What CIOs Should Measure Beyond Cost and Timeline
Introduction
S/4HANA ROI often gets reduced to cost savings and project timelines. But for CIOs, real value lies deeper. Beyond just cutting IT expenses or meeting a go-live date, S/4HANA can drive transformational business outcomes. The right metrics help leaders track innovation, efficiency, and long-term strategic gains.
Why Traditional ROI Metrics Fall Short
Measuring only direct costs and deadlines is limiting. Many S/4HANA business cases focus on:
- Lowering maintenance and support costs
- Simplifying the IT landscape
- Reducing the total cost of ownership (TCO)
As experts at Berkeley Partnership note, S/4HANA delivers not just cost avoidance but fundamentally modernizes systems, enabling AI, better data, and future-ready operations.
Moreover, migration urgency is reinforced by the fact that SAP will end standard support for ECC6 in 2027. Ignoring this risk in ROI calculations can understate long-term savings and business risk.
What CIOs Should Measure to Capture Full S/4HANA ROI
1. Process Efficiency Gains
One of the most powerful drivers of value lies in process optimization. S/4HANA’s simplified data model and real-time capabilities can reduce cycle times across finance, supply chain, and operations.
- Role-based Fiori apps and modern UX reduce process bottlenecks.
- According to AGC Apps, some companies report 5-year ROI as high as 547%, largely driven by efficiency gains and lower IT burden.
Tracking metrics such as cycle time reduction (order-to-cash, procure-to-pay), transaction volume per hour, or user-task latency gives better insight into functional value.
2. Business Innovation and Agility
S/4HANA offers a foundation for innovation. It supports AI, machine learning, and automation, driving new business models.
- According to Berkeley Partnership, embedded AI and ML in S/4HANA can unlock predictive insights and smarter workflows.
- In a Forrester-commissioned study, S/4HANA customers generated $156 million in incremental revenue over three years, thanks to new functionalities.
To measure innovation ROI, CIOs should monitor:
- Revenue from new business processes enabled by S/4HANA
- Customer retention improvements (the Forrester study found a 4% annual reduction in churn)
- Time to market for new products or services built on S/4
3. IT Productivity and Technical Debt Reduction
S/4HANA lowers technical complexity. By consolidating systems and removing legacy customizations, it frees up development capacity.
- Forrester found that customers reported savings in infrastructure, license, and maintenance costs.
- The Altivate-Forrester analysis showed a payback period of 13 months and an NPV of $21.9 million over three years.
Metrics to track here include:
- Developer hours saved per month
- Reduction in number of custom objects or Z-programs
- Support incidents or bug volumes post-migration
4. Data-Driven Decision Making
S/4HANA’s in-memory database and real-time analytics make trustworthy, actionable data available across the business.
- Berkeley Partnership argues that quality master data and real-time reporting enable leadership to make faster and smarter decisions.
- Case studies show improvements in financial closing times, reporting accuracy, and data consistency.
CIOs should measure:
- Reduction in closing cycle time (e.g., month-end, quarter-end)
- Number of decisions backed by real-time dashboards
- Frequency of manual reconciliation or data cleanup
5. Risk Reduction and Compliance
Migration to S/4HANA eliminates legacy risk. With ECC going out of mainstream support, risk increases in terms of security, compliance, and resource availability.
- Berkeley Partnership emphasizes obsolescence risk as a key motivator, staying on older SAP versions will raise support costs post-2027.
- By modernizing, organizations also simplify compliance, improve data governance, and reduce audit complexity.
Trackable KPIs include:
- Number of unsupported modules retired
- Time spent in compliance audits
- Frequency of security incidents or system downtime
6. Talent and Adoption Value
S/4HANA initiatives also develop internal skills. Teams build expertise in Fiori, data modeling, and intelligent automation.
- According to Berkeley Partnership, S/4 migration is an opportunity to upskill internal teams.
- Firms that invest in user adoption often see faster stabilization and higher ROI.
Measure:
- Training hours per user or per role
- Adoption rates of Fiori apps or new modules
- Employee satisfaction / productivity post-migration
Real-World Evidence of Expanded ROI
Some concrete numbers validate this broader perspective:
- In the Forrester-commissioned study, net benefit Gained over three years was $21.9M, with a 134% ROI.
- According to SAP guidance and community advice, 10-20% of S/4HANA value comes from TCO reduction, 30-40% from BI and app productivity, and 50-60% from better business processes.
- In legacy system-scenario modeling, internal ROI calculation showed 289% return in year 1, rising to 695% by year 3 in one architectural business case.
These data points reinforce that value is about transformation, future readiness, and business agility.
How Neolysi Can Help CIOs Capture Full S/4HANA ROI
At Neolysi Technologies, we support CIOs in building rigorous, business-aligned S/4HANA ROI models. We help in several ways:
- Business-case workshops: We facilitate sessions to define which metrics (beyond cost) matter most.
- Value-mapping: We map S/4 capabilities to business outcomes from process efficiency to innovation.
- Baseline measurement: We help capture pre-migration KPIs (cycle times, support ticket volume) to benchmark post-go-live performance.
- Adoption and change management: We design adoption programs around Fiori, data literacy, and technical upskilling.
- Continuous value tracking: We build dashboards and frameworks so you can monitor ROI across process, data, IT, and adoption dimensions over time.
Risks of Ignoring Broader Value
Focusing only on cost and timeline can lead CIOs into several traps:
- Project justification suffers: Without clear business value, leadership may view migration as a pure IT cost.
- Value erosion: If benefits like efficiency or innovation are not tracked, they may never be realized or optimized.
- Poor adoption: If users aren’t measuring adoption and satisfaction, new tools may remain underused.
- Risk left unmanaged: Legacy risks remain unquantified, and future audit or compliance costs may surprise.
Conclusion
Real returns come from agility, innovation, data, and risk mitigation. CIOs who measure beyond cost and timeline can unlock the full power of S/4HANA.
Neolysi can guide your leadership team to define, measure, and optimize these broader value levers.
Connect with us to build a business case and value-tracking framework that reflects your strategic goals.