University still living in the Nineties seeks help with move to SAP S/4HANA

Tens of millions up for grabs as institution needs to dump legacy code

The UK's University of Leeds is looking for a systems integrator to help move its ERP system from an ageing SAP installation dating back to 1999 onto the German vendor's latest S/4HANA platform.

The institution said it wanted to migrate away from its existing SAP ECC6 environment that has been in place from 1999.

"Since then, the environment has been added to, extending SAP and expanding the systems supporting HR, Finance and Purchasing with other third-party offerings. This has led to an environment in need of simplification and systematisation," it said in a procurement notice.

"The university now wishes to upgrade to SAP S/4 HANA (to ensure interoperability with current systems to be maintained) and move to a new operating model for business support services which is compatible with the institution's existing infrastructure."

Myriad customizations, additions and extensions to set alarm bells ringing in the ears of experienced ERP professionals. Not only does the technical complexity need to be understood, users must also accept new ways of working to get to grips with the new system. The combined challenge represents the rocky headland on which many an ERP migration voyage has foundered.

To stay afloat, the university is seeking an SI to help with the migration to SAP S/4HANA software as a service "to implement, integrate and configure that solution."

The initial contract value is around £11 million ($13.4 million) for implementation, with annual recurring charges of approximately £1.5 million to £2.5 million ($3 million), the notice said.

Additional documentation pointed out that the university's current technology solution for finance and payroll, purchasing and HR, based on ECC6, will see support end in 2025 "with extensions likely only available as far as 2027 and then at much-increased cost."

"A replacement Enterprise Resource Planning (ERP) solution needs to be implemented in advance to ensure the University has continuity of operations… The University needs to switch from operating variable non-standard, often complex processes with an undue reliance on manual activity to business-led process re-design to implement standardised, streamlined processes that are technology-enabled," it said.

The university expects to appoint a supplier by September with the initial contract lasting three years with options to extend for two years. It said during 2022 it had worked to create a "Target Operating Model" for new processes covering finance, purchasing and HR.

To migrate to S/4HANA, SAP stipulates a "clear core" approach, meaning there are minimum dependencies on the existing ECC software.

Customers have been warned that cloud-based SaaS implementations should not carry over any customization. In 2020, Oliver Betz, SVP head of product management for SAP S/4HANA, told UK users the transition "requires standardization which needs to happen on the customer side: they have to agree on standardized processes. You cannot have these modifications that you had in the on-premises world, that's not how the cloud works."

In a blog published in December 2022, Gavin Beere, the university's director of the corporate processes and systems program promised it would standardize business processes, clean up data and make it easier to transact, plan, forecast and report.

"It's no simple task. Before arriving at Leeds, I led a similar transformational programme at Yorkshire Water. Change on this scale is complex. The team is working hard to understand the systems and processes we currently use, where we need to get to, and how we get there," he said. ®