SAP’s recent declaration of its intent to finally end support and maintenance for its legacy R/3 and ECC 6.0 platforms has created both a headache and an opportunity for its extensive customer base. It may be tempting to simply move through the process of implementing HANA and S/4 as a logical progression to existing investment, but customers should take this opportunity to consider the alternatives to the ‘wall to wall’ SAP ecosystems of the past. Our experts examine the options available to organisations.
What Is The Current Situation?
SAP’s recent declaration of its intent to finally end support and maintenance for its legacy R/3 and ECC 6.0 platforms has created both a headache and an opportunity for its extensive customer base.
The relatively short time frames in ERP terms has caught many of its customers somewhat on the back foot with SAP R/3 ECC 6.0 coming out of standard support at the end of 2027.
For those still running their ERP systems on 3rd party database platforms, S/4 would involve both a system upgrade and data platform migration to HANA.
SAP is also insisting that the S/4 suite is a new product, not simply the legal successor to ECC 6.0 and must therefore be subject to new licence metrics and controls, thus treating the S/4 transition as a platform migration rather than an upgrade which will incur additional licence expenditure, not least for HANA itself.
Given the cost and risk involved in migrating, not to mention the potential business change required to shift to a SaaS platform, what are the potential options?
While treating S/4 as a new application and introducing the HANA platform, essentially forcing customers to treat the transition as a migration rather than an upgrade, SAP opens up the possibility customers can consider alternatives to the 'wall to wall' SAP ecosystems of the past.
In evaluating their future ERP solution, organisations need to examine options that include:
- Do nothing (remain on R/3 ECC 6.0 until business conditions change or when cloud is more mature)
- SAP S/4 HANA Cloud Edition
- SAP S/4 Private Edition
- Combination of SAP S/4 HANA Cloud Edition and Private Edition depending on size and complexity
- Another product at the core e.g. Oracle / MS Dynamics
- Any combination of best of suite products as part of the ecosystem e.g. Salesforce (CRM), Workday (HR), Manhattan (SCM), Ellipse (Asset)
Obviously, each of these options will have its benefits and risks. Choosing the right solution for the organisation will depend on a number of factors.
Doing nothing and waiting, for example may well backload all the effort in migration and timing as there may never be a ‘right’ time or event that triggers the decision to start.
Moving to a Cloud based ERP offering (with any vendor) has an impact on the skill-sets required of the IT support organisation. For those heavily dependent on external resources for support, moving to Cloud ERP may indeed be an attractive option.
Again, organisational culture and existing IT capability will be a determining factor in deciding between Private Edition and a combination approach. Integration considerations also play a part here.
Finally, if the organisation is looking to change its whole approach to that of a lean ERP core, supported by best of suite products, careful planning and impact analysis needs to be done.
It is also recommended that a mature and stable IT function exists within the organisation in order to smooth the integration, roll-out, support, and adoption of fundamentally different ways of working.
Read more on this topic, including what other organisations are doing and how to make the business case work, in our playbook 'Next Generation ERP Platforms' here:
By Graeme Trevayne, Coeus Consulting