Table of Content
When we read the latest market research reports, we see that the majority of organizations are yet to be convinced and lack the motivation to move to SAP S/4HANA ERP solutions. This can be explained by either CIOs, ERP and IT managers taking their time deciding to deal with this terrifying project, or they don’t believe SAP ECC end of life will really happen during 2027, or they just don’t understand the tremendous value this project brings to the organization.
ERP systems are by nature the heart and soul of every business, this is true for enterprise as well as for smaller companies. The ERP serves as the base for the core operational business processes, performing multiple purposes such as the daily transactional data processing system, reporting, business intelligence (BI) and many other business needs.
Naturally, these systems are in-place for many years, holding tons of business processes changes, tuning, developments and customizations, to fit the shifting business needs along the organizations lifecycle.
(ERP is the heart of the organization)
It’s very common to see businesses running on heavy, messy, out-of-date environments, with lots of unused customizations and code, and most importantly, don’t serve the business’s current needs and future directions.
Why Businesses Avoid Migrating to S/4HANA
S/4HANA projects are IT projects by nature, and IT is most often running in “juggling mode” between major projects: ongoing business enhancements, maintenance, security and infrastructure-related activities and many more. And it’s not like they’ve managed an S/4HANA project before. That’s before we’ve even touched on budget restraints and limitations – therefore, in many cases, there aren’t sufficient resources to plan, run and complete S/4HANA projects independently.
As a result of the complexity of S/4HANA projects, they require intensive assessments and preparations, and in many cases will require a dedicated system integrator which will own part (or all) of the project phases. This comes with a significant financial investment. Justifying and approving such a project demands seeing real ROI, leading CIOs to manage the S/4HANA project as a CAPEX rather than OPEX expense, for obvious reasons. The CIO is hopeful that the project results in optimized business processes, increased business efficiency, resilience, transparency, and readiness for the future.
If that’s the case, I believe it’s extremely important to reflect and manage this project, not as a pure IT project or as any other SAP upgrade, but rather as an innovation revolution within the organization, which highlights the many advantages to the business (first and foremost), and only then to the IT.
Retaining the Earlier Version of SAP Post 2027 – The Bottlenecks
Assuming you’re running one of the latest SAP ECC6 EHP levels (EHP6 to EHP8), your current version is supported until December 31st 2027. However, if you’re running older versions, the end of support is set to December 31st 2025.
For the newer EHP versions, SAP offers extended maintenance support until December 31st 2030, with a premium support fee.
While there is yet no assurance on whether 2027 is real, taking into consideration that the end of support was already postponed once (from 2025), I highly suggest not to take this risk but on the contrary – mitigate it and start planning your S/4HANA project.
I do know that there are organizations that (at least for now) are not planning to move to S/4HANA in the foreseeable future. This means taking a chance with lacking support from your software vendor, the same software which runs your entire business.
I can’t even imagine what a CIO of a company that runs SAP with no vendor support. What will he do once facing a fatal error, one which might stop, delay or disrupt the business processes both internal (with finance, logistics, procurement, HR, etc.) and external (with customers, vendors, banks, etc.). Another risk is a potential cyber breach which can exploit the outdated tech stack and cause havoc and negative business impact.
I’m one of the believers in the common axiom which says that “in IT if you’re standing still, you’re actually going backwards”. This means you’re losing precious time where you could already benefit from an upgraded, newer, better solution for your business, so stop waiting.
Practical Reasons to Migrate to SAP S/4HANA
As we’re getting closer to 2027, we can anticipate that more and more organizations will start their move to S/4HANA. As in any other economic market, there are limited SAP resources including professional consultants, experienced architects and other personnel needed for these projects. A spike in demand of these experts with a strict supply, will lead to increased prices, prolonged or limited availability and decreased services quality.
I believe that this will get worse and worse as we approach 2027 and will not end then. It’s a very important factor to take into consideration when examining and planning the project. Doing it earlier – means doing it in a “calmer” environment, where the resources and attention are there, instead of a last-minute battle over resources.
Running this major, complicated project in a rush is a big mistake, aside from the anticipated missing SAP resources. Not planning sufficient time for proper project assessment, preparation, approval, system integrator selection and the actual project execution, extensive testing and go-live may lead to critical errors, mistakes, expensive “shortcuts” and other future headaches for IT.
You don’t want to do any less than a very detailed, meticulous preparation before you start. There are many decisions to be taken in every phase of the project, including one of the most significant ones – the project approach (Greenfield, Brownfield or Hybrid).
SAP is heavily pushing to S/4HANA Cloud, also as an essential part of SAP RISE and SAP GROW, to ensure their customers get a hand in this risky, costly and complex move. Complying to this strategy is a win-win for the business, while migrating to the newer ERP solutions with their advantages does pose challenges: current outdated application infrastructure, servers, firewalls, databases and more.
One of the roles of the CIO is to “future-proof” their business, or in other words, to ensure the business applications are in full alignment not just to the current business needs, but also to the future needs in terms of scalability, flexibility and readiness for future business needs.
While it’s very common to see organizations running the same business processes, in the same platform using the same technology by the same individual in the same workflow for years – in most of the cases there are better solutions nowadays. This habit of “if it works – don’t touch it”, in this case is a pure daily waste – of time, cost and efforts.
Top SAP S/4HANA Product Benefits
This blog post is too short to cover the many benefits of S/4HANA to modern businesses. Having said that, there are a few significant benefits for any business I would like to highlight:
First, let’s go back to basics, S/4HANA essence is HANA. SAP’s in-memory computing to process vast amounts of data in real-time, enabling faster insights and decisions. This also allows integrating both transactional and analytical activities into a single system (rather than ECC system and other BW/BI system), making it easier to get real-time information across various business functions. This simplified infrastructure, with fewer systems also helps with reduced data footprint and unified systems and processes which support overall reduced Total Cost of Ownership (TCO).
Second, S/4HANA offers a much better user interface, including Fiori, a user friendly, flexible, customizable and responsive web-app which can run on your desktop, tablet or phone. This provides users with a better user experience, which is a huge leap forward from the legacy GUI SAP is known for.
Fiori’s modern look-and-feel is one of S/4HANA’s big benefits because this is what the business users see daily. Understanding this, SAP built Fiori with a different perspective, where the employees’ role is what drives the point-of-view, rather than based on their SAP technical role.
This obviously goes together with the revamped (and almost re-engineered) business processes, where many of the standard SAP processes were simplified and improved to better support businesses and encourage efficiency and agility. The business processes overhaul includes many of the SAP core processes for Finance, Supply Chain, Manufacturing, Sales, Material Management, Compliance, Risk Management and many more.
Third, S/4HANA offers flexible deployment options – be it Cloud, On-Prem or Hybrid, S/4HANA can be deployed in various ways to meet the specific needs of a business, offering flexibility for future scalability and adaptability. It also supports Agile development (which is a relatively new approach to the SAP ACTIVATE (ASAP) “Waterfall-ish” methodology. With faster system upgrades and an API-rich architecture, including many extensibility options. Businesses can now adapt quickly to changes and innovations.
Fourth, S/4HANA provides various solutions for advanced analytics and reporting, understanding that this plays a critical factor for any modern business. It offers embedded analytics capabilities, allowing users to analyze large sets of data without the need for separate BI (Business Intelligence) tools. In addition, it incorporates predictive analytics and built-in AI – allowing businesses to forecast trends, optimize operations, and make data-driven decisions.
Fifth, referring to the previous chapter, S/4HANA is the preferred platform for the future. Its innovation ready nature includes support in everything organizations need to modernize their operations, optimize processes, and become more data-driven in their decision-making. This includes AI, IoT, and blockchain integrations.
(New Fiori Apps in S/4HANA 2023 – source: https://www.sap.com/products/erp/s4hana-private-edition.html#docs)
Conclusion
Making the leap to SAP S/4HANA isn’t just about keeping up with technology; it’s about positioning your business to thrive in the future. While the project can seem overwhelming and full of complexities, costs, and risks – the real question isn’t whether to make the move, but how to make it work in your favor.
Every business faces challenges when adopting new systems but sticking with outdated ERP solutions is akin to driving on a highway with a physical map from 20 years ago. You might still get there, but at what cost? And will your competitors, who’ve already upgraded to GPS, leave you behind?
Migrating to S/4HANA is a strategic move, not just an IT upgrade. It’s an opportunity to reimagine how your business runs, streamline outdated processes, and unlock potential you might not even realize exists today. The benefits: faster decision-making, greater agility, and a future-proof foundation, are all there for the taking. But it’s crucial to plan early, act decisively, and avoid the scramble for resources that will inevitably intensify as we approach 2027.
The lesson is clear: don’t wait until the last minute. Organizations that view this migration as an investment, not a burden, will be the ones that set the stage for sustainable growth and innovation in the years to come.
If you got to this point, you already understand that the move to S/4HANA is a journey, not a one-off project. To overcome the project complexities, accelerate implementation, avoid many of the risks and reduce costs, we at Panaya developed a full suite of solutions, leveraging AI/GenAI and Automation to get you safe and sound to your S/4HANA destination. We’ve run thousands of projects for the largest customers in the world, in various industries and Geographies, interested to hear more? Book a Demo!
Key Takeaways
- Future-Proof Your Business: Migrating to SAP S/4HANA ensures your ERP system stays supported, secure, and aligned with future business needs, avoiding the risks of outdated technology.
- Unlock Efficiency and Innovation: SAP S/4HANA offers improved business processes, real-time analytics, and cutting-edge technologies like AI/GenAI and machine learning, enabling better decision-making and operational agility.
- Act Early to Avoid Bottlenecks: As 2027 approaches, the demand for SAP migration expertise will surge, leading to higher costs and limited availability. Starting your migration early guarantees a smoother, more cost-effective transition.