SAP S/4HANA is the future for businesses that want to thrive in the digital economy. As a digital core technology, SAP S/4HANA will play a key role in helping organizations develop new business models and improve existing business processes.
Like any step on your digital transformation journey, a S/4HANA migration is complex and planning intensive. Before you make the transition, it’s important that you understand everything about S/4HANA from the business case to your specific roadmap. To get you up to speed on the basics, here’s a broad overview of SAP S/4HANA from the business case to implementation.
Why Make the Migration to SAP S/4HANA?
The first question to ask when undertaking a huge move from your traditional SAP ECC system to S/4HANA is why. Afterall, if you are like most large or midsized companies your SAP ERP landscape may be highly customized and well-tuned for your mission critical business processes. If it isn’t broken, should you fix it?
Here’s the plain truth.
While your SAP system may be running just fine for your organization, it will eventually become obsolete. The eventual obsoletion of all traditional ERP systems is a major driver for the migration to S/4HANA.
Think about how business operations have changed over the years with the introduction of new technology. On the enterprise side, we saw the explosion of cloud services, the normalization of DevOps and many other innovations that improved the way businesses run. With the constant evolution of technology, can you continue to depend on your traditional ERP system?
No. You can’t.
At the pace technology is changing, you will need the next generation ERP system that is easy to scale, cloud-native, and more intelligent than ever. This is where S/4HANA comes in. It is the digital core that will help you thrive in the digital age.
What’s New with SAP S/4HANA?
The traditional SAP ERP system is a system of record. With S/4HANA you have a system of innovation. Here’s what you can expect with SAP S/4HANA:
- New Architecture: S/4HANA runs on the HANA database using in-memory tables, with simplified data models and embedded analytics. With the new architecture, time-consuming processes such as period-end closingcan now be done on the fly.
- Process Simplification: Most of the product functionality found in the traditional ERP system has been retained with S/4HANA. The way processes are viewed have been redesigned, however. Tables have been redesigned along with best practices to introduce much needed simplification.
- User Experience: SAP S/4HANA delivers a superior user experience leveraging SAP Fiori. S/4HANA users now have access to role-based apps via smartphones, tablets, and desktops.
Deployment options: Organizations have the option of implementing the S/4HANA on-premise edition or the cloud edition. If your organization has an existing relationship with a cloud vendor, it can have the on-premise edition hosted in the cloud.
What are the Benefits of SAP S/4HANA Migration?
The way you implement S/4HANA will be nothing like the implementation of your traditional ERP system. To successfully execute the migration, your organization needs to be committed to the process.
Before any commitment is made, it’s wise to know what results or benefits your commitment will yield. In the case of S/4HANA, you can expect these benefits after a successful implementation:
- A fit-to-standard approach which reduces customizations: Less customizations means your organization has less of a burden maintaining and enhancing your SAP system.
- Better operational insights with embedded analytics:You can leverage improved operational insights to improve your business processes or seize hidden opportunities.
- Faster business adoption: With a rich UI provided by Fiori apps business adoption is accelerated.
- Better supply chain functionalities: S/4HANA takes supply chain functionalities to the next level with embedded Transportation Management and Enterprise Warehouse Management (EWM).
When building a business case, these benefits will be factored into the costs of an S/4HANA migration.
Approaches for Migration to SAP S/4HANA
You can approach the migration to S/4HANA in a variety of ways. The approach you take will be dependent on these factors:
- Your Starting Point: Do you have an existing SAP system or a non-SAP ERP system? If you are starting out with an existing SAP system, you can migrate from the old SAP ERP to a new S/4HANA implementation. For non-SAP ERP system, it is always a brand-new S/4HANA implementation.
- The level of customization in your SAP system: The more customized your SAP ERP system is, the more complex your business processes typically are. Your level of complexity will have to be factored into your approach for an S/4HANA implementation.
- Number of SAP instances: If you have multiple SAP instances rather than a single instance of SAP ERP across your organization, you may have a case for instance consolidation.
- Your Data: How much of your master and transaction data would you like to carry over to S/4HANA? Your new implementation will be agreat opportunity to clean up organizational data that is no longer in use.
SAP S/4HANA Migration
There are essentially two broad-based approaches for your S/4HANA migration : Greenfield and Brownfield. Here is what each implementation approach entails.
A greenfield implementation is a new implementation of S/4HANA. Since you are essentially starting on a blank slate with a greenfield implementation, your organization has the opportunity to reengineer and set a new standard. Best practices will be used, old practices will be scrapped, and only your relevant data will be converted to S/4HANA. Irrelevant data will be archived or deleted.
You should be aware that your greenfield implementation approach will be different depending on weather you opt for the SAP S/4HANA on-premise or cloud edition. Regardless of which S/4HANA edition you chose, you would opt for a greenfield implementation in the following cases:
- You have many instances of ERPs that you want to consolidate in a single infrastructure
- There’s a low tolerance for customizations and an inclination to leveraging standard SAP processes and best practices
- Your organization is willing to invest significant effort into reengineering and optimizing all business processes and change management that follows.
A brownfield implementation is all about converting your existing SAP ERP system to S/4HANA. While you have less of a process remapping effort for brownfield implementation, you must dedicate a lot of effort into data mapping and conversion as well as testing. Depending on the degree of customization and the volume of data involved, a brownfield implementation can take a long time to realize.
In a brownfield implementation you have variant approaches apart from the wholesale brownfield conversion. Here they are:
- Implementation of Central Finance to integrate with your existing SAP ERP first, then the implementation of the rest of the S/4HANA functionalities
- Implementation of S/4HANA finance while your existing ERP system continues to support nonfinance functionalities as they are slowly transitioned to S/4HANA
- Migration of your existing SAP ERP system to Business Suite on HANA, then to S/4HANA. This approach is viable if you have an old version of SAP ECC and would like to have innovation brought by the HANA database, to start with.
Here are the cases in which you would opt for a brownfield implementation:
- Your current business processes are up to date, optimized, and meet your business needs.
- Your architecture is fully optimized
- You can manage risks associated with data conversion effectively working with vendors or in-house skills
- You are not interested in investing significant effort in reengineering and optimizing all business processes.
Migrate to SAP S/4HANA with Wharfedale Technologies
To successfully implementSAP S/4HANA, you need a partner that understands business processes, the SAPuser experience, technical architecture and cloud offerings. WharfedaleTechnologies’ team of experts not only understand these individual components, butalso how they come together to drive business transformation.
If you would liketo learn more about implementing SAP S/4HANA, contact our team of experts here.