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SAP S/4HANA migration: Critical advice for moving off ECC
With the end of SAP ECC support looming in 2027, organizations must make some tough decisions. Here's a look at your choices.
Seven years may be an eon in iPhone years, but for enterprise systems that's just a blink of the eye.
That means the 2027 SAP ERP Central Component (ECC) end-of-support deadline is coming fast. For SAP customers who don't evaluate their migration strategies soon, the consequences of that deadline will be all too real.
Most SAP customers are planning an S/4HANA migration in some form or another, according to research from the Americas' SAP Users' Group (ASUG). Only 12% are digging in their heels and staying on ECC. However, some SAP customers are going to wait at least two or more years before undergoing an S/4HANA migration, either because it's not a priority, they don't have the resources, they want to see the product mature -- or they don't have a business case for it.
But the longer they wait, the more difficult it might be to pull together their implementations in time.
A gradual S/4HANA migration
SAP customers do have options other than a big bang approach to S/4HANA migration.
SAP and its partners have been encouraging customers who don't have a clear path to S/4HANA to go with tangential products, such as C/4HANA, Concur, SuccessFactors or Ariba, said Len Riley, commercial advisory practice leader at UpperEdge.
"[These customers are] being somewhat nimble and realistic relative to what they can achieve with peripheral cloud solutions as opposed to trying to push a rock up a hill and move from ECC to S/4HANA," he said.
Some customers are also shrinking their ECC footprint and moving to a more modular strategy for some of their business applications, Riley said. For example, they might choose C/4HANA for their customer experience management platform, but for other capabilities that they've traditionally used ECC for, they look at vendors besides SAP.
Clutching at ECC
Rumors abound that many SAP customers plan to stay on ECC. But is this even possible?
The short answer to the question of whether or not SAP customers can still use ECC is yes, but with ramifications, said Harley Lippman, CEO and founder of Genesis10, an IT service management company based in New York. After the Dec. 31, 2027 deadline, there will be two options: Customers can pay increased maintenance fees to SAP for ongoing support, or they can pay for support from a third-party vendor. Since ECC will be frozen, companies will basically be keeping it on life support, Lippman said. There will also be SAP implementation partners that will support a move to S/4HANA, even after the deadline passes.
This is good news for SAP customers who have recently rolled out their ECC systems or finished major upgrades and therefore have no appetite for a move to a new system, Riley said. Staying on ECC may not be a terrible option in the short term, although it's certainly not the best.
SAP is pushing customers to do an S/4HANA migration using a carrot-and-stick approach that will likely include incentives to upgrade and penalties for remaining on ECC, Riley said.
SAP customers have seen this approach with R/3.
SAP offered incentives around migration credits back then, and that's what they're doing now, Riley said. The question is: How long will customers be able to get credits for their previously licensed technology? The other lever SAP will use is likely a more packaged approach for moving to S/4HANA so that companies can add new functionalities only available with cloud-based systems, and offer licenses that let companies run ECC in parallel with S/4, Riley said.
"SAP is going to get creative with carrots," Riley said. "Eventually, they're going to move to sticks."
These sticks will likely include adhering to the 2027 date and taking away migration credits, Riley said. For customers that don't move to S/4HANA by then, SAP will likely charge a premium for support. Even customers that use a third party to support their ECC implementations after the deadline will likely face financial penalties from SAP when they do migrate to S/4HANA, and that needs to be factored in when organizations are considering whether to stay on ECC.
"SAP will have a countermeasure for every action a customer will take," Riley said. "If you're truly leaning toward third-party support, understand the implications of what's going to be on the tail."
Hidden risks of a missed deadline
Opting not to undergo an S/4HANA migration by the ECC end-of-support deadline has real consequences.
Organizations that stay on ECC have to weigh the technology roadmap implications of foregoing the cloud -- and future enhancements to their ERP systems, Lippman said.
"SAP's investments will be earmarked for S/4HANA and not the legacy applications," he said.
From a security perspective, staying on ECC is likely the riskiest option, particularly if companies choose third-party support, said JP Perez-Etchegoyan, CTO of Onapsis, a software company based in Boston. Companies won't have any support from SAP, including security patches, which will leave financial, HR and other regulated data at risk.
At least with any premium support they get from SAP after the deadline, they will have some security patching, he said. The best option, security-wise, is to buckle down on planning and move to S/4HANA by the deadline.
Considering the continually evolving threat landscape, combined with state-sponsored attacks that could weaponize ERP vulnerabilities, the security risks are profound. Any organization with an ERP system could be targeted because of the rich data stored there.
"It's always important to put a security gate into the migration process and into overall operations, especially now," Perez-Etchegoyan said.
While organizations might not stay on ECC intentionally, some will remain because they didn't get their plans put together in time to meet the 2027 deadline, he said.
"We have five years, but it's really a long process," he said, noting that in addition to migrating business applications, organizations will need to consolidate multiple systems. It's a considerable effort, but this is the best approach for SAP customers, especially since they have different deployment options for S/4HANA.
Ultimately, SAP customers can stay on ECC, but experts are hesitant to recommend this course of action. Unlike ECC, S/4HANA can be run in a public or private cloud, in a hybrid environment or on premises, which may make it more tenable to adopt. And with the security risks inherent in running unpatched software, staying on ECC may prove to be a serious financial blow to organizations who miss the deadline.