The SAP world is undergoing profound change. The software giant is pushing its customers towards S/4HANA Cloud and a subscription-based model. But while SAP’s cloud sales are increasing,
From the perspective of Simplifier – the pioneer of simplification and agility in IT – this development is not surprising. It is a symptom of a deeper disconnect between the traditional, monolithic ERP strategy and the demands of the modern, digital world. The migration to S/4HANA is not a purely technical matter; it is a strategic decision that many companies shy away from. Let us analyze the reasons for this in more detail and show you a pragmatic way out.
The bare figures: Customers’ mistrust is palpable
The survey conducted by Rimini Street provides alarming figures that quantify the unease of SAP clients. It is not a matter of vague dissatisfaction, but of concrete, business-critical concerns.
Two main points stand out: the fear of uncontrollable costs and the lack of evidence of a clear return on investment (ROI). 9 out of 10 respondents expressed concerns about rising and unpredictable subscription costs. The change from a perpetual license – an asset on the balance sheet – to an ongoing operational cost means a fundamental loss of control over one’s IT budget planning.
The ROI question is even more critical: an incredible 95% of companies state that creating a convincing business case for S/4HANA is difficult or requires considerable effort. This suggests that the benefits touted by SAP are often not enough in practice to justify the enormous costs, risks and organizational effort of a full migration.
The “one-stop shop” paradigm is crumbling
One of the most revealing findings of the study is that almost 80% of SAP customers surveyed expect to adopt a modular ERP approach and work with multiple vendors in the future. This is a direct contradiction to SAP’s vision of a centralized S/4HANA platform as the sole “digital core”.
“Innovation happens very quickly outside of the big software vendors we all know… Putting all your eggs in the SAP basket will limit future options.” – Scott Hays, Rimini Street
This statement hits the nail on the head. Companies are realizing that agility and competitiveness are not achieved through a monolithic system, but through the flexible combination of best-of-breed solutions. Whether it’s specialized AI services, IoT platforms or innovative logistics tools –innovation takes place in a decentralized ecosystem. A rigid, all-encompassing ERP approach quickly becomes an obstacle to innovation here. This is precisely where low-code platforms such as Simplifier come in: They are the technological bridge to connect a stable SAP core with the agile, modular world of tomorrow without falling into a vendor lock-in.
ECC as a rock in the surf: Why the old is not always bad
Gartner analyst Mike Tucciarone puts it in a nutshell: “In many ways, SAP’s biggest competitor to S/4HANA is its own legacy ERP, ECC.” Many companies have invested heavily over years, if not decades, in adapting, stabilizing and integrating their ECC systems. These systems are the backbone of their business processes – proven, reliable and often “good enough”.
The idea of tearing up this stable core for a “big bang” migration is a nightmare for many CIOs. The risk is immense, the benefits uncertain. Instead of replacing the functioning core, companies are looking for ways to take advantage of the “longer lifetime value of the software they have implemented”, as the article puts it.
This is the great opportunity for a “keep-the-core, innovate-at-the-edge” strategy. Instead of switching off ECC, a technical update of the database to S4/Hana is a good idea in order to remain supportable. This means that the existing system can continue to run as a stable backend while modern, user-friendly applications and processes with a low-code platform are set up on top of it, allowing mobile apps for field service, modern web UIs for management or the connection of new AI services to be implemented without jeopardizing the core system. This is not a “wait and see” approach, but an active, risk-minimized modernization strategy.
The smart middle way: modernization without the big bang
The S/4HANA dilemma is seemingly forcing companies into an “all-or-nothing” decision. However, there is a pragmatic and strategically superior third way, which is made possible by low-code platforms.
- Minimize risk, prove ROI: Instead of starting with a full backend migration, companies can develop new, innovative applications on a low-code platform that are connected to the existing ECC system. This way, the business benefits are quickly visible and the ROI for specific use cases is proven before core remediation is even considered.
- Living modularity today: A low-code platform acts as an integration and orchestration layer. It makes it possible to connect the ECC system with the desired best-of-breed cloud services and thus gradually realize the modular approach desired by 80% of customers.
- Creating future security: Applications that are created on a low-code platform are decoupled from the backend. Should the company decide to migrate to S/4HANA in the future, the frontends and business logic that have already been created can be connected to the new backend with little effort. The investment in the user experience and process digitization remains intact.
This approach solves the key concerns of customers: It enables incremental, budget-controlled modernization, delivers quick visible results (ROI) and preserves strategic flexibility instead of being at the mercy of a single provider.
Conclusion: Doing instead of hesitating – a model for the SAP community
While many are still pondering the business case, others are showing how it’s done. Automotive supplier
By using Simplifier to target where the greatest pain and the greatest potential lie, ElringKlinger quickly achieves visible success. You prove the ROI not in theoretical business cases, but in practice. You live the modular approach desired by 80% of customers by flexibly combining your stable SAP core with the best available tools. And you build a future-proof application landscape that lasts regardless of the underlying backend technology.
ElringKlinger’s message to the SAP community is clear: Take your roadmap into your own hands. Don’t wait for the perfect moment for IT modernization – create it yourself, app by app.
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