In the summer of 2019, ASUG board member and Johnsonville CIO Ron Gilson came to the ASUG research team with an idea. He told us about Johnsonville’s experience when attempting to upgrade from SAP S/4HANA 1610 to 1809 and the barriers it faced due to missing certifications on critical third-party solutions the company had been running with its ERP system.
A Potential Risk for SAP S/4HANA Customers
It’s important to note that Johnsonville was a very early adopter of SAP S/4HANA. The company began its journey in 2016 and was the first North American customer to successfully go live with a brownfield migration from SAP ECC 6.0 to SAP S/4HANA (1610). We wondered whether this would eventually start to come up as an issue as more customers adopt SAP S/4HANA and reach their first upgrade cycle.
At ASUG, we knew we were in a unique position to gather perspectives from not only live SAP S/4HANA customers, but from third-party solution providers and from SAP itself. So, we kicked off a study in the summer of 2019 to find out whether this was, in fact, a potential risk for SAP S/4HANA customers and what might be behind it.
Who’s Responsible for SAP S/4HANA Certification?
As we started to explore this topic, we found that no one seemed to agree about who should be responsible for SAP S/4HANA certifications for third-party solutions to support smooth upgrades for SAP customers. Frankly, we saw a lot of finger pointing and not many clear answers.
To get different perspectives on this issue, we invited three different groups of ASUG members to take our survey: SAP customers who were seriously considering adopting SAP S/4HANA, live SAP S/4HANA customers, and members at SAP partner organizations that work with SAP S/4HANA and pursue certifications with SAP. For those who were considering SAP S/4HANA, we required that they had already purchased or were currently implementing SAP S/4HANA. What we discovered in our research led to three eye-opening findings.
Finding 1: Future Customers Need to Get Educated on SAP S/4HANA Certifications
The majority of the participants (67%) who are planning to adopt SAP S/4HANA are also planning to bring their third-party solutions along for the journey. These are the solutions that customers have already evaluated, implemented, and integrated with their key business processes.
Yet a full 41% of those participants were unaware of the certification status of the third-party software they will carry over. And, unfortunately, the remaining 59% who are aware of this issue do not have a solid strategy in place to verify that their third-party solution providers are certified on the release they’re planning to adopt.
The top two tactics participants told us they’re planning to use if they find out a third-party solution isn’t certified is to ask about the provider’s plan and only investigate if they don’t get a satisfactory answer (a response for 51% of customers) or to push the provider to certify (as 30% responded).
Build a Plan B into Your Migration Road Map
As a wise person once said, hope is not a strategy. Given that customers are simply hoping for the best outcomes with their providers, we believe it’s important for future adopters of SAP S/4HANA to do an audit of the third-party solutions they plan to carry over as early as possible in their migration planning. Reactively pressuring their third-party partners to make a change is an approach that may not succeed, despite the quality of the relationship. Better to have a plan in place to cover the critical functionality you’ll need once you migrate to your new ERP system or to choose to move to another release based on your partner’s existing certifications.
Finding 2: Current SAP S/4HANA Customers and Solution Providers Do Not Align on Certification
While future SAP S/4HANA adopters had low awareness of this certification issue, current customers were much more in tune with this potential hurdle. A full 61% of those who were already live told us they knew that unique partner software certification exists for each version of SAP S/4HANA (versus only 37% of future customers). Nearly half (48%) of current customers had experienced a setback with their partners during migration and 1 in 3 experienced setbacks specifically related to SAP S/4HANA certifications.
No Crystal Ball for Adoption
We also learned that more than half (54%) of third-party providers are attempting to get certified on every release of SAP S/4HANA, though current customers have already skipped versions in their upgrade strategy (13%) and a full 42% of customers plan to skip them in the future. Solution providers—especially the smaller companies—must make difficult decisions about which release to certify for, yet they have no view into which of these their customers will adopt.
While current customers (who are likely in a similar situation as Johnsonville) told us their number one challenge is with their partners’ inability to keep up with certifications, those third-party providers told us they were facing steep challenges, too. On average, they said they are spending about $75,000 per year to pursue these SAP certifications.
Certification a Long and Opaque Process
Partners also told us their number one challenge with the process is that it takes too long and is too complicated, plus they have little to no insight into how the code changes in the new release will affect their solutions. The majority of customers (39%) expect that the certification process should take their partners one to three months, when in reality it requires three to five months for at least a third of partners who participated in our study (34%). This means it’s taking nearly half a year for some to certify on a previous year’s release, when a new release will come into the picture just a few months later. As Ron Gilson has said, that means customers will be forced to take a N-1 approach to their solution road maps so they are consistently behind the upgrade cycle.
Finding 3: There Is No Villain in the SAP S/4HANA Certification Story
Though we saw clear disconnects between customers, partners, and SAP—we did not discover any reason for finger pointing. There are no villains in this story, but we did find that SAP has the potential to be a hero.
When SAP guided current SAP S/4HANA customers through their migration process and made them aware of the certification issue, they were able to plan around it. These customers told us they believe that SAP should be heavily involved in the certification strategy of third-party providers, actively working to keep providers up to date with certifications on every release cycle. Current customers feel that SAP has a key role to play and do not see certification as strictly a partner issue.
SAP S/4HANA Buyers Be Aware
Future customers can take the initiative to consult with SAP as they’re developing their migration road maps. Today, only about 1 in 5 future customers are asking SAP for assistance when selecting third-party software solutions. Of those who are talking about this topic, most said that software certification came up when SAP made them aware of its importance. Only 1 in 5 customers isn’t enough, in our opinion. We believe there’s an opportunity for SAP to play a key role in educating future customers about software certification, and for customers to actively ask for help in this area. Customers should advocate for themselves when it comes to this topic.
Possibilities for Third-Party Solution Providers
Meanwhile, partners are asking for SAP’s help, too. If recertification on each new version was required, the greatest portion of partners would like SAP to simplify the process and reduce the cost. For example, SAP could provide discounts if partners agreed to certify on certain versions that it knows a lot of customers are planning to adopt. Process improvements, such as detailed documentation and early access to SAP S/4HANA releases, could also help incentivize partners to keep up with certifications.
What’s Next for SAP S/4HANA Certifications
Now that we’ve discovered what’s behind this issue, ASUG wants to help both customers and partners resolve it. But as Ron Gilson said, there’s no silver bullet yet. We’ve shared our research with SAP and are actively discussing how we can work together to improve the certification process for all involved. We’re also reaching out to more live SAP S/4HANA customers like Johnsonville to learn more about their needs as they continue to build on their ERP systems. Keep an eye out for more programming to come, including a track for live SAP S/4HANA customers at ASUG Annual Conference in May 2020.
Are you live on SAP S/4HANA and willing to share your experiences with your peers? Please fill out this questionnaire and tell us about what you’ve encountered so far. We just may feature your story (either anonymously or publicly) in an ASUG article. And if you’re attending ASUG Annual Conference, join us for one of our Pre-Conference Seminars with in-depth training for customers who are live or planning to go live on SAP S/4HANA.