Business deadlines typically come and go unnoticed, but the end-of-service date for SAP ECC has sparked anxiety and debates for more than five years. Now, with the December 2027 deadline for moving to S/4HANA in sight, discussions among CIOs and business leaders across industries are reaching a crescendo.
Ironically, the nature and tenor of these talks are shifting. Panic is giving way to pragmatism. Resolve is replacing resignation. While there’s still a degree of urgency, roughly 50% of CIOs are content to weigh the cost of transitioning to S/4HANA against the comfort of what already works.1
Yet this solace may prove as fleeting as promises made in quiet.
AI is evolving from a side conversation to a core business function, and the data that powers traditional, generative and agentic forms of this technology sits squarely in SAP systems. So, the question CIOs must now deliberate isn’t whether to transform — it’s whether not moving forward with S/4HANA and RISE with SAP is starting to hold the business back.
Alex Pond, Kyndryl’s SAP practice lead for the UK, has helped customers at all stages of SAP transformation answer these and other critical questions. Here, he answers some probing questions about why organizations delay or resist change, what factors are reshaping the SAP ecosystem and where AI efforts frequently stall — all with a fresh take on how to address these key issues.
Many observers see the move from SAP ECC to S/4HANA as inevitable, yet more than 60% of the installed ECC base still hasn’t moved or is undecided. What’s causing this hesitation?
A big factor is the mindset of CIOs, particularly in the UK and Europe. They tend to be more risk‑averse and skeptical and often have a ‘prove it first’ mentality.
Another issue is that many organizations invested heavily in SAP ECC 6.0. The move was expensive and difficult to implement — and it still works. They already built a business case and have realized many of the benefits S/4HANA now promises. Building a second business case is genuinely hard.
Given the factors in play, how do you advise customers about moving to S/4HANA when their current system is working?
A few years ago, much of the SAP installed base couldn’t see the full value of moving to S/4HANA or RISE [with SAP]. Today, RISE is clearly positioned as the gateway to SAP’s innovation roadmap.
When you talk about AI, the most valuable enterprise data typically lives in SAP systems. That’s changed the conversation because it allows organizations to build a more credible business case.
The decision to move to S/4HANA also comes down to aligning company strategy with technology. Where does the business want to go and how can technology help the organization get there? Increasingly, customers can see that moving to the latest SAP release supports a broader data and AI strategy, not just a technical upgrade.
“Aligning business strategy with IT goals” is a phrase we hear a lot. Can you explain what that means in practical terms?
It does sound like a stock answer, but it’s real when you break it down. At its core, aligning IT and business goals means identifying what’s inhibiting growth or revenue expansion and using technology to address those specific problems. Whether it’s reducing customer onboarding time at a bank or improving supply chain decisions in manufacturing, the technology supports the strategy, not the other way around.
Take a retailer, for example. At a simple level, they buy or manufacture products, move them, market them, and sell them. The question is, how can technology optimize each of those areas? That might mean faster routes to market through omnichannel strategies or optimizing the supply chain. It could also mean augmenting human judgment with data.
Not too long ago, I worked with a manufacturer that needed help predicting how much margin a supplier might absorb during negotiations. That analysis drew on SAP data from previous deals, combined with external factors like geopolitics and weather patterns. Using technology didn’t replace human judgment — it augmented it.
Has the shift from resistance to acceptance changed how SAP transformations look in practice?
Yes, I think it has. There’s now a better understanding that this isn’t a one‑size‑fits‑all journey. SAP has introduced more optionality, which is better for customers.
For example, organizations can move ECC into RISE with a commitment to transition to S/4HANA later. That approach acknowledges that while systems may be working today, companies still want to be a part of SAP’s roadmap.
Customers are also more cloud-savvy than they were a few years ago. Moving ECC or other environments to the cloud can be a way to future-proof while buying time. Overall, there’s a clearer understanding of the choices available.
Some organizations consider third-party support as an alternative. How do you view that option?
It’s become much more mainstream. For some CIOs, it’s a deliberate decision. They’re not ready for S/4HANA and don’t want to be pressured to make a move, but they still need stable support. Third-party providers may help them reduce maintenance costs significantly.
That said, there’s a trade‑off. One analogy I’ve heard is that you move from driving a luxury car to an economy vehicle that will still get you from A to B, but not as comfortably. It can make sense in the short term, but it’s a strategic pause rather than a long‑term innovation path.
So, when advising customers, you must be pragmatic. Some decisions are emotional reactions to cost or pressure. Our role is to help them understand the trade‑offs and learn from what other organizations have experienced.
Turning to AI, many organizations experiment with the technology but struggle to see measurable ROI. What causes this disconnect?
There’s a big gap between intent and outcomes. Nearly all executives see AI as strategic, yet most AI initiatives never move beyond pilots.
There are a few reasons why these challenges exist. One issue is what I call the ‘bolt‑on trap.’ AI is added as a feature rather than being used to re‑engineer a process. For example, a chatbot might answer HR questions but can’t trigger a workflow in SuccessFactors, so users revert to old habits because AI doesn’t close the loop on their task.
Another issue is trust. Models work in clean sandbox environments but fail in production because enterprise data is fragmented. That’s a huge issue. If an AI recommendation is wrong even 10% of the time, users lose trust entirely.
Finally, organizations often measure activity instead of outcomes. They count pilots instead of tracking real business improvements like reducing Days Sales Outstanding (DSO). This disconnect makes it hard to reconcile IT success metrics and financial results.
How can organizations bridge that gap and get real value from AI in SAP environments?
It starts with transitioning from AI hype to business impact. That means shifting from tool-centric thinking to an architecture-first approach.
You also need to move from generative AI chatting to agentic AI, where systems reason and perform work. For example, instead of just asking AI to ‘summarize spend,’ empower an AI agent via SAP BTP (Business Technology Platform)2 to identify a supply risk and automatically draft a purchase requisition for an alternative supplier, pending human approval. This use moves AI from being a passive observer to an active participant in the value chain.
Another principle is embedded rather than extended AI. SAP already has pre‑trained models embedded in S/4HANA, Ariba and SuccessFactors. Using these capabilities reduces the need for custom builds.
Operationally, organizations should treat AI like a utility. Establishing an AI command center allows teams to manage cost, performance and governance. Leaders must also prepare for and navigate cultural shifts. As AI use grows, roles change. A procurement officer, for instance, moves from data entry to managing AI‑driven exceptions and strategic sourcing.
With multiple SAP deadlines and end of maintenance milestones, how should organizations approach migration planning?
The timelines are more nuanced than a single 2027 deadline. Some ECC enhancement packs are already out of maintenance, and other SAP components are approaching end of life. It’s not a single switch — it’s a series of decisions.
My advice is simple: engage with an experienced SAP partner. There are many viable paths to transformation, including lift and shift, RISE and S/4HANA on-premises or in the cloud. Each approach has different costs, risks and business implications. You need an informed, pragmatic assessment to plan a way forward that meets your organization’s specific needs.
How does Kyndryl differentiate its approach to SAP transformation?
We approach transformation from a technology-up perspective, grounded in data and AI. One example is our immersive workshops in Liverpool, where we take customers from business challenges through ideation to an MVP in a matter of days. [Kyndryl also recently launched the SAP Transformations Center of Excellence (CoE), a dedicated hub where customers can co-create with Kyndryl designers and engineers.]
From a delivery standpoint, we’ve developed Clean Field, an enterprise architecture methodology that combines agentic AI, enterprise architecture, data transformation accelerators and organizational change management to streamline SAP transformation.
Unlike greenfield, brownfield or hybrid, Clean Field enables us to build a best practice S/4HANA environment, migrate only what’s needed, refactor custom code with agentic AI where necessary, and selectively move data. The goal is minimal disruption while opening the door to a modern data and AI strategy.
It’s another option in the toolkit, but one that reflects how SAP transformations increasingly need to support broader business and innovation goals.
Moving beyond deadlines
The debate about S/4HANA migration has moved beyond meeting a maintenance deadline to preparing for growth in the AI era. For future-focused organizations, that means SAP transformation is as much of a strategic decision as a technical migration. The choices leaders make, in turn, will determine whether core systems continue to anchor the past or become the engine that powers what comes next.
1 Nearly half of SAP ECC customers may stick with legacy ERP beyond 2027, CIO, June 2025
2 SAP Business Technology Platform, SAP, January 2025
