SAP RISE was announced in January of 2021. Standard SAP support for ECC ends at the end of 2027. In one of my previous thought pieces, I covered “What is RISE? Is my company a good candidate? How do I upgrade to RISE?” Find out more here. As well as considerations for company leadership when contemplating a transition away from SAP ECC. Learn more here.
With the upcoming deadline for SAP ECC users and the approaching end-of-support date, it’s crucial to strategize for a transition. Nonetheless, we have not thoroughly explored the available alternatives.
Let’s be clear: SAP is notoriously difficult to move away from. With 17 years of experience in this field, I have rarely seen companies move their ERP away from SAP, except in major M&A events. Several compelling reasons support this trend:
- The software has been custom-tailored to your specific company and business processes
- The ERP is heavily integrated to internal, customer, and vendor applications
- Your ECC licenses have been fully depreciated, and you are only paying maintenance
- SAP is offering strong commercial incentives to move to S/4, particularly through their RISE offering
Before jumping at the commercial incentives thrown your way, companies should pause and consider if there are alternatives to moving to S/4. What can you do if your organization can’t provide the resourcing, budget, or justify this disruptive endeavor?
Stick with SAP support through 2030
Many companies may simply need more time. Starting in 2027, SAP will charge an additional 2% on your maintenance base for continued ECC support. This will buy companies another 3 years of SAP support. This option is viable for companies committed to SAP and S/4 but are still finalizing their business case, approach, budget, and resources.
Keep in mind that SAP is strongly pushing RISE. The days of extremely high discount percentages for perpetually licensed software are likely behind us. If you’re interested in S/4 and a move to the cloud, RISE is a must-consider.
Move your ECC support to a third-party
Another increasingly popular option is transferring your support from SAP to a third-party provider. Several vendors offer ECC support at a lower cost than SAP allowing you to continue to receive security, regulatory, and OSS-like support. Several vendors offer full SAP AMS services plus support to other applications, providing a potential opportunity to consolidate your vendor landscape.
This option is worth considering if you fall into one or multiple of the following scenarios:
- The ECC environment is stable and supports the business well
- You have a strong internal SAP support capability with little reliance on SAP
- There is no compelling business case to execute an ERP upgrade or transformation
- You have fully depreciated your ECC licenses
Moving to one of these third parties can save you over 50% off your current maintenance base. The savings generated from the maintenance base could then be used for a future S/4 deployment or other initiatives. Also, SAP will be pushing you to RISE and a subscription-based model. Work with your finance department to understand if this switch from a capex investment to more opex is even palatable.
However, there are cautions to this approach. Working with these potential vendors is important to understand what that support model looks like, the transition plan, and whether it fits your organization. We have heard anecdotally that if you move to one of these vendors and decide to return to S/4 later, SAP will decrease your S/4 incentives to “recoup” the maintenance dollars that SAP would have gotten had you stayed.
Migrate Off SAP
Consider migrating off SAP only in specific scenarios. SAP is a strong software for companies with moderate to high business process complexity and global operations. If major changes, such as M&A activities, have reduced your company’s geographical footprint and business process complexity, consider alternative ERP solutions that might better suit your current needs. There are less expensive software products in the marketplace that may be a better fit, given that your company has a smaller footprint.
Conclusion
As we reach the midpoint of 2024, it is crucial for companies without a plan for their ECC implementation to take action.
Liberty has the experience to help your company assess and determine the best fit for your business needs. There is no universal answer, but there is one that works best for your company. If your company is ready to move forward with an ERP transformation, feel free to reach out, and we’ll give you our candid and objective opinion in a quick workshop.
If your company is ready and eager to start, I discuss the considerations and preparatory activities every company should make when tactically planning for the move off ECC here.
About Liberty Advisor Group
Liberty Advisor Group is a goal-oriented, client-focused, and results-driven consulting firm. We are a lean, handpicked team of strategists, technologists, and entrepreneurs – battle-tested experts with a steadfast, start-up attitude. We collaborate, integrate, and ideate in real-time with our clients to deliver situation-specific solutions that work. Liberty Advisor Group has the experience to realize our clients’ highest ambitions. Learn more on LinkedIn and Twitter.
