September 5, 2023
A good enterprise resource planning (ERP) platform comes into its own as tough economic conditions spur a fresh focus on cost control, efficiency, and value for money.
As the world’s leading ERP system, SAP is at the heart of business for many of our clients and our partner network has been active this year helping them make the most of this incredibly powerful platform.
But a key factor that is driving investment in SAP in 2023, and will continue to do so in 2024, is preparation for the looming end-of-life of SAP ERP 6, (including the core ERP Central Component - ECC 6.0). This is a platform used by thousands of SAP customers around the world, but which SAP will phase out in 2027 in favor of S/4HANA, which was introduced in 2015.
S/4HANA is SAP’s next-generation ERP system, incorporating everything from financial data, and human resources, to inventory management, and customer management. Some of the biggest companies in the world run their operations on S/4HANA which is available as an on-premise installation, and as SAP S/4HANA Cloud in public or private clouds.
Change is coming
It’s a great ERP system, but many SAP customers are still sitting on aging ECC installations. It serves their purposes, so they don’t see compelling reasons to change. But official SAP support for ECC 6.0 will end on December 31, 2027 after which point, customers will have to pay higher fees to receive support in the “extended maintenance phase” out to December 31, 2030. SAP had already pushed the phase out date back from 2025 knowing that many customers wouldn’t meet the deadline.
While numerous third-party SAP specialists have vowed to continue support well beyond the 2027 phase out date, it makes sense for any SAP ERP 6 customer to lay the groundwork now for an orderly migration to S4/HANA, which really is the future of SAP’s ERP platform.
But it is a technically complex and potentially expensive undertaking, not a standard upgrade. It involves new software licenses and may require skills that your existing team doesn’t possess.
CIOs all over the country are currently working through the options for their SAP migration. Do they hold off for a few more years, continuing to invest in their current system, or make the move to S/4HANA now?
Ideally, you shouldn’t just kick the can down the road on that decision, but embark on the inevitable modernization as soon as possible. But every organization has different technical, financial, and skills requirements to deal with. A successful migration could take 2 - 3 years from woe to go for a large organization, so time is pressing.
Seven factors to consider now as you plan to make the move from SAP ERP 6 to S/4HANA:
- Assessment and planning: Perform a comprehensive assessment of your current ECC landscape. Identify the customizations, integrations, and functionalities that need to be migrated. Create a detailed migration plan that outlines the timeline, resources, and scope of the project.
- Understand S/4HANA features and benefits: Educate your team about the features and benefits of SAP S/4HANA to understand how it can add value to your business processes and operations. If, on the other hand, you are considering moving away from SAP entirely, now is the time to consider alternatives. Research the various S/4HANA editions to see which one best suits your business needs. Options include on-premises, cloud, or hybrid deployment models.
- Choose a migration approach: Decide on the migration approach that suits your organization's needs:
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- Greenfield: Implement a new instance of S/4HANA and migrate only essential data.
- Brownfield: Upgrade your existing ECC instance to S/4HANA and migrate data and configurations.
- Hybrid approach: Combine aspects of both greenfield and brownfield approaches. Data Cleansing and Preparation.
- System prerequisites: Investigate whether your current ERP/ECC 6 system meets the technical requirements for S/4HANA. This might involve hardware upgrades, database conversions (if moving to SAP HANA), and software updates.
- Custom code and integration review: Assess the custom code, enhancements, and integrations in your ECC system. Determine what needs to be adjusted, rewritten, or deprecated to work with S/4HANA.
- Change management: Consider the change management strategies you’ll need to employ to address potential resistance from users and ensure a smooth transition with full business continuity throughout the process.
- Review the status of your data: You will want to cleanse and optimize your data to ensure that only relevant and accurate information is migrated. This step is critical to prevent data inconsistencies and issues in the new environment. So getting a thorough understanding of your data landscape will help in the migration planning process.
Engage SAP experts
This is a complex process involving your mission-critical systems, which is why many of our customers outsource part or all of an SAP migration to specialist partners. Consider involving SAP experts or consultants who specialize in S/4HANA migrations. Their experience can be invaluable in ensuring a successful migration.
Remember that each organization's migration journey may differ based on its specific needs, complexities, and resources. Thorough planning, testing, and collaboration among stakeholders are essential for a successful migration from ECC to S/4HANA.
The bottom line is that a next-generation ERP system like S4/HANA allows you to modernize your core infrastructure for the decades ahead. 2027 isn’t far away now.
The Accelerance partner network includes numerous SAP specialists skilled in advising on and undertaking ERP migration projects, as well as providing ongoing support and managed services. They can help you make the right decision and establish a migration timeline that suits your needs.
Get in touch with an Accelerance analyst to find out more about the SAP expertise we can help you tap into all over the world.
