, that provides you with the right mix for your SAP S/4HANA conversion.

[CHG]: The best of both worlds so to speak. And combining this setup with the right team of developers, that know and understand your business processes, and you are setting your company up for a successful transition to SAP S/4HANA.

Want to know more about Neptune Software, how we help with your S4 conversion or why we are the most native development platform for SAP?