SAP migrations often fail during planning phase

Most SAP migrations fail before implementation begins. This is the conclusion of the “The State of SAP Migrations” from ISG.

The technology research and advisory firm, which surveyed more than 200 business and IT decision-makers from large, international companies with over 1,000 employees, found that less than one in five companies (18%) implement new SAP processes and technologies when migrating to S/4HANA. Nearly half (49%), on the other hand, make few or no changes and instead choose to retain existing processes and data.

Missed opportunities

“If companies focus on risk avoidance rather than transformation in their SAP strategies, they may miss out on long-term benefits,” warns Stanton Jones, analyst at ISG and co-author of the report. To fully leverage the potential of automation, analytics, and AI, companies must be prepared to make fundamental changes in governance, data quality, and process standardization.

According to the study, one possible reason why companies are not making these adjustments is time pressure. In the survey, companies frequently cited the end of support for SAP ERP Central Component (ECC) as a reason for migrating to S/4HANA. In these cases, they may be aligning their changes with maintenance and support deadlines — and may be using a limited cloud migration to extend their support lifespan — rather than transforming their IT environments.

Time and budget exceeded

Furthermore, delays and budget overruns in S/4HANA migrations are more the rule than the exception: According to ISG, almost 60% of SAP migrations fall behind schedule and budget, mostly due to underestimated complexity, expanded scope, and internal capacity bottlenecks.

The delays are mostly caused by weak governance rather than technical challenges and can therefore be seen as a symptom of larger problems, according to the analysts.

“Many migration programs involve multiple system integrators, SAP service providers, and niche specialists. But there is a lack of clear decision-making rights, acceptance criteria, and responsibilities between the providers,” explains Stacey Cadigan, ISG partner and co-author of the report.

Inconsistent responsibilities and misaligned incentives lead to scope creep and delays, according to Cadigan. “To effectively manage SAP migration, companies must clearly define implementation responsibilities and ensure independent oversight of critical activities such as data readiness, integration testing, and change management.”

Minimize risks through governance

ISG advises companies to view the governance of SAP migrations as a central instrument for minimizing risk — and not as a purely administrative function. This includes explicitly defining the delivery and results responsibilities of all stakeholders and establishing objective quality gates for the transition from design to build and testing.

Analysts say that programs that rely on service providers to manage themselves typically bring problems to light only once cost and time buffers have already been exhausted.

Another tip from the experts: Link part of the providers’ compensation to specific delivery metrics. Furthermore, early indicators such as the completeness of data migration, the escape rate, the stability of integration tests, and the success of cutover samples enable an early assessment of the project status and shared responsibility for results.

If these mechanisms were lacking, the probability of late surprises would increase, which could hardly be compensated for even with considerable technical effort, according to ISG analysts.