“Who will blink first?”
At the annual UK & Ireland SAP User Group conference in Birmingham this week SAP users discussed, with a deadline looming, if and when they should make the move to SAP’s enterprise resource planning (ERP) software S/4HANA, with the user group warning if everyone moves at once the cost of migration goes up.
The SAP UK & Ireland User Group is a community of over 680 member organisations and 6,000 SAP professionals, last year the group celebrated its 30 anniversary.
A key talking point for the user group is the adoption of S/4HANA, SAP’s ERP software which was released in 2015, so far it’s been a bit of a puzzle for some members as they have to decide if they should make the jump to the successor of SAP’s R/3 and ERP software.
The problem is that SAP have set a deadline of 2025, after which SAP will stop providing support for older versions of its ERP software. This has created a ticking clock for enterprises and of those surveyed by the user group 73 percent said that they plan to make the move in the next 36 months, while 27 percent stated that it will be some time after that before they migrate.
The UK & Ireland SAP User Group chairman Paul Cooper told Computer Business Review that: “Lots of people are struggling with the business case and it’s always hard when there’s a hard deadline. This is the date people do start to focus on that. But then when you go to see your CFO, it’s about the bottom line isn’t it and therefore, you’ve got to be able to put business case on the table because, you know, upgrades are not insignificant.”
A Potentially Dangerous Standoff
In a survey, conducted by the user group, of 467 SAP user organisations 70 percent said that they are planning to, or have already made the move, while 20 percent said that have no plans to use S/4HANA in any capacity.
Many members in the user group believe that SAP will extend the deadline past 2025, an event that SAP has in no way hinted at. “There seems to be a potentially dangerous standoff – the question is, who will blink first? Hopefully, with its customer first strategy, SAP will start to think about this and blink first,” Cooper said.
If no one blinks in this scenario then the year just before the 2025 deadline could potentially see a lot of companies struggle to find the partners they need to help them make the migration.
Addressing the user group this week Cooper stated that: “SAP is going to need to do more to speed up adoption. Put simply, there are a finite number of partners with the skills to help us migrate to S/4 HANA. If we all decide to jump at the same time there won’t be enough of them to go around, and more than likely their rates will go through the roof and we will see quality decline.”