S/4HANA is the new and improved version of the classic ERP (Enterprise Resource Planning), commonly known as the Business Suite or ECC.

A key technical difference is that the S/4HANA platform has been optimized for SAP’s HANA database and is therefore only able to run their own database. The ECC system allows you to run your own choice of database, for example Microsoft, IBM, or Oracle.

A key licensing difference is that you no longer need named user licenses to access packages; the package license covers this usage. You only need S/4HANA user licenses for the Digital Core.

Importantly, SAP does not consider this as a legal successor to ECC, but rather a completely new product. This means there are strict restrictions in what you can and cannot do before, while and after transitioning to SAP S/4HANA.

SAP S/4HANA – Why should I move?

There are two main reasons your organization might switch to S/4HANA.

1.  SAP is only offering mainstream support for Business Suite until the end of 2027. As SAP is critical to the running of your business, it is not advisable to run your SAP estate unsupported. If you choose to stay with SAP, migrating to S/4HANA is almost inevitable as SAP ERP becomes outdated.
2. S/4HANA comes with many added benefits, including in-memory technology and simplifications in coding and tables.

Have you encountered any of these common problems with your SAP contracts?

• Your complex contract history makes it unclear what your rights are and what you own
• You need to pay maintenance on old, unused licenses
• Your organization’s needs have changed, and the license entitlements no longer reflect your needs

If any of these points apply to you, an SAP S/4HANA migration gives you the opportunity to upgrade your software and restructure your licensing estate. As S/4HANA is a completely new licensing model, your old licenses are eligible to be traded in for credit against your S/4HANA purchase. Of course, terms and conditions apply.

SAP S/4HANA – How do I begin this process?

Understanding the process of your S/4HANA migration means you can time it appropriately. The process can take years to fully complete, so being able to map out the steps helps you to plan effectively.

We can help by comparing current licensing against your roadmap and identifying where you require S/4HANA licenses based on your current licensing position and future plans for SAP.

We can then provide you with a list of products that you would require for your migration. The route here splits into two for your license migration options.

SAP currently offers one method of migrating your licensing to S/4HANA:

Contract conversion

The premise of this option is that you can turn your entire SAP contract history into credit. This credit can then be used to purchase your S/4HANA licenses, and you negotiate a new contract with SAP.

Using ITAA’s expertise means you can benchmark your pricing and achieve the outcome that’s best for your organization.’

SAP S/4HANA – Anything else I should be considering?

We often see companies using third parties to help with their technical SAP S/4HANA migration. While this can be an effective strategy, we would advise caution around the licensing aspect.

We have seen cases where implementation partners have been given the responsibility of managing the licenses and determining what is required, despite not being licensing experts. Typically, this leads to:

• A licensing estate with a suboptimal number of licenses
• A lower than achievable discount level (benchmarking)
• Missed opportunities for optimizing the type of licence
• A lack of flexibility post-migration
• A suboptimal approach in phasing the transition (mix of product and contract conversions).

This all culminates in much higher running costs than necessary.

Closing thoughts

Proactive is always better than reactive. License migration always comes before technical migration. Engaging expert support before or during your migration can prevent problems from happening in the first place.

ITAA can assist you with every step of your S/4HANA migration, from the first consideration to the final implementation.

Get in touch to speak with one of our expert consultants.

About the Author

Kudzai Museve, Licensing Consultant

Kudzai is an SAP Licensing and Compliance Consultant with over two years of experience. Combining her legal expertise and vendor licensing knowledge, she specializes in managing licensing agreements, optimizing assets, and advising on S/4HANA transitions. Her proficiency in S/4HANA cost models helps clients prepare for cloud transitions by evaluating options and identifying cost-efficient solutions to maximize investments.