SAP decided to kick off the new year with a bang! On February 4, 2020 it was made public that SAP would be extending the S/4HANA deadline for maintenance and support until the end of 2040.
In addition to the extension of the S/4HANA deadline, SAP will additionally provide maintenance for SAP Business Suite 7 core applications until the end of 2027, while also offering an optional roll off extended maintenance until end of 2030 for these SAP Business Suite customers. The mainstream maintenance offerings of core applications in SAP Business All-in-One include:
- SAP ERP 6.0
- SAP Customer Relationship Management 7.0
- SAP Supply Chain Management 7.0
- SAP Supplier Relationship Management 7.0 applications
- SAP Business Suite powered by SAP HANA
Once the mainstream maintenance period is complete, SAP plans on offering customer specific support for the SAP Business Suite 7 core applications starting in 2028 and onward. These extensions on maintenance are a result of collaboration with customers, user groups, partners, and industry stakeholders. The extended maintenance is reported to cost customers an additional 2% of the annual license fee in addition to the 20% fee for mainstream maintenance.
According to SAP this proactive offering was put in place, so customers don’t have to sacrifice stability for innovation, particularly during times of accelerated change within industry. During a recent interview Michael Kleinemeier, a member of the Executive Board of SAP SE, SAP Digital Business Services stated SAP has made the commitment to deliver innovations for at least the next 20 years with this in mind, securing that customers have a strong backbone in place delivering continuous innovation they can count on for added business value.
The benefit to SAP customers with these maintenance programs include the ability to make long-term but flexible plans to meet everchanging business demands with security from SAP’s platform. The customer ultimately drives the speed at which their business transformation and processes demand.
Thomas Saueressig, a Member of the Executive Board, SAP Product Engineering, SAP SE says, “SAP S/4HANA is the architecture and platform of the future for our customers. SAP is committed to our customers’ success and choice. Offering these maintenance periods is further delivering on transparency and trust. The significant growth in 2019 confirms our SAP S/4HANA strategy and demand.”
SAP believes S/4HANA is the next-generation intelligent suite, enabling the move to a digital intelligent enterprise that is paving the way to the cloud and hybrid architectures. Almost 14K customers have already chosen SAP S/4HANA to reshape their businesses, and the notable investment increases for SAP S/4HANA only confirm the growth to come. The German-Speaking User Group (DSAG) reported over 49% of customers are planning to migrate to SAP S/4HANA within the next three years and the American ‘SAP Users’ Group (ASUG) report the number of customers who have no plans of moving to SAP S/4HANA has dropped to zero. SAP continues to reiterate with this announcement that if you’re an SAP customer who wants to accelerate your business, remove inefficiencies, reduce technical debt, and take advantage of the latest capabilities of SAP software, then a move to S/4HANA is necessary to propel your business forward.
Geoff Scott, CEO, Americas’ SAP Users’ Group (ASUG). “The decision about a company’s ‘ERP of the future’ should not just center on a technical upgrade to SAP S/4HANA. It should be about how best to prepare a company’s business for the future. This announcement is not a signal to slow down. This is now the time to commence plans and move forward so that SAP customers can harness business value from what is the most significant technology change in SAP’s recent history.”
Clarkston’s Perspective on the S/4HANA Deadline Extension
We view this as a way of providing additional flexibility in their journey of innovation and business change for our clients. This flexibility allows us to take time to understand the business benefits and plan better with our client partners. While this provides an additional window of time, the need to modernize your processes and move to a digital enterprise, provide a much better user experience, get access to great analytics, and provide a robust platform for your M&A strategy continues to be critical. From our perspective, the key questions to be asked in a journey to SAP S/4HANA are:
- Why? Which functions and innovations in S/4HANA tie directly to business benefits?
- What? Are we doing a brownfield, greenfield or a hybrid?
- Who? Being that this is the most important question, do we have the resources? Considering the importance of the initiative, can we bring in our best for this?
- When? When and how are we going to execute the transition to S/4HANA? How do we bring the benefits in a phased manner?