SAP has officially announced that mainstream maintenance for SAP ECC 6.0 and Suite on HANA will end on December 31, 2027. While this date may seem distant, in enterprise planning cycles it is fast approaching. For many organizations, core ERP systems underpin finance, supply chains, procurement, HR, and customer engagement. Transitioning away from ECC is therefore not a matter of choice but necessity.

What makes this deadline different from past upgrade cycles is its scope and strategic implications. This is not a simple patch or version update. Enterprises must decide whether to move to SAP S/4HANA on-premise (if they hold the license) or adopt RISE with SAP, which operates on SAP’s managed cloud infrastructure. The choice has deep financial, operational, and strategic consequences.

Historically, ERP upgrades were viewed as IT-driven projects. The focus was on system downtime, migration tools, and compatibility. Today, the conversation has shifted. For CFOs and boards, the real question is: How should we fund the future of our enterprise systems?

ERP modernization now sits at the intersection of:

• Capital allocation: Should capital be tied to depreciating assets or directed toward innovation?
• Risk management: How can enterprises minimize disruption during migration while ensuring compliance and resilience?
• Strategic agility: Can the new system provide the scalability and flexibility needed in volatile markets?

Seen in this light, the SAP 2027 deadline is not simply a technical cut-off. It is a strategic inflection point.

Running SAP on-premise has long been the default model. For some organizations, particularly those in highly regulated industries or with specific data residency needs, on-premise may remain the preferred choice. It offers a sense of control—over infrastructure, data, and governance.

But control comes with significant trade-offs. On-premise environments require:

• Upfront capital investment in servers, storage, and networking hardware
• Ongoing costs for facilities, power, cooling, and security
• Continuous maintenance by internal teams, including patching, upgrading, and monitoring
• Longer lead times for scaling up capacity or adopting new capabilities

These costs are fixed regardless of business conditions. Even when demand dips, the infrastructure must be powered, cooled, and maintained. For CFOs tasked with maximizing capital efficiency, this rigidity can be difficult to justify.

For organizations without an on-premise license, the path forward is RISE with SAP. This model places S/4HANA on SAP’s managed cloud infrastructure, shifting enterprises from a capital expenditure (CapEx) model to an operating expenditure (OpEx) model.

In practice, this means:

• Costs scale with usage, aligning spend more closely with business demand
• Infrastructure is managed externally, reducing the burden on internal IT teams
• Enterprises can tap into cloud-native innovation more quickly, such as AI-driven analytics, automation, and integration with other SaaS platforms

This does not mean cloud is universally cheaper. Costs must be carefully modeled to account for long-term workloads, compliance needs, and integration with existing systems. But what cloud offers is flexibility—the ability to redirect resources from infrastructure upkeep toward business transformation.

It’s important to recognize that most enterprises will not make a wholesale shift overnight. Hybrid landscapes—where some workloads remain on-premise while others move to the cloud—are common. Regulatory requirements, latency concerns, or specific industry needs may dictate a phased approach.

For CFOs and CIOs, the priority is not to debate cloud versus on-premise in absolute terms. Instead, it is to adopt a structured framework that balances financial discipline with operational resilience.

Enterprises approaching this transition often benefit from breaking it into deliberate stages:

1. Assessment – A comprehensive review of current systems, licenses, workloads, and business objectives. This includes understanding whether an on-premise license is held and how that shapes available options.
2. Planning – Developing financial and technical roadmaps. This stage involves projecting costs, identifying dependencies, and modeling return on investment.
3. Migration – Executing the move, whether to S/4HANA on-premise or RISE with SAP, using methodologies that minimize business disruption.
4. Governance – Establishing ongoing practices for cost control, compliance, and system optimization post-migration.

Such a structured path reduces uncertainty and ensures that migration is seen not just as an IT exercise, but as a program tied to enterprise strategy.

CFOs are increasingly central to this conversation. While CIOs focus on technical feasibility, CFOs frame the decision in terms of balance sheet health, agility, and long-term value creation. Key questions include:

• How do we reduce sunk costs in depreciating assets?
• How can technology spending align more closely with revenue cycles?
• What is the financial trade-off between control (on-premise) and flexibility (cloud)?
• How do we ensure capital is freed for innovation and not consumed by maintenance?

By leading with these questions, CFOs can ensure that ERP modernization aligns with shareholder expectations and positions the enterprise for growth.

The end of support for ECC in 2027 is non-negotiable. Every enterprise will need to chart a migration path. But the choice is not simply technical—it is deeply financial.

• On-premise offers control but locks capital into infrastructure and maintenance.
• RISE with SAP shifts the model toward flexibility, resilience, and innovation, but requires careful financial modeling.
• Hybrid approaches may provide a pragmatic bridge, balancing regulatory needs with strategic goals.

The most forward-looking enterprises will treat this not as an IT deadline but as a chance to reframe how they fund, govern, and benefit from their technology landscape.
For CFOs and leadership teams, the key question is not whether to migrate, but how to transform this deadline into a reset point—one that unlocks financial agility and long-term strategic advantage.