Every business today depends on technology in some way. Whether it’s an e-commerce site, a customer management system, or internal software that keeps operations running, companies rely on their tech to stay efficient and competitive. But as businesses grow and evolve, so does the technology they use. And sometimes, in the rush to meet deadlines or cut costs, companies stick with their legacy systems.
A legacy system is simply a setup that a company keeps using because it still runs, even though newer, faster, and safer models are available. Since it’s already part of their daily operations, many businesses would rather continue using it than switch to something new. Switching to something new would take time, money, and effort, causing something called ‘technical debt’.
What Is Technical Debt?
Technical debt refers to the extra work and future costs that result from delaying necessary technology updates. At first, it might seem like a smart move—why fix something that isn’t completely broken? But over time, older systems become slower, less compatible with new tools, and harder to maintain.
A typical example is SAP ECC vs. SAP S/4HANA. SAP ECC has been widely used for years, so many companies have become comfortable relying on it. But the business landscape keeps changing, and so do the technology requirements to keep up.
ECC was built on older database technology, which means businesses often have to wait for reports and insights instead of accessing real-time data. SAP developed S/4HANA to leverage modern technology and solve these performance issues. For one, it features an in-memory database that processes information in real-time, meaning businesses no longer have to wait to make data-driven decisions.
Another major improvement is user experience. If you’ve ever used SAP ECC, you know the old SAP GUI wasn’t the most intuitive. S/4HANA replaces it with SAP Fiori, a modern, web-based interface that’s easier to use and works seamlessly across computers, tablets, and phones. This makes it more accessible for employees, reducing the learning curve and improving productivity.
S/4HANA is also built for the cloud era, giving businesses the flexibility to run their ERP on-premises, in the cloud, or in a hybrid setup. This is a major shift from ECC, which was primarily on-premises and required significant IT resources to maintain. With these improvements, it’s easy to see how delaying upgrades will come at costs that can slow a business down.
How Technical Debt is Slowing Down Your Business
Here’s how technical debt can become a significant roadblock:
Slower Development and Innovation
One of the first ways technical debt hurts a business is by making software development painfully slow. In a survey of over 1,000 company executives, 70% of respondents said technical debt makes it harder for their IT teams to innovate, while 72% said it slows down their ability to adopt new technology.1 In other words, the more a company holds on to old, patched-up systems, the harder it becomes to stay competitive, react to industry changes, and keep up with customer demands.
The problem only gets worse over time. Every update takes longer than it should, every new feature requires extra work, and every system change creates new problems instead of solving old ones. Before long, a company’s software becomes so complicated and fragile that even minor improvements feel like a major project.
Old systems also don’t work well with modern technology, meaning businesses have to rely on manual work, outdated processes, and expensive IT fixes just to keep things running.
Higher Maintenance Costs and IT Overhead
The older a system gets, the more expensive and time-consuming it becomes to maintain. Over time, it needs more patches, fixes, and manual work just to keep running, which drives up costs and slows everything down.
A study by Stripe found that developers spend over 17 hours per week dealing with technical debt and bad code—almost half of a typical workweek lost to maintenance instead of innovation.2 Specifically, 13.5 hours go into fixing technical debt, while another 3.8 hours are wasted on outdated or inefficient code. According to the study, bad code alone drains $85 billion from businesses yearly in lost productivity.
Beyond lost time and money, old systems become more challenging to support. Eventually, vendors stop providing updates, leaving businesses with two tough choices: pay a premium for third-party maintenance or assign internal IT teams to manage an outdated system, which ties up resources and limits progress.
This is precisely what’s happening with SAP, which has already announced that it will stop supporting ECC in 2027. This means that by then, there will be no more security patches, bug fixes, or system updates.
Investment in Continuous Upgrades with no ROI Guarantee
Without SAP’s support for businesses still using ECC, companies will have to pay premium prices for extended maintenance, which can add up quickly.
In 2024 alone, businesses spent an average of $2.7 million on legacy system upgrades.3 However, that money doesn’t necessarily improve efficiency. Most of the time, companies are just paying to keep things running without adding new features or making their systems faster, smarter, or more secure.
And the costs don’t stop there. Many legacy systems run on outdated, proprietary software and hardware that are getting harder to find. That means replacement parts are scarce and expensive, and businesses have to pay top dollar for specialized IT experts who know how to keep these aging systems alive.
Then there’s the constant disruption. Every company rolls out an update or patches security vulnerabilities, so there’s a real risk of compatibility issues, downtime, or even data migration failures. This doesn’t just slow down operations—it can frustrate employees, impact customer service, and ultimately hurt revenue.
Read more: The Cost of Delaying Your SAP S/4HANA Migration
Managing Technical Debts: How to Plan a Smooth Transition from Legacy Systems
Steps you can take to manage technical debts and transition smoothly from a legacy system like SAP ECC to S/4HANA with minimal disruption:
1. Assess and Plan the Migration
The first step in moving from SAP ECC to SAP S/4HANA is understanding your current system and creating a clear migration plan. This involves evaluating your existing processes, customizations, and integrations to determine what needs to be updated or replaced.
You’ll also need to choose a migration approach, whether Greenfield or Brownfield. SAP S/4HANA requires the SAP HANA database, so if your current system isn’t compatible, you may need to upgrade hardware or move to a cloud-based deployment. At this stage, it’s also important to define a budget, timeline, and risk management plan to ensure a smooth transition with minimal disruptions.
2. Prepare Your Data and System
Over time, businesses accumulate redundant data that can slow down the new system. Identifying and archiving old records, standardizing data formats, and ensuring accuracy will improve performance after migration.
Another critical step is assessing custom code. Many businesses have modified SAP ECC to fit their needs, but not all customizations will work with SAP S/4HANA. Running SAP’s Readiness Check tool helps identify incompatible code and provides recommendations on whether to adjust, remove, or replace certain modifications.
To reduce risks, it’s best to set up a test environment (sandbox) to simulate the migration process and test configurations and identify potential issues before implementing the changes in your live system.
3. Execute the Migration and Validate Everything
Once planning and preparation are complete, the next step is executing the migration. SAP provides tools like Software Update Manager (SUM) with Database Migration Option (DMO) to streamline the process.
After migration, it’s essential to thoroughly test the system to ensure that all business processes and integrations function correctly. Testing should cover both business processes and system integrations.
Since SAP S/4HANA introduced a new Fiori-based user interface, employees will need training to adapt to the changes. Providing user support and training ensures a smooth transition and reduces productivity loss.
Trust Raso360 to help you reduce technical debt and aid a seamless transition to SAP S/4HANA.
Reducing technical debt starts with upgrading your technology. If you’re currently using ECC but are unsure where to start with your SAP migration, you’re not alone.
At Raso360, we simplify the process by helping you assess your current system, choose the best approach, and transition smoothly—without unnecessary downtime or headaches.
To help you make informed decisions, we’ve put together a practical guide on SAP S/4HANA migration. Download it today, and let’s talk about how we can support your IT goals.
References:
1. “Upgrade Old E-Commerce Technology and Unlock Growth.” Oracle, 2020, www.oracle.com/a/ocom/docs/upgrade-old-ecommerce-technology-and-unlock-growth.pdf.
2. “The Developer Coefficient.” Stripe, Sept. 2018, stripe.com/files/reports/the-developer-coefficient.pdf.
3. “The Code to Unlock GenAl How legacy tech and poor data is holding GenAl back” Snap Logic, Accessed 24 Feb. 2025, snaplogic.app.box.com/s/whdigy27ufimr21b4d6wpmjyvmkydj43.
