SAP has stated that businesses will need to migrate to S/4HANA by 2025, which seems like a long time from now, but if you’ve been around enterprise IT for a while, you’ll understand that the cutoff is definitely looming. Based on our extensive experience working with SAP clients, here are some best practices you can employ to get the best outcomes for an ECC to SAP S/4HANA migration.
Benefits of an SAP S/4HANA Migration
A number of factors favor the move to S/4HANA, including better efficiency and business agility. The in-memory design of the SAP HANA database offers improved performance and real time data access across the organization. The use of SAP Fiori enables more modern and intuitive user interfaces. The application also introduces new options for running SAP in the cloud.
Approaches to S/4HANA Implementation
We encourage our clients to consider one of three basic modes of S/4HANA implementation. Given the complexity of SAP landscapes and the tendency of SAP to bear on many other systems in an organization, it pays to think through your approach up front. There are variants on these three, of course, but in general, a successful migration will follow one of these patterns:
Starting from Scratch
The “start from scratch” approach involves setting up new, clean instances of S/4HANA. They could be on-premises in the cloud. Onto this tabula rasa, you then implement your business processes one at a time. A good practice is to select one process from your legacy SAP environment as a starting point. You’ll learn a lot from replicating it on S/4HANA. Then, equipped with knowledge, you can move ahead confidently with other processes.
This approach is usually best suited to new SAP customers or enterprises that don’t have a lot of complex integrations between SAP and other applications. It also provides a straightforward path to bimodal IT, which divides IT work streams between slower-moving legacy systems and new fast-tracked development projects. Bimodal IT contributes to business agility by allowing the IT department to support stable, underlying business processes while advancing quickly with strategic innovations.
Converting Your System
It is possible to migrate an existing SAP Business Suite instance directly to S/4HANA. This approach offers the advantage of speed. However, converting a system poses the risk of breaking something along the way. Customizations, for example, which may predate the tenure of the existing SAP team, can be challenging to migrate.
Consolidating Your Systems
It might be wise to consolidate your SAP systems—if you’re running more than one—as a prelude to migration. Let’s say you have SAP instances for each business unit or for regions. Consolidating them makes them a bit easier to migrate. There may also be compelling business reasons to consolidate. For example, by centralizing logistics you might create new business efficiencies.
S/4HANA Migration Best Practices
What’s at stake in the SAP S/4HANA migration process? Risks range from unnecessary spending on the migration due to lengthy work cycles to possible business disruptions from breakdowns in established business processes. Working with many organizations on S/4HANA migration, we have found the following practices to be useful in mitigating migration risks:
- Assessing your current SAP landscape—You don’t have to migrate it all. You can retire or replace certain parts of your current SAP environment. Doing this right means viewing your SAP solutions from both business and IT perspectives.
- Drawing a roadmap—Again, working from a business point of view, it pays to map out where you’re headed with SAP. What future needs do you anticipate? How well will S/4HANA satisfy those needs? What other gaps need to be addressed as you plot your course toward migration? (e.g. are there elements that will require custom coding?)
- Thinking through your architecture—The business that built the existing SAP landscape may not be all that similar to the business you work in today. It’s a good idea to take a careful look at your true architectural needs and plan the migration accordingly. For example, you may have integrations with third party systems or availability requirements that need a refresh. Connectivity has also changed a great deal in recent years. The migration should reflect this reality. The new architecture may need to support new kinds of remote access and security/compliance parameters.
- Training your people—It’s not just the SAP solutions that will be migrating. Your users and IT team will be making significant changes in the way they work as well. Migrating to S/4HANA introduces new technologies, user interfaces and processes into your enterprise – all of which require training. There will be new user interfaces, new administrative workloads and so forth.
- Ensuring connectivity with third parties—S/4HANA will be connecting with third parties. Even if this isn’t your current strategy, it likely will be. Alliances between companies and technology platforms are a staple of digital transformations. There could be more than a few critical applications linking to your SAP landscape. The migration must take these connections into consideration.
Working with Your S/4HANA Migration Partner
The right business partner can make a difference in migrating to ERP on HANA. To the challenge of migrating to S/4HANA, we bring experience in cloud and hosting, IT consulting and ERP managed services. We are known for working closely with you on every step of your journey—maximizing the benefits of S/4HANA while minimizing disruptions and costs.
Contact us to learn how we can help you with S/4HANA migration challenges.