NTT DATA Business Solutions
NTT DATA Business Solutions | October 13, 2023 | 5 min read

SAP S/4HANA Migration Strategies

For organizations, migrating to SAP S/4HANA is more than a routine software update. It represents a fundamental shift in their architecture and operations. In this blog post, we’ll explore the key findings of a PAC Institute survey providing valuable insights into the evolving landscape of SAP S/4HANA migration strategies.

S/4HANA migration strategies

S/4HANA Migration Strategies: Status Quo

SAP S/4HANA Migration stands as a pivotal milestone for organizations worldwide. It’s not just an update, it’s a fundamental shift in architecture, operations, and strategy. The migration project often requires changes in deployment models, significant investments tailored to each customer’s needs, and extensive process reengineering. Nonetheless, most organizations are aligning with SAP’s strategic vision and embarking on the S/4HANA migration journey with a strong focus on cloud-based deployments.

It’s important to note that according to PAC’s CxO Survey on SAP S/4HANA Migration Strategies, nearly half of respondents are still in the planning phase or have not begun preparations for this transformation. With standard maintenance for existing systems set to expire at the end of December 2027, they have a narrow four-year window to complete their migration projects. Time is ticking – so where does your company stand?

Key Findings: SAP Clients Embark on a Journey Towards the Cloud

As a valued SAP partner and IT service provider, we understand the importance of this change, and we’re excited to share the nine key findings from a recent survey conducted by the PAC Institute that sheds light on the strategies adopted by 550 European companies regarding their journey to SAP S/4HANA.

  1. The majority of those surveyed are still about to migrate to SAP S/4HANA. 39% of the companies are in the planning phase, another 10% are still discussing. In contrast, 35% have already migrated, and another 12% are currently working on the SAP S/4HANA migration.
  2.  End of maintenance is not the main trigger for a renewal of the application landscape. The decision to renew the SAP landscape was mainly triggered by the fact that the current SAP installation is outdated and no longer meets the requirements for adaptability and flexibility.
  3. The main challenges that need to be solved are costs and the need for adaptation. Concerns about the need to adapt the new SAP S/4HANA environment to individual needs are particularly pronounced. And of course, the cost of migration is a challenge for many respondents.
  4. Cloud is the preferred deployment model. SAP has clearly stated that cloud is the deployment model of the future. Consequently, the vast majority of respondents prefer either a SaaS edition or RISE with SAP Cloud, private edition, which is usually deployed on a hyperscaler infrastructure.
  5. AWS and Microsoft Azure are the preferred hyperscalers of the SAP community. The survey shows strong current support for AWS. We expect the pendulum to swing towards Microsoft Azure in the long term.
  6. Many want to redesign their processes to become more efficient and innovative. Almost four out of ten respondents are taking the SAP S/4HANA migration as an opportunity to redesign their business processes. They are often aiming for more efficiency and innovations.
  7. Trustful cooperation is an important criterion when choosing a service provider. It is also important to the respondents that the service partner can bring in tools and templates that simplify and accelerate migration.
  8. Successful cooperation with the provider is defined by the quality of the consultants. Customers value the high level of expertise of consultants. For well over half of those surveyed, this is the decisive reason for continuing to work with their chosen service provider.
  9. Those who do not want to migrate are often dissatisfied with SAP’s cloud strategy. Only a few of the respondents refuse to migrate to SAP S/4HANA, often because their current SAP installation is running stably and does not require renewal, but often also because they do not want to follow SAP’s cloud strategy.
PAC’s CxO Survey on SAP S/4HANA Migration Strategies

Whether you're embarking on this journey or want to understand how others are approaching it, dive into the PAC Institute's findings to gain valuable insights into SAP S/4HANA migration strategies.

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About the Survey

The results of this survey are based on an online survey of executives at large and midsize companies in Europe. All respondents have an influence on the decision-making process for an SAP project. Half of the respondents hold a senior position in the IT department and can evaluate the migration from an IT perspective, such as the deployment model, application architecture, and integration capabilities. The other half of the respondents hold management positions in the business departments and can therefore evaluate the SAP environment from the perspective of the users and the affected business processes. The field research was conducted during the second quarter of 2023 and included participants from four major industry sectors: manufacturing and services, transport, and utilities, retail and wholesale, and public sector and healthcare.

About PAC

PAC Analyst is a content-based consulting firm that has been a leader in supporting global software and IT services vendors since 1976. With a team of over 100 experts across Europe, they provide unparalleled insight into European markets, helping clients understand dynamics, increase revenue and improve market presence. Through their portfolio pillars, Guidance, Insights and Visibility, and their renowned SITSI® research platform, they provide market research and analysis in over 30 countries worldwide.

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