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Most SAP customers will eventually have to face the inevitable S/4HANA migration.
SAP has stated it will end support for the legacy SAP ECC platform by 2025. Although migration is a daunting prospect, the fear factor may be overblown, and customers could be missing out on the benefits of going to S/4HANA.
In this Q&A, Chris Carter, founder and CEO of Approyo LLC in Brookfield, Wis., comes at an SAP S/4HANA migration from a more hopeful place: The leap from ECC to S/4HANA may be inevitable, but it's also manageable.
Carter has been around since the SAP R/2 days, SAP's ERP software in the 90s and the predecessor of SAP HANA. Approyo, an SAP partner, provides managed services, hosting, migration and implementation services for more than 300 SAP cloud environments for customers around the world, according to Carter. It has also done just over 100 SAP migrations.
Where are SAP customers in their plans for S/4HANA migration with the 2025 deadline in mind?
Chris Carter: We've been working with SAP hand-in-hand on some of the migrations, but customers are very slow to migrate -- and understandably so. They're fed one line and then there's another real world thing that happens, but it's not as bleak as people think. You've got to work with a lot of Z data codes [non-standard data] and change activities, but there are so many tools that we can use that we can understand what is going on with their current environment in order to move into the new environment. You get a lot of integrators out there trying to get people scared, but it's really not that scary. This is a lot easier than what it was when it was R/2 to R/3, that's for sure.
What's the biggest fear SAP customers have about an S/4HANA migration?
Carter: Cost is No. 1, and change is No. 2. Everybody is worried about change -- is this going to change my job? Is it going to change what we do in FICO with the new [S/4HANA] finance tools? Every new SAP system has changes -- it's been that way since the R/2 days -- so they just have to understand that going in. You have to literally walk them through what those changes are and how they're going to benefit from them. You need strong change management and you've got to be very cognizant of what activities are going to happen.
What are the things organizations need to do when starting a migration?
Carter: The thing is always the plan. What is your plan and what's the plan for your SAP system, because they may not go hand in hand. An SAP system typically has had so many changes to it over the years that the individuals who are working on it today, and who may work on it tomorrow, may not know everything that has changed within that environment and what's going to happen starting tomorrow when the system kicks in.
What deployment models are being used? Are organizations using the upgrade as an opportunity to move to the cloud?
Carter: For us, most organizations are still on-premises. We may see anywhere between a 3% to 7% increase in moving something to the cloud, mainly for things like sandboxes. Very few customers are moving to the SAP HANA Enterprise Cloud.
So most SAP customers will stay on-premises for S/4HANA?
Carter: I believe most will stay on-premises as they move to S/4HANA, but I do see more [Microsoft] Azure coming through the pipe. We've been working with several customers on this, and we're finding some success with SAP on Azure more so than the other [public cloud providers]. They're content with sandbox development and QA going to the cloud, but when you start talking about production, it makes us a little leery because of some of the outages that have occurred. You can get that on-premises as well, but you control it, and it's much better for you if you can control it.
That seems counter to the message from SAP and other vendors that have been touting the advantages of the cloud.
Carter: They're all interested, but they want to see what the cost benefit is. It's kind of like back when everybody said you can't get fired for using IBM? Now it's you can't be fired as long as your system stays up. People have a fear factor because of outages that happened at AWS, GCP and Microsoft in the last couple years. We want our customers to sleep well at night, so it may be worth putting sandboxes up in Azure or others, but can you really sleep well at night if the full production environment is up there? Also, some of the new SAP tools still don't run well inside of any of the three clouds. So you have to be cognizant if you're connecting multiple systems or the older legacy stuff, you still got a little bit of heartburn there because some of the technology isn't 100% there.
One way or another, SAP customers are going to have to migrate.
Carter: The S/4HANA migration is going to happen; it must happen. And it's not only because it's 2025, it's because of the innovation that SAP is putting into the products, and that partners are putting into the products and the tools.