Enterprise migration to SAP S/4HANA is advancing, but at a measured pace as organizations weigh cost pressures, operational risk, and a shortage of skilled talent, according to a research report from Information Services Group (ISG).
The report, titled the 2026 SAP Migration Report, outlines a market that is active yet cautious. While many enterprises acknowledge the necessity of moving from legacy SAP environments ahead of support deadlines, execution remains a mixed picture. Companies are balancing the value of an upgrade with the realities of large-scale transformation projects that often touch every part of the business.
The research is based on interviews with 200 senior decision-makers in large global organizations with 1,000 employees or more, focusing on how enterprises are migrating or intend to migrate to S/4HANA by the end of 2027. ISG gathered responses from organizations at various stages of SAP migration, supplemented by interviews with tech leaders and service providers.
A Business Transformation Initiative
According to the findings, organizations are no longer treating SAP migration as a purely technical upgrade. Instead, it has become a broader business transformation initiative, one that requires rethinking processes, data models, and organizational workflows. This expanded scope is contributing to longer planning cycles and, in some cases, delayed timelines.
The ISG report indicates a tension between ambition and actual readiness. Enterprises widely recognize the benefits of S/4HANA, including improved analytics, real-time processing, and tighter integration with cloud services. Yet many remain in early stages of migration, still evaluating deployment models and building internal consensus.
Cost remains a major factor. Migration projects often involve not only software licensing and infrastructure changes, but also consulting services, data cleansing, and process redesign. For large enterprises, these costs can escalate quickly, requiring a more phased approach to implementation. Rather than full-scale migrations, many organizations are opting for incremental transitions, prioritizing specific business units or functions.
The report also highlights the growing role of cloud in SAP strategies. A significant share of enterprises are choosing cloud-based deployments, attracted by scalability and reduced infrastructure management, but this shift introduces new considerations around security, compliance, and vendor lock-in, which can slow decision-making.
Skills shortages are a definite hurdle. The transition to S/4HANA requires expertise in both legacy SAP systems and modern cloud architectures, a combination that is in limited supply. As a result, enterprises are increasingly relying on external partners to support migration efforts. This dependency adds another layer of complexity in coordinating large-scale projects.
SAP environments often underpin mission-critical processes such as finance, supply chain, and HR, so any disruption during migration can have major business consequences. To mitigate this risk, many organizations are adopting hybrid approaches that allow legacy and new systems to run in parallel during transition periods.
The ISG report notes that automation and AI are beginning to play a role in easing migration challenges. Tools that assist with data migration and system monitoring are helping organizations streamline certain aspects of the process. But these technologies are not yet a complete solution and require careful integration into broader migration strategies.
Momentum on the Upswing
Despite these challenges, the report suggests that momentum is building. As deadlines for legacy SAP support draw closer, organizations are expected to accelerate their migration efforts. Vendors are responding by expanding their offerings, including packaged migration services and industry-specific solutions designed to reduce complexity.
In the near term, the SAP migration landscape is likely to remain fragmented, with organizations progressing at different speeds based on their resources and risk tolerance. Over time, however, the shift to S/4HANA is expected to become more standardized as best practices emerge and tools mature.
