SAP ECC vs S/4HANA: Lessons from Australian Public Sector Projects
Across Canberra, a quiet but unmistakable tension is building inside federal government agencies. SAP ECC 6 — the backbone of many public sector finance, HR, and procurement systems — is approaching its end of mainstream support. With 2027 looming, agencies are being pushed toward S/4HANA whether they feel ready or not.
And the truth is: many don’t.
While private-sector organisations often frame S/4HANA as a strategic uplift, the sentiment in the Australian public sector is far more mixed. For many agencies, this isn’t a transformation driven by ambition. It’s a transformation driven by expiry.
In this blog, we unpack the lessons emerging from early public sector S/4HANA programs across Australia — especially here in Canberra — and explore what agencies can realistically expect as they navigate the shift.
1. The Pressure Is Real — and It’s Not Optional
SAP’s 2027 deadline is non-negotiable. Once ECC 6 moves out of mainstream support, agencies face:
• Higher operational risk
• Increased security exposure
• Rising maintenance costs
• Difficulty sourcing ECC-skilled talent
For CIOs and CFOs, the message is clear: staying on ECC is not a viable long-term option.
But the pressure to move is not matched by enthusiasm. Many agencies feel they are being forced into a major transformation without a compelling business benefit. The driver is compliance, not innovation.
2. Budget Constraints Are Shaping Every Decision
Unlike large private enterprises, federal agencies don’t have the luxury of multi‑year, multi‑million‑dollar transformation budgets. Funding cycles are tight. Approvals are slow. And competing priorities — cyber uplift, digital identity, workforce systems, cloud migration — stretch budgets even further.
This creates a difficult reality:
Agencies must deliver an S/4HANA transformation with less money, less flexibility, and less appetite for risk.
As a result, many are adopting:
• Minimal viable scope
• “Like-for-like” migrations
• Phased rollouts
• Heavy reuse of existing processes
The dream of a full digital transformation often gives way to a pragmatic, budget-conscious migration.
3. The Perceived Benefits Are Not Always Clear
In Canberra, conversations with program directors, architects, and business owners often reveal the same sentiment:
“What do we actually gain by moving to S/4HANA?”
While SAP markets S/4HANA as a platform for real-time analytics, automation, and simplified processes, many agencies feel:
• Their current ECC systems already meet business needs
• The benefits are incremental, not transformational
• The cost-to-benefit ratio is hard to justify
• The change impact on staff is significant
• The business case feels forced
This perception gap is one of the biggest challenges in public sector adoption.
4. Lessons from Early Australian Public Sector Projects
Several agencies — both federal and state — have already embarked on S/4HANA programs. Their experiences offer valuable insights:
Lesson 1: Start Early or Pay Later
Agencies that delayed planning found themselves rushing through discovery, design, and procurement. This led to higher costs and increased project risk.
Lesson 2: Don’t Underestimate Data Migration
ECC systems in government often contain decades of legacy data. Cleansing, archiving, and migrating this data is one of the most underestimated cost drivers.
Lesson 3: Business Readiness Is the Real Bottleneck
Technology is rarely the issue. Change management, training, and process redesign consume far more time and effort than expected.
Lesson 4: Cloud vs On-Premises Decisions Are Not Simple
While SAP pushes cloud-first, many agencies face constraints around sovereignty, integration, and security. Hybrid models are becoming common.
Lesson 5: “Like-for-Like” Isn’t Always Cheaper
Some agencies discovered that replicating old processes in S/4HANA can be more complex — and more expensive — than adopting standard SAP best practices.
5. The Canberra Mood: Mixed, Cautious, and Pragmatic
In the federal government community, the sentiment is neither excitement nor resistance. It’s something in between:
• Cautious optimism from IT teams who see long-term value
• Skepticism from business teams who see limited immediate benefit
• Concern from executives about cost and risk
• Fatigue from staff who have lived through multiple ERP cycles
The transformation is happening — but not because agencies want it. It’s happening because they must.
6. So What’s the Path Forward?
For agencies preparing for the shift, the most successful strategies emerging from early projects include:
• Start planning now, even if funding isn’t approved
• Run a realistic readiness assessment — not a vendor-driven one
• Prioritise data early
• Adopt standard SAP processes where possible
• Invest in change management from day one
• Build a multi-year roadmap, not a single big-bang project
• Leverage shared learnings across agencies — Canberra is a small town, and collaboration is a strength
Final Thoughts
The move from ECC to S/4HANA is one of the most significant technology shifts facing the Australian public sector in the next two years. While the pressure is real and the benefits may feel unclear, agencies that approach the transition with pragmatism, collaboration, and early planning are already seeing smoother pathways emerge.
S/4HANA may not feel like a choice — but how agencies navigate the journey absolutely is.
