2027: This is the deadline announced for the end of SAP ECC support. And it’s very close! The reason for this discontinuation is that the system does not fully meet current technological innovations and needs. After all, the software that has been on the market for 15 years was designed for the business profile of a specific period, and now it no longer supports the agility and efficiency needed for a new scenario.
Therefore, companies that still use SAP ECC will need to migrate to a more modern and scalable platform like S/4HANA to continue receiving support for continuous updates and improvements.
As ETHO’s global SAP specialist Ricardo Soares explains, “this is a natural evolution of the product, technology is like that. For decision-making, it is necessary to understand the problem and know what alternatives the client has. What are the possible market scenarios.”
Although this announcement is not new, it serves as a constant reminder for companies that still use this version of the SAP ECC system. The reason is that this is the time to make an important decision: update to SAP S/4HANA or seek alternatives.
According to IDC, about 34% of companies are already preparing for migration to S/4 HANA, and according to Gartner, 22% of business leaders are aware of the need for migration.
However, from understanding the problem to actually updating, it will be a long process that will consume time and resources from organizations, so it requires careful planning and a well-defined strategy to provide the smoothest transition possible.
In this blog, learn the main aspects of this transition, how to make the most of the benefits of SAP S/4HANA, and some alternatives that can be evaluated. Check out the full reading!
Is it necessary to switch from SAP ECC to S/4HANA?
Migration to S/4HANA is a trend for most companies, but it cannot be said that it is the only path. Although SAP has announced the end of full support for SAP ECC in 2027, it is necessary to understand the current scenario of each organization so that the decision-making process is done consciously and appropriate to the reality of each company.
However, recent research data indicates that migration is slow worldwide and in Brazil below the global average. This suggests that many companies are still evaluating the decision or are not prepared to carry out the migration, possibly due to factors such as the complexity of the process, the need for financial and human resources, and the lack of knowledge about the new functionalities and benefits of S/4HANA.
These numbers demonstrate the companies’ decision-making panorama. They were extracted from the sources: Brazil (Mignow Research – November 2023) and World (SAP Insider Research – March 2024):
- 21% of companies worldwide and 17% in Brazil have already migrated.
- 65% of companies worldwide and 63% in Brazil plan to migrate by 2027.
- 9% worldwide and 14% in Brazil have no plans yet.
- 5% worldwide and 6% in Brazil do not intend to migrate.
Given the need to understand the implications and alternatives until executives decide, the end of SAP’s full support for ECC in 2027 is a deadline that cannot be ignored. This is because if nothing is done, from 2028, companies will not have access to new software versions, technology updates, technical guidance from specialists, correction packages, functionality adaptations, and other resources. Leaving the discussion until the last moment also does not seem to be a good strategy given the high demand for SAP professionals expected for the next 2 to 3 years.
Therefore, companies that do not want to lose competitiveness, revenue, and customers need to act. If it is decided to migrate to S/4HANA, this represents the latest generation of SAP’s ERP system with important features for organizations such as improvements in functionalities, security, and new technologies like artificial intelligence.
Additionally, S/4HANA is a more scalable and flexible platform, allowing companies to become even more agile and competitive. With constantly evolving technology, solutions need to meet new demands, and companies must adapt to continue in the market.
In this context, migration to S/4HANA is an important step for companies that want to stay updated and competitive since ECC does not support the most current intelligent technologies.
Relevant factors influencing the adoption of S/4HANA
Choosing SAP S/4HANA can be motivated by some important factors, including:
- The need to improve operational efficiency;
- The ability to handle increasing volumes of data;
- The demand for a more scalable and flexible platform;
- Cost reduction;
- Risk reduction;
- Improved competitiveness.
Thus, companies seeking a competitive advantage and improving their responsiveness to market changes may find S/4HANA as a solution to meet these needs.
Main challenges of migrating from SAP ECC to S/4HANA
We know that migrating from SAP ECC to S/4HANA is a labor-intensive process involving several stages and challenges and will consume time and resources from organizations at a time when tight budgets and a focus on efficiency are priorities.
Depending on the chosen scenario, there may be a need to restructure and reorganize current data and processes to adapt to the new functionalities and architecture of S/4HANA. This can be time-consuming and demand a great effort in planning and execution.
Additionally, the migration also requires user and IT team training to handle the new functionalities and interfaces of S/4HANA, which can be a huge challenge, especially for companies with a large user base.
Another point of attention is ensuring data integrity and continuity of processes during this migration period. This can be quite challenging for companies that depend on critical processes and tight delivery deadlines. The migration also requires updating and reconfiguring the IT infrastructure. But with careful planning and a well-defined strategy, it is possible to continue processes and maintain data integrity more smoothly.
Ricardo Soares also emphasizes that “this is a process that requires planning, investment, and alternatives to be done. Depending on the reality of SAP ECC in the company, it will have more or less work. And the main issue is to understand the benefit of this change.”
How are companies preparing for this?
A migration project competes with other initiatives, and there arises the first and most important challenge: keeping executives aligned regarding the need, costs, benefits, and possible alternatives to migration to S/4HANA. Research shows that most executives are far from understanding the need to make the most appropriate decision. The recommendation is to start with a short phase of alignment and executive awareness, typically 4 weeks, and do the “homework” by informing executives about the change, impacts, benefits, and risks involved with the migration.
Considering options and alternatives is also part of this phase: what type of migration can be done and, if the migration is not decided upon, what alternatives would be available, impacts, and associated risks. Once executives have understood and are aligned on the possible alternatives, the preparation and planning phase of the chosen alternative(s) can proceed, typically 8 to 12 weeks, detailing scope, internal and outsourced resources, timeline, and costs mainly. The result is submitted for executive approval, and after this phase, the mobilization and hiring of the necessary resources for project execution begin.
How can ETHO contribute to organizations in this change?
In this update context, we already know that changing is fundamental. However, it is necessary to do it with planning! First of all, it is necessary to know the particularities and priorities of each company to access the available alternatives for this transition period and select the best option for each organization.
ETHO has the experience and is ready to understand the ideal profiles and scenarios for each client. In addition to offering solutions for the stages of migration in all aspects: from preparation for the change, execution, management, and allocation of specialized technical resources.
If your company is at any stage of the change moment, talk to one of our specialists.
Comments are closed