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Migrating to S/4HANA: What You Need to Know?

A roadmap to successfully transition to the new business suite

 

Introduction

Transitioning to any new technology is a daunting task for enterprises. However, migrating from SAP ERP systems such as ECC to SAP’s next-generation business suite, SAP S/4HANA, presents unique challenges. With SAP ending the support for the ECC platform by 2027, business leaders know that migrating to S/4HANA is inevitable. However, most are concerned by the cost, extensive customisations, and large-scale data migration that would likely lead to bottom-up disruption.

There are, however, three possible approaches that enterprises can use to successfully transition to the new enterprise management suite, depending on their S/4HANA readiness. Customers migrating to a non-SAP ERP system can choose to start a clean slate by implementing a new system (Greenfield Approach). Others can prefer a Brownfield Approach to convert their existing SAP Business Suite to S/4HANA. Finally, those willing to consolidate their regional SAP systems or integrate selected processes into one global SAP S/4HANA system can opt for Selective Data Transition.

While each approach has its pros and cons, business leaders must consider data quality, database, platform, and configuration factors to determine the right path and migration strategy that best suits the given situation.

This article guides enterprises looking to migrate from their legacy ERP systems to SAP S/4HANA and provides the necessary insights about all three approaches. The document also discusses the importance of clean and lean data for a successful migration and why companies must lay a foundation for a data conversion strategy well before the implementation.

 

What is SAP S/4HANA?

SAP HANA (High-Performance Analytic Appliance) is an in-memory, column-oriented, relational database management system developed and marketed by SAP SE. As the software runs a database server, its primary function is to store and retrieve data requested by the applications. In addition, it performs advanced analytics (predictive analytics, spatial data processing, text analytics, text search, streaming analytics, graph data processing). It includes extract, transform, load (ETL) capabilities as well as an application server.

By centralising data management, SAP software provides multiple business functions with a single view of the truth. This capability helps companies better manage complex business processes by giving employees of different departments easy access to real-time insights across the enterprise. S/4HANA, in a nutshell, is a vital tool guiding forward-looking digital enterprises to accelerate innovation and reinvent their business.

 

The Role of Clean and Lean Data in Successful S/4HANA Migration

Most businesses neglect the importance of prepping up the data when migrating to a newer enterprise management suite. Poor data quality is also one of the reasons why most migration projects cost more and unnecessarily extend the project timeline. As a matter of fact, data suggests that poor data quality is a primary reason for 40% of all business initiatives failing to achieve their targeted benefits. Evidently, high-quality data will lead to faster, better, and cost-effective migration. Therefore, it is critical for enterprises to address data quality issues upfront before carrying the implementation phase.

Moreover, ECC to S/4 migration also offers the opportunity to optimise the master data quality further and streamline the processes to work efficiently when connected to the new system right from the start. Ideally, when profiling and cleansing the data, the goal should be to eliminate legacy data to make it leaner and only transfer correct, complete, and non-redundant data.

There are multiple benefits of this data migration approach. The time and resources required for the migration reduce drastically by reducing the amount of master data to be transferred to the new system. Additionally, businesses can also expect significant cost savings with rapid data migration.

A well-planned migration with lean and clean data also leads to several other positive developments. These include:

  • Streamlined and optimised business processes
  • Fewer duplicate data freeing up space in the main memory
  • Better performance of SAP S/4HANA
  • Easy database management
  • Reduced overall operating costs

 

The Three Approaches for Migrating to S/4HANA

There are three major approaches towards migrating your highly sensitive data to the SAP S/4HANA ecosystem. Let’s take a look at them and the benefits as well as challenges accompanying them.

 

The Greenfield Approach: New Implementation

The new implementation or Greenfield approach is meant for the enterprises that migrate their data from a non-SAP legacy system or SAP ERP suite. It requires an initial data load while implementing a fresh SAP S/4HANA ERP system. In this process, the standard data migration tools and content can be used to implement the SAP S/4HANA system and migrate data from the legacy system.

The Greenfield approach is all about implementing the new system from scratch, making it easier to customise the management suite per the business requirements. In addition, the approach provides an opportunity to eliminate all the issues and limitations present in the existing ERP system and take full advantage of the new S/4HANA capabilities.

However, taking this route also means expecting radical changes in the ways the enterprise will operate. New processes will more likely require a steep learning curve and may impact the entire organisation. Additionally, a completely new implementation is also time-intensive and expensive, without guaranteeing efficiency gains or added value.

 

The Brownfield Approach: System Conversion

System Conversion or Brownfield Approach is the complete conversion of an existing SAP ERP Suite to SAP S/4HANA — Lift & Shift, in insider terms. If an enterprise is not using SAP HANA as their underlying database, Database Migration Option (DMO) and Software Update Manager (SUM) will be technically implemented for data migration.

The Brownfield Approach is affordable in comparison to the Greenfield project. Also, since this migration is more about upgrading the technical aspects of the system, enterprises are less likely to face disruptions in their existing business processes. Although, this new system will still have to deal with the limitations of the previous ERP suite. Additionally, the existing on-premise infrastructure makes the new solution less scalable. As a result, enterprises will require purchasing additional computing capacity when needed. However, the new capacity will likely remain underutilised when there is no more resource demand.

 

Selective Transition Approach: Landscape Transformation

Landscape Transformation is an SAP S/4HANA data migration process that consolidates existing regional SAP systems into a single global SAP S/4HANA system. It can also be done by separating different entities such as company codes of an existing ERP system or consolidate their landscape into a single SAP S/4HANA system.

Selective Transition is one of the most cost-effective and quick approaches to S/4HANA migration. Instead of long migration projects that can take five to ten years, this rapid approach cuts 50 percent of the project implementation time. As a result, enterprises can access innovation faster and see early returns on their investment. Instead of reinventing everything, the selective approach focuses on essential items to get the most out of the S/4HANA transition.

The only drawbacks to this approach are the complexity of the data migration process and the need for specialised SAP tools and resources.

 

Why Market-Leading Consulting Firms Only Recommend Greenfield and Brownfield?

It is evident that, for most enterprises, Selective Transition is one of the most feasible and cost-effective migration approaches. This agile approach is the only way businesses can transition to the new business management suite and take advantage of the innovative new features within an acceptable time.

Most consulting firms recommend complete new implementation or system conversion despite clear advantages. One of the convincing reasons behind this collective push is better margins. The Greenfield and Brownfield approaches are inherently resource-intensive and expensive, proving more profitable for the consulting companies.

However, in 2018, SAP established the SAP S/4HANA Selective Data Transition Engagement Community (SDTE), an expert group of partners that help customers achieve a secure and flexible migration to S/4HANA using the Selective Transition approach. The group leverages the combined knowledge of all the members to define common standards, methods, and processes for organisations looking to efficiently and cost-effectively transition to the new business suite.

 

Which S/4HANA Migration Approach is Right for You?

Selecting the migration approach that best suits your enterprise needs requires extensive analysis, both at the technical and functional levels. Take a deeper look at your existing business maturity and the current operating model to identify where the new S/4HANA will fit in. Pay attention to the master data and make it lean and clean to conform to the new configuration, business processes, and reporting needs. Weigh the pros and cons of each deployment model to identify the approach that best meets your expected returns on investment and digital transformation goals.

While the Greenfield approach may seem like a good way to redefine the processes and establish a new configuration set, you may leave your historical data behind due to limited data conversion possibilities. Brownfield, on the contrary, allows you to migrate all your historical and transactional data. However, this approach also has limitations in terms of scalability and access to new innovative processes. A Selective Transition approach allows the best of both worlds, enabling you to reuse the parts of your existing ERP system and redesign the components that you wish to eliminate as your enterprise moves forward.

 

Accelerate Your Transition to SAP S/4HANA with cbs

From implementing a net-new solution to digitising an existing landscape in the cloud, on-premise, or a combination of both, cbs has the experience spanning enterprises of all sizes, industries, and technology processes for any deployment type.

cbs is also one of the only four global partners selected by SAP as a part of the SAP S/4HANA Selective Data Transition Engagement Community (SDTE). Our Selective Transition approach is based on cbs ET (Enterprise Transformer), enabling you to flexibly transfer your existing processes and system landscapes to S/4HANA data structures.

Our close partnership with SAP allows us to work closely with individual areas of SAP product development and create end-to-end business processes that align with the latest SAP technology. As an expert in SAP and providing support for the entire SAP product portfolio, we also offer business processes change with our functional team. This unique capability is what differentiates us from the other three leading SDTE partners.

 

Next Steps

Migrating from your existing ERP system to SAP S/4HANA is no longer a choice but a necessity. With access to real-time insights, speed, agility, and cost-efficiency, the new business suite from SAP is the way forward for enterprises to future-proof their businesses. Even more, SAP will continue developing new applications that will only support the new S/4HANA. Not transitioning to this new system means limiting your business capabilities and growth.

While there is still time for SAP to pull the support plug for legacy systems, there are several reasons why you should plan the migration sooner rather than later. Regardless of what existing ERP system you are using or what S/4HANA version you are planning to switch to, the migration process is by no means simple. SAP migrations are complex, and it is going to take more time for a successful transition.

Suppose you have already identified the deployment model. In that case, it makes sense to start the migration process as early as possible to prevent overspending on the implementation costs, which are likely to rise as the deadline approaches. Acting sooner is also recommended as there will be a scarcity of people to get all the migrations done in the next three years. As a matter of fact, Gartner predicts that between 2021 and 2023, there will be a Tsunami of S/4HANA adoption, driving up the implementation cost due to scarce skilled resources.

With cbs as your consulting partner, you’ll work with one of the only four global experts that maintain the highest quality standards for a secure and successful migration to SAP S/4HANA, irrespective of the complexity involved.

As specialists in SAP, we will create a tailor-made road map for you and assist you every step of the way. Whether you need an on-premise or a cloud roll-out, Greenfield, Brownfield, or Selective Transition, cbs will help you successfully transition to S/4HANA and reap the benefits of the new business management suite quickly while saving money.

Get in touch with us today to find out how cbs can help you!

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