“A new version of the ERP, you say? Great, let’s just flip the switch. It can't be that difficult, can it?'” Many organisations can be forgiven for thinking along these lines. If only migrations were that straightforward!
In a previous article Accelerate your SAP RISE cloud transformation, we discussed the imminent need to migrate from SAP ECC to S/4HANA, SAP's newest cloud-based ERP product before the end of 2027, and PwC’s differentiated approach to supporting our client’s migration. As IT practitioners will know, three years is not a long time to successfully execute a migration. In this article, we focus on the most challenging step of the journey, business case approval, and provide guidance and insights on how to navigate this complex process effectively and assist your business’ case for change to S/4HANA.
When do we move to S/4HANA? Do we start now? Do we wait until 2026?
We have seen very few SAP ECC customers in Australia and New Zealand migrate to S/4HANA. We have, however, seen a high level of market activity with many organisations starting their migration planning over the past six months. With SAP’s 2027 deadline unlikely to be extended, we are expecting to see a significant number of companies across ANZ start their S/4HANA programs in 2025 and into 2026, competing for a finite capacity of SAP resources.
The sentiment we are feeling in the market currently, is that there is very little appetite for large scale transformation programs. It can be hard to justify spending $50-100+m and disrupting your business for multiple years to put in a new ERP – and certainly while there are so many competing priorities (tough economic conditions, margin pressure, evolving business models, disrupting technologies etc). The irony, however, is that the legacy ERP is sometimes the very thing that is holding back such organisations from delivering on their business strategy.
It is a necessity, and fortunately there are now more than just two options for migrating from ECC to S/4HANA. Traditionally, there were just Brownfield and Greenfield approaches. Brownfield being a purely technical migration and Greenfield being a fresh ERP implementation (starting from scratch). However there are now many different paths to get to S/4HANA using an approach that is right-sized for your organisation and aligned to your appetite and capacity for change. There are almost an infinite number of ‘hybrid’ options across the migration spectrum that sit in between the two approaches. With that being said, there are two main technical approaches that we refer to as Hybrid Brownfield and Hybrid Greenfield (sometimes referred to as Mix and Match). These new approaches allow organisations to take a selective approach to transformation – transforming some parts of the business while lifting and shifting others.
Every organisation is unique. What level of change are you willing and able to embrace?
For many organisations, the question revolves around determining the extent of transformation and change they are willing and able to embrace during the initial migration to S/4HANA. Is it just transformation of the Finance function, adopting SAP S/4HANA best practices including the new universal ledger, embedded analytics and real time reconciliation; while lifting and shifting other parts of the business? Or is it transforming all backoffice functions including procurement and HR? Or field sales and service? Or manufacturing and distribution?
Every organisation is unique. With a Greenfield approach, using a set of best practice industry business processes and preconfigured solutions is universally accepted as the way. However when a more tailored hybrid approach is considered, there are many factors to consider to determine the best course of action – including your organisation's business strategy, its operating model, current business processes and your application landscape.
Making things easier with our S/4HANA Case for Change framework
The complexity of this process for organisations is plain to see. That’s why PwC developed the S/4HANA Case for Change framework – to help clients with these challenging and important decisions. Our approach is a data driven one. We use a combination of standard SAP and third-party tools tools to assess the technical health and readiness of the ECC environment to move to S/4HANA, performing database, data quality, development and integration readiness checks. We use several home-grown PwC assets to guide the conversation around things like current state data quality and target state process and solution definition. And, SAPs Signavio is indispensable, as we’ve already discussed.
The most challenging aspect is transforming the Case for Change into a detailed business case, including cost/benefit analysis of migration approaches, gaining stakeholder buy-in, and identifying benefits that the business is willing to stand behind.
This is not to mention a final report delivered by a trusted third party that can stand up to the rigorous scrutiny of the Exec and the Board. This is why our clients tell us they choose PwC for this very important work. Not only do we have a comprehensive and rigorous methodology and framework, and a portfolio of tools and accelerators to ensure a data driven approach is taken, but we have the business acumen and the brand as a trusted advisor to help get the final business case across the line.
Our S/4HANA Case for Change methodologies are designed to challenge your legacy technology landscape to demonstrate the art-of-possible in a future-leaning yet pragmatic way that makes sense for your organisation.
