SAP: SAP customers struggle with S/4HANA migration

SAP user companies are up against the clock. Migration to S/4HANA must be completed by 2030, and that's only if they buy into SAP's special three-year reprieve beyond standard maintenance end-of-life at the end of 2027.While that may appear to be a distant concern, companies currently working toward an S/4HANA transition, even those with a high level of IT maturity, are finding the journey challenging. A recent study by management consultancy Horváth shows that delays in planned go-live dates are the rule rather than the exception. Significant migration deficiencies According to the study, projects are taking an average 30% longer than originally planned. Only 8% of companies that have completed the transition to S/4HANA did so on schedule. Of the 200 companies surveyed, only 37 have completed their migration to S/4HANA; the majority (57%) are still mid-transformation. At the same time, in more than six out of each 10 cases, the planned budget for the S/4HANA migration was superceded: According to the study, budgets have been exceeded significantly in one quarter of migrations, and significantly in another 40%. Nearly two-thirds (65%) of companies also identified severe to very severe quality deficiencies after completing the migration. The main reasons cited were: Expansion of project scope during the migrationWeaknesses in project management Underestimated testing and data migration phases Revision loops for concepts and processesDecision-making issuesFailure due to misjudgmentsAccording to study director and Horváth partner Christian Daxböck, many problems during the transition are rooted in an incorrect program setup. The complexity of the project and the required resources are underestimated, while organizational competence is overestimated."This mismatch leads to the enormous discrepancies between plan and results," he says. Another problem, according to Daxböck, involves prioritization: Too many goals are classified as equally important and should therefore, at best, be addressed simultaneously, which is ultimately also a consequence of inadequate project management. This also reflects the responses of the study participants. The biggest challenges in the migration project were: Lack of IT integration/IT perspective in the overall project: 28% Insufficiently defined processes: 24% Lack of knowledge/documentation about third-party systems and interfaces: 23% Lack of integrative/whole-entrepreneurial thinking: 22%Lack of understanding of responsibilities and tasks of defined roles: 21% Lack of resources: 20% No optimal placement of project manager: 20% Looking back, almost half of the respondents (46%) would estimate a longer project duration. More than 40% would increase the budget from the outset, and 30% would reduce the project scope. Hardly any interest in public cloudInterestingly, more than two-thirds of the surveyed companies are pursuing a company-specific approach and prefer private cloud (48%) or on-premises (19%) hosting options. In contrast, just under 30% follow the standard set by SAP and have chosen the public cloud as their hosting option. For the Horváth study, 200 SAP user companies with annual revenue of at least €200 million and at least 200 employees were surveyed. The sample includes the DACH region, selected countries in Northern and Eastern Europe, and the US. The interviews were conducted in the first quarter of 2025.See also: SAP user group: S/4HANA usage is growing, but still in the minoritySAP customers still slow to deploy AI broadly