ECC Deadline Disaster

Licenses versus revenue

An SAP partner recently raised eyebrows with an impressive sum. This partner's successful S/4 release upgrades are the foundation for billions of dollars in revenue for SAP customers. This is a market figure that clearly indicates the success of S/4 Hana. An IT tool that is responsible for this revenue on a daily basis can only be good!

However, SAP itself is flying blind. SAP counts S/4 contracts without knowing whether the licenses are in the drawer or in a pilot project. For the time being, the SAP community should not use this as a basis for accusations and recriminations. Nonetheless, the conclusion could be dangerous. If SAP makes the wrong assumptions in its planning and thinks that the 2027 ECC deadline is not a problem, then disaster could loom on the horizon for SAP customers.

Deadline 2027 threatens AI hype

Any form of AI requires a robust and validated database. This database is created with the S/4 conversion. However, SAP customers cannot fire on all cylinders at the same time. Digital transformation must be orchestrated. New end-to-end processes must be designed. Data must be archived and verified. There is a lot to do before the S/4 conversion can be successfully completed.

S/4 conversion is an excellent foundation for future AI applications. But SAP customers must hurry! For many customers, orchestrating, archiving, and consolidating SAP ERP systems will continue well beyond 2027, whether due to a lack of staff, expertise, or partners. A transformation study by NTT Data Business Solutions and Solutive identified organizational deficits, lack of transformation expertise, and lack of external consultants as innovation killers in times of upheaval. There was a live discussion on the subject on the E3 YouTube channel on June 18, which you can watch and listen to here (in German).

The AI hype at Sapphire 2024 Orlando is not wrong. However, it is threatened by the homework that SAP has not yet done. Until ERP algorithms and data structures are consolidated and a stable S/4 system is in place, it is dangerous to think about any kind of AI deployment.

AI implementation is a marathon, not a sprint

"2023 was a year of awakening, with every organization experimenting with AI and GenAI use cases. Now we are entering an era where AI is being widely adopted in enterprises," said Harrick Vin, Chief Technology Officer, TCS, adding: "However, organizations are realizing that the path to implementing AI solutions is not easy and building an AI-ready organization is a marathon, not a sprint."

SAP is delivering its AI applications as promised, but the foundation is still lacking. With 2027 just around the corner and many S/4 release changes still to be completed, there is a risk that SAP's AI will become an afterthought. SAP AI isn't bad; it's just incorrectly positioned. Just as a house cannot be build on sand, so must SAP AI be built on a sturdier foundation. SAP knows very little about its own market and about true S/4 conversion. These technical mistakes lead to big risks.