SAP deadline: two more years but still not enough
If you’re an SAP customer, then you’ve been facing their S/4HANA deadline. You may have had S/4HANA plans somewhere in your roadmap, due to complete by 2025 – though this was thankfully extended to 2027 earlier this year, following customer feedback.
The S/4HANA deadline was 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 – a complex process, very time and resource-intensive, and prone to failure.
Now, given the devastating impact made by the COVID-19 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 cash and rebuild themselves before they can even think of a full system refit.
Organisations aren’t ready yet; but is S/4HANA ready, either?
Is S/4HANA ready to meet organisations’ needs?
Let’s consider a real-life example: an organisation who suffered an SAP implementation failure — an unfortunate case, which carries a valuable lesson.
LeasePlan, a Dutch hire-car service, had been SAP customers since 2006. In 2016, following a large acquisition, they decided on a new SAP ERP strategy. LeasePlan would utilise SAP’s platform to refine their internal operations, aiming to lower their total cost of ownership.
However, they quickly discovered two things; the transition to S/4HANA was far from straightforward and qualified experts are in short supply, and that S/4HANA was fundamentally incompatible with what they wanted to achieve – the functionality simply wasn’t there.
When LeasePlan investors could not justify the mounting costs of the project, LeasePlan pulled the plug, and their total investment of €98 million was deemed ‘unrecoverable’.
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. As a consequence, the system is being restructured.Tex Gunning, LeasePlan CEO
SAP may well market S/4HANA as more dynamic, and a way for organisations to speed up their query resolution – but speed and efficiency are pointless in software that is not fit for purpose.
The elephant in the room – S/4HANA expertise
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 S/4 Hana migration, the research estimated that if every organisation migrating to S/4 Hana 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
The fact is, there are not enough skilled and experienced consultants available to meet this demand.
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.
Best practice: Wait for S/4HANA to be ready for you
S/4HANA isn’t ready for you right now and 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 focus on 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 are 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, not 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, covering why many organisations worldwide are choosing to pause their S/4HANA projects, and how you can do the same.