Migrating to SAP S/4HANA remains a dominant topic in the IT landscape of large corporations. But where do these companies really stand — and which strategies are proving successful?
Computerwoche spoke with Holger Scheel, managing director of cbs (Corporate Business Solutions), to get the SAP consultant’s insights into the current state of SAP migrations, the challenges CIOs face in shifting to S/4HANA, and the latest ERP-related trends.
Here is that interview, edited for clarity and length.
Computerwoche: How strongly is the topic of S/4HANA transformation currently shaping your project business?
Holger Scheel: It’s a key driver — around 98% of the solutions we implement are based on SAP, with a large number of projects triggered by the need to modernize ERP systems and implement the S/4HANA transformation.
Where do companies currently stand in this transformation?
If we look at our core sectors — large and midsize industrial companies — then I would say: To put it positively, about half of the companies have started the transformation. But very few have completely finished it.
Many companies are facing the SAP deadline of 2027. Is that realistic?
Not for many. Larger companies with numerous ERP systems, in particular, are unlikely to make it to extended maintenance by 2027. The 2030 timeline is a more realistic target.
Which migration strategy currently dominates — brownfield or greenfield?
Neither in its purest form. The classic greenfield approach — developing everything from scratch — has proved successful and feasible for very few companies. But even the purely technical conversion, i.e., brownfield, is not the dominant standard among manufacturing customers.
What is the preferred approach instead?
The majority of companies are pursuing a hybrid approach — a selective combination of innovation and transformation. This is often called “smart brownfield” or “mix & match.”
The reason: A purely brownfield approach costs money and time but delivers no added value. Companies want more than just to stay within the release window — they want to create real added value. They want to improve processes, introduce innovations, and be able to explain to their management why the transformation is worthwhile.
SAP strongly promotes the “clean core” approach. How realistic is that in practice?
You have to look at it in a nuanced way. Clean Core doesn’t mean I only use standard software and all custom developments disappear. It’s more about a new design paradigm. The idea is that the ERP core — i.e., S/4 — remains as close to the standard as possible. Everything a company needs beyond that in terms of customization for its business is then organized externally — for example, via platforms like SAP BTP — or through new development approaches.
Critics argue that excessive standardization jeopardizes competitive advantages. What is your view?
Differentiation remains absolutely crucial. Companies must continue to showcase their specific capabilities. Clean core only changes how this is implemented technically — not the need for differentiation.
We therefore speak more of a “cleaner core”: The cleaner the ERP core, the easier upgrades and the use of new functionality become, and the more agile the company becomes. But it remains an evolutionary process — not a radical break.
Where do companies most underestimate the complexity of S/4HANA projects?
A key point is the initial state. Especially in industry, many companies have ERP systems that have grown organically over 20 years — with correspondingly complex data structures and historically evolved processes. Breaking all of this down and achieving a more standardized, harmonized, and consolidated target state is an enormous task that often has to be mastered in conjunction with the establishment of innovations.
What does this mean specifically for the projects?
The more legacy systems a company has and the less prepared its process, system, and data landscape is, the longer the transformation will take. The path to a future-proof ERP platform then becomes correspondingly more complex.
Many users are currently relying on external AI solutions rather than SAP offerings. Do you see the company under pressure in this regard?
Of course, SAP is under pressure — a software manufacturer has to deliver. But historically, SAP has rarely been a first mover with new technologies. Its strength has always lay in the business context that SAP integrates into its systems.
Looking around, AI is clearly of enormous importance to customers. Companies expect it to give them a competitive edge and increase efficiency. Consequently, many solutions have been implemented outside of SAP in the past.
Looking ahead, the crucial point is that SAP is talking about “Business AI”: How can I effectively utilize the wealth of data from my business processes? And this data resides in the ERP system — the “heart and soul” of the company. SAP is, of course, exceptionally well-positioned here thanks to its Business Suite and ERP-driven architecture.
There is currently a lot of discussion about AI and the future of traditional ERP systems. Is the business model threatened?
That’s a misconception. Many people are overestimating this “ChatGPT moment” and think an ERP foundation is no longer needed. AI systems require a reliable, semantically clean data foundation. And that’s where SAP has a significant advantage with its environments, installed base, and experience with industrial customers.
So you do not believe the business model of ERP providers is under sustained threat.
We believe that the current hysteria will subside and that the crucial importance of a solid ERP backbone architecture will be recognized. It forms the basis for implementing new concepts such as an agent-driven company — that is, a system of action built on a classic transactional system of record, such as ERP.
Is this similar to platform approaches — such as ServiceNow’s — that function as a higher-level platform on which agents work and retrieve the necessary data from various systems?
Exactly. That’s how it will be. This is essentially the agent layer that’s placed on top of the existing systems. SAP is also adding this and integrating corresponding solutions and functions into its architecture.
Ultimately, we’re talking about different levels: the system of record on the one hand and the system of action on the other. The data layer lies in between. SAP addresses this, for example, with its Business Data Cloud, to contextualize data and merge analytical and transactional levels — even across systems and vendors.
What does that mean?
My conviction is that the real value still lies in the data treasure trove of companies — that is, in clearly understood and contextualized business data. This remains the crucial foundation for an “agentic company” to function in the future and ultimately be trustworthy.
AI providers have significantly reduced error rates. Nevertheless, we are probably still far from the 100% reliability that companies need for business-critical decisions.
What AI systems can do today, in many cases, is guesswork, provided it’s technically well implemented — and while you can perfect that further, it ultimately remains guesswork.
The reliability of the semantic foundation is crucial. This requires a stable, trustworthy data core — a foundation that even auditors will accept. And that is precisely the foundation that ERP systems provide.
The ERP system therefore remains the backbone.
I am convinced this foundation remains indispensable. Manufacturing companies in particular have invested heavily in their ERP systems. They will not simply abandon them and replace them with purely agent-based systems. I consider that impossible.
Are you already managing many AI projects in the SAP environment for your customers?
We issued a clear guideline over a year ago: When we develop target scenarios for our clients’ digital transformation in the SAP environment, AI is an integral part of the process from the very beginning. We strive to consistently incorporate it and use it to create as much added value as possible. AI shapes our consulting business; AI shapes the SAP-based solutions of the future. AI is a driving force for us — we are investing heavily and sustainably in this area.
It’s important to understand that the possibilities within SAP itself have only developed gradually. SAP distinguishes between embedded AI and custom AI. Embedded AI is what the standard software already provides. Custom AI, on the other hand, refers to specific solutions developed for individual use cases based on SAP technologies — such as the Business Technology Platform.
In recent years, we’ve primarily worked in the custom AI environment because there simply weren’t that many ready-made features available in the core area. However, that has changed significantly since then.
What role does AI play in your projects today?
The expectations have risen significantly. In our workshops with the specialist departments, the question of AI potential is now a standard part of the discussion. We examine processes and consider: Where are there repetitive tasks, where can automation help, where can complexity — for example in analysis or control — be reduced through AI?
And we are finding there are more and more meaningful areas of application and a growing interest on the part of customers to actively address such topics.
Will AI become a new growth area for you? Currently, your business is primarily driven by S/4HANA migrations. What will happen when this wave subsides?
Eventually, companies will have completed their S/4 migration. For providers who have focused exclusively on technical migrations, this may be a risk. But that’s not how we see the market.
Demand for S/4 will not disappear abruptly. While purely migration-driven projects will decrease in the long term, they will be replaced by follow-up projects.
What do you mean by follow-up projects?
We’re already talking about “post-S/4 transformations.” Many companies, for example, migrated to S/4HANA using a brownfield approach, without fundamentally changing their processes. This means that the real substantive transformation — innovation and further development of business processes — is still to come.
The public perception often underestimates the true extent of a company’s transformation journey. It’s not just about a new system, but about a gradual evolution towards a data-driven organization — ultimately, an “agentic enterprise.”
So it’s a longer process?
Companies systematically expand their capabilities over time — and S/4HANA is more of a starting point than the destination. Today, companies are increasingly pursuing a broader agenda: business transformation, technology transformation, process innovation, and digital transformation.
Will there be enough left for consulting partners if SAP increasingly provides its own functionality?
The essential thing is the question: How do I, as a consultant, bring a company along? How do I design business processes? And how do I convey the path to the future? That will continue to be the core task of consulting — and that’s how we are positioned.
We see very clearly that the field of consulting is not shrinking, but expanding. Complexity is increasing massively. Concepts like the “agentic enterprise” add a new semantic layer. This makes IT and process landscapes even more demanding.
Companies increasingly need support to understand and structure this complexity and derive meaningful business solutions from it. That is precisely where our role lies. Services that are very close to pure implementation — classic development, testing, or configuration tasks — are under greater pressure. Although this has always been the case, AI and SAP’s strategic direction will likely intensify this pressure. Such tasks will become easier to replace and will tend to be in less demand.
Entrar
