The advantages of undergoing business transformation are not always obvious. There are clear advantages to using newer software such as SAP S/4HANA Cloud ERP, but there’s also the mantra that if it isn’t broken, don’t fix it.
While upgrading for the sake of upgrading isn’t usually a smart idea, modernizing for ongoing competitiveness is a good reason for undertaking business transformation. And in the case of ERP, businesses running ERP solutions more than five years old or operating with a hodgepodge of software applications have a good reason for business transformation, even if processes and systems technically still work.
The game has changed for backend processes, and businesses need a modern, cloud-based ERP solution to take advantage of AI advances and a business environment that now prioritizes flexibility and quick, data-driven iteration.
7 Reasons for Upgrading to SAP Cloud ERP
Let’s contrast your existing ERP solution with SAP S/4HANA Cloud Public Edition to show why business transformation matters even if your existing processes technically still work.
1. Persistent Innovation
SAP S/4HANA Cloud Public Edition introduces new features and functionality on an ongoing basis, both through twice-yearly automatic system upgrades and through continuous innovations developed by SAP and third-party partners on the SAP Business Technology Platform (BTP). When something new emerges, such as generative AI, S/4HANA can quickly incorporate it because of the platform’s modular, cloud-based structure.
Your existing ERP solution does not benefit from this persistent innovation because feature improvements require a new ERP or application release, and then your IT department must manually roll out this update and make sure it doesn’t conflict with existing processes or custom code.
2. Greater Efficiency Through Automation
System-wide automation, both pre-defined and that suggested by autonomous AI agents built into the system, makes SAP S/4HANA Cloud Public Edition a potent tool for automating away manual tasks and driving greater levels of efficiency. Since SAP S/4HANA is designed from the ground up to integrate with all internal applications and third-party solutions, both on-premise and in the cloud, the automation potential extends to all aspects of company operations.
Your on-premise or less modular cloud-based ERP system has automation, but only certain tasks can be automated, and with great effort. Further, your existing ERP cannot automate across applications or leverage all available data and processes because the existing system silos some data and applications.
3. Highly Secure Environment
SAP protects your data and applications 24 hours a day when you use S/4HANA Cloud, fixing security holes and proactively monitoring traffic. It uses industry-standard security protocols and best practices for a platform that protects your business and all others who use it.
Your existing ERP is on its own when it comes to security. Internal IT must monitor and secure your system, possibly creating a secure environment, but more likely leaving some holes that go unnoticed. When your ERP vendor does create a patch or security update, your IT department must then install it and ensure it works properly. For most businesses, patch management is not as instantaneous as upgrades initiated by a vendor and pushed out through the cloud.
4. AI Application Access
Businesses that use SAP Cloud ERP are operating on the forefront of AI advancement. SAP’s modern ERP platform comes with both an LLM-agnostic AI copilot that can be configured to use ChatGPT, Google Gemini or other LLM, and it seeds AI agents throughout solution for intelligent AI automation and analysis system-wide. AI application access is built into the very foundation of SAP S/4HANA Cloud Public Edition.
Your existing ERP does not have AI baked in by default. You must export data and import it into an AI engine for processing, and automation is limited to rule-based procedures. You’re behind on AI, even if you don’t know it yet.
5. High Quality Data for AI
Generative AI is only as useful as the data you feed it. With SAP S/4HANA, all company data is centralized and accessible in real-time. This means that AI engines understand your business and can both take intelligent actions and give accurate recommendations.
Your existing ERP backend solution silos data, and can’t share it with AI in real-time. So even if your business already uses AI, low-quality data and a lack of full visibility limits the usefulness of your AI applications.
6. Easy Integrations that Just Work
Because SAP S/4HANA is cloud-based and built around modularity, both native applications and third-party software and services easily connect with the system. Most common applications, web services, and online marketplaces are supported out of the box with pre-built integrations, and businesses can quickly create custom integrations for niche software through a drag-and-drop builder within the BTP.
Your existing ERP probably can integrate with many third-party applications, but this takes time and sometimes middleware to set up. Custom code also frequently breaks when a new ERP update is released, requiring your business to create the integration all over again. If you are running an on-premise ERP solution, web services present an ongoing integration headache as well.
7. Managed Upgrades
The ERP core of SAP S/4HANA Cloud Public Edition is updated twice a year automatically with feature enhancements and bug fixes, and security patches are applied on an ongoing basis as needed. These updates are automatic and non-disruptive because S/4HANA is built around a small core that is extended with modules and add-ons. Applications are also upgraded on an ongoing basis and rolled out automatically via the cloud, and businesses can choose to accept these updates or keep using what they have.
The situation with your existing ERP is not as smooth. Upgrades must be performed by your IT department, and they often are not applied right away due to staffing limitations and the need to ensure that an upgrade will not take down the whole system. Functionally, ERP system and application upgrades take longer and happen less frequently because your IT team manages these upgrades in addition to their other responsibilities.
Make Life Easier with a Modern ERP
Sometimes, staying the course makes sense. When it comes to using a modern ERP and digitally transforming your business, however, the value proposition for change is just too strong to ignore.
The good news is that digitally transforming your business with SAP Cloud ERP is easier and less costly than you think; you can complete a digital transformation in as little as 90 days with an experienced ERP implementation partner.
Learn more about the digital transformation process and what it takes by contacting one of our experienced ERP consultants at (801) 642-0123 or by writing us at info@nbs-us.com.
