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With the end of SAP ERP Central Component support looming, SAP customers face some tough decisions in the near future. Understanding the best path forward is a must.
2019 was a tumultuous year for SAP as it underwent major layoffs and leadership changes. The vendor's internal restructuring will undoubtedly influence the direction of the company. But most customers arguably are far more concerned with an SAP ECC to S/4HANA migration as they face the 2025 deadline for the end of ECC support.
To help CIOs and other leaders understand that issue, here are five critical points to understand about an SAP ECC to S/4HANA migration -- and whether all customers are even planning such a move.
1. SAP customers aren't making quick moves to S/4HANA
SAP customers are taking their time planning an SAP ECC to S/4HANA migration, and some aren't even planning to do so, according to a 2019 survey by the Americas' SAP Users' Group (ASUG).
Fifty-six percent of respondents haven't taken specific steps toward an S/4HANA migration, although at some point they intend to, according to the survey. However, 12% do not intend to move to S/4HANA at all.
SAP customers cite a number of reasons for delaying a move to S/4HANA, including the importance of other IT projects, lack of IT resources and lack of a solid business case.
Still, SAP's position is that, eventually, customers are planning an ECC to S/4HANA migration.
"Overall, there's a general sense that they want to do it, they're planning for it, they're gathering data and information, and they're looking for use cases that drive a business case," said ASUG CEO Geoff Scott, when evaluating whether companies are taking a wait-and-see approach.
2. Multiple end-of-support ECC options exist
A number of SAP articles are focused on what options customers have. This is especially true for companies that haven't already considered what a move off ECC entails.
SAP and its partners have encouraged customers that don't have a clear path to S/4HANA to go with tangential products, such as C/4HANA, Concur, SuccessFactors or Ariba, said Len Riley, commercial advisory practice leader at UpperEdge.
"[These customers are] being somewhat nimble and realistic relative to what they can achieve with peripheral cloud solutions as opposed to trying to push a rock up a hill and move from ECC to S/4HANA," he said, when commenting on options for moving off ECC.
Another option for customers is to shrink their ECC footprint with a more modular approach, Riley said. For example, they could choose C/4HANA for their customer experience management platform. For other business processes, they might look to vendors besides SAP.
3. A business case is critical to moving to S/4HANA
Deciding whether and how to move to S/4HANA requires understanding technical requirements and creating a business case. Organizations can deploy S/4HANA in the cloud, on premises or in a hybrid environment, with each having benefits and drawbacks.
ECC has fully developed modules for a number of industries and a full range of functionality, but SAP leaders believe it's not enough for capabilities like real-time decision-making, big data processing and other applications that are a part of business today, said Bjoern Braemer, head of SAP S/4HANA movement at SAP, which could help build an S/4HANA business case.
Data volumes are growing exponentially, and S/4HANA's business intelligence and analytics capabilities present a compelling case for a move, Braemer said.
Yet a move to S/4HANA can seem overwhelming, as worries of ecosystem complexity force SAP customers to consider the greenfield vs. brownfield question head-on, and decide on cloud deployment options. SAP customers considering an S/4HANA move should not underestimate the number of technical and business decisions they need to make.
4. S/4HANA is meant to enable an 'intelligent enterprise'
Any article covering SAP in early 2020 would not be complete without addressing what SAP calls the "intelligent enterprise."
S/4HANA is meant to help create an intelligent enterprise with its focus on getting in-depth and close to real-time insight from the data, said Derek Oats, CEO of Americas at SNP, an SAP partner based in Heidelberg, Germany that provides migration services, in a comment on S/4HANA and the intelligent enterprise.
To create an intelligent enterprise, customers need a platform that can take data from sources, such as enterprise applications and IoT sensors, and prepare it for analytics, AI and machine learning, said Oats. S/4HANA uses SAP HANA to do that and then presents the data in an easy-to-navigate user interface, he said.
However, many current SAP customers could turn to other vendors to enable these capabilities.
"There's going to have to be this movement in the customer base," said Joshua Greenbaum, principal at Enterprise Applications Consulting. "The 'where' and 'what next' is complicated."