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'Realigned' project plan aims to move existing landscape to new platform to 'achieve faster progress'
Zeiss Group has ditched plans for a greenfield ERP migration to latest S/4HANA platform from SAP following years of struggle trying to move off an ageing R/3 system.
The industrial optics company with revenue of around €11.896 billion said it was seeking to “realign” its ERP migration plans by moving its existing landscape to the new platform, a so-called "brownfield” migration.
SAP has long recommended that customers move to S/4HANA — a completely re-engineered version of its popular ERP system — with a clean-core approach, abandoning old customizations and adopting new processes at the same time. It can prove a challenging, costly, and time-consuming journey for many customers as they grapple with business process and technology change in one project.
Reports suggest that Zeiss has sunk €200 billion into the project to move from R/3 — the earliest version of which was introduced in 1992 — which began around 2020.
A company spokesperson told The Register that the company “continuously evaluates larger projects and adapts them flexibly as conditions change.”
They said: “This also applies to the ERP migration, which has now been realigned to achieve faster progress in the transformation and to better meet the diverse requirements of the ZEISS segments.
“As a first step, the existing ERP landscape will be migrated to SAP S/4HANA. The segments will then build upon this with individually configured solutions. The result will be a group-wide core system with segment-specific applications that best reflect the similarities and differences in the processes,” they said.
The company declined to comment on the spending figure attributed to the project. SAP has declined to comment.
Two years ago, CIO Carsten Trapp told the media the company had opted for a greenfield approach in its SAP migration. He said it was a “a lifetime opportunity to clean up” because the company had “messed up our R/3 system over the last 30 years.”
Moving to S/4HANA would mean the technology team could set up “all processes cleanly in the SAP standard from the start,” he told CIO magazine.
He said that in 2020, the board had recognized the scale of the challenge in moving off R/3 — which was replaced by ECC as SAP's main ERP product in the early noughties. Mainstream support for ECC is set to end in 2027.
However, on a call to investors in December last year, Justus Felix Wehmer, CFO of major subsidiary Carl Zeiss Meditec, said administration expenses had increased because of higher IT costs. “We have mentioned that we are introducing a new ERP system, SAP S/4HANA, and that requires additional expenses in that area,” he said.
In May, he said that these expenses would be peaking because of the SAP project “over the next two to three years.”
Zeiss has an existing relationship with Microsoft, which said in 2024 that the optics company was moving its ERP systems to the cloud, on Azure.
SAP has struggled to convince users of the business value of moving from legacy ERP systems such as R/3 and ECC to S/4HANA, despite the promise that it offers greater speed and flexibility owing to its in-memory database. Although the new system was introduced in 2015, as recently as last year, 95 percent of legacy users said building a positive case to migrate requires a big effort or is genuinely challenging, according to research from Freeform Dynamics.®
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