By December 2027, SAP ECC ERP users must convert to SAP S/4Hana, otherwise they will lose SAP Enterprise Support

Over the last three years, Mignow has stood out in the area of automating migration processes from ERP SAP ECC to SAP S/4Hana. The company initiated 61 projects, achieved 29 successful go lives and established 53 strategic partnerships, both national and international. The year 2023, in particular, was remarkable for Mignow, with the addition of 20 new customers and the establishment of 30 new partnerships. In this interview, Guilherme Joventino, COO of Mignow, tells how the company has been taking advantage of the good moment in the market.

How was Mignow born?

Mignow was born out of a market need. There are around 40 thousand SAP large enterprise customers around the world who need to move from SAP ECC ERP to SAP S/4Hana, otherwise they will lose SAP Enterprise Support. This means that, after December 2027, if Petrobras had not gone to SAP S/4Hana, it would no longer be entitled to updates, for example, invoices. In Brazil, we are talking about more or less 1,300 customers who need to make this migration, and now we have less than four years. We should give more than 200 go lives per year and this is not happening and we do not have consultants available on the market to meet this demand. Mignow was born from a spin-off from another consulting partner SAP, which began developing an accelerator at the end of 2016 and launched in 2019. We identified that the product had enormous potential and created this spin-off to have a life of its own. .

Are there other opportunities on the market?

The second problem we identified is that the SAP lifecycle is now different than it was in the past. Previously, an ECC version could go 10 or 15 years without an update. Today, there is only a maximum of 7 years to upgrade, otherwise the customer will lose support. For example, the last ECC update is from 2015, which is already 9 years old. All customers who implemented the first versions of S/4Hana have already lost initial support and have had to perform at least one upgrade. In 2028 we will have 48 thousand customers to upgrade, which means more than 7.3 thousand go lives per year. This is another problem that no one paid attention to and that is even bigger than what is happening today. The customer is paying 22% for SAP support, which is extremely expensive, and is not receiving any of the new functionality.

How does Mignow work?

Looking at all this, we thought about how to solve this problem. It is possible to do it manually, but it is not feasible. We started to develop a solution based on RPA, which works with loads of data, taking it from one side to the other, but it is not a conversion. In a conversion you need to understand the business, have intelligence. We then looked for some Artificial Intelligence tools in 2017 to develop what we now call Mignow. Today, Mignow is the first software capable of keeping SAP up to date. I not only upgrade from ECC version to S/4Hana, but also from S/4Hana to S/4Hana. Today, we are a partner certified by SAP itself, we are on the SAP marketplace, we have some interesting ESG versions, we are leaders in some quadrants with automation for Rise with SAP, which is SAP's new SaaS. Mignow is software that complements Rise with SAP.

What are the benefits for customers?

In a conversion project, we provide more than 80% of automation, but some tasks need to be done manually. We have a case from a large Brazilian retailer that had almost 19 thousand customized objects, it had to adjust 7.5 thousand objects for the new version of S/4Hana. After we ran Mignow, we only needed to add 140 objects, a very significant reduction. If we transform this into hours, it would be necessary to understand, adjust and test each of these 7.5 thousand codes, which would take more than 30 thousand hours. With Mignow, we did it in a total of 2 thousand hours.

Which clients does Mignow have in its portfolio?

Today we have large clients, such as Carrefour, Drogaria Pague Menos, Votorantim, Eurofarma, Randon, among others in Brazil and also outside Brazil, such as Galler (Belgian chocolate shop), EOC (Netherlands), Longping (China), Alouette (Canada) , we are now doing the Central Bank of Costa Rica, a large retailer in Honduras, in addition to a range of pipeline to close around the world. We are now opening our first branch outside Brazil in North America.

Does Mignow also implement SAP?

We do not implement SAP, only the conversion. We are today the only SAP partner in the world 100% specialized in conversion and we only work with that. No SAP partner, who implements the ERP, enters into a contract providing for the update to a new version. When a partner sells SAP, he sells the implementation, a project. Go live, the project is over. This is where an AMS (Application Management Service) comes in, which in the end is support for application management and maintenance, but not a version update. For the market, the update is considered a new project.

What are Mignow's plans?

The December 2027 date when ECC customers who do not convert to S/4Hana will lose support is the first driver of Mignow's business. There is a second driver: customers who already have S/4Hana discover that they need to update more frequently and that is where we come in again. To meet this customer need we changed our business model. We do not sell it as a project, but as a three-year subscription contract for the customer to be entitled to updates and one upgrade per year. Our purpose is to create a new category in the market, we want to be an ERP update company, outsourcing the update process via software. There are other companies that provide this service, but they are more expensive and time consuming. That's why we have several important partners providing this service using Mignow, such as Deloitte, Cast Group, Atos, ITS, Vexia, T-Systems, Neoris, Essence and other big names. There are around 60 partners around the world using Mignow in their SAP conversion projects.

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