Companies are migrating to SAP S/4HANA to gain greater efficiencies and become more agile. Here is what you should know to achieve a successful migration.
If you use SAP’s enterprise resource planning (ERP) software and you are not yet using SAP S/4HANA, you will have maintenance support for core applications of SAP Business Suite 7 software until the end of 2027, followed by optional extended maintenance until the end of 2030, to make to the switch.
While you still have time to plan for a transition, it’s not too early to migrate to S/4HANA.
In fact, more than 8,300 SAP customers have already purchased S/4HANA subscriptions or licenses.
S/4HANA offers many benefits, including improved performance and access to real-time data from every part of a company. It also allows enterprises to take advantage of the cloud to become more agile, innovative, and competitive.
The 3 Main Paths to an SAP S/4HANA Transformation
An S/4HANA implementation can be a complex undertaking, as your SAP systems may touch hundreds – or thousands – of applications across your enterprise.
To help you get started, we’ve outlined the top 10 most important questions you should ask before migrating to S/4HANA.
There are three main paths that organizations can take to migrate to SAP S/4HANA. They are:
System Conversion or Brownfield
A brownfield conversion takes your existing SAP implementation and migrates it to S/4HANA.
This is a higher-risk implementation from a business process standpoint, as your existing SAP environment has likely been in place for many years and highly customized during that time.
It can be challenging to migrate these customizations into SAP S/4HANA.
You also can face pushback during this type of migration. Stakeholders might suggest that you only perform a technical upgrade, so you can get the migration done quickly. Then, they will advise you to fix problems as they arise after the migration.
A greenfield migration sets up a new SAP S/4HANA implementation and is a preferred method for new SAP customers.
This type of migration is also suited for enterprises that don’t have complex environments with mutual dependencies between individual SAP systems. It allows you to put your existing SAP implementation in archive mode so that you can move forward with S/4HANA.
A greenfield conversion supports bimodal IT so you can have one set of business processes for your legacy environment and another set that supports rapid development. With a greenfield conversion, you can leave your antiquated business processes behind and become more agile.
Consolidation or Transformation
Consolidating your systems helps you optimize your infrastructure and processes. For example, you can consolidate regional ERP systems into a single global environment to gain greater efficiencies.
You can also centralize specific functionalities, such as finance. This type of migration allows you to migrate financial data out of your regional ERP systems and consolidate them into a central platform. Meanwhile, your global locations can still use their regional systems for their day-to-day business processes.
S/4HANA Migration Checklist: 5 Steps to a Smooth Transition
Migrating to SAP S/4HANA offers many opportunities – but it also poses a number of challenges. Here are five steps to take to reduce your risks and ensure a smooth transition:
Get a clear picture of your current state
Start by assessing your current SAP environment and the value of migrating to S/4HANA. In this step, you will decide which pieces to move to S/4HANA. You will also identify which SAP systems you need to replace or retire.
Then, check out the SAP S/4HANA Value Advisor to learn if the suite can meet each of your needs. S/4HANA offers a number of line-of-business applications. You might find features that users want but you can’t provide through your current ERP environment.
Does it make sense to migrate from other environments to an SAP S/4HANA offering?
Be sure to look at your existing environment from a business perspective and determine which pieces you want to carry forward. You may find value in your legacy
environments, but leaving these systems behind can allow you to leverage new business models and drive more value for the enterprise.
Create a S/4HANA roadmap
Constructing a roadmap is essential to build a business case for SAP S/4HANA. A roadmap will show others in your enterprise how S/4HANA can meet your business needs and how you plan to achieve your goals.
In this step, you will assess your entire IT landscape and ask the following questions:
- Which SAP S/4 HANA functions meet your IT and business needs?
- What system components should you migrate to SAP S/4HANA?
- When will you migrate each of these components?
- How will an S/4 HANA migration impact your existing SAP environment? Is S/4 HANA compatible with your current SAP systems? Do you need to perform any upgrades?
- How will changes to your SAP environment impact third-party systems and applications? Do you need to upgrade any third-party applications? Or can you achieve the same functionality with S/4 HANA or other SAP products?
- Do your current systems offer any functionality that isn’t available in SAP S/4HANA? If so, what are your plans to remediate this?
- How will you address the findings from your gap analysis? Will you handle them internally? Will you find a partner who can provide custom code or an application to fill your gaps?
Design your architecture
Many ERP environments have been in place for more than 15 years. These aging systems often haven’t been updated to support today’s agile business applications.
In recent years, SAP has changed its underlying technology to allow for higher availability and performance. However, enterprises that run on dated systems can’t take advantage of these benefits.
Look at how your SAP environment is designed and decide whether you need a refresh.
A migration is also an excellent time to speak with business users about their needs and address any unspoken expectations. For example, business users may assume that your systems are available 24/7 – even if your existing design doesn’t allow for this.
It’s vital to include the business in any decisions.
You may think that an S/4HANA migration falls squarely into the realm of IT. While your IT team can make many decisions – such as choosing manufacturers – the business needs a say in your services. Your IT team ultimately provides services to the business. If you can’t give business users what they want, they will go elsewhere and create shadow IT complications.
Also, consider how to provide employees with remote or mobile access to your back-end environments. SAP S/4HANA supports highly available, remote access. It allows corporate travelers to easily access their data from their mobile devices, as opposed to lugging around a laptop with a virtual private network (VPN) client that never works on hotel Wi-Fi.
Train your team and end users
Do not underestimate the additional technical knowledge required for SAP S/4HANA.
Migrating to SAP S/4HANA introduces new technologies, user interfaces, and processes into your enterprise – all of which require training.
Your internal IT staff likely has training in SAP.
- How much of their knowledge carries forward into S/4HANA?
- What training does your internal IT team need?
- Does it make sense to select an external partner to manage parts, or all, of your SAP environment?
Also, consider how an SAP S/4HANA implementation affects your end users. S/4HANA changes the user experience, so you must provide training on your new systems and processes.
Cooperate with third parties
If you use an external hosting provider, speak to them when you start your conversations with business users. Changes to your SAP environment could impact both your hosting infrastructure and the managed services that you get from your provider.
Also, look at any third-party systems that integrate with SAP. You may have dozens of mission-critical applications and systems that touch your SAP environment.
How will migrating to SAP S/4HANA impact everything?
As you move forward with your SAP S/4HANA migration as the countdown continues, you may face internal bottlenecks.
Some stakeholders may say: “We’ve always done it this way. Why should we change?”
However, the same thinking returns the same results. The same results reinforce the same thinking, which locks you into a mindset that doesn’t embrace change. In addition, change is essential to digital transformation.
Working with a partner can ease your transition to SAP S/4HANA and put you on the fast path towards achieving your goals. Look for a partner that has migration experience and will support you throughout every stage of your transition.
With SAP S/4HANA and the right partner, you can transform your business.
Learn more about how to plan a successful SAP S/4HANA migration by watching our top 10- questions to ask before migrating to SAP S/4HANA on-demand webinar.