Home > 01.12.18 Is There Hesitation to Commit to SAP S/4HANA?

Is There Hesitation to Commit to SAP S/4HANA?

 

Most SAP licensees plan to continue running their proven, SAP ERP releases given its rich functionality that more than meets their business needs without the cost, disruption and risk of migrating to S/4HANA. This was the top finding in a recent global survey conducted by Rimini Street, selected by 89 percent of the survey respondents. The findings are based on responses from CIOs, CTOs, IT VPs and directors and managers from a broad range of industries and company sizes across North America, Europe, Latin America and Asia-Pacific.

Conducted in April 2017, the survey also revealed that customers are embracing hybrid IT as a preferred strategy — innovating around core SAP ERP with agile, cost-effective cloud applications — with 30 percent of those respondents who plan to remain on their SAP platform already adopting a hybrid IT strategy to drive innovation and meet business needs now, not years down the road. In effect, many SAP licensees are on "cruise control" with their current core, stable ERP while speeding up at the same time.  

Lukewarm on S/4HANA

Survey respondents were also unenthusiastic about migrating to S/4HANA, with two-thirds (65%) of licensees citing they had no plans to, or were currently not committed to, migrate to the platform:

  • 57% don't see a strong S/4HANA business case and/or clear ROI
  • 35% cite high migration and implementation costs
  • 56% estimate an S/4HANA reimplementation would cost between $10 million and $100 million  

For those that choose to re-implement on S/4HANA, mapping out a strong business case and ROI is clearly advisable. So is a contingency plan for a project that could bust budgets and timelines, given the scarcity of real-world S/4HANA customer success stories to date. Most licensees seem intent on a wait-and-see approach, with the option to upgrade if and when S/4HANA proves to add value to their business.  

But while waiting, many SAP customers surveyed are dissatisfied with their SAP support. Just eight percent feel that support fees are "well worth the value" they receive. Fourty-seven percent say they're paying too much or describe costs as "way out of control." In addition to the costs, 36 percent say it takes SAP support too long to resolve issues, and 33 percent complain about SAP's lack of support for customizations.    

The Bottom Line

SAP licensees who choose to migrate to S/4HANA would be advised to build out a strong business case and ROI before proceeding, and are advised to map out all potential disruptions to the business as budgets and timelines will be higher and longer than anticipated.  

Many SAP licensees surveyed simply don't see a business case for S/4HANA and are wary of a multimillion dollar expense and the lack of functional parity. Given widespread reluctance to upgrade, lukewarm acceptance of S/4HANA and dissatisfaction with costly SAP support, more customers are turning to independent support to reduce overall maintenance spend by up to 90 percent while gaining full support for customizations and direct access to senior support engineers. This frees up resources to be able to invest in more strategic initiatives, such as mobile, cloud and big data, to help their business growth and remain competitive.

Survey Report: 2017 SAP Applications Strategy Findings

Rimini Street surveyed 208 SAP ERP licensees across the globe to gain insights into their strategies for their SAP ERP/Business Suite implementations. Find out what your peers are thinking.

Hari Candadai, GVP, Global Product Marketing and Strategy

Hari Candadai, GVP, Global Product Marketing and Strategy

Mr. Candadai is a seasoned marketing professional with over 22 years’ experience in global product marketing and corporate marketing management. He has consistently demonstrated his leadership by building strong customer relationships and optimal cross-functional partnerships. The author of several thought-leading white papers on disruptive software and services models, and one of the chief evangelists for independent support, Mr. Candadai is a frequent speaker at industry conferences globally.