Should We Upgrade from SAP ECC to SAP S/4HANA?

Written By: Brian Potts
Date: April 24, 2019

This is one of the more common questions across the industry with no clear answer: should we upgrade to SAP S/4HANA?
With limited case studies of successful migrations, companies looking to upgrade their SAP ECC platforms have a tough decision to make.

With the available speed of HANA and integration of emerging technologies to provide competitive edge, there is certainly reason to consider pushing to SAP’s latest ERP, but there are also risks of implementing to S/4HANA.There are a number of pros and cons to consider as you determine how to plan for a successful SAP implementation.

The last thing you want to do is repeat the mistakes of the SAP failure at Lidl, National Grid’s lawsuit against SAP, or the SAP failure at Haribo. Following are some considerations as you measure the viability of an SAP S/4HANA upgrade for your organization.

Who else has been through a successful S/4HANA upgrade to date?

There are certainly “some” case studies and companies have successfully migrated to S/4HANA. However, given that SAP is still one of the most widely used ERP platforms globally, the numbers of S/4HANA migrations are concerning. The number of organizations currently using S/4HANA was recently reported by SAPinsider to be just over 2,200. Companies using the mysterious Oracle ERP Cloud, in comparison, now top 6,000. Given that SAP still has more ERP implementations across the board than Oracle ERP, this is a potential cause for concern for SAP users.

The SAP S/4HANA footprint and typical customer profile

While the overall number of S/4HANA implementations seems low in comparison, as SAP is traditionally used by larger organizations, it should be considered that it will simply take longer to move to SAP’s cloud platform than other ERPs by comparison. SAP is not alone in facing difficulties moving its applications to the cloud and any ERP vendor that is not native to the cloud is having to do the same.

The other consideration here is the availability of certified implementation resources and SAP consultants. As a fairly new, and very complex platform, it takes time to train developers and integration experts who are needed to implement S/4HANA. The numbers are certainly growing, but there is still a limited number of qualified resources in existence compared to the install base of SAP legacy platforms. This, in turn leads to longer wait times and expanded costing structures to upgrade or implement S/4HANA.

S/4HANA functionality is not as mature as SAP ECC

Financials and logistics have been fairly well developed but remaining functional migration from ECC to S/4HANA is still on-going. Companies considering an upgrade should bear in mind that their instance of S/4HANA will more than likely need to be developed throughout the implementation and functionality at this point in time does not match that of ECC. This could be potential cause for delay, added expense and a need for bolt-on technology, and suggests why mostly larger companies have taken this path to date.

It is important to note that this problem exists not only with S/4HANA. This is also a consideration whether you are comparing SAP vs. Oracle Cloud ERP, SAP vs. Microsoft Dynamics 365, or any of the top ERP systems. Lack of maturity is a concern for all the vendors that are introducing new flagship cloud products.

Conclusion: Your upgrade path should be dependent on your company profile and priorities

We are not suggesting that migrating to S/4HANA is necessarily a bad idea, and in fact we are currently guiding six companies down this path. What we do suggest is taking the time to validate the business case for an upgrade and to properly prepare your organization for the move. It is not the SAP the world has grown to love or hate – it is a brand-new species.

Brian Potts

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