1. Not simply an upgrade

Moving from SAP ECC to SAP S/4HANA isn’t simply an upgrade – despite SAP positioning it as such. It is a complete ERP reimplementation on a new platform.

This isn’t necessarily a bad thing, but customers need to be aware that this isn’t just your standard upgrade.

It doesn’t matter whether an organisation takes a ‘greenfield’ approach (starting from scratch and adapting your business to its functionality) or a ‘brownfield’ approach (bringing your existing functionality and processes across from ECC), both are going to come at considerable cost and risk.

S/4HANA may be the successor to ECC, but Gartner® suggests reviewing your broader ERP strategy as ‘there is no single approach that justifies its adoption by everybody […] It is acceptable to decide that you will not adopt S/4HANA, or that you will opt for partial adoption or even third-party support’.*

It’s also going to require a host of consultants that specialise in S/4HANA — of which there is a frighteningly short supply!

Frustratingly, turning to the vendor for help may not be the answer to your skills shortages…

*Source: Gartner®, What Is the Level of Adoption of SAP S/4HANA in 3Q22?

The UK & Ireland SAP User Group (UKISUG) found that 92% of its members raised concerns that a lack of skills could slow migration, while over a third (36%) said that SAP doesn’t provide customers with enough technical resources and training to help manage S/4 HANA.

Source: UKISUG User Group Survey, Nov. 22

2. Considerable migration challenges

When migrating from ECC to S/4HANA, organisations undertaking the transition are finding progress slow after being faced with data management challenges.

A separate survey conducted by UKISUG in early 2022 showed that 61% were finding themselves beset by data management difficulties that are slowing business automation and hindering migrations from ECC to S/4HANA.*

A further survey undertaken later that same year found 64% of those that had migrated found integrations a challenge.**

Yes, migrations are never easy.

But when most of your customers have notable issues, this is something to take seriously, especially when this starts affecting business operations and continuity.

*Source: UKISUG User Group Survey, Mar. 22

**Source: UKISUG User Group Survey, Nov. 22

December 2027

SAP's deadline for customers to move to S/4HANA from its predecessor, Business Suite and its digital core, SAP ERP Central Component (ECC), which it plans to stop supporting in 2030.

3. Confusing pricing structure

Moving to SAP S/4HANA is a costly endeavour.

And it doesn’t help matters when SAP’s pricing structure and commercial models can create confusion amongst its customers.

In response SAP launched RISE with SAP, in early 2021, designed to aid the migration process (constituting 50% of S/4HANA sales so far).

But this appears to have only muddied the waters over the commercial options available for customers as RISE has evolved.

Gartner® vice president and vendor lead analyst for SAP, Ilona Hansen, told The Register in mid-2022 that, "Many options exist, but the strong positioning of RISE with SAP by account executives obscures other S/4HANA licensing options, such as S/4HANA On-Premise Edition, which will likely cost more as SAP continues to shift its revenue to the cloud."*

In the Gartner® Vendor Rating for SAP, published in July 2022, it rated SAP ‘Variable’ under its ‘Pricing Structure’ category >>

*Source: The Register, Jul. 22

‘SAP has pricing structures with various metrics and tiering mechanisms, but customers struggle to understand it without third-party support.’.

Source: Gartner®, SAP Vendor Rating, Ilona Hansen, Tonnie Van Der Horst, and 17 more, 7 July 2022.

4. Where's the support?

Given the huge costs and risks involved in moving to S/4HANA, organisations might want to think about their ROI when considering the costly and risky move from the trusty ECC to the new S/4HANA.

For those still undecided, SAP are currently offering extended support options for ECC up to 2027 (this has already been pushed back since its first end date of 2025).

It’s worth acknowledging this extension comes at a 2% premium to continue support + any additional inflationary increases.*

But the vendor will not keep supporting ECC indefinitely; the time will come when the final deadline date is… final.

What’s more, customers can be forgiven for questioning the ROI on an expensive support package (17% - 22% of their license fee + any annual or inflationary increases) for a system that hasn’t seen any major upgrades in over half a decade.

The last major enhancement delivered was in 2016 with EHP 8 - Enhancement Pack 8.

By 2027, customers could have been paying full rate for their support on an 11 year old system that wouldn’t have received any enhancements for over a decade, all while SAP pours money into developing its HANA systems.

*Source: Gartner®, What Is the Level of Adoption of SAP S/4HANA in 3Q22, Denis Torii, Ilona Hansen, and 1 more, 2 December 2022.

HOWEVER, all is not lost if you wish to continue being supported on your SAP ECC software.

Support Revolution will support ECC indefinitely for as long as you need.

Find out how to take a SAP payment holiday >>