What’s Your Journey? Part 2: The 3 Types of HANA® MigrationEvery company has its own story, and its own journey to HANA. For some companies, it’s a slow and steady trip that takes five years or more. For others, it’s more like a frantic dash to upgrade technology, overcome problems or take advantage of new business opportunities. In Part 2 of What’s Your Journey, we explain the types of HANA migration — and how to learn where you fit in.

 

SAP HANA Migration By the Numbers

In the second quarter of 2017, SAP recorded over 6,300 SAP HANA customers. Not all of those customers are actually running HANA in a production environment at the moment. Some of them are piloting testing and development programs, but the numbers still show how rapidly HANA is growing.

 

Year over year HANA memberships are up over 70%, and SAP had about 500 additional memberships in Q2 alone, including Google, utility company Centrica and supermarket chain, Mercadona. A total of 30% are what SAP calls “net new customers” — a significant percentage in an industry where it’s the norm to stick with the same vendor decades.

 

Adoption is particularly strong in the midmarket, according to iDatalabs. Midmarket companies account for 36% of HANA users, compared to 33% of large companies (over 1,000 employees). Although small organizations (under 50 employees) trail behind, the fact that they account for 28% of users is notable, considering the budgetary constraints faced by small businesses, as well as the options available.

 

SMEs are served by a range of inexpensive SaaS solutions like Netsuite and Salesforce. Those in certain industries, such as professional services and manufacturing, even have the option of adopting SAP’s own SaaS solution, the S/4HANA Public Cloud. The fact that so many companies are passing up the option to go with an inexpensive, vendor-managed solution shows how useful the flexibility and customizability of HANA can be for small businesses.

 

Types of HANA Migration — SMEs vs. Large Companies

SMEs are typically able to see a range of benefits from their SAP migrations. They can modernize their IT infrastructure and support model, address persistent performance, compliance or reliability issues, and harness new HANA functionality.

 

The cost benefits of HANA cloud are often a significant factor in the migration decision tree for these companies. An average SME saves in the neighborhood of 37% on TCO within the first three years, compared to staying on-premise. With the right managed services provider, the cost is generally significantly lower than maintaining on-premise SAP ECC as well. The ability to move from unpredictable CapEx to stable OpEx is also a major factor, particularly for companies that have struggled with maintaining IT performance and controlling costs in the past.

 

For larger enterprises, the equation is different. They may be quick to try HANA, but are often slower to adopt it. According to SAP S/4HANA SVP and General Manager Markus Schwartz:

 

“The large companies pick a line of business to go live fast to collect the experience and plan in parallel the large move. That’s a pattern we see firming up. That way you can create early proof points and trust. The days of the big bang are over.”

 

The reason isn’t that large companies are more culturally conservative or change averse, but that digital transformation is more complex on that scale. Their landscapes are large and complex, and they often have unique issues, like custom code or legacy elements, which can take extra time to address. For these types of HANA migrations, vendors typically employ hybrid cloud adoption as a bridging strategy to transform the landscape, one piece at a time.

 

The cost equation is also different for large enterprises. For SMEs, on-premise hosting and in-house IT is costly and unpredictable, and replacing it with a managed cloud model is an easy way to show significant ROI. But larger companies benefit from the economy of scale. They can build more cost-effective data centers, with stable CapEx that’s similar to what they’d find in the cloud. In many cases, moving to the cloud and outsourcing managed services still cut costs, but it may not be as significant a factor.

 

The flip side is that they have the budget to pilot compelling use cases, and gain insight for the main event. That allows them to be more effective in their overall IT strategy. However, when it comes to planning the actual migration to a HANA production environment, the size of an enterprise is often not the most important factor.

 

The Three Types of SAP HANA Migration Journey

  1. The IT Leader: IT Leaders are tech-forward companies and early adopters. Some are starting over from scratch — startups, or companies planning to leave an old platform behind with a greenfield implementation. Others are existing SAP ECC 6.0 users who have kept their landscape up to date.

     

    What distinguishes these companies is that they view adopting SAP S/4HANA as a primary goal. Like any organization planning a migration, they’ll consider factors such as controlling costs, minimizing disruption and getting the most out of existing resources, but not at the expense of significant delays. HANA has new capabilities that pose a significant advantage in their niche or industry, and success means harnessing those capabilities as quickly and efficiently as possible.

     

    Karma Automotive, is a classic example of the IT Leader. The luxury hybrid car manufacturer was created in 2015 by the Wanxiang Group, which had acquired the assets of the bankrupt Fisker Automotive. Karma was named after Fisker’s first car, and was created to preserve from Fisker’s innovative approach, while learning from its failure.

     

    Karma migrated to S/4HANA because they needed a lot of agility from their landscape. As a luxury automotive manufacturer they have to rapidly adapt new technology, and dynamically scale up to meet production needs. Customers needed a seamless experience that allowed them to configure, preview and order products with up-to-date offerings and pricing across their market. And all that customer demand data had be fed back to Karma, to dynamically reshape both their product offerings and their marketing strategies.

     

    As a result, going with a highly-customized S/4HANA landscape was the obvious choice for Karma. We provided them with a tier-one cloud, which offered a huge 12TB virtualization (and this was all before VMWare vSphere 6.0, when 1TB was the maximum you could get off the shelf). Within that landscape, they were able to use powerful HANA applications, like SAP Configure, Price and Quote, and SAP Hybris to meet the needs of their customers.

     

    The challenge for the IT Leader is to find a provider that can give them a decisive competitive advantage quickly, without taking risks. If you fit in this category, it may be tempting to single-source implementation with a provider who claims functional and technical expertise.

     

    Don’t do it!

     

    HANA migrationThe sorts of integrators who offer this service overpromise in order to get your functional business. Generally speaking, they lack the the technical know-how to do a good job. This can mean missed deadlines, unstable performance or even a failed launch. It’s always important to get a technical provider who is patient, thorough and experienced – this is especially true when you’re working under tight time constraints.

 

  1. The Patient Planner: Karma’s plan made sense for them, because disruption was the goal. They were starting over with a good plan and plenty investment, and needed a way to scale up quickly to serve demanding clientele. But most types of HANA migration are based on a different set of priorities.

     

    The Patient Planner seeks to balance the need to innovate with a range of cost and corporate governance factors. They have to consider how to get the maximum value out of existing investments, and minimize disruption of key factors.

     

    They may want to demonstrate ROI and pilot an approach to migration before going all in, just to make sure they have everything right. In some cases, Patient Planners have data silos or other components that are low priority and expensive to migrate, and need a provider who can integrate those old assets into a new HANA network.

     

    Patient Planners have a wide range of starting points and goals. Some organizations have an existing landscape they’re pretty happy with, and are looking for a way to harness particular HANA functionality without major changes in other aspects of their landscape. Others need to address persistent issues in a particular area, such as hosting, performance or workflow.

     

    In the case of New England Biolabs®, the catalyst was the NEBnow Freezer Program. NEBnow provides biotech labs with their own freezer kiosk, stocked with the reagents they need. The kiosks are monitored and automatically restocked by NEB, eliminating the need for reordering while also controlling cost and environmental impact.

     

    NEB was up to date on SAP ECC 6.0, but their current landscape was not offering certain key functionality in areas such as production planning and costing. The situation was complicated by the nature of their business and industry. Biotechnology is a highly regulated industry, and NEB’s business model emphasized customer support, which opposed additional constraints on their landscape.

     

    The challenge for the Patient Planner is finding the right combination of competencies. NEB carefully considered the capabilities of a range of providers, and chose Symmetry because we had the technical, compliance, business and support capabilities they needed.

     

    Not all companies have needs this demanding, but that doesn’t mean you can settle for technical experience alone. These types of HANA migration require a provider with a high degree of business insight, and may demand regulatory compliance competency as well.

 

  1. The Business Opportunist: Major changes to your business often require changes to your landscape. These changes can be disruptive, but they also represent great opportunities for IT transformation. The Business Opportunist takes advantage of a business event to plan a tactical HANA migration.

     

    Maybe you have a planned merger, where you’ll already need to consolidate two separate landscapes onto a single platform, or a divestiture where you need to separate one particular division into its own landscape. Perhaps you’re facing a change involving a major IT investment — a lease that’s expiring in six months, or a server approaching end of life.

     

    Not all business disruptions accelerate the HANA timetable — these types of HANA migrations are often delayed or constrained by business factors. For example, if you just invested in new IBM iSeries hardware, you’re probably not going to be moving to the cloud for 5 years and when you do, you’ll want to move to an IBM iSeries cloud — a choice you might not have made otherwise.

     

    For one of our clients — an American manufacturing company — the catalyst was a divestiture. The company had been previously acquired by a German company, and was being sold to a second company when they came to us, without a solid roadmap for SAP transformation. The manufacturer needed a partner that could coordinate between them, their parent company and their sister company to build and execute an independent HANA landscape.

     

    The manufacturing company was impressed by our straight talk, experience and quick response time. We met with them the same day they submitted their request, and talked the project through with them.

     

    Flexibility was another key factor. We were able to test their server onsite in Germany, and meet them in the airport to quickly and securely retrieve their data. In a major HANA migration like this, having a provider who is willing to go the extra mile allowed the manufacturer to keep costly downtime to the bare minimum.

     

    For these types of HANA migrations, the requirements can vary greatly. In some cases, the business has everything planned out months or years in advance. But in many cases, a divestiture can surprise companies, leaving very little opportunity to prepare ahead of time. The only solution is to ask the provider tough questions, and make sure they understand your situation and can prove their experience and value.

 

What’s Your Journey?

Are you an IT Leader, charging into the future? A Patient Planner, constructing the perfect SAP strategy? A Business Planner ready to seize an unexpected opportunity? Whatever your journey is, we’d love to hear from you!

 

Contact us to learn how Symmetry can help you plan the perfect journey to HANA.

About Curtis Gaska - Solution Architect

Curtis Gaska is a solution architect on Symmetry's expert SA team, delivering complete SAP® technical solutions from upgrades to complex landscape implementations. Curtis pairs his sound SAP technical expertise with sales skills to knowledgably advise clients, and prospective clients of Symmetry’s services and product offerings throughout each stage of the sales cycle. Curtis has a unique ability to deliver technical knowledge to create customs solutions per the client requirements, by not only taking the technical specifications into consideration but also the business drivers particular to that organization in turn creating an optimal SAP environment. This skilled approached includes scoping, planning, and execution of various projects including Migrations/Upgrades/Installs, Hosting and ongoing Managed Services. He also stays abreast of the latest technologies such as road mapping solutions for client’s to leverage SAP HANA® in their current environment to then be hosted in Symmetry’s state-of- the -art Datacenter.