Two-Thirds of SAP Licensees Surveyed Not Ready For S/4HANA

Two-Thirds of SAP Licensees Surveyed Not Ready For S/4HANA

Two-thirds of SAP licensees surveyed have no plans to migrate to S/4HANA, according to Rimini Street research. That’s true, despite SAP’s planned end of mainstream maintenance for Business Suite 7 and its core ECC6 ERP platform*.

The deadline puts pressure on CIOs decide their SAP roadmap and strategy for the next decade and beyond. They must choose whether to migrate to S/4HANA – following SAP’s roadmap – or choose a roadmap designed around their business objectives, not SAP’s.

For those with established SAP implementations, S/4HANA can represent a potentially risky and disruptive migration path from existing ECC 6 applications, and some customers remain unconvinced that it offers enough business benefits to justify migrating their applications and data. While some organizations are finding applications for greenfield S/4HANA implementations, perhaps for use by subsidiaries, our experience is that in many cases they wind up running S/4HANA in parallel with ECC6, which still serves as the core ERP.

CIOs also feel increasing pressure to drive more innovation, even though they aren’t necessarily being given more money to implement the technologies with the greatest potential to support their companies’ growth. CIOs typically spend as much as 90% of their IT budget on ongoing operations and enhancements, leaving only 10% of the budget for business transformation.1

These conflicting pressures were reflected in our survey findings, which are presented in more detail in our report, “How Customers Are Responding to SAP’s Planned End of ECC6 Mainstream Maintenance Deadline.” Survey respondents included 148 IT, finance and procurement professionals (C-suite to management levels) throughout North America.

SAP Customer Survey Key Takeaways

  1. Respondents cite cost optimization, improving business productivity and investing in digital transformation initiatives as their top priorities.
  2. Nearly 80% of SAP licensees plan to continue to run their customized, mature SAP systems to at least or beyond SAP’s planned end of ECC6 mainstream maintenance date.
  3. 85% of respondents running SAP ECC 6 are not on the latest Enhancement Pack 8 release.
  4. 67% of respondents either have no plans to migrate or are undecided about moving to S/4HANA.
  5. Only 5% of respondents said they felt the fees they paid for SAP support were “well worth the value we receive” in return.

How Rimini Street Can Help

Like the survey participants, Rimini Street clients have come to a range of conclusions about S/4HANA (see Strategies for Supporting SAP S/4HANA From “Wait And See” To “Full Speed Ahead”). Some ask us to keep their current SAP applications operational and optimized while they begin phasing in S/4HANA. For the majority who prefer to defer a switch to S/4HANA, we can take the pressure off. Unlike an SAP mainstream maintenance window for providing full support for ECC6, Rimini Street provides its clients with full support for the enterprise software they are running today they are running today and beyond 2025. Rimini Street guarantees to support the current release of whatever software you entrust to our support for at least 15 years from the start of your contract.

“We were experiencing the push many ECC 6.0 customers face, with SAP trying to move everyone to the S/4HANA platform,” Bob Leek, CIO, Multnomah County said. “When some of the larger SAP customers also refused to pay for that reimplementation in exchange for an immature product, we knew that S/4HANA was not a road we wanted to go down.” In addition to delivering “a far superior level of service,” he added that Rimini Street support “takes the pressure off having to migrate to SAP S/4HANA by the deadline when we see no return on that investment for the cost and disruption to the business. Additionally, as a result of moving our support, we have also been able to redirect our staff to focus on more value-added activities.” (See customer success story.)

Gartner, “IT Key Metrics Data 2020: Executive Summary” December 18, 2019.”

* On February 4, 2020, SAP had announced mainstream support for SAP Business Suite 7 until 2027