By now, you’ve probably heard the news: In February, SAP announced that it was extending support on Business Suite 7 enterprise resource planning (ERP) and related software through 2027. SAP also made a commitment to offer maintenance on SAP S/4HANA, its flagship ERP, through 2040. Organizations struggling with migrations let out a collective exhale with that news—but experts caution that the extended deadline is no reason to automatically delay the move.
Harrison McCoy, IBM Cognitive Systems HANA on Power sales leader, says that while many organizations have reprioritized due to the COVID-19 pandemic, it’s important to view the migration not as simply moving to a new platform, but instead as a path to digital transformation. “SAP S/4HANA is critical for driving the advancement of systems to support everything from business speed of operations to leveraging artificial intelligence,” says McCoy.
A successful migration to SAP S/4HANA begins by developing a solid strategic plan both for the migration and how it fits into the organization’s larger digital transformation. Paul Manuel, solutions architect at Evolving Solutions, recommends working with a partner to create a roadmap that starts by assessing the organization’s current status and then creating goals and timelines.
Before the announcement, a 2020 survey by Americas’ SAP Users Group (ASUG), reported that 16% of surveyed members were already live with SAP S/4HANA, 21% had begun the migration process and 63% had plans to migrate in the future. With the majority of organizations still needing to migrate, the supply of support and partner resources may become increasingly short as the deadline nears.
Making Fact-Based Decisions About SAP S/4HANA Migration
Organizations have delayed their migration for many reasons, including having existing leased infrastructure, waiting to see if SAP would change its plan and the financial cost of migrating. Some organizations have not moved because other projects are viewed as higher priority or are viewed as less time consuming compared to the commitment involved with the business and process planning for their SAP S/4HANA migration.
A common concern revolves around poor performance after migration. Nate Austin, practice director, Enterprise Monitoring & Analytics at Evolving Solutions, says organizations reduce their risk and issues by measuring performance both before and after migration. With the correct data, they can identify problems and reach resolutions more quickly. Additionally, he says that with fact-based measurements, organizations can determine if the system is actually faster or slower instead of using anecdotal information from users reporting poor performance.
Organizations considering delaying should carefully evaluate their decision. Those that wait until the last minute and run into issues will find themselves behind the eight ball, Austin cautions. Fixing issues with migrations often take months, which creates increased pressure for the business.
Alfred Freudenberger, SAP HANA infrastructure and hybrid cloud consultant at ASI Consulting, says organizations that have focused on the COVID-19 crisis and do not have the time and resources for the migration immediately might have a valid reason for waiting. Organizations with other valid reasons to hold off include those that have not been able to justify the business value of SAP S/4HANA, those with a high level of customization in their ERP systems or those that lack the financial resources right now.
“However, some clients are worried about a migration because of retraining, modification of their business processes, moving to new business models,” says Freudenberger. “This brings fear to many clients, which can cloud their ability to make rational business decisions.”
Freudenberger recommends organizations concerned about the migration start by learning their current readiness. This enables them to make a fact-based decision instead of a fear-based decision. By participating in an SAP HANA Readiness and Roadmap assessment, an organization can determine their infrastructure’s readiness for moving to SAP HANA. The assessment creates a plan for moving to SAP HANA based on the database requirements and interdependencies on current systems. Additionally, clients get a view of what business processes must change with the migration.
Waiting to Migrate to SAP S/4HANA May Complicate the Process
Organizations that wait will likely encounter more challenges during the migration because more organizations may be making the transition at the same time, cautions McCoy. “Moving to either SAP HANA or SAP S/4HANA is not a simple transition, but a very deep technical migration,” he says. “When you are under a time crunch even tasks like remediation and testing become a pressure point.”
Because clients must convert at some point in the future, Freudenberger recommends organizations consider the financial cost of waiting, especially in terms of customizations. Organizations that wait to convert will continue to develop their existing systems. Because everything customized in your current SAP ERP Central Component system does not move to SAP S/4HANA, you must modify almost all customizations before migrating. The longer an organization waits, the more expensive a migration becomes.
Gradual Migration Is the Best Path for Many Organizations
SAP’s extension gives clients a collective breather in the migration process, says McCoy. However, he does not recommend letting the extension change the overall plans of organizations already in process with or planning their migration. Because digital transformation brings transformation of all business models, including HR, finance, supply chain and logistics, he recommends organizations use the extension to make a more gradual transition.
Freudenberger says the combination of IBM Power Systems and IBM Storage infrastructure provides the flexibility to change, increase and decrease allocations over time. This allows organizations to start with a relatively small footprint and grow it dynamically while migrating different processes, such as finance, supply chain and logistics.
“The goal with the migration is not to force people into migrating in a way that disrupts their business,” he concludes. “Instead we want to build relationships with clients and help them migrate in a way that provides the most business benefits in both the short-term and the long-term.”