Part 3: SAP Variant Configuration: ROI, Strategic Roadmap, and Final Considerations

Executive Summary

This article is continued from Part 1 and Part 2.

The final part of this 3-part article series presents real-world case studies demonstrating the ROI of migrating from Classic Variant Configuration (LO-VC) to Advanced Variant Configuration (AVC). It explores SAP’s strategic roadmap for AVC, including upcoming innovations in AI integration, cloud deployment, and lifecycle management. The article concludes with a decision framework and summary guidance to help organizations align their configuration strategy with long-term business goals.

Case Studies and ROI Analysis

The following case studies illustrate the tangible business benefits and return on investment (ROI) achieved by organizations that transitioned from SAP’s Classic Variant Configuration (LO-VC) to Advanced Variant Configuration (AVC) as part of their S/4HANA transformation.

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Case Study 1: Manufacturing Equipment Provider

A global manufacturing equipment provider migrated from LO-VC to AVC as part of their S/4HANA implementation. Key results included:

• 85% reduction in configuration processing time
• 60% faster order-to-delivery cycle
• 30% reduction in configuration errors
• Ability to handle 3x more complex product variants

ROI Calculation:

• Implementation cost: Approximately $1.2M
• Annual benefits: $2.5M (productivity + error reduction + increased sales)
• Payback period: 6 months

Case Study 2: Automotive Supplier

An automotive tier-1 supplier implemented AVC for their complex component configurations:

• Configuration performance improved from minutes to seconds
• Enabled real-time configuration in dealer systems
• Supported 2x increase in product variants
• Reduced IT maintenance costs by 40%

ROI Analysis Framework

Factor	LO-VC	AVC	Potential Benefit
Implementation Cost	Lower initial cost	Higher initial investment	Long-term TCO advantage for AVC
IT Maintenance	Higher ongoing effort	Lower maintenance requirements	20-40% reduction in support costs
Performance Gains	Baseline	5-20x faster processing	Productivity and customer experience improvements
Business Agility	Limited flexibility	Faster time-to-market for new variants	Competitive advantage and revenue opportunities
User Productivity	Baseline	15-30% improvement	Labor cost reduction
Error Reduction	Baseline	25-50% fewer configuration errors	Cost avoidance and customer satisfaction

This side-by-side comparison highlights how AVC delivers long-term strategic and financial advantages over LO-VC, particularly in performance, scalability, user productivity, and total cost of ownership.

Future Roadmap and Strategic Considerations

SAP’s strategic direction makes AVC the clear innovation focus moving forward, and organizations should consider aligning their planning with AVC’s expanding roadmap.

SAP’s Strategic Direction

SAP has clearly positioned AVC as the strategic configuration solution for the future. While LO-VC continues to be supported in S/4HANA, the innovation focus and future enhancements are directed toward AVC. Organizations should consider this strategic direction in their long-term planning.

Key Roadmap Elements

1. Enhanced AI/ML Integration: AVC is positioned to incorporate artificial intelligence and machine learning capabilities for predictive configuration and recommendation engines.
2. Extended Cloud Deployment: Full functionality in public and private cloud deployments, aligning with SAP’s cloud-first strategy.
3. Advanced Analytics: Deeper integration with embedded analytics to provide insights into configuration patterns and customer preferences.
4. Expanded Industry Solutions: Industry-specific templates and best practices for AVC implementation across diverse sectors.
5. Extended Configuration Lifecycle Management: Enhanced tools for version management, change control, and configuration governance.

Strategic Decision Framework

Organizations should consider the following factors when deciding between LO-VC and AVC:

1. S/4HANA Roadmap: Timing of S/4HANA implementation or migration
2. Configuration Complexity: Current and future requirements
3. Performance Requirements: Volume and complexity of configurations
4. Integration Needs: Requirements for modern APIs and connectivity
5. User Experience: Importance of modern interfaces
6. Total Cost of Ownership: Long-term cost considerations
7. Strategic Alignment: Alignment with SAP’s roadmap

Conclusion

The case studies presented demonstrate that organizations migrating from LO-VC to AVC can achieve significant operational and financial gains. Both the manufacturing equipment provider and the automotive supplier saw major improvements in configuration performance, product variant flexibility, and order processing speed—resulting in faster time to market, reduced errors, and lower maintenance costs.

Additionally, we have seen in this article series that both LO-VC and AVC offer robust capabilities for product configuration in SAP environments. LO-VC represents a mature, proven solution that continues to serve many organizations effectively, while AVC delivers next-generation capabilities aligned with S/4HANA’s architecture and SAP’s strategic direction.

For organizations running SAP ECC, LO-VC remains the configuration solution of choice until an S/4HANA migration is planned. For those already on S/4HANA or planning migration, the decision becomes more nuanced: a choice between continuing with the familiar LO-VC approach or investing in AVC to leverage its enhanced capabilities.

Key takeaways:

1. Performance advantage: AVC offers significant performance improvements, particularly for complex configurations.
2. Modern architecture: AVC leverages S/4HANA’s in-memory capabilities and provides better scalability.
3. Enhanced user experience: AVC’s Fiori-based interface offers a more intuitive configuration experience.
4. Strategic alignment: AVC represents SAP’s strategic direction for configuration, with ongoing innovation focus.
5. Implementation considerations: Migration from LO-VC to AVC requires careful planning but offers substantial long-term benefits.

Organizations should evaluate their specific requirements, timeline, and strategic objectives to determine the optimal configuration solution for their needs. For many, a phased approach—that is, one starting with LO-VC on S/4HANA and gradually transitioning to AVC—may provide the best balance of risk management and innovation adoption.

About the Author

Sparsh Varsani is a Senior  Solution Architect with over 20 years of SAP experience, specializing in Variant Configuration, S/4HANA deployments, and process re-engineering. He has led global end-to-end implementations, including complex integrations with BRIM, FICA, and Revenue Recognition. Known for bridging technical capabilities with real-world business needs, Sparsh has driven measurable value through strategic data migrations and scalable architecture. His work spans greenfield projects to international rollouts, navigating diverse regulatory environments. This 3-part article series (Part 1 and Part 2) draws on his extensive hands-on experience implementing both LO-VC and AVC solutions, providing readers with practical insights based on real-world implementations rather than theoretical concepts alone.