- Transformations take on average 30 percent longer than planned
- More than 60 percent of companies report deviations in budget, schedule, and result quality
- Manufacturing and large companies usually transform with a brownfield approach, service companies with a greenfield approach
- 75 percent rely on cloud hosting
The countdown is on: By 2030, companies using SAP must have switched to S/4HANA, as SAP will discontinue support for the predecessor system. But even for companies with a high IT maturity level, the transition is not a sure-fire success, as a recent study by the management consultancy Horváth shows, for which 200 top executives from six countries were surveyed about their SAP S/4HANA transformation.
In more than six out of ten companies, there are significant deviations from the plan
According to the study results, a delay in the planned go-live is more the rule than the exception. Projects take on average 30 percent longer than originally planned. Only less than one in ten companies that have already completed the transformation have not exceeded the schedule.
The planned budget is also rarely adhered to. In a quarter of the transformed organizations, it was heavily exceeded, and in another 40 percent, strongly exceeded. Despite time and budget overruns, the result in most cases does not meet expectations: 65 percent report strong to very strong quality deficits. The main reasons for the deviations from the plan cited by the respondents are: expansion of the project scope during the project, weaknesses in project management, underestimated testing and data migration phases, revision loops of concepts and processes, and lack of decision-making.
Problems usually arise already in the program setup
The study authors observe that the foundation for many problems is already laid in the program setup: inadequate planning and often insufficient consideration of the appropriate transformation approach for the current situation lead to the organization being overwhelmed. Project complexity and required resources are underestimated, while organizational competencies are overestimated. This mismatch leads to the enormous discrepancies between plan and result. Three-quarters of the executives surveyed in the study also find that the selection and availability of project managers and staff do not receive the necessary attention in advance. The role and perspective of IT are often underestimated.
Another problem, according to the Horváth experts is the lack of prioritization. The survey results reveal a diffuse picture when it comes to prioritizing objectives and requirements. Too many objectives are rated as equally important and should therefore be approached simultaneously at best. 78 percent of respondents also note that too many topics are integrated into the transformation - ultimately also a consequence of inadequate project management. Companies that still have the S/4HANA transformation ahead of them or are in the preparation phase can learn from the mistakes of other companies. And even after the transformation has been completed, optimization is still possible and is often the better option than accepting long and expensive project delays.
Popular transformation approaches vary by industry and company size
Across all company sizes, the “Business Redesign” or Greenfield approach is most frequently chosen, which is also the most complex. At 37 percent, it is slightly ahead of the “Catch up the Core” or Brownfield approach at 33 percent. Manufacturing companies and large companies with annual sales of 5 billion euros or more – in other words, organizations with more complex structures, mostly transform with the “Catch up the Core” or Brownfield approach. 31 percent opt for a selective transformation, only four percent for a sequential approach (“Decouple”).
Cloud hosting is trending
More than two-thirds of the companies surveyed pursue a company-specific approach and prefer the hosting options “Private Cloud” or “On-Premise”. Almost 50 percent of respondents host their SAP system on a “Private Cloud” to ensure greater system flexibility. Among service companies, the proportion of “Private Cloud” users is particularly high. Around 30 percent follow the standard set by SAP and have opted for the “public cloud” as a hosting option. The proportion of these users is higher among manufacturing companies. Essential prerequisites for using the Public Cloud are harmonized and standardized processes. To achieve this, the transformation approaches ‘Business Redesign’ and ‘Catch up the Core’ are best suited, says Horváth.
About the study
For the Horváth study “Business Transformation Unlocked – Maximizing the Benefits of SAP S/4HANA,” 200 companies were surveyed that use SAP and have at least 200 million euros in annual sales and at least 200 employees. The sample covers the DACH region as well as selected countries from Northern and Eastern Europe and the USA. The survey has been conducted in the first quarter of 2025.
