There was a time when any business or other enterprise moved on to an ERP, they were presumed to be moving the fast paced mode to digital transformation. That is history. Today there is hardly any organisation which can function without an ERP. Founded in 1972 in Germany by five former IBM engineers, SAP has established itself as the gold standard in ERP for quite some time now. SAP is synonymous to ERP in many ways. SAP (Systems, Applications, and Products in Data Processing) integrates key business functions into a single system.
SAP ECC stands for SAP ERP Central Component, and is at the core of SAP’s traditional ERP system. It is the main enterprise software suite used by thousands of businesses globally. So far so good. But there is a major catch as the SAP enabled businesses move forward. However much we would like to believe that software caters to our requirements / customisation etc, the reality is that it is a dictated market, mainly for the IT behemoths to rule their chunk of specialisation, products, services et al. The customers have no choice but to follow suit, mammoth issues notwithstanding.
SAP is dictating the transitioning of its SAP ECC to S/4 HANA. It is a complete reimagining of the ERP system, stands for SAP Business Suite 4 HANA. It is SAP’s next-generation ERP system, designed to run on the HANA in-memory database. The whole problem is of moving to S/4 HANA by diktat and not by choice. Either transition to S/4 HANA by 2027 or face extended maintenance fees to remain on ECC. As per Gartner almost two-thirds are yet to make a leap off ECC as of the end of 2024. CIOs on older versions can see end of support by the end of 2025. Despite pressures, the current rate of migrations will not meet SAP’s deadline target.
Undeniably, S/4HANA promises the new age digital transformative capabilities, yet transitioning to S/4HANA is far more than a technical migration. It is a major enterprise transformation, it’s an entire business initiative. Panic over end-of-life timelines can cause some organisations to skip key steps as process mapping / use input. Business critical features may get overlooked. What software offers is the simpler part, what really matters is mapping your processes first and understanding what is business critical. Short changing their change management plans, underestimating the importance of data cleansing or failing to establish a phased roll plan can turn out to be major bottlenecks.
SAP TO S/4HANA IS A LONG DRAWN COMPLEX EXERCISE DEMANDING SUBSTANTIAL RESOURCES, EXPERTISE, EFFORT AND INVOLVEMENT.
Sanjay Sahay
Have a nice evening.