SAP S/4HANA in the Construction Industry: Key Challenges on the Road to 2027

As the 2027 deadline for SAP ECC mainstream support approaches, organizations across all sectors are under increasing pressure to modernize their ERP landscapes. For the construction industry—a sector marked by complex project management, tight margins, and fragmented supply chains—this transition presents unique challenges and strategic decisions that cannot be postponed.

This article explores the core challenges construction companies face when adopting SAP S/4HANA and the wider SAP ecosystem evolution, and how to prepare effectively for the road ahead.

1. Complex Migration from ECC to S/4HANA

Construction firms with legacy SAP ECC systems must choose between a technical conversion (Brownfield) or a full reimplementation (Greenfield). Many organizations in the sector rely heavily on custom-developed solutions tailored to specific project workflows, subcontractor models, or regulatory environments. Migrating these customizations into a modern S/4HANA architecture—particularly with SAP’s push for standardization—is a technically demanding and resource-intensive process.

Moreover, integration with construction-specific tools (e.g., BIM, CAD, project scheduling platforms) adds complexity to the migration process.

2. Adapting to the Fit-to-Standard Paradigm

SAP S/4HANA emphasizes standardized processes rather than custom-built ones. This is a radical shift for many construction companies that have long relied on bespoke workflows to manage projects, procurement, and workforce logistics.

Adopting the fit-to-standard approach requires not only process redesign but also stakeholder alignment, cultural adaptation, and often a rethinking of how project information is structured and shared.

3. Transition to SAP BTP and Modular Development

SAP encourages companies to shift custom developments from the ERP core to the SAP Business Technology Platform (BTP). While this brings flexibility and long-term sustainability, it also introduces new architectural paradigms and demands skills in cloud-native development—something many construction firms are not yet equipped for internally.

For companies managing large-scale, multi-phase construction projects, ensuring seamless communication between SAP BTP and field solutions (e.g., mobile apps, IoT sensors, drone data) is also a key concern.

4. Cost and Investment Pressures

Construction margins are notoriously thin, and large ERP transformation projects can seem cost-prohibitive. Yet, delaying the transition can lead to higher long-term costs, especially if companies are forced into accelerated migrations as the ECC support deadline nears.

RISE with SAP, SAP’s cloud-based transformation program, may offer a smoother and more cost-predictable path, but it also requires a shift in mindset—from CAPEX-heavy IT ownership to OPEX-based service models.

5. Data Quality and Master Data Harmonization

Project success in construction hinges on accurate data—about materials, suppliers, subcontractors, timelines, and compliance obligations. S/4HANA requires clean, structured master data, and many firms face challenges with fragmented legacy systems, siloed databases, and inconsistent data governance practices.

Without resolving data quality issues, any migration effort is likely to be delayed, over budget, or unsuccessful.

6. Shortage of Skilled Talent in S/4HANA and BTP

The construction industry is already facing a shortage of skilled IT talent, and this is exacerbated by the scarcity of professionals familiar with S/4HANA, SAP BTP, Fiori UX, and fit-to-standard transformation approaches.

Building or sourcing a capable transformation team—internally or via partners—must become a strategic priority.

7. Sustainability and ESG Compliance as New Drivers

Environmental, Social and Governance (ESG) requirements are reshaping procurement, construction methods, and reporting obligations. SAP is introducing new solutions—such as SAP Sustainability Control Tower and Product Footprint Management—to help monitor and reduce environmental impacts.

For construction firms, especially those involved in public infrastructure or green building certifications, integrating these tools early in the S/4HANA roadmap will be key to staying competitive and compliant.

8. Preparing for Automation and AI Integration

With the launch of SAP Joule, SAP’s generative AI assistant, and new low-code automation tools via SAP Build, there is a strong push toward intelligent automation across all industries. For construction, this can translate into improved document processing (e.g., invoices, RFIs), better forecasting, and optimized resource planning.

To benefit, however, companies must first establish a robust, cloud-ready digital core—exactly what S/4HANA aims to provide.