ERP Replacement

ERP upgrade or replace: seven tests for the decision

The upgrade is the default because it is the vendor’s plan. Whether it is the right plan for a given company can be tested, and the tests are about money, fit and control more than about software.

By The editors · Updated · 4 min read

A logistics supervisor at an old desktop terminal and a younger colleague holding a printed pick list and a handheld scanner look at the paper together in a warehouse office.
The clearest sign is the work people do on paper and in spreadsheets around the system.
Contents
  1. Why the default deserves a second look
  2. Seven tests
  3. Reading the result
  4. What to do with the answer
  5. Questions buyers ask
  6. Sources

The pressure to decide usually arrives from outside. SAP’s mainstream maintenance for ERP 6.0 ends at the end of 2027, and in the DSAG Investment Report 2026 some 63% of member companies named the end of maintenance as a challenge for their SAP investment decisions⁠1. A date is a reason to decide. It is not a reason to choose the vendor’s answer.

Why the default deserves a second look

The vendor’s plan is an upgrade, and the installed base has been slow to follow it. Gartner counted about 35,000 ECC customers worldwide and found that 39% had bought or subscribed to S/4HANA licences by the end of 2024⁠2. It expects more than 40% of today’s ECC 6 customers still to be using it for key business areas in 2030⁠3.

The reason is the business case. DSAG’s chairman told The Register that "the main problem is a business case of moving to S/4HANA"⁠2. In the association’s 2026 survey, 79% of member companies named the cost-effectiveness of SAP software investments as a challenge, and 70% named licence and contract design⁠1. The French-speaking user club, USF, has asked SAP to make its cloud simpler and cheaper, and reports that pricing, licences and the end of ECC maintenance remain sensitive subjects among its roughly 3,800 members⁠4.

Seven tests

1. Does the process live in the ERP or around it. Count the spreadsheets, shared inboxes and side databases that carry real work. If the answer is "most of it", the ERP has become a ledger with a costly front end, and an upgrade renews the ledger.

2. Can the custom code survive. More than half of ISG’s respondents agreed they had over-customised their legacy ERP, and members of the Americas’ SAP Users’ Group ranked customisations as the second-largest barrier to migration, after business process change⁠56. If the custom code is the business, a standard suite will not carry it without the same customisation again.

3. What the support fee buys. SAP’s customers paid €10.5 billion for on-premises software support in 2025⁠2. Ask what changed in the product the company runs during the last three years of fees.

4. Who sets the timetable. A system whose maintenance dates, price adjustments and upgrade conditions are set by the vendor is a rented system, whatever the licence says. SAP has announced a further adjustment of maintenance fees for existing contracts from 1 January 2027, capped at 5%⁠7.

5. Whether the system can take part in AI. SAP’s assistants are available on ECC and on-premises S/4HANA only to customers that have started a RISE with SAP migration and meet its commercial conditions⁠89. If the company’s AI work already runs outside the ERP, as it does for most DSAG members with AI in production⁠1, the ERP is no longer where the next ten years of improvement will happen.

6. Whether the business case closes. If the finance team cannot write a positive case for the upgrade, that is a finding. In the Freeform Dynamics poll, 95% of legacy users found it a big effort or a real challenge⁠6.

7. Whether the company wants to own software. Building and owning a system asks for a process owner in each department and someone accountable for the system. A company with no appetite for that should rent a suite and say so plainly.

Four people stand at a long wall of blank coloured index cards joined by string; one moves a card while another checks a clipboard.
The decision is easier once the processes are on the wall instead of in the system.

Reading the result

AnswersRoute
Processes fit the standard, the case closes, the company is committed to the vendorUpgrade
Processes fit a standard, but the price or the vendor does notSwitch to another suite
The process lives around the ERP, custom code is the business, AI runs elsewhereBuild a system the company owns
The system still works and the decision needs two more yearsDefer on third-party support, then choose

Deferral has become easier to arrange. In July 2026 the European Commission accepted commitments from SAP, in force for ten years, under which customers may use outside support providers for each part of an on-premises ERP estate and may terminate licences with their maintenance in defined cases⁠10. The Commission had opened its investigation in September 2025 over concerns that SAP restricted competition in the support aftermarket⁠11.

What to do with the answer

  1. Score the seven tests with finance, operations and IT in the same room, and record the evidence for each.
  2. If the result is "build" or "switch", fix the support position first: extended maintenance, or third-party support, to the date the plan needs.
  3. Price the two leading routes on the same five-year basis, as set out in the cost guide.
  4. Choose one process to move first, and follow the migration plan.

The outcome to aim for is a decision the company made on its own evidence, with the vendor’s date as one input among several.

Questions buyers ask

How do you know when to replace an ERP system?

When several of these hold at once. People keep the real process in spreadsheets, custom code blocks every upgrade, the support fee rises while the product stands still, the vendor has set an end-of-maintenance date, and AI projects are built outside the ERP because it cannot take part.

Is an ERP upgrade cheaper than a replacement?

Not reliably. A move from SAP ECC to S/4HANA is a migration project in its own right, and ISG found nearly 60% of such projects delayed and over budget. An upgrade keeps the vendor relationship and the team’s knowledge; it does not keep the cost low by default.

How often should an ERP be replaced?

There is no fixed interval that we could source. The trigger in practice is an external date, such as the end of vendor maintenance, or a business change the system cannot follow. SAP ERP 6.0 dates from 2006 and many companies still run it.

What are the options besides upgrading?

Switching to another packaged suite, building an AI operating system the company owns, or keeping the current ERP on third-party support while the decision is prepared. Since July 2026 SAP has committed to let customers use outside support providers for each part of an on-premises estate.

Sources

  1. DSAG Investment Report 2026. DSAG (German-speaking SAP User Group), 26 Feb 2026. Accessed 11 Nov 2026.
  2. SAP’s grand cloud escape plan €2B short of the runway. The Register, 19 Mar 2026. Accessed 11 Nov 2026.
  3. Unwary SAP private cloud users face 10% renewal hikes, warns Gartner. The Register, 14 Oct 2025. Accessed 11 Nov 2026.
  4. L’USF encore inquiète sur le cloud et la maintenance SAP. Le Monde Informatique, 15 Oct 2025. Accessed 11 Nov 2026.
  5. Most SAP migrations bust budgets and deadlines, study finds. The Register, 5 Feb 2026. Accessed 11 Nov 2026.
  6. Two-fifths of SAP Americas users yet to ditch legacy ERP. The Register, 5 Nov 2025. Accessed 11 Nov 2026.
  7. SAP passt Wartungsgebühren 2027 an. Complion. Accessed 11 Nov 2026.
  8. SAP U-turn brings AI features to ECC and on-prem S/4HANA. The Register, 13 May 2026. Accessed 11 Nov 2026.
  9. SAP’s AI offer to legacy customers comes with a catch. CIO.com, 13 May 2026. Accessed 11 Nov 2026.
  10. SAP loosens ERP maintenance and support rules. CIO Dive, 9 Jul 2026. Accessed 11 Nov 2026.
  11. EU probes SAP over alleged software support stranglehold. The Register, 25 Sep 2025. Accessed 11 Nov 2026.

Updated 11 Nov 2026: First published.

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