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Why are some SAP customers resisting S/4HANA?

SAP has touted S/4HANA as the natural successor to ECC, but many customers are resisting the move. Here are some of the reasons why.

Many SAP customers are reluctant to move off SAP ERP Central Component, or ECC, and the reasons for this are many. One answer lies in a comparison of the two ERP's functionality.

Since the release of S/4HANA in 2015, SAP has marketed its newest ERP as the natural successor to ECC. Two other changes have been widely associated with the launch of S/4HANA -- namely, the transition to a cloud-first approach and the decision to limit customers to just one database engine, SAP HANA.

That confluence has led some customers to think about S/4HANA largely as a platform migration, with some functional upgrades thrown in for good measure. However, S/4HANA involves substantial functional changes and should be viewed as a major rewrite.

A more important issue for many customers is that S/4HANA doesn't offer all of ECC's functionality. SAP has discontinued certain features and modules, so customers considering a migration should plan carefully.

One example of this is General Ledger architectures. ECC supports two, but in S/4HANA, only the newer one is supported. That difference is accompanied by major changes to the data model, combining SAP FI (Finance) and SAP CO (Controlling) modules into a unified whole.

Many SAP customers are reluctant to move off SAP ERP Central Component, or ECC, and the reasons for this are many.

With S/4HANA, SAP has attempted to streamline some of the duplicate functionality and product overlap it created through acquisitions and in turn also lost some ECC functionality. For example, SAP Human Capital Management (HCM) was slated to be replaced by SuccessFactors. However, after hearing from customers, SAP announced it would release HCM for S/4HANA by 2023. Following that, many customers expressed concerns about the complexity and cost of the proposed solution. Since then, the company has accelerated that timetable and announced some additional changes to its HCM architecture.

For many customers, a deciding factor for moving to S/4HANA is whether the features they need for their industry are available. They may not be. The company has made many legacy industry applications available for S/4HANA through "compatibility packs" that provide at least partial capabilities. However, those are largely viewed as a stopgap measure and may not do what is needed. Meanwhile, SAP has shifted the emphasis of its new development to cloud-based industry software based on a more granular microservices model.

Customers considering a migration to S/4HANA will need to review their business processes and figure out whether the processes they currently perform in ECC are available for S/4HANA.

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