Two-fifths of SAP Americas users yet to ditch legacy ERP

S/4HANA migration? Many still worried about business process change

Around two fifths of North America's SAP users have yet to begin migrating to S/4HANA with just two years until mainstream support ends for legacy systems.

Research from the Americas' SAP Users' Group (ASUG) found that a little more than 60 percent of 173 members are already live or actively switching to S/4HANA, the in-memory database system first introduced a decade ago.

The remaining users are likely to be reliant on legacy system ECC or earlier. Mainstream support for ECC ends after 2027, while extended support is available until the end of 2030, for a 2 percent premium.

The research — commissioned by data integrity vendor Precisely — doesn't define “in the process”, though ECC-to-S/4HANA migrations can take years for large organizations.

Figures from Gartner, released earlier this year, paint a bleaker picture: just 39 percent of worldwide ECC users had licensed S/4HANA to begin migration, suggesting users in the Americas lead their global counterparts.

The ASUG research found business process change was the greatest barrier to migration among 49 percent of the users surveyed.

“The shift from ECC to S/4HANA is not a simple ‘lift-and-shift'. It requires companies to fundamentally rethink how core SAP data creation and management processes are structured and administered,” the report states — a significant challenge given SAP runs some of the world's largest, most complex organizations.

Customizations ranked second at 44 percent. SAP mandates a clean core implementation with extensions built outside the core on its cloud-based Business Technology Platform.

“Many organizations have built unique, business-critical processes in ECC that cannot be transferred with SAP’s standard migration tools. This makes adopting SAP’s ‘clean core’ strategy difficult, often requiring additional custom tool development or manual workarounds,” the research says.

Organizational inertia presented barriers to migration for 37 percent. “Change management remains one of the most underestimated challenges. Companies consistently tell us that the cultural and operational shifts associated with moving to SAP S/4HANA are as challenging as the technical migration itself,” the report adds.

One of the problems is that users struggle to justify major expenditure and disruption for software that essentially replicates existing functionality.

While SAP touts S/4HANA agility and productivity gains, another recent survey found 95 percent of legacy users say building a positive case to migrate requires a big effort or is genuinely challenging. Freeform Dynamics’s poll of 455 CIOs, senior-level IT roles, SAP specialists, and business managers also found that 83 percent of users did not fully understand SAP's latest migration policies and deadlines. And some 84 percent expressed concern about current messaging and how it would impact their operations. ®