Navigating the SAP transition: 2027 and beyond

Many organisations are aware that mainstream support for SAP’s ECC ERP systems ends in 2027. Despite this approaching deadline, we estimate only 35% of existing SAP customers have purchased RISE with SAP. Of those that have, it’s unclear how many have successfully implemented it after years of effort and business transformation challenges.

If you are among the many customers who haven’t made the transition, are still considering your options, or are determined to stick with perpetual ERP licensing, this blog is designed to help you focus on some of the most salient facts.

Rising costs and licensing complexities

To encourage customers to transition, SAP has been increasing annual support fees by 3% per year—a compounding increase that can amount to hundreds of thousands of dollars annually. SAP’s licensing structure is one of the most complex in the industry. Many customers using SAP ECC operate under multiple contracts spanning decades, with terms originating from software licence agreements, order forms, and addendums dating back 10, 20, or even 30+ years.

In our experience, billing errors often occur, and these are rarely in the customer’s favour.

Identifying and rectifying these errors can result in significant cost savings.

Enhanced audits: a new pressure point

SAP has intensified audits, with deep dives into areas such as Named Users, SAP HANA Runtime, SAP HANA Enterprise, Business Objects, and Indirect Access. These audits often serve as additional pressure points, pushing customers toward RISE with SAP. However, without careful preparation, transitioning to RISE with SAP can lead to substantial financial risks and cost overruns.

4 key considerations before transitioning

1. Understand your current usage
   • Assess what you actually use, what is under-licensed, and what is over-licensed.
   • Accurately evaluate how users currently interact with your licences. This will help you avoid financial risks and potential embarrassment in future.


2. Evaluate licensing and service options
   • If you’re considering moving from SAP ECC or SAP S/4HANA On-Premise to RISE with SAP, thoroughly understand the licensing and service options available. The only way to achieve this is by asking SAP the right questions.
   • Analyse financial outcomes, contractual changes, and opportunities for cost optimisation.


3. Plan for cloud licensing
   • Cloud subscriptions under RISE with SAP are based on user authorisations rather than actual usage. This can lead to overpaying if you don’t have a clear understanding of end-user behaviour.


4. Negotiate strategically
   • Without a well-planned negotiation and execution strategy, annual support costs for on-premise systems and RISE with SAP subscription fees can increase significantly—sometimes by as much as 5 to 20 times over five years.
   • Delays in transition can result in dual costs, where you’re paying for both RISE with SAP licences and legacy on-premise licences.