Why Australian Businesses Are Hesitant to Upgrade to SAP S/4HANA—and What It Means for the Future

The Calm Before the Storm: Are You Ready?

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Australia's SAP landscape is at a crossroads. As the clock ticks down on SAP's support for ECC systems, many businesses remain undecided about upgrading to SAP S/4HANA. But why? What is holding Australian companies back from making this crucial transition? More importantly, what will happen if they don’t?

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This blog explores the reasons behind the slow adoption of SAP S/4HANA in Australia, examines the impending skills shortage in the market, and offers insights into why the time to act is now.

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Why the Hesitation?

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Upgrading to SAP S/4HANA is not just a technological shift; it’s a business transformation. For many Australian businesses, the hesitation comes down to several key factors:

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1. High Costs and Budget Constraints: Implementing SAP S/4HANA requires a significant financial investment, which includes software costs, infrastructure upgrades, and potentially even new hardware. With economic uncertainty, many companies are opting to delay such a substantial outlay.

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2. Complexity and Disruption: An SAP S/4HANA migration is complex and can disrupt business operations. Organisations fear that the transition process might affect their day-to-day operations, leading to potential downtime or customer dissatisfaction.

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3. Lack of Internal Expertise: Many Australian companies rely on their internal IT teams to manage their current SAP systems. However, these teams may lack the specialised skills required to handle an S/4HANA migration, making the process seem even more daunting.

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4. Uncertain ROI: Businesses are also hesitant due to concerns about the return on investment. With existing systems still functional, many question whether the benefits of SAP S/4HANA—such as improved analytics, streamlined processes, and greater flexibility—are worth the immediate cost and effort.

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The Impending Skills Shortage: A Ticking Time Bomb

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While these concerns are valid, there is a larger issue looming on the horizon: a significant skills shortage. As the deadline for SAP ECC support draws nearer, the demand for SAP S/4HANA expertise is expected to skyrocket. However, with so few businesses having made the transition, the pool of experienced professionals is limited.

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This skills shortage could have several impacts:

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1. Higher Costs for Talent: As demand outstrips supply, the cost of hiring SAP S/4HANA experts will rise. Companies may find themselves in bidding wars for the few professionals available, driving up project costs.

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2. Delays and Bottlenecks: With limited resources, companies may experience delays in their migration projects. These bottlenecks could push some businesses past the deadline, forcing them to operate without official support from SAP.

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3. Increased Dependence on External Consultants: Businesses that lack internal expertise will likely turn to external consultants. However, the limited number of experienced consultants could mean longer wait times and even higher fees.

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4. Operational Risks: Delays and inadequate expertise increase the risk of incomplete or flawed implementations. This can lead to operational disruptions, data integrity issues, and a failure to fully realise the benefits of SAP S/4HANA.

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Why You Need to Act Now

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Given these potential challenges, the question isn’t whether to upgrade to SAP S/4HANA, but when. Delaying the decision not only puts your business at risk of being left behind but also subjects you to the increased costs and risks associated with a skills shortage.

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Now is the time to start planning your migration, assessing your internal capabilities, and securing the expertise you’ll need to make the transition smooth and successful.

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What’s Your Next Move?

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As we edge closer to the end of SAP ECC support, how will your business prepare for the future? Will you take the proactive steps necessary to ensure your systems are ready, or will you wait and risk the consequences? The decision you make today could shape your business’s success for years to come.

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We’d love to hear your thoughts—how are you planning to address the SAP S/4HANA transition in your organisation? What challenges are you facing, and what strategies are you considering to overcome them? Let’s start the conversation.

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