Future Tech

North American S/4HANA migrations ramping among SAP users

Tan KW
Publish date: Mon, 15 Apr 2024, 11:26 PM
Tan KW
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Future Tech

Nearly two-thirds of SAP users in North America are set to migrate to its latest S/4HANA ERP platform, or have already started the process, according to a recent survey.

IT leaders tend to approach ERP upgrades with extreme caution as the organization's financial and operational processes literally run on the system. Once a system is up and running successfully, changing it can be challenging, as the many failing projects confirm.

Hence Europe's largest software vendor has struggled to get customers onto its latest S/4HANA system, based on an in-memory database, as they have found it tough to create a sufficient business case to justify the costs. SAP, in turn, has discounted its RISE with SAP migration program, and insisted support for its earlier ECC platform will end in 2027 - after allowing a two-year extension.

Research from the Americas' SAP Users' Group (ASUG) - which represents users in continental North America - found that 47 percent were already running on S/4HANA or had begun their migration programs, while 22 percent planned to begin the shift within the next two years.

According to the survey of 766 ASUG members, 48 percent said S/4HANA is the most important area of focus, while last year 42 percent said it was the top concern.

Other measures of SAP's efforts to migrate users to S/4HANA appear less bullish. Last year, global tech researcher Gartner found that only 33 percent of SAP users relying on its legacy ECC ERP system have bought or subscribed to licenses to start their transition to S/4HANA.

The ASUG results - from research in October and November last year - are also more upbeat on combining the application software upgrade with a move to cloud hosting. The majority (62 percent) of respondents said they plan to run SAP S/4HANA in the cloud, followed by private cloud (40 percent), managed cloud (16 percent), and public cloud (6 percent).

Research from the German-speaking user group DSAG published last month found less enthusiasm for the cloud model when executing SAP migrations.

As more migration projects move forward, a number of users in the Americas say maintaining knowledgeable staff and turnover of skilled tech professionals is a top challenge, cited by 29 percent of respondents versus 37 percent a year ago.

ASUG research director Marissa Gilbert said, however, that the skills challenge specifically in S/4HANA projects was more severe. Within the ASUG membership, 48 percent said they were lacking S/4HANA skills at their organization.

"One of the big changes from last year is the challenge organizations were having addressing turnover and having the right staff at their organization. Although that dropped and is not the main challenge, the lack of skills is still a strong trend," she said. ®

 

https://www.theregister.com//2024/04/15/american_s4hana_migrations_ramp_up/

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