- May 2026
SAP is the spine of many large Chemicals and Life Sciences companies, connecting their data, processes, and different parts of the business. For this reason, a migration to SAP S/4HANA1 represents a major strategic opportunity – a chance to drive widespread business transformation, and realize benefits far beyond those promised by ERP modernization alone.
Too often, however, business leaders don’t recognize their SAP transformation as a pivotal moment in their company’s evolution. Rather, they view S/4HANA migration as an IT project: another technical upgrade that needs to be completed before vendor support for a legacy system ends.
It’s a strategic error that will, in time, damage a company’s bottom line and dull its competitive edge. Instead, Chemicals and Life Sciences company leaders must make S/4HANA migration the first step in a longer, broader, and much more valuable journey.
The risk of reducing S/4HANA migration to an IT project
Approaching SAP transformation purely as a technical upgrade limits its business outcomes, while doing nothing to reduce its costs.
For most mid-sized companies operating in multiple countries, moving to S/4HANA requires years of dedicated resources and ongoing investment. Chemicals and Life Sciences businesses – with their complex manufacturing processes, heavy regulatory burdens, and often extensively customized systems – face higher SAP transformation costs than most.
Even if the transformation goes relatively smoothly, the bill can run to hundreds of millions of dollars. In some instances, the lack of a clear, upfront vision forces companies to halt their programs midway, reset expectations, and correct their course. Initial investments are partially wasted, and an anticipated five-year delivery timeframe sprawls to over ten.
The complex reality of S/4HANA migration is reflected in SAP’s expanding range of extended maintenance options, including the extension of on-premises ERP support (under certain conditions) until 2033.2 It’s also evident from the continued growth of the S/4HANA systems integrator services market, which is projected to surpass $108.5 billion by 2032.3
However smoothly SAP transformation is managed, it’s a time-intensive and resource-heavy undertaking for Chemicals and Life Sciences companies, and one that comes with a high opportunity cost. The value it delivers needs to reflect this huge level of investment, and that’s often not the case.
When a company views its move to S/4HANA as a technical upgrade project, its migration ambition is limited. Going live on a secure, compliant, and efficient ERP platform, with ongoing vendor support, is often enough. What comes next is less clear. Unlocking more valuable, strategic change simply isn’t on the roadmap.
In answering these questions, companies necessarily engage both IT and business stakeholders, sowing the seeds for a collaborative migration effort that spans functions. Even more importantly, they surface the broader opportunities S/4HANA migration will create. These will include:more importantly, they surface the broader opportunities S/4HANA migration will create. These will include:
- Opportunities founded in S/4HANA capabilities. For example, improved commercial decisions, based on increased, real-time visibility into stock levels and logistics costs across their countries of operation.
- Opportunities enabled by SAP transformation. For example, adopting shared services. Unifying operations on S/4HANA can remove a longstanding barrier to harmonizing global business processes, opening the door to a shared service model.
- Opportunities created through improved data foundations. S/4HANA migration compels organizations to clean up, harmonize, and govern master data—creating a reliable data backbone that is essential not only for day‑to‑day operations, but also as the basis for automation and every meaningful AI application.
Having developed a clear sense of their eventual destination, and the opportunities on the road ahead, Chemicals and Life Sciences leaders can drive SAP transformation with confidence. Ultimately, success will depend on regular course-correction, proactive change management, and the effective prioritization of competing opportunities, not least those presented by AI.
Ensuring consistent course-correction
A lot can change for a Chemicals and Life Sciences company over the course of a multi-year SAP transformation:
- Shifts in key markets and the wider economy can intensify financial pressures, stretching program budgets.
- A company’s target operating model can evolve. The move from an In-Country model to a Global Business Unit model, for example, will impact core processes and move the SAP transformation goalposts.
- Mergers, acquisitions, and divestments may be completed, cloud infrastructure adopted, standalone solutions for activities like invoicing and pricing implemented – all altering the shape and scope of ERP transformation work.
During the early phases of a SAP transformation, a business will also accumulate knowledge it can use to accelerate later phases. Rolling out S/4HANA in one region, for example, may generate insight into the skills gaps that will be present in others, allowing them to be addressed in advance.
Both a company’s changing circumstances and its growing expertise should continually inform its SAP and business-transformation strategy. Best practice is to create a project workstream that regularly reviews:
- The overall vision. Does it still reflect where we want to be?
- The anticipated outcomes. Are these still relevant? Are we on track to achieve them?
- Ongoing transformation activities. Are they still aligned with our overall vision? How can they be optimized, based on where we are and what we’ve learned?
Proactively managing the change
The scale of the change management challenge presented by SAP transformation is easily obscured when it’s seen as an IT project alone. Simply stepping back to view the larger business transformation picture helps Chemicals and Life Sciences companies to snap it into focus.
A strategic move to S/4HANA inevitably involves the implementation of new processes and the adaptation of existing ones. Some tasks will be automated. Others may be transferred from one department to another.
When presented with these new ways of working, Chemicals and Life Sciences companies – like any other business staffed by human beings – can be slow to adapt. Success depends on devoting sufficient time and resources to change management:
- Understanding existing processes and workplaces
- Engaging stakeholders at every level of the business
- Actively driving adoption
Prioritizing innovation effectively
Chemicals and Life Sciences leaders are, like those in other industries, under increasing pressure to demonstrate successful applications of AI. Many, however, view SAP transformation as the more urgent priority – and for good reason.
S/4HANA migration drives businesses to review their master data, reduce duplication, and improve consistency. It also surfaces new opportunities for process optimization and automation. As such, it creates a more solid foundation for AI.
The need for this foundation is clear. In 2025, a BearingPoint study of C-suite executives worldwide found that only 5% of Chemicals, Life Sciences, and Resources companies have fully integrated AI projects.4 In another BearingPoint study, the majority of Chemical and Life Sciences respondents cited data quality and availability as the top barrier to AI transformation.5
Amid inevitable pressure from the board to divert time and energy to AI, business leaders must keep SAP transformation as their primary focus. They should develop their AI strategy in parallel – and in the knowledge that, as they modernize their ERP system and data model, they are creating the conditions for AI’s success.
When a company establishes a strong vision of its desired future state before conducting this business-wide inventory, the unavoidable exercise becomes a potent catalyst for strategic transformation. Opportunities are unlocked – from the development of shared services, to the successful standardization and automation of global business processes. What’s more, companies that keep a constant eye on change management and delivery optimization are likely to complete their SAP transformation faster.
It’s hard to overstate the value that a comparatively rapid transition to S/4HANA can deliver for Chemicals and Life Sciences companies. Every year saved will be a year of increased competitive advantage over less-surefooted peers – a year in which a unified, modern ERP platform enables smarter commercial decisions, greater operational efficiency, and more impactful, AI-driven innovation.
