What does SAP end-of-life for SAP ECC really mean?

SAP (Systems, Applications and Products in Data Processing) announced end-of-life support for their legacy SAP ECC (ERP Central Component) in 2027.  I bet 90% of you didn’t know what SAP actually stood for ;)  For a "modest" service fee, SAP will continue support for ECC through 2030.  If you are one of the thousands of companies running on SAP ECC, what does this mean for you?  Have you already started your upgrade? If not, are you feeling anxious or excited? I propose if you follow these three steps, this can be an exciting time.  You better buckle up and get ready for a bumpy ride though, because this isn’t going to be easy!

1. You better be budgeting, aligning internal resources and identifying the kind of implementation partner you want.

2. CIO/CTOs need to be working with their C-suite counterparts to prepare and align priorities for implementation.  

3. The business teams need to look at their systems and processes and determine if they are really getting the expected value out of them

If you are looking at a Greenfield implementation, you are in luck!  New implementations of SAP S4 can be done in as fast as 6 months, but realistically will take 12 months.  If you are one of those thousands of companies already running some version of SAP or another ERP system, you need to budget at least18 months for implementation.  This means that unless you are kicking off your upgrade next month, you aren’t going to make the 2027 deadline!  

If you are just now starting to prepare, you better figure out step 1.  The first piece is controlled by the IT team, which actually makes it the easiest step of all.  Once you figure out step 1, you have to ask yourself if you are going to remain a back office “IT help desk” team or a strong IT partner for your business counterparts.  

If you want to just remain a help desk, stop at step 1.  If you want to be more, then lean into steps 2 and 3.  CAUTION: If your IT team isn’t doing the little things right, then don’t bother with steps 2 and 3.  Your team has to be supporting the existing systems well or you will have no credibility with the business and therefore steps 2 and 3 will fail!

Assuming your team is doing the little things right, CIO/CTO’s have to make sure their C-suite executives understand that this project will affect everyone!  These are not just Finance or Supply Chain projects!  If the various business groups are not aligned on this, then they will not resource the project for success.  Have the hard conversations and if you are ignored or glossed over, keep evangelizing!

Every leader and C-suite executive wants to see a strong ROI (Return on Investment) before approving a project.  We IT executives try to justify these projects with grandiose ROI’s like: reduced inventory cost, increased operation efficiencies, cheaper operating costs, etc.  ERP implementations and upgrades are expensive and disruptive!  There are some projects that you just HAVE TO DO, if you are a business.  SAP S4 is very powerful, but it is not going to magically deliver these benefits.  In most cases it is actually going to cost more to maintain and cause significant inefficiencies, especially right after launch.  

If you want to truly get some of these benefits out of the implementation, you have to focus on point number 3!  Does every business unit need their own “pet system” that requires you to build custom integrations back into SAP?  Is that system a competitive advantage for the business or is the business just afraid of sharing with another department?  Do you need all those reports and who is actually looking at those reports?  What KPI’s (Key Performance Indicators) does leadership actually use to make decisions?  

Every ERP implementation and upgrade is a “Digital Transformation” for the business.  IT teams are always pushing for a seat at the table or wanting to be true business partners.  If we want to be more than just an IT help desk, we have to ask these questions and keep asking these questions until you feel comfortable that you have the right answers.  

These ERP implementations or upgrades are great opportunities to consolidate system architecture and simplify business processes and reporting!  Getting business partners to let go of their “pet systems” and to challenge, “This is how we have always done it!” is hard and uncomfortable, but it can also be transformative for the business.

IT Leaders, don’t let this opportunity pass you by!  Embrace this opportunity and show the business that partnering with the IT team can be immensely beneficial to the business leaders and their teams’ operations.

What are your plans to handle SAP ECC end of life?

What have your experiences been during one of these “digital transformations”?