Most SAP users plan to stick with older ERP due to costly Hana migration

A survey of 208 SAP users in Europe has found that businesses can expect to pay between $10m and $100m to migrate from their existing SAP system to S/4 Hana.

The survey, by Rimini Street, reported that almost two-thirds of those asked had no plans to, or were currently not committed to, migrate to S/4 Hana.

The top reason given for not committing to S/4 Hana was “no strong business case and unclear ROI [return on investment],” according to Rimini Street.

A large majority of users (89%) planned to stay with their existing SAP ERP (enterprise resource planning), with many saying the rich functionality of their current releases met their business needs and formed the foundation of a preferred hybrid IT model.

Some 89% of respondents said they planned to run their current, proven SAP ERP releases, and 30% said they would look to implement a hybrid IT strategy.

This would potentially enable them to maximise the value of their core SAP system as a system of record, while freeing up funds and resources to drive innovation more quickly and flexibly through systems of engagement.

Their existing SAP ERP could then be augmented with cloud applications for innovation – such as salesforce automation, travel and expenses, and procurement – from SAP and/or other cloud providers.

Rimini Street CEO Seth Ravin said: “CIOs and IT decision-makers prefer to maximise the value of their current robust SAP ERP system that more than meets their business requirements, rather than advancing to a new platform that is still in development, with no current business case to support a full reimplementation.”

Ravin said the survey results showed how SAP users were deploying hybrid IT to help their businesses gain a competitive advantage now, without having to wait indefinitely for meaningful new innovations and capabilities from SAP.

Vinnie Mirchandani, author of SAP Nation, said: “The SAP Business Suite is remarkably robust and feature-rich, but SAP’s ability to successfully innovate outside core ERP has not kept up, so a two-speed approach makes sense. Stick with the proven core, but continue to innovate around the edges with many modern solutions that are available from some very nimble companies.”