Most SAP customers are finding the SAP ERP 6.0 upgrade significantly easier than past upgrades, according to AMR Research.It's largely because customers on R/3 4.6 and 4.7 releases upgrading to ERP 6.0 need take only the functionality they're interested in. In the past, they had to take, apply and test everything and then sort out what they wanted and didn't want.
Plus, SAP did a much better job with the tools available to help with the upgrade, which allow customers to do a significant amount of work before the actual conversion. There are better tools for estimating the size and duration of the project, as well as tools and techniques that allow customers to do the vast majority of work without the systems being down, including test grips and automated testing.
"They did a much better job than we've ever seen before," said AMR Research vice president Jim Shepherd, who conducted the research as part of the research firm's SAP Peer Forum. The program offers best practices and lessons-learned through summits, teleconferences and webcasts.
As has been the trend with all IT projects, the recession has slowed upgrades. Shepherd estimates about 9,500 customers have upgraded to the latest version. Back in November, SAP CEO Leo Apotheker said about 500 customers a month were moving onto SAP's newest release, and he predicted that by 2010 all customers will have moved onto ERP 6.0 or the latest Business Suite releases.
Also, the upgrade is harder for companies on really old releases of R/3 because the difference between what they had and what's available now is so great -- the data models have changed, the underlying technology has changed, and the look and feel has changed, Shepherd said. It becomes more like a new implementation.
That said, the upgrade is not a particularly expensive project, and in some cases, this is actually a good time to do it because things are slow enough that companies have resources available to work on it, Shepherd said. Smaller companies are even opting to do it themselves without contracted help.
In turn, a lot of customers are doing the upgrade in two stages – performing a technical SAP ERP upgrade first, and a functional one if necessary. The impact on business users is very small with a technical upgrade, and the kind of testing companies have to do with a technical upgrade is much less labor-intensive than a functional upgrade.
"By phasing this, they're able to significantly minimize the impact," Shepherd said.
While there's a huge range, generally the ERP 6.0 upgrade is a three to six month project – and the actual conversion for the vast majority of companies will occur over the weekend.
The end of support is a major driver in upgrading to ERP 6.0, but there are others.
Some customers are looking to clean up their environments by getting rid of modifications and customizations, cleaning up data, and archiving information that they don't need.
"The more of that stuff gets cleaned out, the faster and easier the conversion is," Shepherd said.
The biggest challenge is deciding what new functionality to take, he said. Customers have to ask themselves whether their interest in adding new functionality justifies training employees or getting rid of an existing application that does the same thing.
SAP has made a lot of improvements to the SAP financial systems, adding a new general ledger that provides for much better reporting, and a financial supply chain capability. It's also added expense and travel management.
In turn, SAP has significantly improved the usability and look and feel of the product and added a lot of embedded BI and analytics – which is very appealing for customers.
Most customers are completing the technical upgrade and then deciding that they'll add functionality next year or at some later point. This is largely because SAP enhancement packages should make upgrades significantly easier in the future, Shepherd said. From now on, customers can download the functionality they want, when they want it.
"The upgrade process becomes a completely different animal with enhancement packages," Shepherd said.