IPR-Insights Sapper


2 Mar, 2023


Challenges around S/4HANA migration options: planning

When we think about the options we have in the future with our current ERP system, we keep facing the question: “How can we contract SAP in the future? What are the decision drivers and aspects that we need to consider when looking into S/4HANA?” – by Gábor Hédai, IPR-Insights.

The answer is no less typical: we will make the right decisions based on the information at hand. But do we really know what we’re dealing with? Not sure, right? Let’s see some of the main challenges we are facing with increasing urgency as we near 2027, the final date when we have to decide whether or not to commit to the migration.

Challenges with planning our future ERP

Since Suite for HANA was released, most SAP clients, especially those on ECC, have been looking for answers to what a migration to S/4HANA really means. In the meantime, it’s been two years since we’ve had RISE with SAP on the table, and we have slowly realized this is no longer a question of migrating just software anymore.

All this is more complicated than we thought in the beginning. It is not only about understanding the differences in managing an on-premises or cloud infrastructure, but we also need to consider Application Management Services, migration costs and crucially, return on investments (ROI). Another key question is the justification for migrating to S/4HANA. It is not only a software decision anymore!

It is more a complex decision that affects our level of captivity by SAP, our ability to manage our infrastructure and service levels by ourselves. Do we choose the path of ongoing adaptation to changes or do we take the one that is more comfortable but less flexible?  And yes, we can say: “Well, we don’t want to take care of our IT infrastructure, and perhaps not even Application Management Services; so, SAP, please take care of all of that!”. In other words, we may want an all-in-one contract.

If, however, we may not want to put all our eggs in that very demanding basket. Gartner came up with their so-called Composable ERP idea, which proposes we stick with a main suite of software for ERP like SAP but when it comes to specific business functions such as warehouse management, we may look for another solution like Blue Yonder for supply chain management, perhaps Oracle HCM or Workday for human capital management, and for CRM, maybe Salesforce. It is pretty much a best-in-class approach still with SAP at the center but being open to other solutions if they better serve our business.

From a planning perspective, we have to keep in mind that we have more than just a single option. Let’s take the opportunity, mapping them and understanding their implications, as soon as possible. It may be worth our while to take a good look around for some alternatives, and soon.