The question isn’t whether you should modernize your SAP environment—it’s how you should approach that modernization to achieve your business objectives while managing risk and complexity effectively. Your future competitive advantage depends on making that decision strategically and executing it successfully.
The pressure to modernize your SAP environment is mounting, but the path forward isn’t always clear. Should you pursue a transformative overhaul or focus on evolutionary improvements? The answer lies in understanding your unique business context and aligning your technology strategy with your organizational goals.
The term “transformation” gets thrown around frequently in discussions related to the move from legacy SAP ERP solutions to the latest SAP Cloud ERP release — but not every SAP journey requires a true transformation. There are a lot of reasons to move to the latest version of software — and those range from the tactical to the strategic to the truly transformative. Every customer is on a journey with a different starting point, a different endpoint, different goals and objectives for the journey, different competing projects and initiatives, and different tolerance levels for risk, change, and investment levels. The bottom line is that every customer is different, so every journey will be different.
Some of these journeys are truly transformative – they will fundamentally transform how the organization gets work done. They will enable new/different business models, create a foundation for mergers and acquisitions or divestitures, or create entirely new ways of conducting business.
However, many organizations benefit more from evolution—a measured approach that modernizes technology and addresses critical needs while preserving operational stability. Your path forward may focus on achieving a non-disruptive upgrade to ensure you operate on a modern, secure, and supported platform. The opportunity cost of investing in a large transformative project vs other organizational priorities may simply be too large for the organization to absorb.
Alternatively, you might choose a more moderate pace to align with your organization’s ability (or desire) to change, or to better align with your cash flow requirements or risk profile. This approach focuses on establishing a solid foundation while delivering an innovation roadmap over time that more closely aligns with your specific needs and timeline.
Too often, conversations migrate to one end of the spectrum or the other. There is a whole range of journeys spread between the polar opposites of “technical upgrade” and “transformation”. You are in control of your journey — this journey is not SAP’s journey, your partner’s journey, or some other “expert’s” journey. The best journey is the one that works best for your organization.
Your SAP journey represents a people project first and a technology project second. Thus, we need to change the narrative around change. Every project has an OCM (Organizational Change Management) component. We really should have a mindset of OCE (Organizational Change Enablement). As a leader, we don’t simply want to “Manage Through the Change”, we want to enable the organization to change. It may sound like a play on words, but a shift in mindset and how we approach change will lead to a more engaged organization.
Change enablement starts with the executive team. These projects demand active involvement from senior leadership—they are not spectator sports. These projects are disruptive to an organization. The executive team will need to make some very hard decisions on what will, and will not, get done. Organizations do not have unlimited resources, so tradeoffs need to be made. Everyone in the organization needs clarity on these tradeoffs and priorities.
As mentioned earlier, these projects — transformative or not — are people projects first, and technology projects second. Too often, organizations fixate on the technology and then dramatically underinvest in preparing their people for success. Here are a few additional thoughts to ponder:
Every organization must answer the “Why now?” question based on their unique circumstances, but certain realities apply universally. Delaying your SAP upgrade will not make the process easier or less expensive — the issue isn’t simply going away. The technology and paths to get to the latest versions have been proven hundreds of times — it is no longer a “Will it work?” question. The longer you wait, the more complex and costly the transition will become. It is not a matter of “If”—it truly is a matter of “When” and “How”.
The pace of technological change continues to accelerate. Artificial intelligence capabilities are rapidly advancing and will only improve over time. Real value derives from having high-quality data that informs decisions, generates insights, and supports efficient business transactions. If poor data quality, complex technology landscapes, or obsolete technology inhibit your ability to extract real-time insights and conduct business effectively and efficiently, a transformation or upgrade and innovation roadmap is warranted.
Technology providers continue moving forward with their investment decisions regarding which products they will build, sell, and support. Technical obsolescence represents a real risk, and technical debt will continue accumulating in your organization as every technology provider continues to optimize their solution portfolio and go-to-market strategy.
Most projects face four primary sources of risk that require prioritized attention: data, integrations, testing, and change enablement. Take a critical eye to your plan and ensure these areas receive appropriate focus and investment.
Organizational alignment and commitment represent fundamental dependencies. You need active engagement from your executive team and all leadership levels. Everyone must share the same story regarding priorities and objectives.
Organizational readiness involves having people with the right skills and attitudes in appropriate roles. Are you prepared to backfill resources dedicated to the project? The more transformative your initiative is, the more resources you will require.
Your non-SAP solutions and integrations demand careful consideration. Which third-party solutions will remain and which will be replaced? Are they compatible with your target platform? Do you have a solid integration strategy and platform?
Start your planning and discovery process now, even if you don’t begin executing immediately. Understanding your journey options, preparation steps, and organizational alignment requirements will prove extremely valuable when you’re ready to proceed.
The talent market will become increasingly competitive as more organizations move from planning to implementation phases. The closer you get to the 2027 and 2030 support end dates, the more pronounced talent shortages will become.
Begin upskilling your internal teams now, rather than waiting until you have a confirmed project and kickoff date. This applies to your technical teams as well as super users and subject matter experts. Consider using smaller projects to build skillsets gradually, rather than requiring your team to jump in with both feet.
Invest in a thorough Phase 0 process to understand your alternative paths forward, technical complexity drivers, total investment requirements, optimal roadmap options, organizational readiness levels, and success metrics. The fewer surprises you encounter regarding costs and complexity throughout the project duration, the better your outcomes will be.
Your SAP upgrade — whether transformational, evolutionary, or somewhere in between — represents more than a technology refresh. It’s a strategic business decision that will impact your organization for years to come. The key lies in choosing the right journey for your specific context rather than following a generic transformation playbook.
Focus on the critical risk areas: data quality, people readiness, integration complexity, and comprehensive testing. Build your plan with realistic timelines and adequate resource allocation. Remember that these are journeys, not day trips, and success requires sustained commitment from your entire leadership team.
The question isn’t whether you should modernize your SAP environment—it’s how you should approach that modernization to achieve your business objectives while managing risk and complexity effectively. Your future competitive advantage depends on making that decision strategically and executing it successfully.
