Rushing to the Cloud

Former SAP CEO Professor Henning Kagermann advised customers to transition to mySAP.com 2004 and subsequently to SAP Business Suite 7, despite the fact that a considerable number of users were content with SAP R/3 and had recently completed the release upgrade to R/3 Enterprise.

SAP is encouraging customers to transition to the S/4 Cloud with RISE and GROW. It is imperative that this occur expeditiously. In 2025, S/4 will celebrate its tenth anniversary. Regular maintenance for Business Suite 7 (SAP ECC 6.0) will end in 2027. For the time being, S/4 Hana will receive support from SAP until 2040. It is evident that a considerable number of new customers have chosen S/4 in recent years. However, it is notable that many ERP systems in the portfolios of current R/3 and ECC customers remain on previous versions.

The good news is that, in response to years of pressure and threats from SAP, many customers have now opted for S/4 proof-of-concepts. Many SAP partners are also well aware of the potential challenges associated with an S/4 conversion and can offer it with minimal risk. In theory, there are no obstacles to a rapid release change to S/4 Hana.

However, the bad news for many SAP customers is that the S/4 release change is not the most urgent issue. In order to achieve digital transformation, it is essential to address the lack of ERP infrastructure concepts and global challenges in the respective organizational and operational structures. ECC 6.0 remains a stable and reliable system, and once again the old IT adage applies here: never change a running system.

SAP Business Suite (ERP/ECC 6.0) with AnyDB or Hana is a suitable solution for many projects and plans in the context of digitalization. This was recognized by the DSAG user association many years ago, much to SAP's dismay, and little has changed since then. Conversely, external tools can be leveraged to more efficiently and effectively address the evolving challenges of digital transformation. SAP partners offer AI applications directly, and SAP customers are better able to identify AI innovations in start-ups. At any rate, the majority of integration tasks can be integrated effortlessly via the SAP BTP (Business Technology Platform).

The SAP community is in no rush to transition to an S/4 cloud. This is not an outright rejection of cloud-based SAP ERP solutions, but rather a current critique of the prevailing circumstances. However, for SAP, the optimal strategy for growth and expansion is to rush to cloud, if you will. Nevertheless, the SAP community is engaged in discussions surrounding the potential of hybrid, private, and public clouds. Many of these concepts are well-founded, yet SAP has yet to fully address certain aspects.

One of the significant challenges customers face when adopting RISE with SAP is licensing conditions. In addition to purchasing a cloud model, customers must also decommission an on-prem model, typically ECC 6.0. It is challenging for SAP customers to reach a reasonable compromise without legal support from experts. However, there is a positive outlook regarding cloud exit. An EU regulation will soon come into force which states that cloud providers must provide their customers with fair offers and active support when exiting the cloud. Details, however, are still lacking and SAP has so far remained silent on this EU law.

If an SAP user chooses the RISE contract, the success of the release change is largely dependent on the customizing team provided by SAP. This means that there is currently a great deal of uncertainty for future S/4 users. There are highly motivated and well-trained SAP teams from SAP headquarters in Walldorf, but also less experienced teams from India. This means that the S/4 path to the cloud needs to be carefully considered and, importantly, not rushed. So, dear SAP customer, avoid rushing into anything and be sure to take your time!