Implementation of SAP S4HANA in the manufacturing industry: Challenges and Opportunities for the business model

As small and medium-sized enterprises (SMEs) navigate the complexities of the digital economy, adopting advanced technologies such as SAP S/4HANA has become crucial for maintaining competitiveness. This paper examines the role of SAP S/4HANA in transforming business proces-ses for small and medium-sized enterprises (SMEs) within the manufacturing industry. SAP S/4HANA, an ERP system leveraging the HANA in-memory database, offers real-time data processing and advanced analytics capabili-ties, streamlining operations and improving decision-making. The research investigates the benefits of using SAP S4HANA, such as enhanced process efficiency, data integration, and competitive advantage, alongside challenges including signifi-cant implementation costs and technical complexities. Through a review of existing studies and expert interviews, the paper explo-res how SAP S/4HANA supports digital transformation by integrating ad-vanced technologies like AI and IoT. It emphasizes the need for strategic alignment, readiness for digitalization, and strong change manage-ment for successful ERP implementation. Ultimately, this research provides valuable insights into how ERP systems can foster innovation and long-term growth for SMEs, contributing to the broader discourse on digital transformation in the manufacturing sector. JEL Codes: C80, D2, L10, L23, L60, M11, M15, O33, Q55