Migration from SAP ERP to SAP S/4HANA – What needs to be considered?

SAP S/4HANA is the most significant SAP product development since the market launch of SAP R/3 in 1993. There is no doubt that SAP will massively reduce support for old ERP solutions starting in 2025. To prepare for this deadline, companies using old SAP ERP systems should define their IT strategy for the coming years. Preparing an appropriate roadmap is a complex task, and numerous parameters have to be taken into account. But no matter what IT strategy a company chooses, it should be made clear that the migration to S/4HANA is not just a system update. It can fundamentally alter the business model and mode of operation. The following migration scenarios are conceivable:

a) Migration to S/4HANA as soon as possible

This scenario is suitable for companies that want to realize the potential of digitalization as quickly as possible. Such an early adopter strategy no longer bears any risks: The system's teething troubles have been eliminated since the solution was introduced in 2015. The benefits of early implementation must not be underestimated. Companies that put their money on the new business suite early on can offer better service for their customers, speed up their processes, and improve the satisfaction of their employees. S/4HANA is also an ideal platform to benefit from innovations such as the Internet of Things or predictive analytics. This allows early adopters to offer new, attractive business models to their customers while setting themselves apart from their competitors.

b) Migration to S/4HANA in 2025

This scenario is particularly well suited for companies who want to take the opportunity to rethink their IT and company strategy, or those with a complex business or ERP structure where migration needs to be prepared well in advance. They see the potential of the new solution, but want to take their time to work out what benefits they can gain and how their business processes can be optimized. There is enough time to develop new business models that are now conceivable, thanks to the new solution, and to define the optimum point in time for a migration.

c) Staying with the current SAP solution

Continuing to use the current SAP ERP beyond the year 2025 can in fact be a good option when companies are not (yet) able or willing to provide the resources for a migration. Support and bug fixes for the solution can still be obtained from SAP even after 2025 – but prices will increase annually. Adaptations to legal changes, in finance or human capital management (HCM), for example, that have been implemented by SAP directly in the system via hot packages to date will be discontinued. Furthermore, all future developments of the SAP portfolio are going to be based on the HANA technology, so they will not be available to companies with old ERP solutions. A detailed cost/benefit analysis therefore has to be conducted to determine whether staying with the old SAP solution is truly less costly than a migration to S/4HANA.