SAP S/4HANA puts older SAP ERP systems easily in the shade. It enables improved decision-making and innovative business models. It ensures sustainable processes and increases productivity thanks to Fiori interfaces. But there’s still one thing that many companies worry about: expensive errors during the transition.
So how can companies make the transition to S/4HANA? We will outline three options that you should know before you talk to a solution provider.
A New Start: the Greenfield Approach
Your new S/4HANA system will be constructed on a “greenfield site,” parallel to your current system. This variant will motivate your company to rethink long-established processes (business process re-engineering) and throw off excess ballast. This option will also enable you to develop new business models. In addition, your specialist departments will reap the benefits of S/4HANA almost instantly.
If you are looking to save time and resources, you can fall back on tried-and-tested best-practice models and processes that cover the various industry requirements. Since it differs only slightly from the standard SAP system, the first prototype is quick and easy to implement. Either way, you will transition from old to new on an agreed day.
Let’s Start with the Simplest Scenario
If you are looking to integrate multiple branches of your company, it’s worth taking a look at the second variant of the greenfield approach. Here, implementation first takes place in the branch where the situation is the least complex. For example, the sales team in Austria is the first to receive S/4HANA, which is connected to the ERP at the headquarters in Germany. Next up are the warehouse and service teams in France, followed by the production team in the USA. The process of connecting the team is easy because the interface technology is the same as before. This operational convergence allows the internal IT departments and users to familiarize themselves with the new system and develop a global template for introducing S/4HANA – up to the point at which the company headquarters, too, make the transition. In addition, the chosen branches and departments can enjoy the benefits of this new technology almost right away.
A Mix of Old and New: the Brownfield Approach
Do you like the idea of continuing to work on established foundations? If you really want to retain tried-and-tested processes and value chains, you should consider a transition that essentially involves converting an existing SAP ERP system. Even if you actively use numerous Z programs and operate multiple branches, conversion could well be your best option. That said, the system should fulfill a few technical requirements – creditors and debtors, for example, should already have been converted to business partners.
First S/4HANA Conversion, Then the Interfaces
The bulk of the work will initially take place in the old system. During the preparation phase, the solution provider will check the add-ons and Z programs that you use to see whether they are compatible with S/4HANA. Incompatible software will have to be changed, deleted or replaced. The conversion process – including all the data – will take place on day X, albeit in the background. Users won’t notice a thing because the processes and interfaces will remain the same, at least initially. Only later in the adoption phase will the new SAP S/4HANA functions and interfaces be implemented and visible to users – module by module, too.
And What Will Happen to the Data?
It will be migrated. One feature of the brownfield approach is that the current and historical data is migrated and converted for the HANA database. This means that this data is available in real time and can be evaluated for operational purposes. In the greenfield and mixed approach, however, your company can choose to have specific data migrated on a specific day (and the rest archived) or to have all data migrated in one go.
A Happy Medium Is Possible: the Mixed Approach
There is a third option for transitioning to S/4HANA. This mixed approach – comprising the greenfield and brownfield approaches – takes the best of both worlds. The old system will be retained and implemented on SAP S/4HANA, after which the processes can then, if necessary, be refashioned within the new system. This represents a significant advantage over a purely brownfield approach, in which you can adjust and adapt existing processes only retroactively and to a limited extent. If you desire, the HANA database can contain not only date-specific data but also historical data.
So How Do You Make the Right Decision?
The three approaches may differ in method and technique, but not in outcome. The financial outlay and timeline are also comparable – at least if you consider the transition as an end-to-end process, from your initial considerations concerning SAP S/4HANA to the complete transitioning of your company and processes.
The size of the project depends primarily on the number of system sections, users, accounting areas, sales organizations and rollouts. The degree of utilization of the standard SAP system – in other words, the number of adjustments (including Z programs) – is also a factor. The available in-house resources in the specialist and IT departments also have to be taken into account.
Your Roadmap for S/4HANA Conversion
There’s no one-size-fits-all solution. Instead, it’s up to companies and solution providers to develop a common strategy. This begins with the value check, often followed by a roadmap and/or series of strategy workshops. The outcomes are customer-specific arguments for SAP S/4HANA conversion; defining exactly what kind of transition is to take place and how; and planning budgets, times, milestones and ROI.
Make sure that your roadmap documents the following factors:
- Your situation and the current system landscape
- Times, milestones and strategy
- Variant-dependent outlay
- Optimal implementation scenario: S/4HANA version and operating model (cloud, on-premises, hybrid)
- Project schedule containing all the relevant steps
The manufacturer will continue to support the old SAP ERP system until 2025. Use this time to systematically prepare for the transition.
Further detailed information about SAP S/4HANA conversion and the roadmap can be found on our website. If you have any additional questions about transitioning to SAP S/4HANA, do not hesitate to contact us personally.
– By Lorenz Beckmann, Principal for SAP S/4HANA and SAP Cloud Platform, itelligence AG –
Interested in more information about SAP S/4HANA? See for yourself what our expert Andy Steer, Chief Technical Officer tells you in his vlog.
Want to embark on your journey to SAP S/HANA? And you need a competent, reliable partner at your side? Read more about us, what we can do for you and our SAP S/4HANA implementation services in our solution brief.