TLDR: Many companies are choosing to bypass SAP’s Joule AI during their transition to S/4HANA, presenting a significant challenge for SAP. Despite SAP’s aggressive push and a looming 2027 support deadline for legacy systems, a 2025 study indicates that only 8% of companies have completed their S/4HANA migrations on schedule, with implementations taking 30% longer than planned. The generative AI copilot, Joule, is largely perceived as a ‘nice-to-have’ rather than a critical incentive for migration, as its value in core financial processes remains unproven.
The transition to SAP’s S/4HANA cloud-based ERP system is proving to be a slow and challenging endeavor for many enterprises, with a significant number opting to sideline SAP’s generative AI copilot, Joule. This reluctance poses a considerable hurdle for SAP, which has been actively promoting Joule as a key incentive for migration. A 2025 study by Horvath & Partners reveals that S/4HANA implementations are taking 30% longer than initially planned, and a mere 8% of companies have successfully completed their migrations on schedule. This slow pace persists despite a decade of promotion and the approaching 2027 deadline for mainstream support of legacy on-premises systems, which can be extended to 2030 for a premium.
SAP’s strategy to accelerate adoption includes ‘supercharging’ Joule with collaborative AI agents and expanding its capabilities to over 500 skills, aiming to cover 80% of frequent business and analytical transactions by the end of 2024. However, many customers view Joule as a ‘distant nice-to-have’ rather than a transformative tool. Early adopters have noted its promise in areas like HR and procurement but report that it has yet to deliver substantial value in core financial processes, where return on investment is most critical.
The migration to S/4HANA is more than just an upgrade; it necessitates a complete redesign of IT infrastructure, particularly concerning the shift to the public cloud. SAP advocates for a public cloud S/4HANA model, but over two-thirds of companies surveyed by Horvath prefer private cloud or on-premises solutions, with 48% specifically choosing the private cloud. Only 30% are aligning with SAP’s public cloud recommendation. This divergence stems from concerns over compliance risks in regulated industries, shop floor connectivity for manufacturers, and cross-border data laws for global firms.
Financial implications also play a major role in the hesitation. Migration costs frequently exceed initial estimates, with Gartner research indicating budget overruns of 15% to 25% due to resource shortages and compressed timelines. Large-scale S/4HANA implementations can range from $250,000 for smaller projects to millions for larger, more complex enterprises. Nearly 40% of organizations in the Horvath study stated they would allocate higher budgets if they were to replan their migration.
Furthermore, while almost all organizations (98%) seek external support for their SAP transformation, only 21% invest in change management specialists. This oversight often leads to technical success but operational failures, as teams revert to old processes, key features remain unused, and ROI timelines extend indefinitely.
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As the 2027 end-of-maintenance deadline for ECC systems draws closer, nearly half (47%) of SAP customers continue to operate legacy systems, many still undecided on their S/4HANA migration strategy. This ongoing skepticism and the significant challenges in cost, implementation time, and perceived value of AI tools like Joule underscore the ‘slow march’ to SAP S/4HANA.
