ERP systems – legal and business strategies

Solutions

ERP systems are essential for comprehensive enterprise management, with ERP software integrating all enterprise business aspects, enabling the planning and management of the entire main chain of supply, production, services, financial resources and other intra-organisation processes.

Key benefits

of ERP systems are enhanced performance and better project management, which facilitate financial planning, budgeting, forecasting and reporting.

SAP is among the most popular ERP systems.

Although SAP SE announced support for the previous system version (ECC) would be phased out by 2025 to make way for S/4HANA, in February 2020 it extended the support period until the end of 2027 due to the COVID-19 pandemic.

How will this affect you as a SAP system user?

  • If you don’t implement S4/HANA by 2027, you can use extra paid maintenance until 2030, or you will be left without support.
  • The previous version will no longer be supported from 2030, so your organisation will be left with an ERP system that is not supported and therefore not secure.
  • ERP system replacement is a complex and time-consuming task that can take two years or more.
  • 90% of customers are still at the beginning of their migration. The closer the end of SAP support, the more difficult it will be to get favourable terms, resources and external support for the migration. This may result in increased costs and extended schedules.
  • ERP system replacement often involves cloud computing introduction.

Why does the migration project take so long and what does it look like?

This is a complex, multi-stage project, requiring a number of strategic decisions to be taken.

According to SAP SE, migration to SAP S/4HANA should take 12-18 months. However, Gartner research is not that optimistic. Businesses that have already started the process indicate that it

could take much longer with individual phases of the process taking as long as 12-18 months each.

What should be taken into consideration when migrating to S/4HANA?

The change in SAP licensing allows for identifying and re-designing obsolete processes, as well as checking whether everything is working properly and being used as intended.

This is the right time to:

  • analyse existing SAP contracts;
  • verify their actual use;
  • determine which licenses are needed:
    • SAP S/4HANA,
    • Business Suite functions for which there is no S/4 successor,
    • third-party apps and their impact on SAP licensing (digital access),
    • cloud-based products (SAP & non-SAP);
  • develop a negotiation strategy for new SAP contracts.

If you intend to migrate to S/4HANA, please note that ca. 1,500 other organisations in Poland have similar plans. It is therefore essential to secure the best resources available in the market at the earliest possible stage to ensure a seamless transition. Keep in mind that the best experts will be in great demand, and their calendars are steadily getting booked up. The sooner you contract service providers and business consultants, the better the terms you will get and the more confident you will be about completing the process in time.

Why should you start now?

  1. Limited availability of experts.
    The market offers a limited number of experts who can help you take a holistic approach. Many businesses around the world have delayed starting their migration and are still at the beginning of the process, which may create a shortage of qualified consultants. Our experience shows that organisations are already starting discussions to ensure access to appropriate external skills they need.
  2. Negotiating of optimal expert pay rates.
    With the anticipated shortage of SAP consultants, demand will drive up the cost of qualified consultants’ support. For this reason, the sooner you start looking for external SAP experts to guide you through the migration process correctly, the better pay rates you can expect.
  3. Well-planned migration process.
    There is still time to properly plan, prepare and carry out a sound migration process, without the necessity to take shortcuts or use quick alternative solutions or compromises that may turn out to be unfavourable. Available reports reveal that the migration process can even take three years or more.
  4. Full use of SAP S/4HANA solutions.
    The S/4HANA suite is now complete, meaning in practice that you can already use proven solutions that have been tested in the market environment. You can start using S/4HANA functions earlier, which will allow you to streamline your current business processes, organise and simplify your system structure and, in consequence, start saving money and time, and gain a competitive edge.

What legal issues will you need to deal with?

Purchase

  • Software/licence

Contract

  • Software/licence

Negotiations

  • SAP
  • SAP + Integrator

Our assistance covers:

  1. purchasing process;
  2. contract analysis and negotiation;
  3. licensing;
  4. migration to cloud computing;
  5. GDPR data flow;
  6. compliance.


More information

 

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Contact us:

Łukasz Węgrzyn

Łukasz Węgrzyn

Partner, Head of Technology Practice

+48 795 576 136

l.wegrzyn@kochanski.pl

Szymon Ciach

Szymon Ciach

Attorney at Law, Senior Associate

+48 534 834 259

s.ciach@kochanski.pl

Piotr Kaniewski

Piotr Kaniewski

Advocate, Senior Associate

+48 503 723 166

p.kaniewski@kochanski.pl