Don’t Rush into SAP S/4HANA - You Might Be Missing a Crucial Step!

If your IT landscape is deeply rooted in SAP and you are planning a move from SAP ECC to SAP S/4HANA, you might be skipping a critical step if you dive straight into Phase 0 of S/4HANA migration.

ERP migration, when rightly done, is not just a technical migration but a business transformation. For a landscape built around legacy SAP products, the complexity is magnified. With several SAP products nearing the end of mainstream maintenance in the next two to five years, you must make key architectural decisions before launching your SAP S/4HANA implementation. This is your opportunity to rethink your enterprise architecture before making long-term commitments.

Key SAP Products Nearing End of life

Before we get into details, here is a list of some core SAP products nearing the end of their mainstream support in the short term along with the successors proposed by SAP.

The Challenge

 A typical SAP heavy IT landscape will have the following SAP footprint at minimum with several additional SAP/Non-SAP applications integrated around these.

• SAP ECC supporting core financials and operations.
• SAP BW 7.5 for analytics,
• SAP PI/PO for integrations,
• SAP Solution Manager for Application Lifecycle Management(ALM),
• SAP BusinessObjects for reporting / SAP BPC for planning

 Each of these components has a different roadmap, leaving you at a crossroads: 

• Do you follow SAP’s recommendations for each product?
• Do you explore non-SAP alternatives for some functionalities?
• Is there an option to simplify your landscape by consolidating or retiring some of the legacy SAP systems?
• How far does SAP recommendations align with your long-term business objectives?

 SAP’s roadmap provides guidance, but it might not be the right answer for your landscape.

Decisions you need to make

The question is not just which SAP products to adopt, but how to design a consolidated, optimized architecture that supports business agility and innovation. There are several decisions that go beyond the typical Phase 0 considerations - deployment strategy, implementation approach, and data strategy -  needed for an efficient, future-proofed digital core

Integration Strategy

SAP PI/PO has historically served as the core middleware for SAP integrations. It has been the backbone of integration and orchestration for SAP landscapes managing workflows, and orchestrating business processes across the enterprise. However, with its phase-out, you need to decide whether to adopt 

• SAP Integration Suite, 
• Third-party Best of breed middleware,
• A hybrid approach that balances cost, capability, and strategic fit.

 Application Lifecycle Management (ALM):

SAP Solution Manager has been widely used for managing the SAP ecosystem. It serves as a central hub for managing the entire lifecycle of SAP applications. With SAP CALM (Cloud ALM) being SAP’s future direction, You have options from

• Staying on Solution Manager until 2030 with extended maintenance,
• Migrating to Cloud ALM with third-party solutions to cover the gaps,
• Subscribing to SAP Solution Manager PCE,
• Focused Run
• Third-party solutions,
• Some kind of hybrid approach

 Analytics & Reporting:

Many organizations still rely on SAP BW for analytics and SAP BusinessObjects for reporting. It essentially serving as the data warehouse for comprehensive business analysis and reporting purposes. The shift to a modern data and analytics stack means evaluating

• SAP Datasphere
• SAP Business Data Cloud - the new kid in the block
• Considering external solutions like Snowflake or Databricks based on use cases.

 Application Rationalization and User Adoption:

Over time, your IT landscape might have evolved through M&A, organic growth, or shifting priorities, leading to redundant applications such as multiple copies of SAP BW or multiple warehouse systems including SAP WM or multiple ERPs resulting from M&A. 

• Should you consolidate your landscape by retiring redundant applications or replacing them with cloud-native alternatives?

 User adoption remains a significant challenge when multiple applications undergo transformation.

• How do you ensure business continuity and a smooth transition?
• With several SAP applications going out of date, what would be the optimal order of migration considering the business impact and interdependencies?

The Risk of Rushing Into Phase 0

Many organisations panic when their ERP is nearing end-of-life and jump straight into Phase 0, engaging SAP System Integrators (SIs) without considering the bigger picture. They start relying on their SAP SI to help with the decisions above. But here is the risk:

1. While SAP System Integrators provide technical expertise, their recommendations often focus on SAP-centric solutions which might not be the right answer for you in all cases.
2. Many companies default to a like-for-like SAP migration, leading to fragmented, siloed, and short-term decisions.

I have supported customers who had to pause their S4HANA project mid-way during Design phase,  because their design was based on limited options from an SI that did not align with their long-term business objectives, leading to delays and extra costs.

 The Need for Independent Advisory

 This is where a broader, strategic, non-biased assessment of the enterprise architecture becomes essential.   You require a broader architectural perspective, one that considers best-of-breed technologies, integration across diverse ecosystems, and long-term business objectives. You need a partner to support you to: 

• Assess your entire application landscape and understand the business processes supported by each SAP application.
• Define a coherent integration strategy that doesn’t just replace middleware but optimizes the flow of data across business processes.
• The total cost of ownership (TCO) of maintaining vs. migrating each system. The strategic value of moving to cloud-based alternatives.
• Harmonize data and analytics to ensure insights remain accessible even as underlying systems change.
• Future-proof your architecture to accommodate new technologies and business models beyond SAP’s ecosystem.

Many generic advisory partners can help with these decisions, but without deep SAP expertise, they might miss the nuances of SAP interdependencies. Understanding how the SAP system has evolved over time and its fit and direction is crucial for making the right cost effective decision.

You need a partner who has deep SAP and industry expertise and can be completely objective in their assessment and recommendations.

No matter where you are in your ERP journey,  if you need an independent partner and a critical friend for your ERP upgrade/non-upgrade journey, reach out to us—the SAP Advisory team at Baringa. Our team brings deep SAP expertise combined with an independent, business-led approach to help you make the right decisions for your enterprise architecture.