For all of us that are working in the SAP ecosystem, December 31st, 2027, is the date that will drive us and our industry for the next years.
SAP is committed to provide mainstream maintenance for Business Suite 7 — the release that a lot of our customers are still using — until the end of 2027. Companies have the option to buy a maintenance extension until 2030 for an incremental 2% in maintenance fees. The prior 2025 support deadline was pushed to 2027 after customers requested more time to move to the new release in 2020 making it unlikely that the 2027 deadline will be moved yet again.
When assessing the current installed base of Business Suite 7, Gartner estimates that 70 percent of Business Suite 7/ECC customers have yet to migrate to S/4 HANA, but SAP S/4 HANA sales are growing at record levels based on SAP latest financial results and comments from SAP CEO, Christian Klein.
Combining these factors, we will see a wave of Business Suite 7 to S/4 migrations hitting the SAP System Integrator community in the next few years. We always knew it was coming, but the pandemic took 2 years out of our planning cycles.
So, here we are at t-5 years with countless customers that have yet to make the move. For IT practitioners, 5 years sounds like a long time, but everyone who has been working on large enterprise initiatives knows: you must create a business case, allocate funding, work with SAP on a license agreement, select an implementation partner, perform the implementation itself, roll it out and ultimately drive adoption of the solution to collect the business benefits you originally committed to in the business case.
If you are a small organization and don’t mind big bang rollouts you might be able to execute this in a year, but for most enterprises we work with, you easily look at an average 2–3-year timeline for transforming from ECC to S/4.
Working in the SAP implementation space, we are equipped to handle a steady stream of SAP projects, ranging from small add-ons to large implementations. We are also equipped to handle ebbs and flows in demand, but the wave we see coming is more analogous to a Tsunami hitting us on all fronts. Business process experts need to re-assess what improvements and benefits S/4 implementations can bring, functional experts need to configure S/4 and various technical teams must migrate interfaces, extensions and any other customer-specific content into the new Cloud-based paradigm.
For SAP customers that means you should start the journey as soon as possible, build your business case, estimate your implementation duration and certainly find and lock in your implementation partner as resources will get sparse and potentially more expensive as demand will undoubtedly outpace supply. Depending on your estimated implementation duration, you might have an alternative to delay the implementation and use the option of paying a premium to SAP. Most companies will likely want to use the 2027–30 timeline as a contingency, though.
To make the S/4 business case more attractive, the industry is continuously working on improving both factors (benefits and cost) of the equation.
New SAP applications and technologies open additional areas of benefit realization, but our teams, as well as our customers, must be equipped to see the potential, implement the changes in the system, processes and most important of all, take their people on the journey to increased efficiency.
Compared to the standard, consultative approach used in the past, cost reductions in the implementation effort can be achieved by standardizing and harmonizing business processes while following and utilizing best practices.
In the SAP implementation space, we are working hard to add capacity and ensure our implementation resources are trained up and ready for the hard work and long hours.