Can SAP Really Force You to Move to S/4HANA ERP by 2027?

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SAP will end mainstream maintenance for current enterprise resource planning (ERP) systems in 2027, but does that looming deadline mean you have to move to S/4HANA now? I will save you from having to read more if you just want the answer: NO! But the case study below might be worth sticking with it.

Sure, SAP support will be shut down in 2027, and frankly, the company is charging a premium now to support a system that hasn’t been upgraded since 2018. Doesn’t sound like a great investment to me. Regardless, you don’t have to move off your current ERP if you don’t want to—other third parties will be happy to support you long after the 2027 deadline.

So why contemplate a move now?

The real reason to move now is to avoid significant issues down the road when you go to integrate your legacy ERP data or make the S/4HANA transition years after a major digital transformation project is complete.

The Difference Between a Service Integrator and a Business Integrator

The journey doesn’t begin with choosing a service integrator (SI). Instead, it needs to start with choosing a business integrator (BI). What’s the difference and why do you need both?

Think about building a new home. The SI is the general contractor, and the BI is the architect, who will design the overall plan. Without the architect (or BI), the house will be framed and you will have a roof that does not leak (we hope), but what about the bathrooms or the fireplace or the all-important electrical system? If these are afterthoughts, you will be spending a great deal of time retrofitting these important elements. The BI ensures all the important features are present and optimized, including how the system integrates with finance and other business functions that depend on and benefit from the data.

In short, the BI can help de-risk the technology program investment by pivoting to a business-led agenda. The dual integrator approach (SI and BI) can be a win-win for business and IT teams, offering improved visibility into program risk and control, and a transformed data, analytics and reporting execution roadmap custom tailored to the finance function and aligned with parallel, ongoing transformations, building connectivity across siloed efforts.

How to Avoid an Expensive Trap

I recently met with the team at Genpact, who shared a case study that highlights the importance of including both an SI and a BI in transitioning to S/4HANA.

A $90 billion grocer opted to kick off an ERP modernization project without a BI included, and simultaneously embarked on a huge cloud data lake journey. Thankfully, the SVP of finance and controller stepped in to add a BI, in this case Genpact, to the project to act as the voice of the business and of finance in particular. If the controller hadn’t acted so quickly, the business unit would have been faced with poor end-user adoption and user experience and an overwhelmed internal team. The company also avoided aggravating cross-function and cross-system reconciliation efforts by decommissioning key legacy systems.

Fortunately, this story has a happy ending. Can two firms make equally important contributions when one is the SI and another is in the BI role? Absolutely!

So, do you have to move to S/4HANA? The simple answer is no. But if digital transformation is on your roadmap, planning for this transition is a very smart move. Just don’t forget to include both the general contractor (SI) and the architect (BI).

About the author

John Boccuzzi, Jr. is Partner and Chief Sales Officer, ISG Research, which is the community that brings together buyers and sellers of digital services and technologies, leveraging ISG’s data and market insights.

John runs a dynamic team of professionals that work closely with Service providers to understand their needs and create solutions to drive success.  A recognized speaker, blogger and TEDx speaker, John is a passionate thought leader in the area of Customer Experience. In 2018 John’s TEDx talk “I was Seduced by Exceptional Customer Service” was the most popular CX video of year by Omoto. John prides himself on focusing on the client’s needs and then developing unique solutions that will set an organization on the correct path.

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