Why 70% of SAP Migrations Fail, and How MDM Creates S/4HANA Success
Migrating to SAP S/4HANA is one of the most ambitious transformations a company can undertake. Yet, industry research reveals a stark reality: a majority of SAP S/4HANA migrations fail to meet timelines, budgets, or business expectations. Surveys indicate that over 60% of ERP migrations either run over schedule, over budget, or face significant post-go-live issues. The figure often cited, 70% failure rate, captures the scale of the problem. But behind the statistics lies a common culprit: bad data.
This post explores why so many SAP S/4HANA projects falter, how Master Data Management (MDM) fixes the root cause, and why golden records must come first if you want S/4HANA success.
The Real Failure Modes in S/4HANA Projects
SAP S/4HANA isn’t just a technical upgrade. It’s a business transformation requiring clean, harmonized, and trustworthy data. Unfortunately, this is where most organizations stumble.
Top causes of migration failure include:
- Poor data quality: Duplicates, missing attributes, and inconsistent master records (vendors, materials, customers) break processes once inside SAP S/4HANA.
- Legacy complexity: Decades of custom code, outdated formats, and siloed systems increase the difficulty of data mapping and migration.
- Lack of governance: Without ongoing data stewardship, errors creep back in, undermining post-go-live stability.
- Integration breakdowns: Inconsistent identifiers across plants, geographies, and business units cause failures in reporting, procurement, and supply chain execution.
In short: migrate dirty data, and you inherit dirty outcomes.
Master Data, The Silent Killer of SAP S/4HANA Projects
Master data is the backbone of every process in SAP. When vendor names are duplicated, when material codes are inconsistent, when asset hierarchies are misaligned, the consequences cascade:
- Invoices don’t match purchase orders.
- Maintenance teams order duplicate parts.
- Finance reports misstate spend categories.
- Supply chain visibility vanishes.
The cost isn’t just financial; its operational disruption, delayed go-live, and frustrated end users.
Why “Golden Records First” is the Right Strategy
A golden record is the single, trusted version of truth for each critical data entity: material, vendor, asset, customer, or chart of accounts. Golden records are not just cleansed, they are enriched, standardized, deduplicated, and governed.
Implementing golden records before migration ensures:
- One version of the truth: No duplicates, no conflicting values.
- Seamless mapping: Clean records align smoothly to SAP S/4HANA structures.
- Governance continuity: Validation rules prevent errors from returning.
- Faster ROI: Clean data accelerates process automation, analytics, and reporting.
Without golden records, SAP S/4HANA’s advanced features, like real-time analytics, predictive maintenance, and AI-driven planning, are built on shaky foundations.
Golden records are the foundation of a smooth S/4HANA migration. See how clean, governed data can save your project from costly setbacks.
The MDM Playbook for SAP S/4HANA Migration Success
Step 1: Profile and Assess
Audit existing master data domains. Identify duplicates, gaps, and non-compliance.
Step 2: Cleanse and Standardize
Apply automated tools to deduplicate, correct formats, enrich attributes, and align to industry standards.
Step 3: Build Golden Records
Establish a central MDM hub to create and validate golden records across vendors, materials, and customers.
Step 4: Govern with Rules and Workflows
Define ownership, validation rules, and approval workflows to ensure only high-quality data enters SAP S/4HANA.
Step 5: Test Migration Loads
Run test loads to validate mapping accuracy and identify gaps before go-live.
Step 6: Sustain Post-Go-Live
Continue governing master data with MDM processes to maintain integrity as the system evolves.
Case Study
A global petrochemicals company migrating to SAP S/4HANA faced over 30% duplicate vendor records across regions. Using MDM to harmonize vendor masters into golden records, they:
- Eliminated 20,000 duplicate entries.
- Improved procurement efficiency by 18%.
- Reduced invoice mismatches by 40%.
- Completed migration with zero data-related go-live outages.
This underscores the ROI of golden records before SAP S/4HANA.
Common Objections & How to Address Them
- “We’ll clean data after migration.” – By then, errors are embedded in SAP S/4HANA. Fixing post-go-live is costlier and riskier.
- “We don’t have time.” – Data readiness work prevents rework and delays later, saving time overall.
- “We can just migrate as-is.” – This perpetuates decades of poor-quality legacy data into the new system.
Checklist: Is Your Master Data Ready for S/4HANA?
- Do you have a process to identify and eliminate duplicate records?
- Have material, vendor, and customer masters been standardized across all plants?
- Do you have duplicates in material or vendor masters above 5%?
- Are taxonomies aligned with global industry standards?
- Is governance in place for ongoing data quality maintenance?
- Do you have ownership defined for each data domain?
- Have you validated mapping rules with test loads?
- Have you integrated enriched data into test S/4HANA environments?
If the answer is “no” to any, your migration readiness is at risk.
Get a 30-minute Data Readiness Audit with our experts and walk away with actionable insights.
Frequently Asked Questions
1. What is the number one reason SAP S/4HANA migrations fail?
Poor master data quality like duplicates, inconsistencies, missing attributes.
2. How long does it take to implement MDM before S/4HANA?
Depending on data complexity, 3–6 months is typical, but the payoff is reduced risk and faster migration.
3. What master data domains are most critical for SAP S/4HANA migration?
Vendor, material, customer, asset, and finance masters.
4. Can MDM integrate with SAP S/4HANA natively?
Yes, MDM platforms (including SAP MDG or third-party) integrate seamlessly for data governance.
5. Can’t SAP’s built-in tools handle data quality automatically?
No. SAP provides migration tools but does not fix poor-quality legacy data. You need an MDM strategy before migration.
6. What industries benefit the most from MDM during migration?
Asset-intensive sectors like Oil & Gas, Utilities, Steel, Chemicals, and Manufacturing see the biggest gains.
Conclusion:
SAP S/4HANA migration is not just an IT upgrade; it’s a business transformation. But without clean, governed, and enriched master data, even the best ERP system will fail. The evidence is clear: S/4HANA success starts with golden records.
Enterprises that invest in MDM upfront de-risk their migration, accelerate ROI, and unlock the true power of SAP’s digital core.
