More ASUG members are currently pursuing SAP S/4HANA migration initiatives than ever before, according to recent ASUG research. With mainstream maintenance for SAP Business Suite 7, which includes SAP ERP Central Component (ECC), running out in 2027, SAP users are increasingly making progress in the planning and execution of digital transformation projects.
Nearly half (45%) of the research respondents reported they’re already live on SAP S/4HANA or have started to move, while 30% indicated their organizations will go live on SAP S/4HANA in the next six to 24 months, ahead of the 2027 deadline. 16% noted they plan to go live on SAP S/4HANA more than two years from now; only 1% currently have no plans to move.
Respondents are split between brownfield and greenfield approaches, with 34% of respondents pursuing brownfield strategies, 33% greenfield strategies, and 20% pursuing hybrid strategies. Private cloud environments, meanwhile, are the leading choice for those running SAP S/4HANA environments, continuing a trend from 2023 that grew further in 2024. Similarly, interest and intent to use RISE with SAP for SAP S/4HANA Cloud, private edition, is higher than interest and intent to use RISE with SAP for SAP S/4HANA Cloud, public edition, within the ASUG member community.
While SAP S/4HANA migrations remain complex, SAP users are having an easier time getting there, compared to the findings in last year’s research. Risks experienced as part of the move to S/4 have stabilized or decreased compared to 2023, but resources vital to enacting SAP S/4HANA migration projects, such as consultants and migration partners, are expected to become more in-demand as more SAP customers reach the go-live stage of their migrations.
The research was conducted earlier this year to assess SAP S/4HANA migration trends and ASUG members’ experiences with support, timelines, expenses, business risks, and realized benefits related to ERP implementation. The research builds upon the findings of this year’s ASUG Pulse of the SAP Customer Research survey while illuminating SAP S/4HANA adoption rates and challenges faced within digital transformation projects. 208 members of the ASUG community participated in this year’s research.
Here are three of the biggest takeaways from the new 2024 ASUG SAP S/4HANA Journeys: Voice of the ASUG Member research.
Projected Budget and Timelines
The research reveals that SAP S/4HANA migration costs can exceed expectations. For SAP users already live on SAP S/4HANA, 49% of respondents indicated costs exceeded their original budgets (up 17% from 2023).
That said, costs aligned with expectations for 23% of these respondents (down 13% from last year’s results). 24% of respondents were not sure whether actual costs aligned with their organizations’ anticipated costs for their entire SAP S/4HANA projects, and 4% said that costs went below expectations.
Respondents note that more accurate forecasting and resource distribution are needed. Consulting fees are the main source of unexpected costs, increasing by 20% since 2023. Implementation services through partners/system integrators (SIs) also represented the greatest costs to go live on SAP S/4HANA.
Anticipated and actual timelines for SAP S/4HANA implementations are generally consistent, with an average migration time of 1.5 years (slightly less than the anticipated 1.7 years). On either end of the spectrum, some implementations took up to six years, while other implementations took as little as four months.
The research indicates that migration projects are complex; although overall timelines weren’t significantly affected, 46% of respondents noted that the multi-step nature of migration, combined with existing business complexities, made the process ultimately more time-consuming and resource-intensive than anticipated to stay on schedule.
Survey participants note that proper resource allocation, internal support, change management, and business-wide collaboration are keys to successful SAP S/4HANA migrations.
Leveraging RISE with SAP and GROW with SAP
RISE with SAP, a service designed to help SAP customers accelerate their embrace of cloud ERP, is gaining traction in the ASUG community.
RISE with SAP S/4HANA Cloud, private edition, is the most widely utilized RISE option among ASUG Members, with 17% of respondents reporting the service is currently at place in their organizations. Over half (59%) indicated they are planning to leverage it in the next year or are currently considering it for future use. Only 14% reported they’re not considering RISE with SAP S/4HANA Cloud, private edition, and only 8% have never heard of it.
RISE with SAP S/4HANA Cloud, public edition, is another matter. Only eight percent of respondents are currently leveraging the solution or reported using it in the past. While 28% said they are considering using it in the future, 48% indicated they are not considering using it; only 10% have never heard of the service.
While three percent of respondents indicated their organizations are already using GROW with SAP, a transformation-service offering for the midmarket sector, some members of the ASUG community will consider selecting the service in the future. Seven percent plan on doing so in the next year, and 25% are considering future use. However, 37% of respondents said they have no plans to leverage GROW with SAP, and 29% said they have never heard of the solution.
Speaking to the adoption of RISE and the overall awareness of GROW, David Robinson, President of RISE with SAP, told ASUG that “each customer is different, with different starting points, industry constraints and operating models that shape their distinct digital journey.”
Given these distinctions among its customer base, SAP strives to provide its customers with options that will best fit their specific needs.
“SAP has a long history of providing choice and optionality in the market given the importance customers place on leveraging SAP capabilities that fit with their choice of operating models,” Robinson said. “Based on size, degree of fit-to-standard, industry and operating model preferences, many enterprises continue to choose a dedicated tenant architecture supported via private edition, and for those customers that are seeking a more autonomous experience based on reduced operating model complexity, public edition is increasing as a standard for enterprises.”
SAP S/4HANA Cloud Migrations and Concerns
The research examined SAP S/4HANA environments in the ASUG community, overall finding an increase in cloud adoption for S/4HANA environments, compared to 2023 research.
Private cloud environments are most popular among ASUG members who are live on SAP S/4HANA, in the process of moving, or moving within the next two years, with 42% (up from 33% last year) reporting they are either already live in the private cloud or will be live in this environment within the next two years.
Managed SAP S/4HANA private cloud environments are the next most utilized option; 23% of respondents selected this option. Meanwhile, less SAP users reported that their organizations were adopting hybrid or public cloud environments for SAP S/4HANA (9% for both, down from 12% for both in 2023).
That said, a few ASUG members remain divided on embracing SAP S/4HANA cloud environments. Over half (54%) of the 16% of respondents who plan to move to SAP S/4HANA on-premises indicated that data security and private concerns are the main reason their organizations are not moving to the cloud.
Jon Reed, ERP analyst and Co-Founder of Diginomica, told ASUG that he believes the security concerns around public cloud environments are overstated.
“I do find these data privacy and security concerns a bit frustrating,” he said. “I understand where those concerns are coming from, but I am not at all convinced that customers' private clouds or on-premises installations are more secure than public cloud. I believe that's more of a perception issue than reality, but it is interesting to think of how the data privacy conversation could be fleshed out.”
ASUG will continue to dig into this important research in the coming months. As part of our coverage, ASUG interviewed David Robinson, President of RISE with SAP, to get his thoughts on the research. Read the conversation—and his additional comments—here.