SAP bet the house on S/4HANA but most users aren't ready to move

More than half won't pull suitcase from the attic for at least two years

As the UK and Ireland SAP User Group conference opened in Birmingham today, customers of the enterprise software monolith gave their verdict on the cloud-and-AI platform S/4HANA.

Which can be summed up as: "Oh, you mean the thing we don't want to upgrade to yet?"

How long are they going to wait? Of 467 user organisations quizzed in the annual member survey, 58 per cent did not intend to make the move to S/4HANA in the next two years. Indeed, 27 per cent said they would not upgrade in the next three.

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It is a worry for the ‎€24.7bn revenue enterprise software giant. S/4HANA was billed as SAP's biggest update to its ERP strategy and platform in over two decades. It has been available for nearly five years, but, regardless of the value of the technology, users have been reluctant to tackle the lengthy and complex upgrade.

While 70 per cent of user organisations said they were using or planning to use S/4HANA, only 13 per cent were considering the migration in the next year. Asked for the reason for rejecting a more timely move to the new platform, 42 per cent of SAP users cited "cost", while 34 per cent said the move would require considerable change management at their organisations. Forty-two per cent also cited "other" reasons for rejecting the upgrade.

Relationships between users and SAP were mixed, the survey found.

Only 8 per cent said the company was a trusted advisor; 54 per cent said it was a reliable technology partner; and 16 per cent said it was a transactional technology partner. SAP's Q3 2019 results, posted in October, showed a 13 per cent increase in earnings year-over-year to reach €6.80bn.

Former CEO Bill McDermott also stood down in October after nearly a decade at the top of the company. He will remain on board in an advisory capacity until the close of 2019, when he finally relinquishes all control. The CEO role is now being split between Jennifer Morgan and Christian Klein.

SAP owes its fortunes to ERP software and databases, and more recently aimed its cheese knife at Salesforce market share, with C/4HANA, launched in June last year.

SAP started off this year by embarking on a cloud-tastic €950m restructuring drive, which included the axing of 4,400 jobs, though recruitment plans mean total headcount will not fall. ®

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