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Over the past six years, I have had the opportunity to interface with hundreds of customers, prospects, technologists, consultants, system integrators (SI), vendors, and ERP executives who are considering, assessing, planning, implementing, and fixing SAP S/4HANA conversions. I have seen first-hand and heard about many success stories, repeatable patterns, lessons learned, and cause & effect scenarios. These are the top 10 points to consider on your SAP S/4HANA journey.
1. Embrace a S/4HANA conversion rainbow
There’s always some Greenfield in a Brownfield conversion and vice versa. Brownfield conversions will re-engineer the business processes whose underlying standard SAP components have been deprecated in S/4HANA. Greenfield conversions will invariably leverage (dare I say copy?) as much custom ECC functionality as possible to support processes that can remain as-is in S/4HANA. It’s not a matter of methodology but rather a matter of business priority and practicality.
2. Quantifiable ROI
I have seen that most initial steps in an S/4HANA conversion are linked to quantifiable ROI. The most popular ones are:
- Move to Business Suite on HANA – Saving RDBMS license cost and proactively mitigating most HANA syntax issues.
- Move ECC to private cloud infrastructure – Saving on ERP hardware and administrative costs.
- Rationalize non-SAP systems into S/4HANA before converting ECC operations to S/4HANA – Saving the costs of maintaining older legacy applications and getting IT familiar with the nuances of S/4HANA. So, they are better prepared to handle the more extensive ECC conversion later on.
- Re-engineering processes in ECC so they are S/4HANA compatible – These smaller projects can be scheduled when IT has available resources (no extra cost), and it minimizes downstream business disruption.
SAP will provide many soft ROI metrics based on operational efficiencies, but these are (pardon the pun) hard for some CFOs to digest.
3. Learn about SAP’s edge applications
SAP has added cloud-based edge systems and capabilities to the S/4HANA family – and has deprecated core ECC functionality in their favor to accelerate cloud adoption. If you are running ECC and do not know much about Ariba or IBP, start learning. Migrations to these edge apps can add further disruption – and license costs – to your project. And more such applications, new and acquired, are on the horizon.
4. SAP’s OOTB conversion analysis utilities will not uncover every critical risk factor
SAP anticipates that Brownfield conversions will require 4+ sandbox iterations, i.e., conversions that failed and require additional pre-conversion activities and yet another conversion attempt. That means companies are converting with unknown risk factors. I have heard of companies failing after 10+ conversion attempts. Similarly, companies planning Greenfield conversions assume that certain business processes will run as-is, based on SAP’s conversion analyses – only to discover that re-engineering is required. Consider the purchase of a best-of-breed change analysis tool that augments SAP’s analyses. They will save you a HUGE amount of time and money.
5. Assume that your SI is facing a resource shortage
Experienced consultants are taking advantage of the ‘Great Resignation’ to move to other jobs offering better salaries and quality of life. You should expect that your SI is juggling resources, despite their assurances to the contrary. Expect some delays in delivery and responsiveness.
6. Manual testing efficiencies will make or break your project
Test Automation and RPA are the buzzwords of the day, but your S/4HANA conversion will transform many critical processes and their related user interfaces. These changes must be validated through manual testing. Only then can automation be considered. I have seen projects repeatedly fail because of inadequate manual testing tools. Simply put, testers do a poor job with poor tools. Invest in a best-of-breed manual testing platform – both IT and the business users will love you for it. And don’t forget that companies who invested millions in building test automation assets for ECC now must remediate much of their automated asset library to support S/4HANA.
7. Be an educated consumer – and don’t purchase anything based on a PowerPoint slide
Products and services usually look outstanding on paper, and many software companies invest more in Marketing than R&D. Pretend you are from Missouri (the Show-Me State) and ask for live demos to compare\contrast all products being evaluated. Also, make sure that you speak to references who have used the exact product\service mix that you are considering. Lastly, your implementation partners may recommend products that give them the best referral fee – so be cautious.
8. The RISE program will not be all things to all people
When RISE was first announced, many companies and SIs approached the offering with a dose of healthy skepticism. After all, this was not the first incentive that SAP offered to accelerate S/4HANA adoption. After a few tweaks, this offering seems to be holding its own as it provides much unique and compelling value to all parties. But you must understand the pros and cons of its subscription model and the costs of moving off that model. There are many compelling reasons to consider RISE,but ensure that your long-term costs will be as attractive as the up-front cost savings and value propositions.
9. SAP is just warming up its innovation and upgrade streams, so buckle up
SAP S/4HANA was brilliantly architected so the underlying and highly simplified data model can serve as a solid foundation for future innovations. Since its inception, SAP has continued to evolve the S/4HANA platform, adding new features, enhanced capabilities, and moving core capabilities to edge applications and cloud-based, value-add offerings. Also, expect to upgrade major S/4HANA releases every 4 years. Embrace this rapid rate of change but treat every S/4HANA upgrade as seriously as your initial conversion.
10. Do not be afraid to do what’s right
Choose the SAP migration path with the best mix of speed, value, and risk mitigation.
- I have seen some companies adopt an overly long-term conversion process, typically reserved for complex landscape consolidations and data migrations because they are heavily regulated and risk-averse. This extremely methodical approach makes sense for them. Unbelievably, one has already dropped their Tier 1 SI for another due to project complications.
- I have seen some companies run a simple Brownfield conversion to get everything up and running in S/4HANA as quickly as possible with minimal process disruption. Only after go-live would they consider re-engineering anything that was working – to replace it with a more efficient approach or an updated Fiori interface.
- I have seen large IT shops rely on SI expertise for all the heavy lifting and small IT shops rolling up their sleeves and owning the conversion themselves.
S/4HANA conversions can be as risky as the Y2K conversions that occurred 30 years ago (yes, I am that old), and every company has its share of unique characteristics and risk factors. Plan accordingly, and do not be afraid to take a unique path if it makes sense to your stakeholders. And enjoy the wild ride.