Hidden Costs and “Gotchas” in SAP S/4HANA Migration Deals
Introduction: The Realities of SAP S/4HANA Migration Costs
SAP S/4HANA migrations are often riddled with hidden costs that catch enterprises off guard. Many CIOs and CFOs underestimate these SAP S/4HANA migration risks because the focus stays on software and technical tasks.
In reality, the cost traps are often buried in the fine print of contracts and licensing agreements.
SAP’s aggressive push for RISE with SAP cloud deals adds new cost pitfalls. RISE promises simplicity by bundling software, cloud infrastructure, and services in one contract.
However, this all-in-one approach can mask fees and SAP contract lock-in clauses that favor SAP.
Executives must be vigilant: long-term commitments and bundled services mean the real SAP migration hidden costs often surface after you’ve signed the deal.
Crucially, contracts, not technology, drive many SAP S/4HANA upgrade cost traps. Licensing terms, maintenance agreements, and cloud subscriptions dictate costs over the next 5–7 years.
A slick technical migration can still go over budget if you fall into a contractual cost trap. The key is to scrutinize SAP’s proposals and negotiate protections up front, ensuring your S/4HANA upgrade doesn’t become a budgetary black hole.
Read our overview of SAP S/4HANA Migration Contracts & Negotiation.
SAP RISE Migration Pitfalls and Contract Lock-In Risks
RISE migration pitfalls stem from the way SAP bundles everything into a single agreement.
A RISE with SAP contract typically requires a 5+ year commitment with SAP as the sole vendor. All your ERP eggs are in one basket: software, cloud hosting, and support are tied together.
This gives SAP tremendous leverage, creating a classic vendor lock-in scenario. Once you commit, switching providers or pulling certain services out of the bundle becomes nearly impossible without hefty penalties.
Another hidden gotcha is the limited flexibility to switch hyperscalers or exit early. Even though you choose AWS, Azure, or GCP as the cloud platform for RISE, SAP holds the contract.
You have no direct agreement with the cloud provider, meaning you can’t change cloud strategy mid-stream. If SAP’s service disappoints or your cloud costs spike, you’re stuck until the term ends.
Early exit is usually not allowed or comes with paying out the full term’s fees. Essentially, RISE locks you into SAP’s managed cloud ecosystem with few escape hatches.
Negotiation tip:
Secure explicit exit clauses and scope adjustment rights in your RISE contract. Push for the right to terminate for convenience after certain years or if SLAs are repeatedly missed.
Negotiate a clause to adjust scope or volume (for example, reduce user counts or switch cloud region) at defined intervals. If SAP resists, even a shorter initial term (e.g., 3 years instead of 5) can preserve future flexibility.
Insist on transparency in pricing, ask SAP to break out software vs. infrastructure costs, so you know where markups might lurk. A skeptical, hard-nosed approach during RISE negotiations is needed to prevent long-term lock-in risks.
Read our commercial tips, Negotiation Tips for Your S/4HANA Conversion Contract (On-Prem or RISE).
Legacy Maintenance Costs During Migration
A big hidden cost in SAP migration is the double payment for legacy systems during the transition. Many enterprises continue paying annual maintenance on SAP ECC (the old ERP) while also funding S/4HANA licenses or RISE subscriptions.
This dual maintenance situation can quietly drain hundreds of thousands of dollars. SAP won’t volunteer to pause those fees – you have to demand it.
The risk is especially high in phased migrations. If your S/4HANA go-live is 12+ months out, that’s a year or more of overlapping costs.
Without a special agreement, you’ll pay SAP maintenance fees for ECC and subscription fees for S/4HANA at the same time.
Worse, if you lack explicit dual-use rights, you could even face compliance issues. Using ECC and S/4HANA in parallel might technically violate license terms, exposing you to SAP audit exposure during migration.
To avoid this trap, negotiate a maintenance holiday or fee reduction during the transition. Push SAP to waive or discount ECC maintenance while your S/4HANA project is underway.
Many customers have successfully arranged a 6–12 month maintenance holiday, especially if they’ve committed to S/4HANA by a certain date.
Also, ensure dual-use rights are written into the contract: SAP should allow you to run ECC and S/4HANA in parallel for a defined period without extra cost or penalties.
This protects you from double licensing and audit accusations as you cut over to the new system.
In short, don’t quietly accept paying for two systems.
Raise the issue early with SAP, and use your leverage (the S/4 deal) to get relief on legacy maintenance. Every dollar saved on avoided overlap can be reinvested in the migration itself.
SAP S/4HANA Sizing Challenges and Data Volume Traps
Misjudging the size and usage of your future S/4HANA environment is another costly pitfall. SAP licensing under S/4HANA (especially in RISE deals) often uses the Full User Equivalent (FUE) metric or specific resource entitlements.
If you underestimate user counts or data volumes, you may sign a deal that’s too small for your needs – and find yourself busting through those limits later.
Sizing errors drive unplanned cost overruns. For example, underestimating the number of professional users or the average workload can exhaust your FUE quota. Mid-term, you might have to buy additional FUE bundles at a much higher unit cost (since your initial discount won’t apply).
Similarly, data volume and cloud infrastructure sizing can be a trap. If your S/4HANA system requires more memory, CPUs, or storage than planned, a RISE contract may force an expensive upgrade to the next tier.
In the cloud, more consumption = more cost, and SAP’s bundled pricing might include steep overage fees or require an immediate contract uplift.
To prevent these S/4HANA sizing challenges, negotiate safety valves. Build in buffer capacity from the start: slightly overestimate users and storage so you’re not at 100% on day one. Negotiate the right to true-down or adjust if you initially overshoot. Also seek price caps for additional FUEs and storage.
For instance, have the contract specify a fixed price (or a discount) for any additional users or TB of storage you might need in the long term.
Another strategy is agreeing on an on-demand pricing model for certain resources, so you pay incrementally rather than committing up front blindly. The goal is to avoid nasty surprises like a budget-busting invoice for additional licenses or cloud resources two years into the deal.
Read about different deployment options, SAP RISE vs DIY Cloud Hosting: Contractual Pros & Cons.
Custom Add-Ons and Third-Party Integration Costs
Not all costs in an SAP migration are contained in SAP’s quote. Enterprises often overlook custom add-ons and third-party integrations, which can become hidden migration expenses. When moving to S/4HANA (especially in the cloud), any bolt-on tools or custom code extensions must be evaluated.
The risk: you might need new licenses or compatibility updates for these add-ons, and those might not be covered in your S/4HANA or RISE agreement.
For example, if you use a third-party tax calculation engine or a supply chain optimizer that hooks into ECC, will it work with S/4HANA? You may have to upgrade that tool or purchase a S/4HANA-compatible version.
In SAP RISE, certain classic add-ons are not included and require a separate subscription on SAP’s Business Technology Platform (BTP) or marketplace.
Hidden cost alert: what was once running on your servers might need a new cloud service (with new fees) after migration. Custom ABAP programs might need to be rewritten or moved to BTP, potentially incurring SAP BTP consumption costs if not negotiated upfront.
The mitigation is to audit all your add-ons and integrations early. Identify which SAP industry solutions, plug-ins, or third-party products are in your current landscape. Then get clarity from SAP on how each is handled in S/4HANA.
Negotiate clear compatibility and migration support commitments.
For critical add-ons, ask SAP to include their S/4 versions or cloud equivalents in the deal (or at least secure a discount for them). Ensure the contract specifies that existing interface licenses or connectors remain valid during the migration.
Essentially, don’t assume every piece of your ECC environment magically carries over. Budget for the retrofit of customizations and include those needs in contract talks so you’re not left footing unexpected bills for supplementary software.
Training, Change Management & Adoption Costs
A successful S/4HANA migration isn’t just a technical upgrade—it’s a business transformation. Training, change management, and user adoption costs are frequently underestimated cost traps in SAP projects.
SAP S/4HANA introduces new user interfaces (e.g,. Fiori apps instead of the old GUI) and often new business processes. If your workforce isn’t prepared, productivity can plunge, and you might need expensive remediation later.
The hidden risk is that many S/4HANA budgets ignore the human factor. Companies spend millions on software and hardware, but allocate minimal funds for training employees or redesigning processes.
This can lead to lower utilization of the new system (wasting your investment) or costly delays as teams struggle to adapt. In some cases, organizations end up paying external consultants post-go-live to fix process issues or provide emergency training—unplanned costs that blow the ROI.
To avoid this, plan for training and change management from day one. Make it a part of your migration deal negotiations.
Secure SAP training vouchers, advisory credits, or enablement services in the contract if possible.
SAP might provide some free training sessions, online learning subscriptions, or send experts for workshops as part of a large S/4HANA deal, but only if you ask. Ensure that your implementation plan includes a robust change management workstream with a clear budget and allocated resources.
It’s wiser to invest upfront in comprehensive training, communications, and process alignment than to pay later for firefighting and user dissatisfaction.
Remember, a well-adopted system delivers value; shelfware or underused features are a hidden cost that might not show up in the project budget but will hurt your business case in the long run.
SAP Migration Hidden Costs and Negotiation Mitigations
| Hidden Cost Area | How It Arises | Mitigation Strategy |
|---|---|---|
| RISE contract lock-in | Long 5-year terms, single-vendor dependency | Negotiate exit/renewal flexibility (e.g. shorter terms, termination clauses). |
| Legacy maintenance fees | Parallel ECC + S/4 payments during migration | Negotiate maintenance holiday or reduction for overlap period. |
| FUE/user sizing | Underestimating user needs or growth mid-term | Add buffer upfront; cap costs for additional users; negotiate flexible true-up terms. |
| Storage & infrastructure | Data growth and cloud consumption overruns | Secure price protections for extra storage/CPU; allow scaling flexibility without punitive costs. |
| Add-ons/integrations | New licenses needed for custom or third-party tools in S/4 | Include migration support clauses; get S/4-compatible versions or services included in contract. |
| Training & adoption | Project training, change management costs not budgeted | Negotiate credits for training services; allocate budget for user enablement from the start. |
Checklist: Avoiding SAP S/4HANA Migration Cost Traps
- Demand explicit dual-use rights to avoid double licensing during the transition period.
- Secure a maintenance holiday or fee reduction while ECC and S/4HANA run in parallel.
- Negotiate FUE and storage price caps to limit mid-project cost surprises.
- Include exit and flexibility clauses in RISE contracts (termination options, ability to adjust scope).
- Map and right-size user licenses carefully to prevent shelfware and unexpected true-ups.
- Budget for training and change management as a mandatory part of the migration plan.
FAQ: SAP S/4HANA Migration Hidden Costs & Traps
Q1: What’s the biggest hidden cost in an SAP S/4HANA migration?
A1: Double-paying for SAP ECC maintenance while also funding S/4HANA (or RISE) subscriptions during the transition.
Q2: Can SAP waive ECC maintenance fees during the migration period?
A2: Sometimes, if negotiated. You should push for a maintenance holiday or reduction to avoid parallel costs.
Q3: How do FUE licensing “traps” increase migration costs?
A3: Misjudging user counts means buying extra Full User Equivalents mid-term at high rates, driving up costs unexpectedly.
Q4: Are RISE with SAP contracts flexible if my strategy changes later?
A4: Not by default. You must negotiate flexibility up front – for example, exit clauses, shorter terms, or scope adjustment rights.
Q5: What about custom add-ons we use – will they cost extra in S/4HANA?
A5: Many add-ons require new licenses or cloud versions. It’s vital to negotiate support for these migrations and include them in the plan early.
Q6: Do we need a budget for training in an S/4HANA migration?
A6: Yes, absolutely (unless you negotiate it in). Ensure you secure training vouchers or services in the contract, or set aside funds for user adoption.
Q7: How can we avoid SAP migration cost overruns in general?
A7: Thorough planning and negotiation: audit your users, size workloads carefully, include buffers in contracts, secure dual-use rights, and don’t skip on change management.
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