SAP S4HANA Migration Guide

SAP S/4HANA Migration Guide

SAP ECC: The Final Countdown

SAP and the Americas’ SAP Users’ Group (ASUG), one of the most influential groups of its kind, have been vocal advocates of the need for back-office core applications like SAP ERP Central Component (ECC) to catch up with the pace of innovation among front-office applications.

“Organizations are spending a lot on marketing innovation, such as front-office technology, where there’s a lot of buzz, but the front office and the back office [will] have to be in sync at some point,” according to Geoff Scott, ASUG’s CEO.

For SAP ECC 6.0 that deadline is pretty much known, as the software will be officially sunset in 2027. The need for a SAP S/4HANA migration before then is clear; yet, many organizations have yet to fully embrace the change.

S/4HANA Migration: State of the Market

Panaya’s customer feedback shows that the S/4HANA migration ship is definitely sailing – and everyone wants to be on it. Our findings are on a par with those of the SAPinsider report, SAP S/4HANA: State of the Market. According to a SAPinsider survey, over half (52%) of respondents are currently in the evaluation phase of their S/4HANA migration. This sounds encouraging, perhaps, but it also means that many, perhaps most, organizations planning a move from SAP ERP ECC to S/4HANA have not taken more concrete steps to get there.

Why?

According to the insights we gathered while talking to customers in various verticals (consumer goods, retail, manufacturing, and pharma, to name a few):

  • Most SAP customers are planning to take the system conversion (brownfield) path to S/4HANA.
  • A major customer pain point is the evaluation (business case) phase.
  • Project scope, resources and timeline are difficult to evaluate.

With so many moving parts and new standards, complexity and risk seem to be inherent to every SAP S/4HANA system conversion. In fact, an ASUG and DSAG joint survey affirms that complexity remains a major barrier to SAP S/4HANA implementations. Other challenges include delays that can be attributed to the current COVID-19 global crisis.

Three Options, One Goal

There is no single approach to completing a SAP S/4HANA migration that is appropriate for every organization. Some have chosen to start clean by implementing a new system with no ‘baggage’, known as a greenfield project. Others prefer a complete system conversion, a brownfield project, because it doesn’t disrupt their existing business processes. And for those who want to consolidate their current system landscape into SAP S/4HANA, there’s the landscape transformation option.

Each approach uses a different methodology, and each has its own advantages and disadvantages. Read on for an analysis of each approach and how you can choose the one most suitable for your specific set of circumstances.

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The Greenfield Approach – New Implementation

A greenfield project is a new implementation of SAP S/4HANA. It is a golden opportunity to redefine and simplify business processes, and to take full advantage of S/4HANA capabilities that you may not have leveraged before. While this approach does not guarantee operational success from the start, there is time to make whatever adjustments are necessary as the new system is implemented.

Nonetheless, the radical changes inevitably introduced in the way you operate the system can be a bit unnerving. And the re-implementation process can be tiresome and time-consuming, especially on the change management side. So, before you go down the greenfield path, be sure you’re ready for an intense and involved re-engineering process.

The Brownfield Approach – System Conversion

The brownfield alternative is SAP’s recommendation for customers who want to migrate to S/4HANA but preserve the value of the time and effort invested in adapting SAP ECC to their needs. It is a conversion process, in which you migrate and adapt all your business processes to the new S/4HANA platform. This approach is less disruptive and can offer a better solution if you don’t want any essential operational changes.

A brownfield project runs the risk of possible technical issues during and after conversion. However, SAP has provided specific conversion tools and guidelines intended to mitigate such problems from the start.

Landscape Transformation – Selective Combinations

Landscape transformation is not a system conversion or a new implementation; rather, it’s selective SAP S/4HANA migration or a consolidation of multiple systems.

With this approach, you can limit SAP S/4HANA migration to specific business processes while leaving the rest as is. Some organizations choose to go down this route for migrations expected to produce the best or fastest ROI, such as for example, incorporating S/4HANA capabilities into their Central Finance business unit.

The same essential methodology, executed with the right SAP tools, can be used to consolidate SAP and non-SAP systems. This creation of single, centralized system reshapes your business landscape for more streamlined management.

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Greenfield vs Brownfield Approach on Your Move to SAP S/4HANA

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How to Choose the Right S/4HANA Migration Approach

What kind of migration project is best for you?

Well, that depends.

You’ll need an extensive analysis of both technical and functional aspects of your organization to determine SAP S/4HANA readiness. This includes evaluating the database, platform and configurations currently in use, your business workflows, the system landscape, and more.

More importantly, you should take a look at how the migration fits into your organization’s digital transformation roadmap. That is, identify where you are now, where you want to go in the coming years, and how you plan to get there.

What do you want to accomplish?Type of migration
  • Simplification of current business process.
  • Quick implementation of the new S/4HANA system
Greenfield
  • Convert your current SAP ERP system into S/4HANA.
  • Preserve operational continuity.
Brownfield
  • Selective migration, such as for a certain business process or organizational unit.
  • Consolidation of both SAP and non-SAP solutions into one global system.
Landscape Transformation

In an interview at the 2018 SAP TechEd conference, Rudolf Hois, SAP VP and chief product owner for SAP S/4HANA said that 50-60% of the SAP S/4HANA installs have been system conversions. In fact, to accommodate the growing popularity of this brownfield approach, the latest version of SAP S/4HANA includes improved automation and less downtime for system conversion. That said, however, Hois also noted that the type of SAP S/4HANA migration is really dependent on the change management methodology at each organization.

Steps to a Successful SAP S/4HANA Migration

Once the path has been decided upon, it’s time to plan the exact ECC to S/4HANA migration steps needed for a successful implementation. 

Greenfield

For the greenfield approach, the SAP Activate methodology provides a clear structure and a detailed series of steps.

  1. Discover: Identify the value of your business, and then develop the roadmap and strategy to be used in the implementation of the project.
  2. Prepare: Start working on final project plans and preparing your team. Choosing the right people for your team is essential to ensure the project will run optimally.
  3. Explore: SAP S/4HANA offers a wide range of solutions for your business, especially for a new implementation. Initiate the scope evaluation process with a Fit/Gap analysis — instead of traditional blueprint requirements — to ensure a more efficient implementation.
  4. Realize: Focus on the business requirements defined in the previous phase. These include system configuration settings, integration scenarios and data migration.
  5. Deploy: Set up the production environment in this phase. When it’s ready, execute cutover activities and move business operations to the new system.

Brownfield & Landscape Transformation

The necessary landscape transformation or S/4HANA conversion steps are divided into two phases: preparation and realization.

Preparation:

  • System Requirements & Planning: Conduct an assessment of the existing system and then define the best possible solution to execute the migration.
  • Conversion Pre-Check: Ensure any add-ons or business functions active in the current system are compatible with S/4HANA. (SAP has provided the Simplification Item Check for this purpose.)
  • Custom Code Migration: Check your custom code for S/4HANA compatibility. This is essential, especially if there are enhancements in your current system.

Realization:

  • System Installation: Start the conversion to SAP S/4HANA, including database migration and data conversion.
  • Follow-On Activities: After the technical conversion, all relevant customized settings must be migrated.
    • Data consistency check (especially for financial data): Since SAP S/4HANA collects all relevant components from Financial Accounting (FI) and Controlling (CO) into one data pool, called the Universal Journal, it is imperative that you reconcile your accounting components so that data can be merged correctly.
    • Iteration Testing: When all customizations are completed and all data has been migrated, you need to perform test iterations to make sure that the system runs correctly.

3 Things You Can Do to Ease SAP S/4HANA Migration

Tackle the most common S/4HANA migration obstacles with these three moves:

  1. Use Value Stream Management to prioritize, so you allocate resources based on added value for the end-user experience. Do not automatically assume your most challenging projects are also the most impactful ones.
  2. Start building a viable business case well ahead of your move. Waiting until the last minute means you will have to pay the cost of indecision: technical debt, market share lost to competition; and a rushed, insufficiently resourced migration project.
  3. Connect with Panaya to learn how we can ease your journey to S/4HANA and ensure a quicker return on your technology investments.

The Journey to S/4HANA Success Begins with Panaya 

Panaya, the leader in SaaS-based change intelligence and testing for SAP, has partnered with SAP in developing Panaya S/4Convert.

The solution provides the certainty and simplicity you need to start your S/4HANA migration journey, bridging the change management gap with valuable insights and detailed reporting. It is designed to help reduce the time, cost and risk of S/4HANA migrations, tackling the challenges of defect management and implementation failure with optimal scoping, automatic intelligent code remediation and accelerated business process re-implementation. 

Panaya draws on its experience with over 80 HANA migrations and over 9,000 SAP projects to help you make a successful transition to S/4HANA.

“All roads lead to S/4 HANA, but not all of them might be right for your company, which is why Panaya uses its decade of SAP ERP domain expertise to develop a solution specifically tailored to help enterprises manage ERP change safely and effectively,” said David Binny, CEO at Panaya. “It’s like travel insurance for a company on its journey to S/4HANA.”

Whether your project is greenfield, brownfield or a landscape transformation, Panaya’s change intelligence ensures continuous quality and visibility throughout. You get the freedom and peace of mind you need to be more agile in responding to change, and your S/4HANA projects are both 50% faster and 100% safer.

Through the unique partnership with SAP, Panaya provides everything you need in one SaaS solution:

  • The Most Comprehensive Impact Analysis Coverage. Leveraging SAP tools, best practices, and Panaya proprietary Change Intelligence AI.
  • Intelligent Code Remediations. Massive automatic code corrections ready to deploy at the touch of a button.
  • Real Data & Usage-based Scoping. Project plans, including all correction and test activities, are automatically generated in 48 hours.
  • A Testing Platform Designed for SAP. The business-process-centric testmanagement platform, designed for SAP, is fully integrated with Test Automation.

Case Study: How Panaya Helped ODTH Migrate to S/4HANA

During a global health crisis, logistics and warehousing companies like Belgium-based ODTH are tasked with keeping vital supplies moving. But being in demand was not enough for Bart Weymans, ODTH Innovation manager. Bart wanted innovation on-demand.

Bart had a special need for speed and wanted his custom-made business applications to be ready for the challenges ahead. So he led a team of eight towards the successful completion of an SAP S/4HANA migration. Read this blog post and listen to Bart’s audio testimonial to learn how he did it, while saving five weeks of functional testing in the process. 

The Bottom Line: Here’s What to Expect

Here’s what you can expect from your SAP S/4HANA migration when you have Panaya’s change intelligence on your team.

  • Remove the Guesswork: A clear understanding of what to install, how to install it, what to run, and in which order, with a tailored project blueprint of object connections based on your company’s production codebase.
  • Mitigate Risk with Next-Gen Impact Analysis: Real-time risk analysis evaluates change impact, business processes and code quality, helping to eliminate uncertainty and maintain security, performance and compliance.
  • Eliminate Scope Confusion: With made-for-SAP risk-based testing and custom code fixes, you get a clear path to rapid implementation of valuable corrections and the elimination of unnecessary changes.
  • Accelerate Test Execution: Automated test plans ensure efficient release cycles, while a record-and-play feature can capture tests to be reused for codeless automation.

With an understanding of S/4HANA, a properly defined business case, and a clear migration path, the daunting task of moving to S/4HANA is simplified. If you are contemplating a migration or are stuck in the evaluation phase, don’t wait – contact Panaya today.

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