Companies today face the challenge of maintaining a clear IT strategy while balancing cost with business impact. Enterprise resource planning (ERP) systems provide the backbone of IT architectures and often dictate operating models — meaning decisions around their enhancement need to be based on a holistic view. This includes organizational and personnel disruption, implementation and maintenance costs, and the business value they generate.
As on-premise solutions lose importance and offerings shift to cloud-native and “as a service,” new opportunities are opening in areas such as AI, data integration, and modular application design. Vendors now provide comprehensive offerings containing cloud infrastructure and security, migration, and implementation services.
They highlight the potential to reduce costs and streamline operating models by aligning with standards but also minimize the degree of disruption faced during implementation and maintenance. Multiyear contract terms with mandatory minimum purchases increase the need to make a balanced decision based on how much ERP is actually needed and how centralized solutions are sourced.
Part of this trend, SAP Cloud ERP Private (aka RISE with SAP), originally launched in early 2021, is a subscription-based platform designed to facilitate long-term digital transformation by integrating AI for streamlined operations and enhanced decision-making. It supports real-time data analysis, autonomous decisions, and seamless data integration, coupled with increased flexibility.
Many customers report positive experiences when implementing the platform, especially those with a high degree of standardization, a clear cloud strategy, and strong program governance. They benefit from accelerated transformation timelines, integrated tools, and simplified contracting models. However, other companies have voiced concerns about unclear cost structures and integration challenges, particularly for customized systems. Moreover, some users feel locked in with SAP, restricted in flexibility, and have criticized the company’s sales approach, which at times sidelines operational stakeholders and leads to internal project tensions. While market analysts stress the long-term potential of the solution, they also emphasize the need for clear governance, careful partner selection, and realistic expectations throughout the implementation.
For years, Arthur D. Little (ADL) has supported clients as they make strategic and long-term decisions on their IT landscape and ERP transformations. It remains vendor-neutral; however, given SAP’s market position and revenue development regarding cloud-based ERP solutions, this Insight focuses on SAP Cloud ERP Private. To effectively navigate its adoption, ADL recommends four key strategic essentials.
Deploying SAP Cloud ERP Private is a strategic transformation, not just a system upgrade. Success hinges on four essentials: clear strategic planning, resilience in managing trade-offs, readiness for organizational change, and a negotiation strategy that secures tailored outcomes.
Adopting the platform requires a clear, forward-looking IT strategy. Companies must assess the role of SAP within their broader application landscape, including current system architecture, alignment with standards, existing dependencies, and planned transformations. Given that contracts typically span seven to 10 years, this is not a tactical upgrade but a long-term commitment. One international company highlighted how a strategic, future-oriented assessment was key to determining theplatform’s fit. The long-term impact on system integration, governance, and flexibility must be fully understood from the outset to avoid costly later misalignments.
A well-considered migration strategy should align with the company’s overall IT roadmap, readiness level, and desired degree of standardization. It must also account for data quality, legacy complexity, and integration requirements. Ultimately, the chosen approach will determine how effectively the organization can realize the benefits of SAP Cloud ERP Private while managing risks and operational disruption. Therefore, transparency on your current IT landscape is essential to define a realistic target architecture and map potential migration paths to meet business-specific needs without overengineering.
While SAP Cloud ERP Private offers a comprehensive, standardized operating model, it cannot resolve legacy complexity without substantial organizational change. The transition shifts responsibilities and may limit flexibility, particularly for customized environments or hybrid setups.
Companies must define clear goals, whether cost efficiency, process standardization, or platform innovation, and prepare for operational disruptions during the transition.
As seen in a telecommunications company’s experience, success depends on understanding your strategic position as a customer, including how the platform compares to non-SAP alternatives. Adapting to SAP’s governance model and realigning internal roles is a significant shift — and one that requires organizational resilience and strong change leadership to maintain control and accountability.
The financial business case must go beyond license and infrastructure costs and reflect the full cost picture. The platform’s modular pricing model — with fixed base fees, variable usage costs, and essential “options” — demands detailed, multiyear planning to avoid unpleasant surprises over the contract horizon. Companies with legacy complexity must account for required skill shifts, limited internal capacity, and the need for external support.
Experience from a transport company showed that migrating applications in bundles rather than all at once can help reduce risk and manage complexity.
Leaders should incorporate scenario planning, pilot phases, and stakeholder alignment into their transformation roadmap. A successful migration depends not just on technical readiness but on organizational preparedness, including the planned involvement of employee representatives, especially in unionized or regulated environments.
Given SAP’s focus on its standard offerings, strategic negotiation plays a key role in achieving the best outcomes. Companies should enter discussions with a clearly defined migration plan, along with service-level expectations and fallback positions. Robust service level agreements (SLAs) are critical to ensure delivery of the agreed-on performance levels. High-level relationships and well-timed escalations can accelerate issue resolution and unlock flexibility. In one international case, top-level engagement proved instrumental in securing contract terms that aligned with the company’s operating needs.
Given the complexity and duration of contracts, companies should invest in negotiation expertise — either in-house or through external advisors — to ensure they capture the full value of the offering while retaining necessary control.
A migration journey consists of three key moments, beginning with evaluation, which drives the remaining two steps (negotiation and migration) — see Figure 1. The more you understand your IT landscape, how SAP affects it, and how much migration will change your operations, the more successfully you can understand requirements and decide whether to migrate or not.
Platform-based ERP systems, including SAP Cloud ERP Private, are more than updated licensing models or approaches to embracing the cloud.
They reshape how organizations run their IT core and impact the entire IT landscape and operating model. For example, depending on the initial start point, business processes may need to be rethought and adapted. This means that strategic decisions must happen up front to validate the impact of ERP on achieving strategic, business, and IT targets. When moving forward with migration, robust change management, cross-functional alignment, upskilling, and leadership that embraces transformation beyond technology are all necessary to ensure you realize continuing business value through your ERP systems.
By Lucas Könnecke, Dr. Fabian Dömer, Dr. Michael Kolk, Michael Majster, Dr. Kai-Oliver Zander, Dr. Klaus Schmitz, Joel Hauser
cloud technology
Citring inició su actividad a finales de 2017 y fue impulsada por Lan...
