Earlier this week, SAP acknowledged that many of its customers are going to take far longer to move to S/4Hana, its next generation ERP system.
For over 20 years, Computer Weekly has looked at the complexities of implementing SAP ERP systems. It began towards the end of the 1990s, as companies began reporting that ERP failings had contributed to lower than expected financial results. One of the first businesses Computer Weekly looked at was Danish Hi-Fi maker, Bang & Olufsen. This was later followed by implementation issues at Volkswagen, WH Smith, Hershey, Goodyear and most recently, Lidl and Avon.
In the 1990s, ERP systems like SAP R/3 were part of business’ Y2K mitigation plans to replace mainframe systems, that could fail due to the date bug. Former Gartner analyst Derek Prior, began working at the analyst firm, in 1998, having previously worked in hardware sales. He says enquiries from Gartner clients at the time were not about issues of Unix hardware unable to run global business operations that previously ran on a mainframe, but the challenges of ERP implementation.
These challenges have led to two decades of lessons learnt, centres of excellence and best practices, which are helping organisations around the globe keep their SAP Enterprise Core Components ERP (ECC) system running.
Migrating away from this stable platform, which has become essential to business operations, is considered far too risky for many of SAP’s customers. In October 2019, Forrester published the Look Beyond ERP, in which analyst Liz Herbert discussed the challenges updating ERP system. “ERP customers are more risk averse. They are typically finance, operations, and manufacturing professionals who rightfully fear that the wrong kind of disruption in their systems could cripple the enterprise,” she says.
Then there is the elephant in the room, which takes the form of Oracle. The database company has had a partnership with SAP since 1998, and its relational database is at the heart of many ECC implementations. While S/4Hana is a modern ERP and has its own in-memory database system, migrating to this new database while implementing the ERP system, seems like a big bang implementation project. Such big bang projects were the ones going spectacularly wrong in the late 1990s. Let’s hope the remaining decade or so of ECC support that remains, is used wisely.