SAP S/4HANA Adoption in Uncertain Times

The global economy is unsteady and your business has probably, in some way, been impacted. Because of this, your company might be in survival mode—doing everything you can to not only keep your business afloat but continue moving forward (even if progress is slow) with important projects.

One such project is the adoption of SAP S/4HANA, a platform that is of great importance to businesses everywhere. And although such a migration might be deemed as disruptive to your business that is seeing a growing demand from customers, clients, and other companies, the benefits gained are significant to the productivity of your pipelines and chains.

What must CIOs consider when addressing the plans for rolling out the latest iteration of SAP S/4HANA? Let’s examine this.

SAP S/4HANA 7

It’s important to consider that although SAP has changed the end of mainstream maintenance of SAP S/4HANA 7 to 2027, the goal should be to focus on the migration to the newest iteration sooner, rather than later, so to continue driving the success of your business forward. And although you can hold off on the transition to the latest release, the big question is whether you should wait.

Although, thanks to the change in mainstream maintenance (extended to give CIOs a bit more breathing room before they must migrate to the latest release), your company should not ease up plans for migration. In fact, according to a report from Gartner, there are specific recommendations to help mitigate certain impacts for the new maintenance support deadlines.

In their report, “What CIOs Must Now Consider Amid Disruption and Deadlines Around SAP S/4HANA,”[1] Gartner identifies three important impacts.

One impact is the extension of SAP Business Suite 7 support through 2030. Gartner says this “has weakened the business justification for customers who had been under pressure to migrate to SAP S/4HANA by 2025, the original deadline for SAP Business Suite 7 maintenance to end.” ¹ To mitigate this impact, Gartner recommends that CIOs should “avoid losing momentum and failing to achieve their organization’s strategic goals by proceeding to execute their SAP S/4HANA adoption plan.”

Another impact is the global pandemic, which Gartner says “has created economic uncertainty, as many companies are in survival mode and do not have the appetite for large-scale migration or modernization until the global market recovers.”  Gartner’s recommendation here is to “avoid a costly and high-risk ‘big bang’ by embracing composable ERP and breaking out function and adopting them in phases to incrementally replace SAP ERP Central Component (SAP ECC) with SAP S/4HANA and other SAP strategic SaaS products.”

Cost, in terms of time and money, is the final impact. “Migration to SAP S/4HANA requires the additional adoption of other SAP SaaS offerings, resulting in a substantial increase in the cost and effort required to deploy and integrate,”  says Gartner. Their recommendation to address this impact is for CIOs to “reduce risk if they cannot upgrade now by keeping up with enhancements and support package updates, or transition to independent third-party maintenance support.”

Devil in the Details

There are some important things you should understand about the extended support. Although you may keep running SAP ECC for an extended time, you’ll not only experience a two-percent increase in overall maintenance, but your SAP landscape must remain at a certain level—in terms of enhancement packages (EHPs)—to remain compliant with the SAP support policy.

On top of that, other SAP NetWeaver Business Suite for SAP CRM, SAP Supplier Relationship Manager, and SAP Supply Chain Management tools must adhere to the same support levels.

Third-Party Maintenance Support

You might be considering opting to use a third-party to further extend your maintenance support and buy you time before the upgrade becomes a must. This option is appealing, as it can offer a more personalized support engagement, by assigning support engineers to each account. On top of that, third-party support can be had at reduced costs.

However, if you do opt to go the third-party route, there are certain things you’ll need to consider that a third-party support provider will not do for you, according to Gartner :

• It will not replace the vendor as a developer of a new application code for enhancements or new functionality.
• It does not have the access to, or the right to share the vendor’s content, such as patch notes and new releases.

The Gartner report continues to say, “If you decide to leave now, then return to SAP later to adopt SAP S/4HANA, you must come back as a net new customer and select the reimplementation strategy to avoid back maintenance pay.”

Conclusion

Even with your company suffering under the weight of economic uncertainty, you can rest assured that you have the power (and the options) to make a smooth migration to the latest release of SAP S/4HANA. You can extend your rollout to the latest iteration, knowing that this transition is not only financially feasible, but an important step to keep your business functioning smoothly and in compliance.

This Gartner report gives CIOs and those responsible for SAP systems specific recommendations for cost considerations and setting the right expectations within the business. To help you get up to speed on your migration to the latest release of SAP S/4HANA, click here for complimentary access to Gartner’s report, What CIOs Must Now Consider Amid Disruption and Deadline Around SAP S/4HANA.

^[1]  Source: Gartner, What CIOs Must Now Consider Amid Disruption Deadlines Around SAP S/4HANA, Duy Nguyen, Fabio Di Capau, 3 December 2020