SAP S/4HANA adoption has grown steadily over the last few years. While SAP has not reported specific SAP S/4HANA license numbers for a few quarters, between 21 and 22,000  customers currently own a license. Based on what SAP has reported, approximately two-thirds of those own license have deployed  SAP S/4HANA. Examining the approaches used for these deployments will be the focus of SAPinsider’s July 2023 research report, Deployment Approaches to SAP S/4HANA.

Historical SAP S/4HANA Deployment Trends

For the last four years a system conversion, frequently referred to as a brownfield deployment, has been the most likely deployment model for SAP S/4HANA. According to SAPinsider research, approximately 45% of SAP S/4HANA deployments in 2022 used this model. The next most likely deployment model is a greenfield deployment or new implementation, although there has been a gradual drop in the number of organizations taking that approach over the last couple of years. Part of this decline is due to the increase in organizations planning selective data transitions. This is an approach most likely to be taken by larger organizations with significant historical data sets, and they do not want to move all their existing data into SAP S/4HANA. In 2020 and 2021 the most likely way for respondents to deploy SAP S/HANA was in a standalone configuration, selected by over 50% of respondent organizations. A standalone deployment is a single instance of SAP S/4HANA that probably replaced a previous ERP deployment. However, in 2022, the number of organizations planning a stand-alone deployment dropped to 43%, the same proportion of those planning a scaled-up deployment. That correlates to the increase in the number of respondents reporting that centralizing and automating financial planning, accounting, and reconciliation activities was the preferred strategy for SAP S/4HANA deployment. Looking at where organizations are performing these deployments, there has been a gradual decrease over the last four years of those with no plans to deploy in the cloud. That correlates with the steady increase in the number of respondents planning cloud or hybrid-cloud deployments. The biggest change in 2022 was a 10% increase in those planning a hybrid deployment with some instances in the private cloud and some in hypercaler environments. 2022 also saw an 8% increase in those planning to use RISE with SAP. Both these trends will be monitored in SAPinsider’s 2023 research.

2023 SAP S/4HANA Deployment Hypothesis

Standalone deployments of SAP S/4HANA have been the most likely deployment model over the last four years. That is possibly because it is just one of several ERP systems being updated or because the customer is net new and this is their first SAP ERP deployment. But in 2022, that changed, with just as many customers planning a centralized, scaled-up deployment. That deployment is more likely to be in a cloud environment than on-premise. In 2023, we expect the focus on centralization to increase as more existing SAP ERP customers look to move to SAP S/4HANA. Based on 2022 numbers, the proportion of respondents planning a scaled-up deployment will surpass those planning a stand-alone deployment. We also expect that the proportion of those planning an on-premise deployment of SAP S/4HANA will continue to decrease, with a continued increase in those using hybrid environments or RISE with SAP. The proportion of those planning a selective data transition will also continue to increase in 2023.