S/4HANA is touted as the dream and given the elaborate nature of red-carpet welcome, with some strict timeline and monetary conditions attached, yet it was supposed to be a smooth transition. The SAP ECC would be without seven whimper time lag and all the timelines which have been created for the smooth, yet forceful transition served as seamless one, without anything great to bother about. The business approach was loud and clear, and if timelines were to go by, it was taken as a forgone conclusion. Even the plans of the best of the product companies can go, because there are any number of complexities in the game.
Not accepting will take SAP as a company into rough business and technical weather. S/4HANA has to happen through a positive, proactive and a convenient engagement and not in any other manner. News from SAP’s Sapphire Conference in Florida is heartwarming to say the least. Nearly half of the SAP ECC customers may stick with legacy ERP beyond 2027 and that is not good news for the company. The fact of the matter is that as the end of support for ECC nears, many customers continue to avoid moving to S/4HANA.
Why are they having issues with the dream ERP S/4HANA? The main being put forth is the cost and complexity. The companies need to be that sort of company and also be ready to shell out. The Florida attendees were fed a lot on the vendor’s umbrella Business Suite and its Joule AI agents. For sure for reasons best known to them the German software giant barely made any mention of customer uptake on its flagship ERP, S/4HANA. That is the only way to show their progress today. Because of the tardy progress, the SAP leaders avoided talking about it in Florida.
S/4HANA at the end of 2024 had only 39% of the 35,000 SAP ECC customers migrated to S/4HANA. Gartner predicts that there would still be 14,000 handouts or nearly half of the ECC customer base by 2027. More than a third of ECC customers will remain with the legacy ERP in 2030. SAP released the first version of S/4HANA but even with the SAP’s RISE guided transformation package launched in 2021, the migration has been steady but slow. First 50% SAP has been able to migrate in 15 years, what is the guarantee that the pending 50% can be sorted out in 5 years. Many of the SAP ECC installations are heavily customised and the cost are the barriers. Migrations can cost as little as $2 million but it can also run up to $1 billion for large enterprises with complex installations.
JOURNEY TO FULLFLEGED S/4HANA WILL BE AN ARDUOUS JOURNEY.
Sanjay Sahay
Have a nice evening.