Extended deadline for S/4HANA: Why companies should still migrate now

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By MR BLUEFIELD - March 20, 2020

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The deadline until which companies need to migrate to S/4HANA has been postponed: SAP is extending the ERP standard maintenance for Business Suite 7 until the end of 2027. MR BLUEFIELD explains why companies should nevertheless tackle the switch to S/4HANA early.

The SAP community has been speculating for some time about whether the software company would actually end maintenance of existing ERP systems in December 2025. Now it is clear: the support will be extended by two years. In addition, SAP is offering extended maintenance until 2030 at an additional charge, which can be used optionally. Therefore, companies have more time to switch to the new Business Suite S/4HANA.

 

Companies shy away from S/4HANA migration

This news underlines the fact that the change is an extremely complex challenge for companies and their decision-makers and has therefore been approached rather hesitantly so far. A fact that is also illustrated by the figures from a trend survey conducted by IT-Onlinemagazin in cooperation with SAP partner SNP. While only eight percent of the companies surveyed have already completed the migration to S/4HANA, 16 percent of the survey participants would like to switch this year, and another 13 percent are planning on migrating next year. However, the majority (60 percent) do not want to initiate the project until 2022 or even later.

 

S/4HANA: Preparing processes and systems for migration

Real-time analyses, the linking of analytical and operational functions, and a significantly lower overall database memory requirement: SAP software itself has undergone extensive technological change and offers enormous potential for innovation and optimization for companies. But this also means that the changeover is far more complex than a mere software update. In order for companies to benefit from the advantages of SAP S/4HANA, extensive redesign work on existing systems and business processes is often required along the entire value chain. This calls for in-depth IT expertise as well as an understanding of business processes, but also of the challenges of progressive digitization in general. By extending support for existing ERP systems, companies can now tackle their complex transformation projects in a more structured and sustainable manner.

 

Creating a strategic platform for further technological leaps with S/4HANA

"In order to provide a strategic platform for future technological leaps, the introduction of S/4HANA is often combined with process optimizations, return of customer developments to the standard and/or system and client consolidation," says Burkhard Schröder, Manager Consulting at SNP, drawing on his many years of S/4HANA project experience. "With such a broad-based modernization push, companies want to achieve medium and long-term competitive advantages".

 

Planning security: Maintenance for SAP S/4HANA confirmed until 2040

In addition to the maintenance extension for existing ERP systems, SAP has agreed to maintain S/4HANA until at least 2040. This will provide companies with the assurance that they will be continuously supplied with innovations on their digital transformation journey and will be able to derive long-term business benefits. "This is probably the longest maintenance guarantee ever made for a software solution," says Thomas Saueressig, member of the SAP Product Engineering Executive Board, in a news release by the SAP News Center. SAP committed to this independent of its customers' future business needs. The software company expects SAP S/4HANA to meet all these challenges.

 

Conclusion: Using new scope for transformation projects

Alas, decision-makers can breathe a sigh of relief as SAP gives them more time to make forward-looking decisions. At the same time, the long maintenance commitment for S/4HANA gives them more planning security, so that they can best leverage the potential of investments in SAP systems in the future. It is advisable to use the new freedom effectively in order to plan the migration and preparatory work without time pressure. Companies should certainly schedule sufficient time for determining their migration strategy. Afterall, according to the trend survey by IT-Onlinemagazin, this is the greatest challenge for 60 percent of companies. Depending on the transformation approach – whether Greenfield, Brownfield or Bluefield are used – the design options and system downtime required for a migration can vary greatly. Companies should intensively deal with the differences and choose a migration path that meets their specific requirements. It should also be borne in mind that specialized service providers are generally highly requested. Companies that migrate at an early stage will have access to external help to make the changeover less complicated, faster and more secure. They are able to benefit from the advantages offered by S/4HANA earlier than their competitors.

 

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MR BLUEFIELD SUMMARIZES

  • SAP extends ERP maintenance for Business Suite 7 until 2027 and 2030. This gives companies more time to migrate to the new SAP S/4HANA Business Suite.
  • The migration to S/4HANA is a complex challenge for companies: Existing systems and processes along the value chain often need to be comprehensively redesigned.
  • In addition to the maintenance extension for existing ERP systems, SAP has agreed to maintain S/4HANA until 2040. This will give companies more planning security and thus enables them to maximize the potential of investments in SAP systems in the future.
  • Decision-makers are well advised to take advantage of the new freedom to plan the migration and all preparatory work without time pressure.
  • Companies that migrate at an early stage secure access to external support that makes the changeover less complicated, faster and more secure. They can benefit earlier than their competitors from the advantages that S/4HANA offers them.