SAP S4HANA Migration Guide

SAP S/4HANA Migration Guide

There is no single solution when it comes to SAP S/4HANA migration, and each organization is in a different stage of SAP S/4HANA readiness. Some have chosen to start clean by implementing a new system, or the greenfield approach. Others choose to perform a complete system conversion, or the brownfield approach, because it doesn’t disrupt their existing business process. And for those who want to consolidate their current system landscape into SAP S/4HANA, they can opt for a landscape transformation.

As each methodology has its advantages and challenges, you have to take a look at the database, platform, and configuration before making a decision as to which route may be most suitable for your given situation. Here below, we analyze each methodology to help you do just this.

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The Greenfield Approach – New Implementation

The greenfield approach requires a new implementation of SAP S/4HANA. This can be a tiresome and time-consuming project, especially on the change management side, since you have to start everything from scratch. The upside to this path is that you can redefine and simplify the business processes and take full advantage of S/4HANA capabilities. This does not guarantee that the newly implemented system will actually work on the operational side, but there will be time for adjustment.

Going through this re-implementation route can be unnerving because there will be radical changes in the way you operate the system. So if you want to go down this road, make sure that you are ready for the whole re-engineering process.

The Brownfield Approach – System Conversion

With all the repercussions of the greenfield approach, there is an alternative way: the brownfield route. This is SAP’s recommendation for existing customers who are operating on SAP ECC and want to migrate to S/4HANA but still keep their investment in the current system.

With system conversion, you will move the whole system and business process to a new platform of S/4HANA. This approach can offer a better solution if you don’t want any changes in the operations of your business process. It essentially allows you to run your business with less disruption since it’s more of a technical system conversion. The downside is that possible issues on the technical side can arise, but SAP has provided conversion tools and guidelines for this. Therefore, the risk can be mitigated.

Landscape Transformation

The focus of landscape transformation is not on the whole system conversion, but rather on selective parts of the business process that you want to migrate. Using SAP landscape transformation, you can selectively migrate to SAP S/4HANA or consolidate your business landscape into one global system.

This means that you can first select the process that gives you the best—and fastest—ROI to be migrated to S/4HANA. Customers may choose to go down this route, for instance, when adopting S/4HANA capabilities for Central Finance.

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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?

Choosing the right approach requires that an organization performs extensive analysis and evaluation of both technical and functional sides. The existing system landscape, business function, and user readiness are a few things that need to be taken into consideration. More importantly, you should take a look at your own roadmap for digital transformation. That is, identify where you are and where you want to go in the upcoming years.

Key Points to Help You Decide Which Path to Take for Your S/4hana Migration

What are you looking for?Path to Take
  • Simplification of current business process.
  • Quick transformation into the new S/4HANA system.
Greenfield
  • Convert the current SAP ERP system into S/4HANA.
Brownfield
  • Selective migration, such as for a certain business process or organizational unit.
  • Consolidation of multiple systems, both SAP and non-SAP, into one global system.
Landscape Transformation

SAP users deliberating the migration process often wonder what SAP’s official recommendation is. In an interview at the 2018 SAP TechEd conference, Rudolf Hois, SAP VP and chief product owner for SAP S/4HANA was quoted saying that 50-60% of the SAP S/4HANA

install base has already chosen system conversion as their route. In fact, to accommodate this route’s growing popularity, the latest version of SAP S/4HANA, 1809 simplifies and improves automation and downtime for system conversion. Mr. Hois also shared lessons learned on different implementation projects. He noted that the route chosen for SAP S/4HANA migration is really dependent on the Change Management methodology a given organization can afford.

For those aiming to keep their investments in their current ECC, system conversion is the preferred approach. Panaya S/4HANA System Conversion solution provides the certainty and simplicity you need to start your journey to S/4HANA migration, including valuable insights and a detailed report.

Steps to a Successful SAP S/4HANA Migration

Once the path has been decided upon, it’s time to prepare for the actual migration by planning the exact steps that will be needed for a successful implementation. 

Greenfield

If your decision is to perform a new implementation via the greenfield approach, there is an entire methodology called SAP Activate that explains each step required to do so.

Greenfield steps - S/4HANA Migration
  1. Discover: The first step is to identify the value of your business and then develop the roadmap and strategy to be used in the implementation of the project.
  2. Prepare: In this phase, you initiate the project and start working on your final project plans as well as 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. In this phase, the scope evaluation process will be performed, and Fit/Gap analysis can be adopted—instead of traditional blueprint requirements—in order to ensure a more efficient and faster implementation.
  4. Realize: This phase focuses on the realization process of the business requirements that have been defined in the previous phase. These include system configuration settings, integration scenarios, and data migration.
  5. Deploy: The production environment is set up in this phase. When it’s ready, cutover activities will be performed and business operations are moved to the new system.

Brownfield & Landscape Transformation

If you decide to do a system conversion or landscape transformation, there is a sequence that you have to follow to ensure a smooth deliverable. The process is divided into two phases: preparation and realization.

Brownfield-Landscape
Brownfield Landscape - SAP S/4HANA Migration

Preparation Phase

  • System Requirements & Planning: This assessment should be conducted to analyze the existing system and then define the best possible solution to execute the migration.
  • Conversion Pre-Check: A compatibility check of any add-ons or business functions that are active in the current system is required to ensure they can technically be converted into S/4HANA. SAP has provided the Simplification Item Check to identify the mandatory steps before converting your system.
  • Custom Code Migration: This step will check your custom code against S/4HANA compatibility. This is essential, especially if there are enhancements in your current system.

Realization Phase

  • System Installation: After the preparation phase, you can start the conversion to SAP S/4HANA. This step includes 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 perform reconciliation between your accounting components. In this way, the data can be merged correctly into the Universal Journal.
    • Iteration Testing: When all customizing has been performed and all data have been migrated, you need to perform test iterations to make sure that the system runs correctly.

How Urgent Is the Move From SAP ECC to S/4HANA?

The talk of  SAP ERP Central Component (ECC) 6.0  approaching support deadline of 2025 is nothing new. The need for an SAP S/4HANA migrations *supposedly* undebated.

SAP ECC: The Final Countdown

The Americas’ SAP Users’ Group (ASUG), is one of the most influential SAP user groups.  Both organizations – SAP and ASUG – have been vocal advocates of organizations’ need to have back-office core applications like SAP ECC catch up with the pace of innovation for front-office applications. Geoff Scott, ASUG’s CEO was recently quoted as saying that ”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.”

Despite this clear directive from industry pundits, organizations running SAP ECC are seemingly unfazed by the official product end-of-life. An ASUG and DSAG  joint survey, affirms that complexity remains a major deterrent to SAP S/4HANA implementations.

This means most organizations are planning a move from SAP ERP ECC to S/4HANA, but haven’t taken any concrete steps to get there.

What’s Taking So long?

Indeed, with so many moving parts and new standards, complexity and risk seem to be inherent to every SAP S/4HANA system conversion. Judging from the survey, the complexity of the move remains the main barrier to S/4HANA implementations.

More delays can be attributed to the current COVID-19 crisis. The recent SAP and Panaya partnership bridges the change management gap and tackles the challenges of defect management and the risk of implementation failure are major deterrents. 

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 the SAPinsider survey, over half (52%) of respondents are currently in the evaluation phase of their S/4HANA migration.

SAPInsider Graph

Here are just some of the insights we gathered, talking to customers in various verticals; consumer goods, retail, manufacturing, and pharma, to name a few:

  • Most SAP customers are planning 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

Facing Your SAP S/4HANA Migration Obstacles, Head-on

Here are 3 steps you can take today to tackle the most common S/4HANA Migration obstacles:

  1. Use Value Stream Management to realize your IT priorities. Allocate resources based on added value to 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. This may sound obvious, but apparently, some organizations could use a reminder. Waiting until the last minute means you will have to pay the cost of indecision; technical debt, market share loss to competition and eventually, 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 

Companies migrating to S/4HANA are looking for the improved functionality and efficiencies that S/4 provides, however, there is still uncertainty about how and when to embark on the journey to adoption. Panaya, the leader in SaaS-based Change Intelligence and testing for SAP, has partnered with SAP to simplify and accelerate S/4HANA adoption move with Panaya S/4Convert.

Panaya Change Intelligence Platform for SAP S/4HANA system conversion is designed to help reduce the time, cost and risk associated with migrations, using tools to ensure optimal scoping, automatic intelligent code remediation and accelerated business process re-implementation and testing of any SAP S/4HANA project. 

Whether greenfield, a full system conversion or a landscape transformation, the journey starts by first determining where a company is on the road to migration. Panaya then brings its expertise and knowledge of 80+ HANA migrations and over 9000 SAP projects to ensure a smooth 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.”

By ensuring continuous quality throughout the S/4HANA project, Panaya enables companies to be more agile in addressing constant change, and ultimately safeguarding their journey. The functionalities and visibility offered in its Change Intelligence for SAP S/4HANA platform ensure S/4HANA projects are not only 50% faster, but also 100% safer.

Through a unique partnership with SAP, Panaya is able to provide everything you need to migrate with confidence in one SaaS solution:

  • The Most Comprehensive Impact Analysis Coverage. Change Intelligence for SAP S/4HANA leverages SAP tools, best practices, and Panaya proprietary Change Intelligence AI.
  • Intelligent Code Remediations. Ready-to-deploy massive automatic code corrections with the touch of a button.
  • Real Data & Usage-based Scoping. Based on an automatically generated project plan in 48 hours, including all correction and test activities.
  • A Testing Platform Designed for SAP. Business process-centric Test Management platform designed for SAP, fully integrated with Test Automation.

Here’s what companies can expect when using Change Intelligence for SAP S/4HANA:

  • Remove the Guesswork: Gain a clear understanding of what to install, how to install, what to run, and in which order employing a tailored project blueprint of object connections based on your company’s production codebase.
  • Mitigate Risk with Real-Time Impact Analysis: Risk analysis for change impact, business process and code quality help eliminate uncertainty when implementing updates and help maintain security, performance, and compliance.
  • Eliminate Scope Confusion: With risk-based testing and custom code fixes, users get a clear path to testing so companies can quickly implement code corrections to fix affected areas and eliminate unnecessary changes.
  • Accelerate Test Execution: Automated test plans ensure efficient release cycles, while a record and play feature can be used to capture tests to be reused for codeless 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 Panaya Solution

  • Made-for SAP risk-based testing is generating traction
  • The Panaya S/4HANA System Conversion Solution saves resources using next-generation SAP impact analysis for accurate assessments
  • It also accelerates execution by 50% with intelligent change automation capabilities like automated code quality

If you are also contemplating a migration or stuck in the evaluation phase, don’t wait. With a right understanding of S/4HANA, the proper business case, and a clear migration path, the daunting task of moving to S/4HANA is simplified.

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