SAP Release Change or ERP System Change


Expensive RISE with SAP
The SAP community has been discussing the true costs of an ERP release change with RISE for many years. From a revenue perspective on the SAP side, CEO Christian Klein made an enlightening contribution at the last Annual General Meeting: he stated that new cloud subscriptions are around three times the size of old ERP contracts. Put simply: every on-prem euro becomes three euros under RISE with SAP thanks to the cloud ERP model.
Has SAP simply tripled the on-prem license fees with a cloud subscription? Yes, SAP software has become more expensive—like many other things. No, a complete S/4 Hana cloud system (SAP Cloud ERP) is difficult to compare with an on-prem ERP such as ECC 6.0 or SAP Business Suite 7. New end-to-end and AI processes also enable an optimized workflow and organizational structure for SAP customers. Whether the new opportunities can be exploited in a tight economic situation has not yet been determined.
The tense economic and geopolitical situation is forcing 82 percent of the companies surveyed by the consulting firm Horváth in the DACH region to cut costs, with 53 percent of IT departments affected by cost-cutting measures. One in four companies is reducing its IT budget. Half are planning slight budget increases —adjusted for inflation—of 1.5 to 3.6 percent per year over the next three years. However, as IT costs are rising in parallel, this also ultimately means savings. Instead of across-the-board budget cuts, there is an overall shift from transformation budgets—which are decreasing by six percent across all companies—to operating budgets, which are increasing by the same amount.
More than 350 CIOs and IT managers from more than 15 industries with a focus on the DACH region were surveyed for the Horváth CIO Study. The study was conducted in the second quarter of 2025 and the analysis was completed in June. The majority of the companies surveyed employ over 1,000 people and generate an annual turnover of at least 100 million euros.
RISE or exit strategy
SAP customers will need to spend a good deal of money by 2033 at the latest to bring an old ERP/ECC 6.0 up to the level of S/4 Hana. This incurs high costs when converting the operating model from on-prem to cloud, for change management, and for training and education costs. RISE and the end goal of an SAP Cloud ERP can be a worthwhile investment, but not always! In many cases, the S/4 release change costs just as much as the implementation of an alternative ERP system.
Because many ERP systems on the market are not generically designed like SAP software, but have a real industry focus and, therefore, a demonstrable competitive advantage, ERP users sometimes opt for these special solutions. The advantage is obvious: while the ERP is customized by SAP, the ERP comes fully configured by an industry specialist.
According to the Horváth study, CIOs are focusing their measures on efficiency and self-optimization in order to cushion the pressure to save: process automation, outsourcing, personnel savings, cutting back on services, and optimizing purchasing form the current toolbox. Artificial intelligence is a particular lever: around half of the participating companies are planning IT knowledge bots and around 40 percent are planning AI-based code generation and optimization. In operations, AI solutions primarily support service desk processes, documentation, and system monitoring.
Until now, IT has focused on AI applications in the specialist area. Now IT is applying the knowledge gained to increasing efficiency within IT. In the medium to long term, automation and AI will reduce the cost curve in IT. At the same time, the consistent modernization of the existing IT landscape (ERP, CRM, cloud use) is on the agenda in order to be able to quickly support new business initiatives.
Composable ERP on SAP BTP
SAP also offers a strategy for reducing costs: Clean Core and SAP Business Technology Platform. A modified SAP ERP system can be returned to the standard with an extensive and often time-consuming clean-up run. This can also reduce costs in ongoing operations and avoid engine licenses (SAP NetWeaver), for example.
A "new" and individualized ERP can then be created on the Business Technology Platform (SAP BTP). A composable ERP can be created with the help of AI processes and external software solutions such as Salesforce, UIPath, Workday, or ServiceNow. The SAP community is only at the beginning of an innovative development, but after 2030 the topic of composite business software will be relevant for everyone. A Composable ERP can be an answer to the current IT cost explosion.
According to Horváth, the proportion of purely centralized IT units will decrease by around 20 percentage points in three years. Specialist departments are increasingly taking on their own IT tasks, which requires closer governance, cost transparency, and clear responsibilities. At the same time, companies are professionalizing their sourcing: India remains the dominant offshoring location, while Austria, Switzerland, and Bulgaria are catching up with Spain and Portugal in terms of nearshoring. However, only 28 percent of companies manage their providers in line with holistic corporate goals. There is clear potential here to minimize risks and leverage economies of scale. The Horváth CIO Study 2025 confirms a fundamental trend from previous studies: IT is moving closer to the business and increasingly assuming a strategic position within the company. Its role as a low-cost service provider and pure platform provider is increasingly receding into the background. Instead, it is making a greater contribution to business success.
2 comments
Per
Composable ERP – ich lach mich tot!
Hoffentlich nicht nur composable, sondern auch kompostierbar.
Peter M. Färbinger
Nach unserer Erkenntnis ist Composable-ERP (also ein „zusammengesetztes“ ERP) die logische Fortsetzung von Best-of-Breed, das sich in der Vergangenheit unter gewissen Umständen sehr bewährt hat – es braucht aber eine effiziente und stabile Plattform wie etwa SAP BTP.