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The CFO guide to SAP S/4HANA®
What you need to know to decide when and how to implement SAP S/4HANA®
SAP HANA® is SAP’s brand of in-memory computing, a technology that handles massive data sets without breaking a sweat. SAP® built its latest next-generation intelligent ERP (SAP S/4HANA) around this technology. SAP launched SAP S/4HANA in 2015 and plans to stop supporting older ERP versions on December 31, 2025. SAP reports more than 12,000 customers have committed to SAP S/4HANA.
What’s different and better about SAP S/4HANA?
Traditional ERP systems are optimised for transaction processing, with data stored in many different tables. SAP S/4HANA uses its Universal Journal to store all financial transaction details in one table. Availability and access to all that data can happen with near-zero latency. The new system also brings a simplified data model that lets you record once, use many times, and create a single source of truth. So analytics and insights that were historically unfeasible or very time consuming now process quickly.
SAP S/4HANA enables more speed and better insights in almost every area of Finance. It’s also a platform for real-time analytics—with no more waiting for separate reporting systems, batch jobs, and long processing times. Yes, it can be expensive, and yes, there may be implementation risks, but defining a Digital Transformation roadmap upfront, driven by prioritised capabilities that drive value for the business, can help address both cost and risk in a positive way.
Factors to consider
As you weigh the decision when and how to implement SAP S/4HANA, consider these factors:
- Do you have a reconciliation process that seems to go forever at the end of each month? SAP S/4HANA provides an additional level of detail through its Universal Journal capabilities, allowing complete transparency to a reconciled ledger that enables accounting and corporate shared services to manage an “anytime” close and possibly eradicate the need for a month-end close altogether.
- Can you look at true product cost without the noise of messy intercompany transactions and markups? SAP S/4HANA’s valuation process allows you to “see through” your cost to the underlying components.
- Does your team struggle with time-consuming forecasting that is out of touch with actuals—and which leaves little time for analysis? SAP S/4HANA’s embedded planning offers a unified information model with prebuilt forecasting methods.
- Do you have one source of record to support consolidated, management, and statutory reporting? SAP S/4HANA lets you drill down from your consolidated financial statements to the business transaction.
Things you can do now
Start building the business case.
SAP S/4HANA is a great solution to many finance challenges, but a business case based only on cost reduction may not be enough. Ask yourself, what’s possible with all this power? How could SAP S/4HANA improve business partnering? What other innovations will it enable?
SAP S/4HANA implementation and configuration processes are complex and time consuming. Your top talent could be tied up for years. Plus, you’ll need specialised integration knowledge that you may have to go outside for. As 2025 approaches, the best people will be in high demand.
SAP S/4HANA is designed to support integrated financial and management reporting. While it can also support other kinds of operational reports—for example, tracking social media or IoT sensor data—the additional storage requirements for massive non-transactional data can get costly.
Know your options.
Large enterprise clients currently tend to choose on-premise technology for their SAP S/4HANA implementations, an approach that lets them use existing infrastructure investments while maintaining the option for a cloud migration in the future. A cloud-first deployment, on the other hand, could allow a faster implementation, but may not provide the flexibility to adapt the technology to your needs.
Companies committed to SAP will likely find themselves grappling with SAP S/4HANA decisions over the next five years. Making choices earlier—building in time for your teams to influence both the overall vision and the implementation options—should increase the odds of getting things right.
For many CFOs, deciding when and how to implement SAP S/4HANA could be the most significant technology investment choices of their career. It’s a big deal.