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Advance SAP Strategy and S4/HANA Migration Decision with Third-Party Support

by Hari Candadai

valoir assessing SAPIndustry research firm Valoir has published a report analyzing SAP customer behavior regarding migration to S/4HANA, and the results may be surprising.

Rather than flock to S/4HANA or dismiss it altogether, many SAP customers who leverage third-party support create their own win/win situation: deferring the decision and controlling the timing until it makes sense for their businesses while fueling innovation with software support savings.

With the September 30 deadline for renewing annual SAP support looming — and a 2027 end date for ECC6/Business Suite 7 mainstream maintenance support closer than it sounds — it’s more important than ever to understand S/4HANA migration costs, alternatives, business implications, and timing options.

S/4HANA Migration Overview

Migration to S/4HANA is not an ordinary upgrade. It’s an all-new implementation of the enterprise platform and database, likely involving business disruption and a multimillion-dollar investment.

Valoir notes somewhat limited availability of S/4HANA-skilled services and resources. The firm estimates a price tag for customers currently paying $1 million in annual SAP support of $15 to $30 million to migrate and operate S/4HANA, with short term implementation costs of 5 to 7X license costs.

A key Valoir observation is that migration to S/4HANA now is “not just a significant undertaking, but a bet on SAP’s delivery of the evolving S/4HANA roadmap.” It is no small decision because S/4HANA is still relatively new and does not appear to have the breadth of capabilities of the existing ERP.

Three pillars of an SAP-Rimini Street strategy

Valoir analyzed SAP customer experience when engaging with Rimini Street for software support and learned that customers are not abandoning their licensed SAP software or rejecting the possibility of an SAP ECC to S/4HANA migration.

Instead they are, for now, strategically maximizing the value of their existing investment while it continues to deliver strong business value, and partnering with Rimini Street across three pillars of their SAP strategy:

  • Defer the S/4HANA migration decision
  • Leverage existing SAP investments for faster innovation
  • Plan a potential return to SAP or implement an S/4HANA alternative

By choosing Rimini Street third-party support as a replacement for SAP support, these customers neutralize the impact of SAP ECC end-of-mainstream-maintenance support deadlines, regaining control of their IT roadmaps and strategies.

They also save 50% on annual fees for support that includes advisory services and inclusion of customized code; have the potential to save up to 90% on total support costs; can reallocate IT funds and team members to digital transformation; and can consider migration to S/4HANA on their own timetable, not SAP’s.

Defer the S/4HANA migration decision

“Stopping the clock” on SAP-imposed deadlines removes the time pressure and stress of vendor ultimatums, business disruption, and potential multimillion-dollar S/4HANA investment. Customers can take their time evaluating S/4HANA maturity and then decide if and when S/4HANA — or another next-generation platform solution — may be right for the business.

According to Valoir, some SAP customers are simply waiting until S/4HANA’s capabilities and value proposition are more evident and the S/4HANA migration path is more proven before making a move:

“We knew HANA wasn’t really an upgrade path — it was starting over. We think the HANA decision is probably a few years off. We run $12 billion of our business through this, so we’re going to be a little risk-averse.”

“For us, we always had a view that we would wait for the market — let end-of-maintenance activity settle and do ours sometime after that. Wait until people are available and don’t feel compelled.”

With no time pressure for migration to S/4HANA, these customers can continue driving growth while maintaining business continuity with Rimini Street support.

Leverage existing SAP investments for faster innovation

Valoir learned that engaging with Rimini Street for third-party support did not mean an end to innovation; it meant potentially more innovation, accelerated innovation, and greater control of digital transformation.

Rather than waiting for S/4HANA innovation, Rimini Street clients took savings from SAP software support and redirected them to transformation projects of their own choosing, aligned with their most important business priorities. Doing so then created higher ROI for existing SAP systems:

“It was always a strategy to innovate around the SAP digital core. Keep SAP as the core and explore other platforms around the edge for analytics, asset maintenance, and processes around Success Factors. We think of SAP as the core transactional system, and there are plenty of other things that sit on top of that.”

Plan a potential return to SAP or implement an S/4HANA alternative

Valoir discovered that savings from Rimini Street support could also be used to fund a future migration to S/4HANA, often at a better price. Moving to Rimini Street improved the SAP customer experience, enabling customers to “reset” their relationship with SAP, establishing an improved negotiating position as new customers:

“… they (SAP) communicate more with us because they want to win our business back.”

“They understood our points … that a couple of years earlier they refused to negotiate on. I think they were stunned more by third-party maintenance than they originally anticipated.”

Looking ahead

If SAP customers choose to return to SAP support and are concerned that the current SAP discounts to migrate to S/4HANA will expire, perhaps they shouldn’t be.

Valoir predicts that “attractive deals for S/4HANA will continue to be offered, and as products from other vendors expand to compete against SAP, competitive pressure will drive additional opportunities for discounts.”

In the meantime, SAP customers can continue to save, innovate, and grow with Rimini Street support.

Download the full Valoir report, “Assessing an SAP-Rimini Street Strategy.”

 

“...SAP customers who leverage third-party support create their own win/win situation.”

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