The Persistent Challenge of S/4HANA Business Justification
More than ten years after SAP introduced its groundbreaking S/4HANA in-memory ERP platform, a surprising reality has emerged: the vast majority of legacy customers are still struggling to build compelling business cases for migration. Recent research reveals that 95% of established SAP users find constructing a positive migration rationale either requires substantial effort or presents genuine challenges. This persistent hesitation highlights deeper issues within SAP’s upgrade strategy and customer relationship dynamics.
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The enterprise software giant faces an increasingly complex landscape as it attempts to transition customers from its legacy ECC system to the modern S/4HANA platform. With mainstream support for ECC concluding in 2027 and extended support ending in 2030, the clock is ticking for organizations that have invested millions in customizing their current systems to perfectly align with unique business processes.
Understanding the Customer Resistance
A comprehensive survey of 455 IT leaders, SAP specialists, and business managers uncovered significant concerns about SAP’s evolving approach. Eighty-three percent of respondents admitted they don’t fully comprehend SAP’s latest migration policies and deadlines, while 84% expressed apprehension about how current messaging would impact their operations. This confusion is compounded by SAP’s shifting licensing models and support timelines, creating an environment where strategic planning becomes exceptionally difficult.
The research, sponsored by enterprise application support provider Rimini Street, found that 94% of organizations see substantial value in extending their existing SAP systems rather than undertaking a costly and disruptive migration. This sentiment reflects broader market trends where organizations are increasingly cautious about major technology investments during economic uncertainty.
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The Cloud Transition Challenge
SAP’s strategic pivot toward cloud-first deployment has introduced additional complexity for legacy customers. While S/4HANA initially offered both on-premise and cloud deployment options, SAP now strongly favors a cloud SaaS model, positioning artificial intelligence and other innovations as exclusive to cloud deployments. This shift has prompted user groups like DSAG (representing Germany, Austria, and Switzerland) to demand greater transparency in cloud licensing terms.
The introduction of SAP’s new Full-Use-Equivalent (FUE) metric for pricing, replacing the previous RISE with SAP package, has further complicated migration planning. As organizations evaluate their path forward, many are discovering that AI implementation benefits promised by vendors don’t always materialize as expected in enterprise environments.
The Customization Conundrum
Perhaps the most significant barrier to S/4HANA adoption lies in SAP’s recommendation that users eliminate customizations developed over years of ECC implementation. For many enterprises, these customizations represent critical competitive advantages and operational efficiencies. The prospect of abandoning these tailored solutions or rebuilding them on SAP’s cloud platform represents both a substantial financial investment and operational risk.
This challenge is particularly acute for industrial organizations where ERP systems are deeply integrated with manufacturing processes and supply chain operations. Recent industrial innovations in computing infrastructure highlight how specialized solutions often require customized ERP integrations that standard cloud offerings may not accommodate.
Exploring Alternative Paths
As uncertainty persists, many SAP customers are investigating composable ERP architectures that allow for more flexible integration of third-party solutions. Distinguished analyst Dale Vile notes that this “business-led rather than supplier-led approach” has become commonplace in other IT domains, delivering benefits in flexibility, control, and access to innovation.
This trend toward modular enterprise architecture reflects broader technology developments where organizations seek to avoid vendor lock-in while maintaining access to cutting-edge capabilities. The composable approach allows enterprises to address specific pain points without undertaking comprehensive platform migrations.
The Road Ahead for SAP and Its Customers
Despite the challenges, migration activity continues, with organizations weighing their options as support deadlines approach. Recent data from Gartner indicates that 61% of SAP ECC customers haven’t yet licensed S/4HANA, suggesting the migration wave many anticipated has yet to materialize.
As the 2027 mainstream support deadline draws nearer, organizations face critical decisions about their ERP futures. Some may pursue extended support options while others may accelerate migration planning. What’s clear is that the path from ECC to S/4HANA represents more than a technical upgrade—it’s a fundamental reassessment of how enterprises leverage ERP to drive business value.
The ongoing evolution of enterprise technology, including Microsoft’s AI advancements and competing platforms, provides organizations with more options than ever before. As SAP continues to refine its cloud strategy and migration incentives, the coming years will reveal whether the S/4HANA value proposition ultimately resonates with the legacy customer base that has powered SAP’s success for decades.
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