SAP deadline: two more years but still not enough
If you’re an SAP customer, then you’ve been facing its S/4HANA deadline. You may have had S/4HANA plans somewhere in your roadmap due to complete by 2025. SAP has now extended the deadline to 2027 following customer feedback.
The deadline has been extended because SAP’s customers didn’t feel ready; they didn’t have enough time to prepare for the transition. Moving to S/4HANA Public or Private Cloud isn’t just a lift-and-shift upgrade. It involves a full ERP reimplementation which is a complex process, very time & resource-intensive, and prone to failure.
Now, given the impact made by the pandemic, it’s possible that 2027 will still be too soon a deadline for most. Organisations need the coming months, possibly even years, to save and rebuild themselves. This certainly comes before they can even think of a full system refit.
Organisations aren’t ready yet – but is SAP ready, either?
Is S/4HANA ready to meet organisation’s needs?
Let’s consider a real-life example of an organisation that suffered an SAP implementation failure. It’s an unfortunate case which carries a valuable lesson.
LeasePlan, a Dutch hire-car service, had been a SAP customer since 2006. In 2016, following a large acquisition, it decided on a new SAP ERP strategy. LeasePlan would utilise SAP’s platform to refine its internal operations, aiming to lower its total cost of ownership.
However, LeasePlan quickly discovered that the transition to S/4HANA was far from straightforward and qualified experts are in short supply. Also, for what it wanted to achieve, S/4HANA was fundamentally incompatible; the functionality simply wasn’t there.
LeasePlan pulled the plug, and its total investment of €98 million was deemed “unrecoverable,” when LeasePlan investors could not justify the mounting costs of the project.
“The system is not fit for purpose in the emerging digital world. The monolithic nature of [the SAP system] hinders its ability to make incremental product and service improvements at a time of accelerated technological change. The system is being restructured as a consequence.”Tex Gunning, LeasePlan CEO, Consultancy.uk
S/4HANA is marketed as more dynamic, and a way for organisations to speed up their query resolutions, but in software that is not fit for purpose, speed and efficiency are pointless.
Expertise: The elephant in the room
So S/4HANA may not be adequately developed and suitable for many organisations, but there’s another more immediate problem, which is getting there in the first place.
“Based on a nine-month migration, the research estimated that if every organisation migrating to S/4HANA hired an average of 15 SAP consultants per project globally, 108 million days of consulting effort would be needed to complete the migration of the 42,000 SAP customers still on ECC.”ComputerWeekly.com
There is too much demand for the amount of skilled and experienced consultants available in the market.
A successful reimplementation alone would cost an organisation dearly in terms of time and resource, not to mention business disruption and downtime. Those problems only escalate if this “S/4HANA traffic jam” causes the process to go on for even longer.
Wait for S/4HANA to be ready for you
S/4HANA isn’t ready for you right now. The shortage of experienced consultants to assist with the implementation makes it even more risky at this point. Our advice for all SAP customers, and indeed for all organisations right now is: focus on savings and your IT roadmap, not your vendor’s.
“The road to S/4HANA is not the “yellow brick road to a fabulous emerald city” that SAP is trying to sell you. The reality is that it is a narrow, risky road that leads to a construction site.”Ken Metcalfe, Head of SAP Practice at Support Revolution
We recommend you delay your S/4HANA implementation and switch from SAP Support to third-party support in the meantime. This will mean two key things:
- You immediately cut your current SAP support bill in half, unlocking key savings at this crucial time.
- You can ignore SAP’s deadlines. We will support you indefinitely, so you can move to S/4HANA at a time that suits you rather than SAP.
Temporarily holding off from S/4HANA isn’t denying your own IT development. It’s a strategic choice giving both you and SAP time to prepare, before making the switch at a better time.
Below is a link to our guide on this subject. It covers why many organisations worldwide are choosing to pause their S/4HANA projects, and how you can do the same.
Want to read more content like this? Sign up to our newsletter below and be the first to receive our latest content!