Since 2015, SAP S/4HANA has been in the market, yet still there are some businesses which haven’t migrated to it. However, the rise with SAP will continue in 2022 to fulfil its mission to convince SAP customers to move to S/4HANA and the cloud.
Bundle of SAP products and services focussed on the digital core of the S/4HANA Cloud is evolving steadily and gaining value with its new elements offering customers with more flexibility in deployment options. But the estimates show that more than 89% of the S/4 transformation is still to be done. Let us take a look into the current state of S/4HANA adoption by SAP ERP Central Component (SAP ECC) customers in 2022.
SAP S/4HANA by the numbers
SAP S/4HANA adoption has steadily increased with approximately 18,800 customers during the first quarter of 2021 which was 18% increase than previous years. The same report states that of those companies on S/4HANA, 13,100 are live which is not bad as there were nearly 35,000 existing ERP customers running ECC when the move to S/4HANA began. This means more than half of SAP’s ERP customers are now on S/4.
Research shows that some of those customers don’t require S/4HANA at some point but they are forced to get a licence to renew it. We have found that at the end of Q4 2020 almost 60% of SAP ECC customers had S/4HANA license and another 60% have either initiated their migration or are living in at least one system which is probably a generous number.
Future S/4HANA story
As a part to push many customers to adopt S/4HANA, SAP has announced it will stop supporting ECC officially at the end of 2027. However, the customers can purchase extended support to 2030. This was already fixed as the push back since the launch of S/4 with some delayed backlog of transformation. In such cases, companies will either have to use third-party maintenance services or will need to switch to another ERP platform if they haven’t yet made the shift.
Regardless of when SAP has decided to finally end support for ECC, this applies to the ECC application itself, not the database it runs on. Even if we assume SAP does delay the end-of-life date for ECC, businesses might still have to migrate to Suite on HANA. Companies still can use third party maintenance services from Oracle or IBM which they can use until 2027 or move their database to HANA in order to keep using ECC.
Considering the state of the market today, such companies will be hard-pressed to find the talent and resources required as the need for technical resources and expertise begins to spike, since there will be a need to begin a large-scale transformation project.
Possible upgrades
Both SAP and their ECC customers are in a challenging position, as S/4HANA migration projects are time-consuming and complex. A beginning delay of the migration project could lead to more complexities, which means more time and costs. We expect that SAP will wait as long as the migration completely happens to put pressure on as many customers as possible to begin their upgrades.
Conclusion
The path of S/4HANA is a bit more complicated than you might think. If your business hasn’t yet begun your migration to S/4, start your project today with us. Contact us today, to find out how SAP Basis Solution’s automation can help accelerate and de-risk your move.