In an increasingly dynamic and competitive environment, the constant updating of technological tools is essential to maintain leadership and efficiency in business. This need for continuous innovation is one of the main reasons driving companies to consider migrating from SAP ECC to SAP S/4HANA. Another equally important factor is the end of support for SAP ECC scheduled for 2027.
However, this strategic decision presents several challenges for executives who need to carefully evaluate the pros and cons of this transition.
The Need for Innovation and Updating
Migration to SAP S/4HANA seems to be the natural option over time for about 80% of customers. However, staying on ECC is also a strategic option for some customers, who should prepare to continue maintenance and support without SAP, understanding the risks of this decision.
According to Ricardo Soares, a global SAP expert at ETHO, “one of the biggest challenges for IT professionals alongside executives in decision-making is detailing how to make the change in an organized manner and the importance of not leaving it until the last minute. Addressing issues such as time and costs. Many executives are still not fully prepared to understand the reasons for change and how to implement it. Furthermore, understanding the scenarios for this change and the options for each organization.”
Without SAP support, companies face significant risks such as system obsolescence, security issues, and decreased competitiveness. This scenario makes migration not just an option but a strategic necessity for many organizations. The end of support implies that companies need to prepare now to avoid future operational and security problems.
The good news is that there is considerable maturity in the migration process to S/4HANA and an understanding of its benefits, such as the ability to process synthetic and analytical information in real time, artificial intelligence, machine learning, automation, and IoT integration, which are essential for maintaining competitiveness and operational efficiency. While SAP ECC has served many companies well, it was designed in a different era with limitations that no longer align with modern business demands.
Continuous innovation provided by these functionalities is crucial for companies seeking to stay ahead of the competition.
Factors Influencing the Decision
Several factors influence executives’ decision-making. Migration to S/4HANA helps mitigate the risks associated with SAP ECC obsolescence, ensuring continuous support and regular updates. The cost of migrating to S/4HANA is offset by a reduction in the total cost of ownership in the long term due to greater efficiency and advanced functionalities.
Moreover, S/4HANA offers opportunities for continuous innovation, allowing companies to stay ahead of the competition with new features and technologies. Migration also enables companies to maximize their existing SAP infrastructure investments. With the end of ECC support in 2027, the pressure to migrate increases, making the preparation and execution of the migration project a priority.
Migration Challenges
Change is necessary, but certainly, the challenges of migration are many and vary depending on the complexity of each organization. The migration project can involve significant costs, from acquiring new hardware and software to consulting and training services.
Migration can cause temporary disruptions in operations, requiring meticulous planning to minimize impacts. Many companies have extensive customizations in ECC that may not be compatible with S/4HANA, requiring significant reviews and adjustments.
Furthermore, the transition to a new system can encounter resistance from employees, necessitating effective change management and proper training. Companies often have other priority projects competing for resources, complicating the migration process even further.
Strategic Scenarios and Paths
Companies have several options when considering migration:
- Plan and execute the migration to S/4HANA, leveraging the benefits of a modern and scalable platform.
- Continue with ECC after SAP support ends and maintain it with another specialized company, though this option involves significant risks of obsolescence and security issues.
- Consider migrating to another ERP provider, evaluating the costs and benefits of this change.
Each of these options requires detailed analysis and careful planning to ensure the final decision aligns with the company’s strategic objectives.
Different Market Perspectives on Migrating from SAP ECC to S/4HANA
Some companies see migration as an opportunity to review processes and improve alignment with business needs, driven by market pressure to innovate more rapidly with digital products and services.
Other companies, however, may feel comfortable with the current solution and do not see clear or tangible benefits in migration. They may also be concerned about the extra costs related to the change, the duration of the project, and competition with other more important projects.
Check out the main points of those who have opted for migration and those who are still seeking more secure information to proceed with changes.
- Arguments from those who have already said yes to migration:
- Opportunity to review processes and improve alignment with business needs.
- Market pressure to innovate more rapidly with digital products and services.
- Evolve alongside the product (new features and technologies).
- Mitigate the risk with the end of SAP support.
Viewpoint of those who do not want to migrate in the current scenario:
- The current solution meets business needs.
- Benefits are not clear or tangible.
- Extra costs related to migration.
- Duration of the migration project.
- Competition with other priority projects.
The decision to migrate from SAP ECC to S/4HANA is complex and strategic, involving technological, financial, and operational considerations. With a well-planned and informed approach, executives can navigate these challenges and position their companies for continued success in the digital future.
To make an informed decision, executives should conduct an in-depth study of scenarios and their impacts, evaluate the costs, benefits, and risks of each option, involve all stakeholders in the decision-making process, and carefully plan the migration, including hiring suppliers and preparing teams.
Count on ETHO at Every Stage of Migration
At this moment of change, it is crucial to have a reliable partner to help navigate the transition. ETHO is a company specialized in SAP with experience in large-scale projects and a deep understanding of each client’s specific needs.
Our approach is personalized, beginning by understanding the particularities and priorities of each company before offering tailored solutions. Our team of experts is prepared to participate in all stages of migration, from preparing for the change to executing, managing, and allocating specialized technical resources.
If your company is at any stage of change, talk to one of our specialists. It will be gratifying to help you find the best solution!
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