ERP Cloud Migration for SMEs: Why Replatforming Is the…
TL;DR
70 % of mid-sized companies plan ERP modernization by 2027
Replatforming beats lift-and-shift on cost and value
Hybrid cloud maintains control over critical processes
SAP Business ByDesign is being discontinued – alternatives are becoming mandatory
Five steps for an ERP migration without production downtime
One in three mid-sized companies in Germany is currently in the middle of an ERP migration or plans to start one within the next 18 months. The reason is not a passion for innovation, but pressure: SAP will stop selling Business ByDesign in April 2026, legacy systems are no longer receiving security updates, and cloud providers such as proAlpha, Haufe X360, and Scopevisio are pushing into the market with attractive migration offers. Companies that fail to act now risk technical debt that will cost many times more later.
The Key Points at a Glance
- One in three mid-sized companies in Germany is currently in the middle of an ERP migration or plans to start one within the next 18 months.
- The reason is not a passion for innovation, but pressure: SAP will stop selling Business ByDesign in April 2026, legacy systems are no longer receiving security updates, and cloud providers such as proAlpha, Haufe X360, or
- Many IT departments choose what seems to be the simplest path: moving the existing ERP system to the cloud one-to-one.
- According to the DSAG Investment Report 2026, 42 percent of the companies surveyed are relying on S/4HANA on-premises, while only 6 percent choose the public cloud version.
Why Lift-and-Shift Is an Expensive Mistake
Many IT departments choose what seems to be the simplest path: moving the existing ERP system to the cloud one-to-one. According to the DSAG Investment Report 2026, 42 percent of the companies surveyed are relying on S/4HANA on-premises, while only 6 percent choose the public cloud version. This shows how deep the fear of losing control runs. But a pure lift-and-shift preserves exactly the problems that made the move necessary in the first place. You pay cloud prices for a system that feels like on-premises.
The better alternative is replatforming. This means selectively modernizing core processes while the migration is underway. Interfaces are standardized, data models are cleaned up, and modules that no one uses anymore are removed. This takes longer than a simple lift-and-shift, but in the long term it saves 20 to 35 percent in operating costs, as an analysis by Bitkom Research for the German Mittelstand shows.
“For cloud transformation to succeed, it needs a consistent and harmonized architecture, uniform operating models, clear migration paths, and transparent licensing and discount models.”
Jens Hungershausen, Chairman of the Board, DSAG, Annual Congress 2025
proAlpha Shows How Replatforming Works in the Mittelstand
The Weissenfels-based ERP provider proAlpha has chosen a pragmatic approach for its hybrid cloud strategy, aligned with the everyday reality of mid-sized manufacturing companies. Instead of a big-bang switch, customers migrate module by module: purchasing and sales move to the cloud first, while production planning and financial accounting initially remain on-premises. Only once the cloud modules are running reliably and the team has built confidence does the rest follow.
This approach addresses the greatest concern among mid-sized managing directors: production outages during the transition. Anyone running a manufacturing company with 500 employees cannot afford a two-week ERP shutdown. Modular migration reduces the risk to individual business areas and makes mistakes correctable before they affect the entire company.
The counterargument: Why some companies deliberately stay on-premises
Not every cloud skeptic is wrong. There are legitimate reasons why certain mid-sized companies deliberately choose not to move their ERP system to the cloud. Companies in regulated industries such as defense, medical technology, or critical infrastructure are subject to compliance requirements that simply prohibit a full cloud migration. Companies with highly customized ERP systems that have grown over decades also face the question of whether a migration makes economic sense or whether a complete rebuild would be cheaper.
The DSAG report confirms this skepticism with hard numbers: For S/4HANA investments, the on-premises variant, at 42 percent, is far ahead of the public cloud at 6 percent. This is not a failure of cloud strategy, but a signal that mid-sized companies think in a more nuanced way than the marketing departments of cloud providers suggest.
Five steps to ERP cloud migration without production downtime
Anyone who decides to migrate to the cloud needs a structured roadmap. These five steps have proved effective in practice:
1. Create a process map: Before a single system is migrated, it must be clear which business processes are actually represented in the ERP and which have long since moved into shadow IT. Experience shows that mid-sized companies actively use only 40 to 60 percent of the available ERP functions.
2. Check data quality: Bad data does not get better in the cloud. Master data cleanup before migration is mandatory, not a nice-to-have. Duplicates, outdated supplier data, and inconsistent article masters must be removed beforehand.
3. Plan for a hybrid phase: Run both systems in parallel for at least 6 to 12 months. This costs money, but protects against nasty surprises. During this phase, the old and new systems run at the same time, and the team learns during live operations.
4. Take change management seriously: The technical migration is the easier half. The harder part is getting 200 employees to change their familiar routines. Training, key-user programs, and honest communication about limitations during the transition are crucial.
5. Define an exit strategy: What happens if the cloud provider doubles its prices or discontinues the service? Anyone who stores their data only in proprietary formats is trapped. Open standards and regular data exports are not paranoia, but corporate due diligence.
What the DSAG Report Really Means for 2026
The current DSAG Investment Report 2026 paints a nuanced picture: AI is establishing itself as a firm component of ERP strategy, while cloud investments are being scrutinized more critically than they were two years ago. This is not a step backward, but a sign of maturity. The first wave of cloud hype is over, and companies are no longer asking „Should we move to the cloud?“, but „Which workloads belong in the cloud and which do not?“
For SMEs, this means one thing in concrete terms: pure cloud euphoria has given way to a pragmatic cost-benefit analysis. Companies migrating today are not doing so because „cloud“ is on the executive board agenda, but because specific problems need to be solved. That is the healthier motivation and leads to better results.
Comparison: Migration Strategies at a Glance
| Criterion | Lift-and-Shift | Replatforming | New Build (Greenfield) |
|---|---|---|---|
| Duration | 3-6 months | 6-18 months | 18-36 months |
| Costs (initial) | Low | Medium | High |
| Operating costs (5 years) | High (+15-25 %) | Medium-low | Low |
| Risk of production downtime | Medium | Low (module by module) | High |
| Degree of modernization | Minimal | Substantial | Maximum |
Checklist: Is Your Company Ready for ERP Cloud Migration?
Current ERP license expires within the next 24 months
More than 30 % of ERP modules are not actively used
Master data quality has been reviewed in the last 12 months
Budget for 6-12 months of parallel operation is available
At least one key user per department has been named
Exit strategy and data portability are defined
Conclusion: Yes to Migration, but with a Plan
ERP cloud migration is not a question of whether for German SMEs, but of how. Replatforming offers the best compromise between modernization and risk minimization. Companies that migrate module by module, put data quality before speed, and plan for an honest hybrid phase will reach their goal without jeopardizing ongoing operations. The first step: create your own process map and honestly assess which ERP functions are actually being used.
Frequently Asked Questions
What does an ERP cloud migration cost for SMEs?
Costs vary significantly depending on company size and complexity. For a company with 100 to 500 employees, a replatforming migration typically ranges from 150,000 to 500,000 euros. This includes licensing costs, consulting, data migration, and training. Lift-and-shift is less expensive initially, but results in higher ongoing costs.
How long does it take to migrate an ERP system for a mid-sized company?
With a modular replatforming approach, companies should plan for 6 to 18 months, including parallel operation. A pure lift-and-shift can be completed in 3 to 6 months, but delivers less of a modernization effect. Important: The timeline depends heavily on data quality and the number of interfaces.
Which ERP cloud providers are suitable for German SMEs?
Established providers include proAlpha (strong in manufacturing), SAP S/4HANA Cloud (for larger mid-sized companies), Haufe X360 (for retail and service companies), Scopevisio (for SMEs with up to 250 employees), and Microsoft Dynamics 365 Business Central. What matters is industry fit, not the brand name.
What happens to SAP Business ByDesign after the sales stop?
SAP will continue to provide existing ByDesign customers with security and legal updates, but will no longer develop new features. New customers will no longer be able to purchase the product from April 2026. Existing customers should develop a migration strategy by 2028 at the latest, as rising operating costs and declining support can be expected in the long term.
Further Reading
- SAP Migration 2026: Why SMEs Are Now Under Pressure to Act (MyBusinessFuture)
- Agentic AI in SMEs: How Autonomous AI Agents Are Transforming Business Processes (MyBusinessFuture)
- Kubernetes Cluster Governance for SMEs (cloudmagazin)
More from the MBF Media Network
- FinOps: How Companies Can Finally Get Cloud Costs Under Control (cloudmagazin)
- CIO Agenda 2026: Between Cost Pressure and the Need to Innovate (Digital Chiefs)
- NIS2 in Germany: What Companies Need to Know Now (SecurityToday)
Frequently Asked Questions
What matters in Why lift-and-shift is an expensive mistake?
Many IT departments reach for what seems to be the simplest route: moving the existing ERP system to the cloud as-is. According to the DSAG Investment Report 2026, 42 percent of the companies surveyed rely on S/4HANA on-premises, while only 6 percent choose the public cloud version.
What matters in proAlpha shows how replatforming works for mid-sized businesses?
The Weissenfels-based ERP provider proAlpha has chosen a pragmatic approach for its hybrid cloud strategy, one that is aligned with the day-to-day reality of mid-sized manufacturing companies. Instead of a big-bang switch, customers migrate module by module: purchasing and sales move to the cloud first, while production planning
What matters in The opposing view: Why some companies deliberately stay on-premises?
Not every cloud skeptic is wrong. There are legitimate reasons why certain mid-sized companies deliberately do not move their ERP system to the cloud.
What matters in Five steps to ERP cloud migration without production downtime?
Anyone who decides to migrate to the cloud needs a structured roadmap. These five steps have proven effective in practice:
What matters in What the DSAG report for 2026 really means?
The current DSAG Investment Report 2026 paints a nuanced picture: AI is establishing itself as a firm component of ERP strategy, while cloud investments are being scrutinized more critically than they were two years ago. This is not a step backward, but a sign of maturity.
Cover image source: Pexels / RDNE Stock project
