As recently as the end of 2024, approximately 60%¹ of companies were still running outdated SAP ECC ERP systems. The extended S/4HANA deadline looms large in 2030, with support beyond this point incurring substantial fees – but reports reveal that up to 70%² of ERP programs fall short of their goals, and roughly a third³ run over budget. So why the inertia?

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‍Many already efficient Nordic companies that use standardized ways of working view the shift to S/4HANA solely as an IT modernization, one offering minimal efficiency gains and slow ROI. Others are considering the jump but fear running out of time. Regardless of efficiency or readiness, this is a once-in-a-decade opportunity.

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A strategic roadmap is mission critical. Enterprises in the Nordics need an approach built around incremental wins tethered to business outcomes - it must also foster AI development and digital competitiveness. Too often we see AI programs being postponed because of the misguided belief that new ERP is a prerequisite.

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It is time to flip the script – ERP transformation is far more than just another expense and there are multiple ways to go about it effectively. To plan a comprehensive roadmap, understanding the challenges is an essential first step.

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Stalling and Stagnation

A set of compounding factors are causing enterprises in the Nordics to put their ERP transformation plans on hold. The speed of change in the economy is one of these forces, a challenge exacerbated by the fact that CEOs change every 4 to 6 years on average.

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With transformation cycles taking place every 5 to 7 years, and changes in management causing significant delays, windows of opportunity for modernization are small and close fast. But as the S/4HANA deadline draws nearer, modernization cannot be postponed indefinitely.

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Aligning your ERP program with new management agendas is critical. This means designing and implementing a transformation approach and governance model which can maintain continuity in spite of strategy and operating model changes.

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When it comes to the technical considerations associated with rebuilding an ERP system, there are three primary migration paths (but no one-size-fits-all approach):  

• Brownfield – Everything is kept in place with this approach, including existing inefficiencies, but it may be effective if existing processes are deemed largely fit-for-future (and require minimal change). If timelines are very tight and the existing system is clean and stable, a brownfield methodology may be viable
• Smartfield (Selective Data Transition) – Sitting between the brownfield and greenfield options, smartfield approaches are quickly gaining popularity. They fundamentally update the ERP core and can be executed rapidly, aiding broader business transformations
• Greenfield – This involves rebuilding from scratch on S/4HANA, requiring clean data and a new process baseline. This approach is ideal if your legacy system is heavily customized and hard to maintain – but it is more expensive and calls for considerable change effort

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In our experience, Nordic enterprises benefit significantly from hybrid, smartfield approaches, with many citing the game-changing advantages of selective migration. But in each case, it is critical to make sure that a hybrid method is the right choice for you – this will depend on your organization’s level of complexity⁵ and key characteristics.

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The (Digital) Competitive Edge

Successful ERP modernization can help enterprises become formidable digital competitors in this next high-stakes chapter. But it is important to emphasize that advantages will not necessarily be unlocked by the upgraded ERP itself, but by the wider business changes that transformation entails.

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This is a chance to make integral, value-adding modifications, including harmonization and standardization improvements (if required). Depending on the approach selected, enterprises can capitalize on having a clean core to implement AI, to introduce real-time analytics, or achieve modular cloud-readiness.

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From greater speed-to-insight and improved regulatory agility, to the advanced resilience enterprises need in today’s world, those that approach the S/4 shift as a business transformation will leapfrog those that hesitate.

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What a Winning Roadmap Looks Like

Having helped many enterprises overcome the S/4 hurdle and maximize business transformation benefits, we know what good looks like when it comes to roadmaps.

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BCG and BCG Platinion also work with SAP⁶ directly to help ensure platform modernization is a business transformation catalyst. A phased model is recommended, featuring four critical steps:

1. Assess readiness – Evaluate the ECC landscape, including key pain points and constraints, to establish your main value levers
2. Define the vision – At this stage you need to design a target architecture, select one of the migration paths mentioned earlier in the article, and pick a hosting strategy – you may opt for a datacenter or hyperscaler approach, with or without RISE
3. Deliver value early – Focus on value delivery to help identify any issues with your approach while also building momentum and confidence
4. Scale boldly – Now is the time to integrate your approach with wider IT modernization and AI strategies, and to ensure that governance will outlast leadership cycles through value delivery capability and strategic flexibility

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At BCG Platinion, we adopt a next-gen, holistic ERP approach when assisting clients with the complex process of migrating core systems. Data and Digital Platform (DDP) thinking is central to our methodology, putting the client’s valuable information at the core to work (and getting digital use cases up and running).

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From Obligation to Opportunity

It’s true, 2030 is not far away and this reality should focus the minds of enterprise decision-makers – but ERP transformation is far more than a costly obligation. It is a strategic play for the business that transcends IT, one with the potential to become a powerful value-creation engine.

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‍Take action now in the Nordics to not only beat the S/4 deadline, but to gain a lasting competitive advantage over the late movers. To continue the conversation, simply reach out to our experts below.