June 12, 2026

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7 min read

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Gorev Moudgil, Managing Director

Why S/4HANA Transformations Fail. And What the Evidence Shows

The majority of S/4HANA programmes miss their targets on time, budget or quality. The evidence points to a governance gap rather than technical complexity — and five public failures show what that gap costs.

The data is clear: the majority of S/4HANA programmes miss their targets on time, budget, and quality. The cause is not complexity. It is a governance gap that leaves senior leaders without an independent view of programme health.

With SAP's 2027 end-of-mainstream-maintenance deadline approaching (SAP, 2020), S/4HANA migration is no longer optional for most enterprises. It has moved from strategic choice to operational imperative. Budgets are approved. System integrators are engaged. Programmes are underway.

But beneath the momentum, a pattern has emerged and the evidence should concern every CIO, CFO, and board member with an S/4HANA programme in flight.

What the data tells us

A 2025 Horváth study surveyed 200 SAP user companies across the DACH region, Northern and Eastern Europe, and the United States, all with annual revenues of at least €200 million (Horváth, 2025). The findings are stark:

  • Six in ten exceeded both budget and schedule. A quarter of transformed organisations overran their budget heavily, and a further 40% strongly.
  • 65% reported strong to very strong quality deficits. Not minor deviations. Quality gaps significant enough to generate system instability, rework, and delayed value realisation.
  • Projects took 30% longer than originally planned, on average. Fewer than one in ten of the companies that had completed the transformation stayed on schedule.

The leading cause was not technical failure. It was scope expansion during transformation, compounded by underestimated testing and data migration, concepts and processes that were revised rather than fixed, weak project management, and slow decision-making. In other words: decision failures, not engineering failures.

Five cases that illustrate the pattern

These are not hypothetical scenarios. They are public-domain examples of what happens when programme governance fails at scale.

Revlon: $64 million in lost sales and an investor lawsuit

In February 2018, Revlon switched on a new SAP ERP system in the United States. Within weeks, its largest manufacturing facility, in Oxford, North Carolina, experienced service level disruptions severe enough to prevent it from fulfilling shipments to major US retail customers.

The direct cost was approximately $64 million in lost net sales, and Revlon booked a further $53.6 million of charges to remediate the decline in customer service levels (Computer Weekly, 2019). When the company disclosed a material weakness in its internal controls linked to the implementation, its share price fell almost 7% in a day, and shareholders filed a class action against Revlon itself, NOT against SAP or the integrator, alleging it had failed to disclose the risks (Lachman v. Revlon, 2020). The suit was eventually dismissed, but by then the losses, the disclosure and the scrutiny had all landed.

The Revlon case is significant not just for the scale of the loss, but for where the scrutiny fell: on the company and its board, not the vendor. The information the board received from the delivery organisation did not reflect operational reality.

Haribo: 25% sales decline during peak trading

In October 2018, Haribo began converting 16 candy factories across 10 countries to S/4HANA. The migration was intended to consolidate aging, heterogeneous ERP systems — some dating to the 1980s — into a single platform.

Shortly after go-live, the system could not track raw materials or inventory. Product shortages appeared in grocery stores across Europe during the holiday season — Haribo's peak trading period. Sales of the company's flagship Gold Bear product declined by 25% in 2018 (TechRepublic, 2019).

Subsequent analysis pointed to three failures: the system was not tested under full-scale operational conditions before go-live; SAP's standard configuration did not align with Haribo's logistics model; and executive alignment was insufficient to drive the change management required for a programme of this scope.

Lidl: €500 million sunk over seven years

Lidl invested an estimated €500 million and seven years attempting to implement SAP, before stopping the project in 2018 and reverting to its legacy inventory management system (Consultancy.uk, 2018). The fundamental issue was a process-system mismatch that was never resolved: Lidl manages inventory by purchase price; SAP's standard model uses retail price. Despite extensive customisation efforts, the gap could not be closed.

Compounding the technical problem, the programme leaned heavily on external consultants and lost its head of IT in 2017, a year before it was stopped — fracturing ownership of the very decisions that would determine success or failure.

LeasePlan: nearly €100 million written off

LeasePlan, the Dutch fleet management company, stopped the SAP-based core leasing system it had been building since 2016 and, in 2019, wrote off €98 million (Consultancy.uk, 2019). Its CEO said the monolithic system hindered the incremental product improvements the business needed, and the expected efficiency benefits had shrunk or disappeared (Computable, 2019).

The failure was rooted in strategic misalignment: the digital transformation was running on a different track from the corporate strategy, and neither was adjusted to account for the other.

National Grid: nearly $1 billion against a $384 million budget

Though predating S/4HANA, National Grid's SAP failure in the US remains the reference case for implementation litigation at scale. The company sued its integrator, Wipro, alleging it had misrepresented its experience and over-customised the system (TechTarget, 2017). After go-live, employees were paid too little, too much or nothing at all, and more than 15,000 supplier invoices went unpaid within two months.

Stabilising the system took more than two years (The Register, 2018). A New York Public Service Commission audit projected the total cost would reach $945 million against an original budget of $384 million (IDG News Service, 2014). Wipro settled for $75 million in 2018, without admitting liability.

The structural problem: information asymmetry

Across all five cases — and across the broader Horváth dataset — the failure pattern is remarkably consistent. It is not that the technology does not work. It is that the people accountable for outcomes do not have an accurate picture of programme health until it is too late to act.

This is a structural problem, not a competence problem. It has three components:

  • Delivery teams report progress, not risk. The commercial model of system integration incentivises reporting that sustains the engagement. This is not dishonesty — it is the natural consequence of asking the same party to deliver a programme and to objectively assess its health.
  • Internal PMOs lack the independence to challenge. PMO teams embedded within the programme are accountable to the programme director, not to the board. Their perspective is shaped by proximity to the work, not distance from it.
  • Boards receive filtered information. Status reports pass through multiple layers before reaching the CIO, CFO, or board. By the time a green dashboard turns amber, the cost of recovery has often already escalated by an order of magnitude.

The result is that senior leaders face a binary moment: the programme is either "on track" or it has failed. There is no early warning system. There is no independent signal.

What changes the outcome

The cases above share a common feature: at the point where independent assurance could have changed the trajectory, none was in place. The question for any senior leader with an S/4HANA programme in flight — or about to begin — is whether that gap exists in their organisation.

Three principles separate programmes that recover early from those that produce write-offs:

  • Independent programme assurance, separate from the delivery organisation. Not a second opinion from the same ecosystem: a structurally independent view of whether the programme is on track, from a party with no commercial interest in the answer.
  • Evidence over narrative. Programme health assessed against objective indicators — data migration readiness, integration test coverage, cutover rehearsal outcomes, operational simulation results — rather than subjective RAG status and milestone reporting.
  • Early intervention, not post-mortem. The value of assurance is not in explaining what went wrong. It is in providing the signal early enough that the CIO, CFO, or board can act — before scope has expanded, before the budget is committed, and before the operational disruption has reached customers.

The statistical baseline is clear: the majority of S/4HANA programmes will miss their targets on at least one of time, budget, or quality. The question is not whether your programme carries risk. It is whether you have a line of sight into that risk that is independent of the people creating it.

If you are weighing up independent assurance for an S/4HANA programme, see how we approach SAP S/4HANA programme assurance.

Sources

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