SAP ECC customers bet on composable ERP to avoid upgrading
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Organisations running SAP ECC 6.0 are finding it hard to justify upgrading to the latest SAP S/4Hana cloud-based subscriptions
A study from Freeform Dynamics for third-party support provider Rimini Street has found that almost all of the 455 organisations surveyed are struggling to justify the cost of the upgrade.
The survey of IT and business leaders expressed concern over the subscription-based licensing of SAP’s S/4Hana enterprise resource planning (ERP) product. Almost a third of the business and IT leaders polled (31%) say they are finding it difficult to make a positive return on investment (ROI) case for S/4Hana.
Nearly two-thirds (64%) feel it takes some effort to put forward a business case to upgrade from SAP’s older Enterprise Core Components (ECC) ERP, which is being supported directly by SAP until 2033, if customers commit to transitioning to its SAP Rise offering.
The survey reported that 29% of the respondents whose organisations still run ECC are not looking to SAP for innovation. Many are instead choosing a composable ERP strategy based on offerings from multiple enterprise software providers, to integrate best-in-class products and services and emerging technologies more rapidly, preserving flexibility, cost and roadmap control, and enabling faster business outcomes.
The results from the poll suggest the majority of business and IT leaders surveyed do not fully understand SAP’s latest migration policies and deadlines. Freeform Dynamics also found that 84% express some level of concern about current messaging and how it will impact their operations.
Freeform Dynamics’ analysis of the survey data shows SAP’s constant shifts in deadlines, packaging options, transition programmes and even renaming of products is adding to the uncertainty felt by its customers, making strategic planning more difficult, but also encouraging them to explore alternative paths forward.
Over three-quarters (77%) of the IT and business leaders polled are okay with software as a service in principle, but they have reservations about SAP’s approach. In fact, 92% cited escalating and unpredictable subscription costs as a significant concern to their operations, while 95% of respondents say building a positive ROI case for S/4Hana requires significant effort or is genuinely challenging.
The survey also reported that 83% of those polled see clear value in composable approaches for faster access to emerging technologies such as artificial intelligence (AI), while 94% highlight the freedom to choose best‑fit applications for each business need.
“It’s good to see so many SAP customers now fully embracing the idea of open composable architecture and the use of loosely coupled third-party solutions to meet ERP needs,” said Dale Vile, distinguished analyst at Freeform Dynamics. “This business-led, rather than supplier-led, approach has been commonplace in other areas of IT for a while as it pays dividends in terms of flexibility, control and access to new innovations.”
In June, Rimini Street announced it would be offering new and existing customers extended support for SAP ECC 6.0, and S/4Hana support for 15 years.
Discussing the role of third-party support in helping organisations succeed with composable ERP systems, David Rowe, chief product and marketing officer at Rimini Street, said: “Rimini Street clients are leveraging our third-party support and optimisation solutions to effectively extend the life and value of proven existing SAP releases, freeing up critical funds to accelerate adoption of emerging technologies such as AI, maintain control over their roadmaps and achieve above-average performance.”
