Opportunity to Migrate to SAP S/4 HANA

Users of SAP’s ERP software that have not yet migrated to SAP S/4HANA will have maintenance support for core applications of SAP Business Suite 7 software until the end of 2027 – with optional extended maintenance until the end of 2030.

This follows an announcement by SAP recently, which pushes the deadline forward from 2025 to 2027, giving users more time to make the switch. However, despite the extended timeframe, users should still take advantage of the business imperatives of switching and should already be considering their move.

While the deadline might no longer be as pressing, the current state that enterprises have now found themselves in during lockdown – due to COVID-19 – presents an opportunity to use the additional time to carefully address the preliminary aspects of migration, such as de-risking, analysing custom code and performing historisation and archiving of data. Aside from this, organisations can also use the additional time to ensure they get the best return on investment by better planning their migration strategies.

While 2027 might seem a long way off, giving enterprises ample time to prepare for the move to S/4 HANA, there are several key challenges that can arise if this is left too late – with escalating budget and skills scarcity topping the list.

In simple terms, if you have a relatively small SAP footprint, moving to S/4HANA early is a smart play, as the transition will be simple. You have to get ready now to operate in a changed world. Conversely, organisations therefore need to consider that the development on Enterprise Central Components (ECC) such as SAP ECC6 is slowing down and the development on S/4HANA is gradually increasing. If you wait until 2027, your business will have grown and expanded and, as a result, there will be longer delays in migration as the gap between the existing version and the version of S/4HANA to be migrated to increases.

Another crucial factor for organisations to keep in mind when planning their migration is the issue of skills availability. Late uptake drives huge shortages and cost increases for suitable skilled resources.

Considering that there are approximately 900 customers in South Africa that have SAP solutions deployed, there is a sizeable chunk that will need to plan for the S/4HANA migration by 2030. SAP skills are scarce in South Africa and the later the migration, the higher the cost of these skills, due to the increased demand over a short period of time. The price per SAP consultant is going to spike horrendously closer to the deadline, while the availability of consultants is also expected to become an issue.

However, the one advantage of moving late is that your organisation will be privy to the lessons learned from those that have migrated earlier. On the other hand, there is the risk that you might not have the right people and time available to do the migration if you leave it too late.

While it might not be feasible for everyone to jump on the bandwagon and migrate now, it is advisable that organisations start reviewing their activities and processes between now and the time they decide to migrate. This is to ensure their current environment is ready for migration and the move is as risk-free as possible.

One of the challenges that is common to all ERP owners, regardless of whether it’s a SAP platform or not, is that historically a lot of these environments have been customised. If you’ve created bespoke code and applications, when you want to upgrade your platform, you really need to consider the elements you’ve added – do you still need them? What would be the impact of removing them? How can you get all this functionality on a standard system? Will your current standard system enable you to be more agile in future?

A global trend among the largest SAP customers is that they are de-customising their environments and moving back to SAP standard platforms. Bearing in mind that the functionality is very rich in S/4HANA, these organisations are thinking long and hard before keeping any customisation in the system.

SAP’s extended deadline shouldn’t lead organisations to change their stance of focusing attention and resources on the execution of their migration strategies – even if it takes some of the pressure off.