SAP S/4HANA Migration: Your Must-Read Guide

What You’ll Learn

• The necessity and benefits of migrating from SAP ECC to SAP S/4HANA.
• The challenges commonly faced during the SAP S/4HANA migration process.
• The three primary migration strategies: greenfield, brownfield, and landscape transformation.
• Steps to choose the right migration approach and ensure a successful migration.
• Best practices for SAP migration to minimize risks and maximize efficiency.
• How Panaya can facilitate a smoother and more efficient SAP S/4HANA migration.

SAP ECC: The Final Countdown

SAP and the Americas’ SAP Users’ Group (ASUG), one of the most influential groups of its kind, have been vocal advocates of the need for back-office core applications like SAP ERP Central Component (ECC) to catch up with the pace of innovation among front-office applications.

“Organizations are spending a lot on marketing innovation, such as front-office technology, where there’s a lot of buzz, but the front office and the back office [will] have to be in sync at some point,” according to Geoff Scott, ASUG’s CEO.

For SAP ECC 6.0, that deadline is pretty much known, as the software will be officially sunset in 2027. The need for a SAP S/4HANA migration before then is clear; many organizations have yet to embrace the change fully.

Why migrate to SAP S/4HANA?

SAP HANA migration can provide numerous benefits for organizations. It offers improved performance with faster processing speeds and increased operational efficiency, leading to real-time analytics and better decision-making through advanced data visualization and insights.

Additionally, organizations can leverage the latest SAP technology and innovations to stay ahead in their respective industries.

What are the benefits of a S/4HANA migration?

SAP S/4HANA migration offers a wide range of benefits for organizations. They include improved real-time analytics, faster period-end financial closings, access to the latest technologies such as AI, process automation, and easier-to-update business models. Ultimately, the choice to migrate to SAP S/4HANA is about supporting a company’s strategic objectives and staying ahead of the game.

SAP Migration to S/4HANA: State of the Market

Panaya’s customer feedback shows that the S/4HANA migration ship is sailing, and everyone wants to be on it. Our findings align with the SAPinsider report, SAP S/4HANA: State of the Market. According to a SAPinsider survey, over half (52%) of respondents are currently in the evaluation phase of their S/4HANA migration. This sounds encouraging, perhaps, but it also means that many, perhaps most, organizations planning a move from SAP ERP ECC to S/4HANA have not taken more concrete steps to get there.

According to the insights we gathered while talking to customers in various verticals (consumer goods, retail, manufacturing, and pharma, to name a few):

• Most SAP customers plan to take the system conversion (brownfield) path to S/4HANA.
• A major customer pain point is the evaluation (business case) phase.
• Project scope, resources, and timeline are difficult to evaluate.

With so many moving parts and new standards, complexity and risk seem to be inherent to every SAP S/4HANA system conversion. An ASUG and DSAG joint survey affirms that complexity remains a major barrier to SAP S/4HANA implementations. Other challenges include delays that can be attributed to the current COVID-19 global crisis.

Learn all about the 5 common mistakes ECC customers make when planning their SAP S/4HANA Migration.

What are common SAP S4HANA migration challenges

SAP S4HANA migration can present several challenges that organizations need to be prepared for, including:

• Data migration: Moving large amounts of data from legacy systems to SAP S/4HANA can be time-consuming and complex, requiring significant effort to ensure data accuracy and completeness.
• Customization compatibility: Customizations made in the legacy system may not be compatible with the new SAP S/4HANA system and may require rework.
• Technical compatibility: Ensuring that SAP S/4HANA integrates with other systems and ensuring technical compatibility can pose a challenge.
• Cost: The cost of migration can be high, especially if extensive customizations or integrations are required.
• Technical expertise: Migrating to SAP S/4HANA requires a high level of technical expertise, and a shortage of skilled resources can be challenging.
• Testing: Extensive testing is required to ensure the new SAP S/4HANA system works correctly and meets business requirements.
• Time: Migration can take several months to complete, and disruption to business operations during this time can be significant.

S/4HANA Migration Strategy -Three Approaches, One Goal

There is no single S/4HANA Migration Strategy that is appropriate for every organization. Some started clean by implementing a new system with no ‘baggage,’ known as a greenfield project. Others prefer a complete system conversion, a brownfield project because it doesn’t disrupt their existing business processes. And for those who want to consolidate their current system landscape into SAP S/4HANA, there’s the landscape transformation option.

Each approach uses a different methodology and has its advantages and disadvantages. Read on for an analysis of each approach and how to choose the one most suitable for your specific circumstances.

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The Greenfield Approach – New Implementation

A greenfield project is a new implementation of SAP S/4HANA. It is a golden opportunity to redefine and simplify business processes and take full advantage of S/4HANA capabilities you may not have previously leveraged. While this approach does not guarantee operational success from the start, there is time to make necessary adjustments as the new system is implemented.

Nonetheless, the radical changes inevitably introduced in how you operate the system can be unnerving. And the re-implementation process can be tiresome and time-consuming, especially on the change management side. So, before you go down the greenfield path, be sure you’re ready for an intense and involved re-engineering process.

The Brownfield Approach – System Conversion

The brownfield alternative is SAP’s recommendation for customers who want to migrate to S/4HANA but preserve the value of the time and effort invested in adapting SAP ECC to their needs. It is a conversion process in which you migrate and adapt all your business processes to the new S/4HANA platform. This approach is less disruptive and can offer a better solution if you don’t want any essential operational changes.

A brownfield project runs the risk of possible technical issues during and after conversion. However, SAP has provided specific conversion tools and guidelines intended to mitigate such problems from the start.

Landscape Transformation – Selective Combinations

Landscape transformation is not a system conversion or a new implementation; it’s selective SAP S/4HANA migration or consolidation of multiple systems.

With this approach, you can limit SAP S/4HANA migration to specific business processes while leaving the rest as is. Some organizations go down this route for migrations expected to produce the best or fastest ROI, such as incorporating S/4HANA capabilities into their Central Finance business unit.

The same essential methodology, executed with the right SAP tools, can be used to consolidate SAP and non-SAP systems. Creating a single, centralized system reshapes your business landscape for more streamlined management.

How to Choose the Right S/4HANA Migration Approach

To choose the right migration approach, you’ll need an extensive analysis of your organization’s technical and functional aspects to determine SAP S/4HANA readiness. This includes evaluating the database, platform, configurations currently in use, your business workflows, the system landscape, and more.

More importantly, you should look at how the migration fits into your organization’s digital transformation roadmap. Identify where you are now, where you want to go in the coming years, and how you plan to get there.

Steps to a Successful SAP S/4HANA Migration

Once the path has been decided upon, it’s time to plan the exact ECC to S/4HANA migration steps needed for a successful implementation.

Greenfield

The SAP Activate methodology provides a clear structure and detailed series of steps for the greenfield approach:

Discover: Identify the value of your business and then develop the roadmap and strategy to be used in the implementation of the project.

Prepare: Start working on final project plans and preparing your team. Choosing the right people for your team ensures the project will run optimally.

Explore: SAP S/4HANA offers a wide range of solutions for your business, especially for a new implementation. Initiate the scope evaluation process with a Fit/Gap analysis — instead of traditional blueprint requirements — to ensure a more efficient implementation.

Realize: Focus on the business requirements defined in the previous phase. These include system configuration settings, integration scenarios, and data migration.

Deploy: Set up the production environment in this phase. When it’s ready, execute cutover activities and move business operations to the new system.

Brownfield & Landscape Transformation

The necessary landscape transformation or S/4HANA conversion steps are divided into two phases: preparation and realization.

Preparation: System Requirements & Planning: Conduct an assessment of the existing system and then define the best possible solution to execute the migration.

Conversion Pre-Check: Ensure any add-ons or business functions active in the current system are compatible with S/4HANA. (SAP has provided the Simplification Item Check for this purpose.)

Custom Code Migration: Check your custom code for S/4HANA compatibility. This is essential, especially if there are enhancements in your current system.

System Installation: Start the conversion to SAP S/4HANA, including database migration and data conversion.

Follow-On Activities: All relevant, customized settings must be migrated after the technical conversion.

Data consistency check (especially for financial data): Since SAP S/4HANA collects all relevant components from Financial Accounting (FI) and Controlling (CO) into one data pool, called the Universal Journal, you must reconcile your accounting components so that data can be merged correctly.

Iteration Testing: When all customizations are completed and all data has been migrated, you need to perform test iterations to ensure the system runs correctly.

3 Steps to Ease SAP S/4HANA Migration

Tackle the most common S/4HANA migration obstacles with these three moves:

1. Use Value Stream Management to prioritize so you allocate resources based on added value for the end-user experience. Do not automatically assume your most challenging projects are also the most impactful ones.
2. Start building a viable business case well ahead of your move. Waiting until the last minute means you will have to pay the cost of indecision: technical debt, market share lost to competition, and a rushed insufficiently resourced migration project.
3. Connect with Panaya to learn how we can ease your journey to S/4HANA and ensure a quicker return on your technology investments.

SAP migration best practices

Here are some best practices for SAP migration:

• Plan and prepare: Thoroughly plan the migration, including defining the scope, timeline, budget, and resources.
• Assess the current environment: To understand the existing systems, customizations, and data structures.
• Define the target landscape: Define the target landscape, including the desired functionalities, customizations, and integrations with other systems.
• Data migration strategy: Develop a data migration strategy that includes data cleansing, mapping, and validation.
• Test the migrated system thoroughly to identify and fix any issues before going live.
• Establish change management: Establish change management procedures to ensure that all stakeholders are aware of the migration and its impact on their roles and processes.
• Re-evaluate customizations: Re-evaluate customizations made in the legacy system and determine if they are necessary for the new SAP S/4HANA system.
• Assign a dedicated project team: Assign a dedicated project team with the necessary technical and functional expertise to lead the migration.
• Partner with a trusted vendor: Partner with a trusted vendor or consultant with extensive experience in SAP migration to ensure a smooth and successful migration.
• Monitor and adjust: Continuously monitor the migration and make adjustments as needed to ensure that the project stays on track and meets the desired outcomes.

The Journey to S/4HANA Success Begins with Panaya

Panaya, the leader in SaaS-based change intelligence and testing for SAP, has partnered with SAP in developing Panaya S/4Convert.

The solution provides the certainty and simplicity you need to start your S/4HANA migration journey, bridging the change management gap with valuable insights and detailed reporting. It is designed to help reduce the time, cost, and risk of S/4HANA migrations, tackling the challenges of defect management and implementation failure with optimal scoping, automatic intelligent code remediation, and accelerated business process re-implementation.

Panaya draws on its experience with over 80 HANA migrations and over 9,000 SAP projects to help you successfully transition to S/4HANA.

“All roads lead to S/4 HANA, but not all of them might be right for your company, which is why Panaya uses its decade of SAP ERP domain expertise to develop a solution specifically tailored to help enterprises manage ERP change safely and effectively,” said David Binny, CEO at Panaya. “It’s like travel insurance for a company on its journey to S/4HANA.”

Whether your project is greenfield, brownfield, or a landscape transformation, Panaya’s change intelligence ensures continuous quality and visibility. You get the freedom and peace of mind you need to be more agile in responding to change, and your S/4HANA projects are both 50% faster and 100% safer.

Through the unique partnership with SAP, Panaya provides everything you need in one SaaS solution:

• The Most Comprehensive Impact Analysis Coverage. Leveraging SAP tools, best practices, and Panaya proprietary Change Intelligence AI.
• Intelligent Code Remediation. Massive automatic code corrections are ready to deploy at the touch of a button.
• Real Data & Usage-based Scoping. Project plans, including all correction and test activities, are automatically generated in 48 hours.
• A Testing Platform Designed for SAP. The business-process-centric test management platform, designed for SAP, is fully integrated with Test Automation.

The Bottom Line: What to Expect

With Panaya, you can expect a seamless and efficient migration experience characterized by the following attributes:

• Remove the Guesswork: A clear understanding of what to install, how to install it, what to run, and in which order, with a tailored project blueprint of object connections based on your company’s production codebase.
• Mitigate Risk with Next-Gen Impact Analysis: Real-time risk analysis evaluates change impact, business processes, and code quality, helping to eliminate uncertainty and maintain security, performance, and compliance.
• Eliminate Scope Confusion: With made-for-SAP risk-based testing and custom code fixes, you get a clear path to rapidly implementing valuable corrections and eliminating unnecessary changes.
• Accelerate Test Execution: Automated test plans ensure efficient release cycles, while a record-and-play feature can capture tests to be reused for codeless automation.

With an understanding of S/4HANA, a properly defined business case, and a clear migration path, the daunting task of moving to S/4HANA is simplified. If you are contemplating a migration or are stuck in the evaluation phase, don’t wait – contact Panaya today.

Key Takeaways

• Migrating to SAP S/4HANA is crucial before SAP ECC is sunset in 2027, offering improved performance and real-time analytics.
• S/4HANA migration provides faster processing speeds, operational efficiency, and access to advanced technologies like AI and process automation.
• Organizations face challenges such as data migration, customization compatibility, technical integration, costs, technical expertise, extensive testing, and time.
• Three main migration strategies—greenfield (new implementation), brownfield (system conversion), and landscape transformation—each with distinct advantages and methodologies.
• Best practices are to lan thoroughly, assess current systems, define the target landscape, develop a data migration strategy, test extensively, and establish change management procedures.
• Panaya offers tools for impact analysis, intelligent code remediation, usage-based scoping, and a specialized SAP testing platform to ensure a risk-free and efficient migration.
• With Panaya, organizations can expect a seamless migration experience with clear project plans, real-time risk analysis, efficient test execution, and minimized scope confusion.

Frequently Asked Questions

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