Managing Hidden Risks in a Technical SAP S/4HANA Migration: PwC’s Perspective

As the deadline for SAP’s mainstream support for ECC approaches in 2027, organizations are increasingly opting for a technical migration to SAP S/4HANA. This “brownfield” approach often promises faster transitions with minimal disruption compared to “greenfield” or “bluefield” methods. However, managing hidden risks in security, controls and governance, risk, and compliance (GRC) is crucial to enable a successful migration. 

While the technical upgrade is perceived as a simpler route, treating it solely as a technical task can lead to significant oversight. SAP S/4HANA introduces new functionalities and architectural changes that necessitate attention to security, controls and GRC. A recent blog by the PwC and SAP Alliance outlines that ignoring these elements can result in audit challenges, security vulnerabilities and missed opportunities to enhance compliance frameworks. 

Understanding New System Risks 

SAP S/4HANA is not just an enhanced version of ECC. It represents a fundamentally new system requiring careful evaluation of IT general controls (ITGC). Changes in database structures, platforms and potential cloud environments mean that controls over data access, change management and computer operations must be reassessed. Custom code and reports from ECC should also be validated to avoid control gaps or inaccuracies. 

Migrating data from ECC introduces further challenges. Data conversion controls should address risks such as duplications, stale records, and misaligned master data. Proper documentation and testing of these controls are critical to meeting system development lifecycle (SDLC) requirements, according to PwC. 

Preparing for Mandatory Changes 

SAP S/4HANA introduces transformative features, including the universal journal, the Fiori user experience, and business partner consolidations. These changes demand updates to security roles, access controls, and GRC frameworks. For instance, role-based access control models should be revised to reflect the new transaction structures, and rulesets should be adapted to help prevent underreporting of risks. 

Many migrations coincide with a shift to cloud-hosted environments like SAP RISE. This introduces unique risks under the shared responsibility model, where the organization should enable compliance with data protection regulations while the cloud provider manages infrastructure security. Reviewing SOC reports, implementing real-time threat detection, and establishing robust incident response plans are essential, according to PwC. 

Even with a technical migration, some organizations take the opportunity to redesign specific processes. This can improve efficiencies but also risks introducing control gaps. Engaging security and GRC teams early confirms new processes align with compliance requirements while leveraging automation to embed controls and reduce manual compliance efforts. 

Aligning with Auditor Expectations 

Auditors expect clear evidence of control updates and testing during migrations. ITGCs, data migration controls, and custom reports must all be validated for the new environment. The hypercare phase post go-live is particularly critical, as heightened access and frequent adjustments can introduce vulnerabilities. 

A technical migration to SAP S/4HANA is more than a lift-and-shift exercise. By addressing hidden risks and focusing on security, controls, and GRC, organizations can achieve a smooth transition while improving their compliance environment. Proactive planning and collaboration with internal and external stakeholders can establish both immediate success and long-term operational efficiency. 

What it means for SAPinsiders 

Empowering SAP Professionals for Seamless Migrations: For SAP professionals such as IT managers, security officers, and GRC specialists, the move to SAP S/4HANA marks a transformative shift in daily operations. As your organization navigates this technical migration, your role will expand to include reassessing IT general controls, improving compliance frameworks, and ensuring data integrity. SAP S/4HANA’s enhanced architecture, including features like the universal journal and Fiori UX, demands updates to access controls and role structures. These changes will not only elevate your organization’s compliance posture but also provide opportunities to leverage automation and reduce manual compliance efforts. By addressing hidden risks early, you can streamline processes, mitigate vulnerabilities, and enable a successful transition to this next-generation platform. 

Navigating a Rapidly Evolving Market Landscape: The global ERP market, driven by innovations like SAP S/4HANA, is projected to grow from $44 billion in 2023 to $71 billion by 2028, with cloud-based solutions leading the charge. Competitors like Oracle, Microsoft Dynamics, and Workday are also shaping the market by offering robust ERP platforms with integrated compliance and security features. SAP’s technical migration approach through S/4HANA aligns with macro trends of digital transformation, including the shift to cloud-first strategies and increasing regulatory demands. However, hidden risks in governance, risk, and compliance can differentiate successful migrations from costly missteps. Organizations should remain vigilant in balancing innovation with robust security measures to stay competitive. 

Key Evaluation Criteria for Migration Success: When selecting technology and service providers for SAP S/4HANA migrations, end-users should prioritize expertise in risk management, compliance, and security integration. Look for partners with proven methodologies for data migration controls, ITGC updates, and post-go-live hypercare. Confirm providers offer tools for real-time threat detection and incident response, particularly if moving to cloud-hosted environments like SAP RISE. Flexibility to address selective transformations and the ability to align with evolving auditor expectations are also critical. By choosing providers who understand the complexities of SAP S/4HANA and proactively mitigate risks, you can confirm a smoother migration and build a resilient, future-ready ERP foundation.