Create a compelling business case for SAP S/4HANA migration, enumerating process and financial benefits, justified by ROI calculation benchmarks.

Building a Comprehensive Business Case for SAP S/4HANA Migration

Migrating to SAP S/4HANA represents a significant milestone in any organization’s digital transformation journey. However, such a transition requires careful planning, strategic vision, and solid financial justification. Building a comprehensive business case is essential to ensure stakeholders understand the value, risks, and expected returns of this complex endeavor.

This article explores the critical components of a compelling SAP S/4HANA migration business case, guiding you through its key strategic components, migration planning and preparation, and simplification opportunities.

Download our SAP S/4HANA migration whitepaper to explore all the migration process details for your successful transition.

Why Do You Need a Business Case for SAP S/4HANA Migration?

Migrating to SAP S/4HANA is a major strategic imperative that requires more than just technical planning: it demands a well-structured business case. A comprehensive business case plays two critical roles in the migration journey.

Securing buy-in from key decision-makers

A clear, data-backed business case is essential for aligning executive sponsors, finance leaders, and other key stakeholders. It translates the technical benefits of S/4HANA into strategic business value, demonstrating how the migration supports organizational goals such as increased agility, improved operational efficiency, and future readiness. This alignment is crucial for securing the budget, resources, and organizational support necessary to move forward confidently.

Establishing a benchmark for measuring ROI

The SAP S/4HANA business case, besides serving as an investment justification, also acts as a benchmark to measure the overall success of the SAP S/4HANA migration. Clearly defining expected outcomes, such as cost savings, performance improvements, or process enhancements, provides a baseline against which post-migration results can be measured. Calculating the ROI of SAP S/4HANA migration ensures payback and allows optimizing investment over time.

Key Components of an SAP S/4HANA Business Case

A comprehensive and persuasive business case for SAP S/4HANA migration covers many aspects of your company’s current state and performance, defining benchmarks for future success measurement. When establishing a compelling case, thoroughly consider the elements detailed below.

Strategic objectives

Clearly setting strategic objectives is essential for the SAP S/4HANA migration business case, as they will help you establish your goals, adhere to the migration plan, and prove the necessity of this investment to key stakeholders. Usually, strategic objectives include:

Alignment with corporate goals

• Better customer experience: Offer unique customer journeys and improve satisfaction with the help of real-time data processing and predictive analytics.
• M&A readiness: Provide seamless mergers and acquisitions due to unified and streamlined business processes.
• Global expansion: Ensure smooth worldwide operations and compliance with key regulations with a scalable and flexible ERP.

Business drivers

• Agility: Promptly adjust operations in response to market fluctuations and changing trends with flexible processes.
• Real-time analytics: Access relevant data for informed decision-making and proactive issue resolution.
• Simplified operations: Streamline business processes to reduce operational burden and boost efficiency.

Competition

• Global digital transformation: Businesses worldwide actively implement new technologies and switch to up-to-date ERP solutions to gain a competitive advantage in hectic, fluctuating markets.
• Adoption of SAP S/4HANA: SAP S/4HANA offers companies a set of competitive advantages, such as access to real-time analytics, process automation, system agility, and AI capabilities.

Current state assessment

A comprehensive assessment of your current IT landscape is crucial to highlight the limits of a legacy system, find drawbacks of your current processes, and spot potential compliance risks. This creates a baseline for success measurement after migration, showcasing the advantages of SAP S/4HANA.

Strategic Advantages of SAP S/4HANA

• Real-time analytics and data processing that support data-driven decision-making.
• Simplified data model that lowers data redundancy and data footprint.
• Intuitive SAP Fiori interface, which enhances user experience and makes the system available on mobile devices.
• Advanced functionalities and innovations, such as embedded analytics, AI, machine learning, and robotic process automation.
• Better integration with cloud and digital technologies due to hybrid and cloud deployment.
• Seamless integration with SAP cloud portfolio (SAP Cloud Platform, SAP Ariba).
• Improved performance and scalability due to the HANA in-memory engine.
• Simplified IT landscape and lower total cost of ownership (TCO).

Financial justification

Proving that the SAP S/4HANA migration is financially reasonable is crucial for persuading key stakeholders to start the process. It will also help you adhere to your financial plan and track the payback period, reaching your goals as a result. Financial justification comprises the following steps:

ROI calculations and metrics

Define clear metrics to track the overall success and ROI of SAP S/4HANA migration:

• Cost savings: Set benchmarks to track expense reduction caused by IT maintenance, process inefficiencies, and system downtime.
• Operational efficiency: Track cycle times, fulfillment rates, and other key performance indicators that are relevant to your industry.
• User adoption rates: Evaluate how effectively employees are using the system to perform their roles.

TCO reduction plan in 5 -10 years

According to research by Forrester, organizations can greatly reduce TCO (total cost of ownership) after implementing SAP Cloud ERP.

• Shifting from local on-premise ERP solutions eliminates related infrastructure, maintenance, and labor expenses, cutting overall maintenance costs.
• SAP S/4HANA improves efficiency by up to 30% for users who spend the majority of their working time interacting with the ERP system, and by up to 15% for users who only interact with the ERP system occasionally.
• Switching to in-built SAP Cloud ERP security features instead of legacy recovery platforms and security solutions also saves costs on third-party tools.

Payback period and breakeven point

Set the financial recovery timeline to clearly showcase the payback benchmarks:

• Payback period: The typical timeframe for recovering the initial investment in SAP S/4HANA ranges from 18 to 36 months.
• Breakeven point: The cumulative benefits from the migration offset the total costs incurred within 2 to 3 years post-migration.
• Ongoing value generation: Besides breakeven, companies may expect growing ROI due to scalable operations, enhanced data-driven decision-making, and reduced IT overhead.

Risk assessment and mitigation plan

Evaluate all the potential risks while migrating to SAP S/4HANA. This will help you prepare your options if the transition does not go according to plan. Additionally, work out a migration plan that will help your business gradually adjust to the new system, providing a smoother transition.

Potential risks

• Implementation challenges: The complexity of data migration and system integration.
• User adoption: Resistance to change and inadequate training.
• Operational disruptions: Downtime during transition.

Mitigation strategies

• Comprehensive planning: Detailed project timelines and resource allocation.
• Change management: Effective communication and training programs.
• Phased implementation: Gradual rollout to minimize disruptions.

Implementation roadmap

One of the best practices for implementing SAP S/4HANA is the SAP Activate methodology, which breaks down the implementation process into six essential steps:

Discover

• Evaluate current processes: Assess the existing needs and processes of your business.
• Define technical requirements: Create a detailed specification of the functional and technical needs of the new system, in our case, SAP S/4HANA.

Prepare

• Set goals and objectives: Establish and agree on the goals for the project.
• Assemble the project team: Appoint team members and define their roles and responsibilities.
• Develop the project plan: Create a comprehensive plan that outlines project phases, timelines, resources, and KPIs.
• Determine budget: Estimate and approve the budget.
• Prepare specifications: Develop the technical and functional specifications for the development team.

Explore

• Ensure that business requirements are met: Check that SAP S/4HANA migration aligns with business requirements and project objectives.
• alidate data:V Verify the accuracy and compliance of the data.

Realize

• Migrate data: Transfer data from existing systems to the new one.
• Configure the system: Set up the solution according to requirements and specifications.
• Customize the system: Develop additional features and modules, if the standard solution does not meet all needs.
• Integrate with your business: Configure SAP S/4HANA to work with other IT systems and applications in your environment.

Deploy

• Test the system: Perform functional, integration, regression, and load testing to ensure everything works correctly.
• Educate users: Organize sessions to help users become familiar with the new system.

Run

• Check system readiness: Verify that the system is ready for operational use.
• Launch: Officially transition to active use of SAP S/4HANA.
• Ensure ongoing support: Continuously monitor solution performance to identify and resolve any issues.

KPIs

To measure the success of migrating your business to SAP S/4HANA, consider setting KPIs. This will help you achieve your business goals and make timely adjustments to the strategy in case of underperformance.

System performance metrics

• System availability: Monitor the reliability and accessibility of the SAP system.
• Transaction response time: Measure how quickly transactions are processed to ensure a smooth user experience.

Business process efficiency

• Order-to-cash cycle time: Track the duration from order receipt to payment collection.
• Procure-to-pay cycle time: Measure the efficiency of your procurement process.
• Inventory turnover rate: Assess how quickly inventory is sold and replaced.

Financial metrics

• Cost savings: Calculate reductions in operational costs, IT maintenance, and overhead.
• Revenue growth: Evaluate improvements linked to faster processes and better decision-making.

User adoption & satisfaction

• User adoption rate: Percentage of employees actively using the system compared to the total number of anticipated users.
• Training completion rate: Track how many users have completed SAP training programs.
• User satisfaction score: Collect feedback to gauge ease-of-use and support quality.

Data quality & reporting

• Accuracy of master data: Monitor error rates in key data fields.
• Report generation time: Measure how quickly business insights are produced.

Innovation & agility

• Number of process improvements implemented: Track how many optimizations or automations have been introduced post-migration.
• Time to market for new products/services: Measure how migration enables faster launches.

How DataLark Makes SAP S/4HANA Migration a Success

Migrating to SAP S/4HANA is a complicated and, let’s be honest, costly procedure that requires time and resources. It’s natural that business owners want to lower the price without losing quality.

DataLark, an SAP-centric data management solution developed by LeverX, can help you significantly boost the cost efficiency and success of the SAP S/4HANA migration. By streamlining complex data migration processes, DataLark enables organizations to achieve faster, more reliable, cost-effective transitions to SAP S/4HANA, making the business case more attractive.

With DataLark, you get:

• 60% acceleration of the SAP S/4HANA migration process
• 90% improvement in data management transparency
• 60% enhancement in business modernization and scalability speed

No coding experience required! The intuitive, drag-and-drop interface allows non-technical users to design and implement data workflows. This accessibility reduces the dependency on specialized IT resources, lowering labor costs and expediting the migration process.

DataLark offers robust data extraction, cleansing, transformation, and validation capabilities. These functions ensure high-quality data migration, reducing errors and the need for costly post-migration corrections.

Supporting on-premise, cloud, and hybrid environments, DataLark provides organizations with the flexibility to choose deployment models that align with their infrastructure and cost considerations.

DataLark integrates smoothly with the SAP Migration Cockpit and supports various data loading methods, including OData and RFC APIs. This compatibility ensures a cohesive migration experience and leverages existing SAP tools, enhancing overall efficiency.

DataLark’s unified data‑migration assessment & roadmap

DataLark allows you to create a consistent data migration strategy, assess data, conduct testing, and prepare a fallback plan (in case something goes wrong) via fruitful collaboration with LeverX migration experts.

This offer is a four‑week consulting sprint. We design a safe, cost‑balanced path to move your master and transactional data from SAP ECC and non‑SAP systems into SAP S/4HANA.

As a result, the following artifacts of your SAP S/4HANA will be migration-ready:

• High-level migration blueprint — target architecture, data‑flow diagrams, tooling stack
• Pilot results report — load metrics, issue log, remediation actions
• Data quality & cleansing report — ranked by risk and impact
• Cut-over playbook — a plan with fallback scenarios

Conclusion

To effectively support decision-making, it's essential to blend both qualitative and quantitative evaluations of SAP S/4HANA migration and present them in a clear, leadership-friendly format. The focus should be on highlighting key business value drivers, current pain points, opportunities for improvement, and setting practical, achievable goals. Before embarking on a migration journey, business owners should validate the business case to ensure alignment and accuracy.

We hope this has provided valuable insights into creating the business case for the SAP S/4HANA migration and demonstrated why it represents a strong investment opportunity. When implemented with the right strategy, this robust ERP solution can drive efficiency and reduce costs, enhancing productivity, customer satisfaction, and overall business performance.