The vast majority of SAP users have not migrated to HANA. Out of roughly 110,000 deployments, only about 4,000 have moved so far. The number of SAP HANA migrations has been increasing, but many companies won’t start to seriously think about migration until 2022 — three years before the 2025 deadline when SAP claims that companies must be running on HANA in order to remain supported.
At that point, there will still be enough time left, but managed services providers and cloud hosts will be working to meet an unprecedented onslaught of new SAP clients, which could pose obstacles to your migration or limit your choices. So why are companies risking these complications, when they could undergo an SAP HANA journey?
How Companies See the SAP HANA Migration Process
Part of the reason is that enterprises think of SAP HANA migration as primarily an infrastructure upgrade, rather than a strategic upgrade. This makes cost a dominant factor. Companies want to get the most value out of existing investments, then replace it with a solution that minimizes both immediate CapEx and overall TCO.
This can be rather tricky when it comes to ERP — particularly for companies currently running their own data centers. Computing demand can grow unpredictably, and servers quickly depreciate and become more costly to run compared to newer models. There’s also a huge range of hosting and staffing models to consider, licenses for SAP and third-party software, and the cost of the migration itself. With all these factors, it’s easy for strategic considerations to get lost in the noise.
Another issue is the rapid rate of technological change, both in SAP and the cloud in general. Innovations like the Next Generation Cloud combine traditional public cloud benefits like automation and scalability with private cloud security and control in new ways that are hard to predict ahead of time. When providers aren’t shaking up the market with new technology, they’re making rapid incremental improvements, or pioneering new approaches to costing and managed services.
Even keeping up with the development inside SAP can be difficult, with new options in the SAP Cloud Platform, the S/4HANA Public Cloud, and the HANA Enterprise Cloud, greater integration with technology partners like Apple and Microsoft, and an ever-growing range of third-party vendor services. This makes it very difficult to take a strategic, long-term approach — likewise, it insures that you’ll probably have more choices tomorrow than you do today.
Finally, a lot of enterprises are change-averse. Whatever SAP HANA migration journey you take, moving and upgrading your ERP is a major project. Particularly for large, established organizations that trust their existing landscape, SAP migration can seem like a risky, costly and potentially disruptive project — organizations know they have to deal with it some time, but they don’t want to deal with it now.
But the journey to SAP HANA isn’t like performing a building upgrade or outsourcing financial services. It’s a complex, strategic upgrade that provides powerful new tools and improved functionality. To get the most benefit from it, you need to understand what’s involved — your options, the costs, and time constraints — and make sure you have the right partners and resources to succeed.
What Are My SAP HANA Migration Options?
If you’re on SAP ECC 6.0, you’re almost certainly going to end up on S/4HANA eventually. The question is, how? There are three basic SAP cloud migration paths. Companies that want to start off slowly can undergo a traditional SAP cloud migration, moving their assets into the cloud without moving to SAP HANA at all. This allows you to show ROI quickly from running in the cloud, while minimizing initial disruption (since your landscape doesn’t have to change significantly) and lets you leave the SAP upgrade for a later date.
The next option is migrating to Suite on HANA — SAP ECC 6.0 Enhancement Pack 7 (at a minimum) running on a HANA database. This gives you all the incremental benefits of HANA, such as faster performance and compatibility with newer applications, and gets you close to a full S/4HANA landscape.
However, a lot of companies can benefit from moving straight to S/4HANA. In many cases, a complete upgrade and migration is less disruptive and costly than multiple smaller upgrades, and the new functionality can provide a major competitive advantage.
What’s Involved in an SAP HANA Migration?
SAP HANA technical implementation — the actual process of migrating and upgrading your SAP landscape — typically takes anywhere from 6 months to 2 years to complete. The time commitment depends on the requirements of your particular upgrade, whether you upgrade all at once or in stages, and a range of other factors. However, the process starts long before the actual SAP HANA migration.
First, you’ll need to work with a functional provider to plan out the changes to your landscape. The provider will look at the functional requirements of your landscape — what your SAP software needs to do — and plan out a SAP HANA landscape that meets those requirements. The functional program will need to accommodate the needs of shareholders at multiple levels, from strategic executive goals to the daily job duties of entry level workers. As such, this process can be quite complex and time consuming for companies planning a major S/4HANA transformation.
The technical team are the folks who put all the pieces together, make sure it works, and handle the actual migration, go-live and post go-live tuning. The goal of the whole process is a flawless go-live. On the day the provider actually migrates the system, turns it on, and switches production over from your old SAP ecosystem, everything needs to work perfectly, down to the timing of each stage.
To accomplish this, technical providers like Symmetry use a recursive strategy. First, we iron out any major bugs by asking the functional provider a lot of questions — especially questions about who or what needs access to the system. Most SAP systems have to connect with resources and people outside the landscape. There are offshore stakeholders who need VPN access, external tax systems, banking partners, and so on. If the functional provider has overlooked any of these connectivity needs, we address them near the beginning.
The next two stages of the project are preliminary work — setting up the data center, downloading software and so on. After that, most of the work is just refining the landscape. We’ll catch any major issues in a sandbox migration, use what we learned in the sandbox during the development migration, and make any final tweaks in quality assurance. Throughout the process, we’ll also be working with your stakeholders, meeting to discuss the process and make any needed changes. That ensures that, when it’s finally time for the SAP HANA production migration, there won’t be any unpleasant surprises.
What Are the Benefits of SAP S/4HANA Migration?
The Business Suite vs. S/4HANA dilemma is where SAP HANA migration starts to take on a strategic dimension. SAP HANA is a major improvement over a traditional Relational Database Management System (RDBMS). Because all data is stored in memory, HANA doesn’t have to slow down to read a disk, eliminating a traditional performance bottleneck. HANA also structures data differently. While RDBMSs have a separate transactional databases (used for things like processing orders) and analytical database (used for complex queries) HANA combines them both into one structure. (check out what is SAP HANA for more information).
This provides immediate incremental benefits. It compresses memory and speeds up processing. Properly tuned, SAP HANA is incredibly fast, eliminating slowdowns that eat up productivity. Upgrading to SAP Fiori UX adds further benefits, including improved productivity, and an intuitive, user-friendly interface that supports mobile and desktop use with equal ease.
But other benefits depend on adopting S/4HANA apps, which have been reengineered to harness HANA’s performance, and data analysis ability. This provides a wide range of benefits, from overall strategic tools like better predictive modeling, to department and industry-specific upgrades, such as faster closing and real time cash flow analysis for finance, and tools to help logistics spot and fix supply chain bottlenecks. Whether that’s a huge advantage or a moderate gain depends on your use case. A large financial organization might be positioned to gain more benefits from S/4HANA analytics than a regional retailer, for example.
Additionally, because S/4HANA apps have been rebuilt from the ground up, transitioning can take a lot of work, and that work depends on your landscape. Preparing a legacy landscape with lots of custom code to migrate will take a lot more work than moving an up-to-date, fairly standard SAP ECC environment.
In some organizations, a move straight to S/4 will provide a major competitive boost. Other organizations might benefit more by starting in Suite and gathering data to plan their SAP S/4HANA migration, or even just taking a first step into the cloud with a traditional SAP migration. The challenge is understanding the options available, and weighing strategic factors alongside cost, complexity, institutional culture and other considerations.
What Happens If I Don’t Move to HANA?
No one is going to force you to give up your current database platform, but if you stay, you’re pretty much on your own. SAP has announced they will continue to support Business Suite 7 until the end of 2025, which means continued maintenance for products like SAP ERP 6.0, CRM 7.0, Supply Chain Management 7.0, Supplier Relationship Management, and Suite on HANA. After 2025, however, SAP expects everyone to be on S/4HANA, and won’t provide support for older products.
That’s not necessarily disastrous in the short term — it’s likely that not everyone will make the cut off, and MSPs will continue to be available to keep your system tuned and secure — but it will unnecessarily increase risk over time. Without SAP hunting down and patching vulnerabilities, it’s likely your system will become less stable.
There will probably be more immediate consequences for your technology stack. SAP has been working with companies like Apple and Microsoft to provide new apps and more powerful integrations for HANA, and software providers are going to increasingly focus on companies that have up to date versions of S/4HANA.
Staying on ECC already constrains your choices, and the choices will get narrower in the future. If your SAP landscape utilizes third party apps, you need to consider their support strategy in planning your SAP HANA migration. You could lose support well before 2025, or miss out on valuable new functionality depending on the vendor and app.
In other words, 2025 is an important deadline, but you may need an SAP upgrade much sooner. Like everything else in your migration, it depends on your company’s unique situation.
What Business Factors Affect SAP HANA Migration?
An SAP HANA migration shouldn’t seriously disrupt business processes. You’ll have to briefly take down your SAP ERP system during the go-live, but your vendor should be able to time the rollover so that it occurs during low demand, minimizing disruption and costs to your business.
However, SAP HANA migration is disruptive in other ways. It takes time for stakeholders to meet and plan the migration, evaluate progress and plan any needed changes, and learn the new system. You may have to change your IT hosting strategy and close up a data center, outsource support tasks, or alter your vendor portfolio. If you’re in the middle of a core vs. context discussion and looking to replace in-house IT support with third-party vendors, that needs to be factored into your HANA timetable and vendor strategy.
The timing of your SAP HANA migration also has significant cost implications. A company that has a couple years left on their SAP software license, or has just purchased new servers will have a different timetable than a company with aging servers and a license that’s about to expire, for example. Budget is another factor. A company with a modest IT budget may need to cut costs in the short term by moving to the cloud, then use the ROI to fund a HANA migration later on.
You also need to think about business upheavals. A merger or acquisition can require big changes to your SAP landscape anyway, making it an ideal opportunity for an SAP HANA upgrade.
Finally, you need to look at your performance and your industry. Are there challenging new compliance requirements you need to face? Are you falling behind on GRC? Do you need the new analytical tools SAP offers? It depends a lot on specifics, but in general, the bigger the required change, the more likely SAP HANA will help.
Your SAP HANA Journey is Just Beginning
Unexpected adventures are one of the best parts of travel, but on your journey to HANA, there should be no surprises. In Part 2 of What’s Your Journey, we’ll help you identify what type of journey your company takes, explain how to plan the right SAP HANA migration, and share some tips and resources to help you prepare.
Contact us to learn more!