By Richard Stokes, Director of Technology and Transformation, itelligence UK
Are you an SAP ERP customer? If so you are probably aware that SAP launched S/4HANA back in 2015 the successor to SAP ECC 6.0, heralded as the biggest update in SAP’s strategy and platform in over two decades. You may well have also heard about the SAP Intelligent Enterprise (of which S/4HANA is at the heart). SAP ECC was released in 2004 and was not developed for today’s evolving digital economy and as such is now an outmoded technology with SAP promoting transformation to the Intelligent Enterprise. SAP mainstream support for the ECC platform will end in 2025.
Running away from a problem or running towards an opportunity?
Outside of the customer base who either implemented S/4 from the beginning or have already transitioned, if you run an SAP ERP system you probably fall into one of two camps. The first is running towards the opportunity of what S/4HANA can do for their business by utilising new functionality and capability. The second group is running away from the threat of falling behind or becoming out of date and un-supported. Either way you probably recognise that you need to transition sometime between now and 2025 but …and it’s a big but ….you have a lot of questions and gaps in your understanding. If that sounds like you…read on.
10 Mantras for a Successful Transition to S/4.
In my role as Transformation & Innovation Director at itelligence I have worked to pool together our global experience from 520 HANA customers, 266 HANA projects and 83 S/4 live customers to create 10 Mantras for a Successful Transition to S/4 with a big helping hand from one of our Transformation Architects Stephen Jerram, and our CTO Andy Steer.
#1 Forewarned is forearmed
SAP talk about three main options to transition to S/4. Lots of customers get stuck there…. right at the beginning. There are a number of very specific scenarios that would rule out a conversion but really for most customers, conversion is the only real option.
Explore the working assumption that conversion is the right approach and understand and size the task by working with a partner or using the tools that SAP provide (including the readiness check). Understand the systems that connect to SAP – document the interfaces and data flows both inside and outside of the organization.
Take the time to carefully understand the results. This is an important first step….understanding. By understanding the most practical transition path you can start to plan that into your overall applications roadmap going forward.
#2 Plug in, then switch on
‘Plug in’ to S/4 HANA then switch on new capability….
The second key part of the story is to approach the transition like a technical upgrade and then in a second step roll out new capability or business improvement in contained, rapid, low risk work packages.
Think of the actual conversion like you would a major database upgrade. It is something that you have to do. You need to get it done quickly and with little or no disruption to the business.
Keep the scope of the conversion completely contained and the scope focused on purely what you need to do to get to S/4. Most of your simplification list will not be a choice but a necessity. Focus on getting them implemented and any change management needed with the business.
From a business case perspective, by keeping the scope very small lots of our customers are treating this as something that is part of the cost of keeping a modern IT platform. For some customers we are working on one overall project (for which a business case is created) that is executed in two (or more) steps, the first being the conversion.
There is pre-work that you can do (more later) to help keep the conversion project short and low risk. We call it getting match fit. See mantras #3 to #9 for more detail.
Enabling the key value to your business should follow on quickly in phased roll out of new capability or adoption of simpler, streamlined best practices.
In summary – keep the conversion small by getting your pre-work done and the scope focused purely on getting live on S/4HANA and plan and build the business case around phased roll out of quickly following ‘Enable’ projects prioritised by business needs.
#3 Height restrictions apply
When considering an S/4HANA conversion project, be aware that you have to conform to a number of prerequisites that are all clearly documented. Examples include Unicode and Application Server ABAP only. ERP releases should not be an issue as we can convert from ECC 6 EHP 0-8 but beware of OS and DB levels. If your SAP landscape has suffered from a lack of investment then there is potential for this to trigger significant BASIS work that you have probably not budgeted for.
Read the Conversion Guide
Although storage is relative cheap these days many of our customers have a lot of data that is now redundant. Some have never done any archiving and some have fallen behind and have not done any archiving for some time. Now is the perfect opportunity to declutter to help minimise the amount of data that needs to be brought across.
As part of the conversion the data is checked for consistency and issues need to be resolved. It is highly likely that your data will contain inconsistencies that will need to be fixed. Less data to bring across means less problems to solve. One of our customers for example had a discrepancy between the MM & FI GL balances due to some direct table entries being made at some point in the past.
#5 More fixes, less breaks
If you have custom code this will require some remediation when you move to S/4. This is for two reasons – database and application.
Database – we refer to the HANATISATION of the code. Code that is not HANATISED may run sub-optimally. The ‘Hanatisation’ can be done before the conversion project using an SAP tool that can be used that not only identifies the requirements but does a level of auto remediation. You can ‘Hanatise’ your code now.
Application – some of your code may refer to functionality or database structures or tables that have been simplified (simplification items) and will therefore not work. You can work in advance to scope your level of custom code with reference to the simplification list and even start remediating some of this too. Incidentally itelligence have developed a tool that is almost ready that automatically remediates much of this code.
#6 Develop in haste, repent at leisure
By being ‘#1 Forewarned and forearmed’ you should have a view on the size of the transition and the likely timing. It is likely that this is not immediate. In the meantime….
Are your SAP developers familiar with the modern principles of developing for future compatibility in an S/4 world? When did you last invest in training for them?
Are they familiar with the modern principles of developing for future compatibility in an S/4 world, in techniques like CDS views for instance?
Have they reviewed the developer guidelines?
How will you develop? In the core or on the SAP Cloud Platform? What is your strategy?
Do you know the difference between in app and side by side extensibility?
That new functionality you are thinking of developing, is it already standard in S/4? How would it be developed in S/4?
Have you considered Business Intelligence? A move to S/4 has important considerations for BI. Ensure your BI developers are aware of the changes.
Make the right choices now by understanding the impact the impact of your changes further down the line.
#7 Adopt change early
A key part of ‘#1 Forewarned is forearmed’ is running the ‘Readiness check’. You need the latest version for three reasons. i) The readiness check itself is improving and getting better all of the time ii) The simplification list is growing as new functionality is added iii) you need the latest picture of your own system.
Be aware of the simplification items in advance – e.g.: Business Partners Credit Management, Fiori apps (some are being deprecated), Storage location MRP, Rebates, Foreign Trade.
You can start to adopt the changes now. The business partner change is a good example that applies to everyone.
#8 Get test ready
When you do your system conversion how ready will you be to test? Do you know your business processes and are they documented? Do you know what you are going to test and how? Who is going to do the testing? Get ready to test.
#9 Get target infrastructure right
Guess what? S/4HANA means you need HANA. How will you run it? Can you stand up the necessary infrastructure as per a production landscape? Make sure you consider the whole landscape you need to convert including Dev, Test etc. Will you take this opportunity to work with a 3rd party to manage your infrastructure for you?
#10 This is not a rehearsal
The conversion process is essentially a cycle of break, fix & repeat. In our experience we typically need three or four iterations. It is essential that each cycle is carried out in controlled conditions. Eliminate wastage and stay as streamlined as possible by starting with the end in mind. Every step and action is part of a defined plan.
Walk into the project with a cut over mind set from the beginning – the whole project is a cut over. Everything you do (in terms of steps) needs to be documented and repeatable in the cut over. In each cycle, be exact, don’t change approach from cycle to cycle.
The first mantra “#1 Forewarned is forearmed” is key. Understand the size, cost and path for you.
Here are some ways to do that:
The itelligence 2019 conference is on the 15th May at the QEII Centre in London. It boasts an impressive line-up of SAP experts with an agenda packed full of inspiring keynotes, new customer case studies, exciting live demos, SAP consultant-led workshops, customer Q&A sessions and our complimentary networking reception.
I will be presenting on “Low Friction S/4HANA Transition – Introducing the itelligence Rapid, Low Cost, Low Risk Approach”. You can join my presentation at 2pm in Fleming on the third floor. My colleague Stephen Jerram will be presenting after me on “The 10 Mantra’s of Successful S/4HANA Conversions – Approaches, Experiences, Tips and Tricks to Prepare Your Teams and Systems”. This session will also run in Fleming and starts at 3:15pm. Sean Baker will be presenting on “Best Practices for Project Managing S/4HANA Transformation Initiatives”. His presentation starts at 4pm in Fleming. We look forward to seeing you at Conference.
itelligence offer a fixed price package engagement, it.assess, to carry out a personalised assessment of your path, timeline and investment needed to move to S/4HANA, assessing and sizing your functional, technical and infrastructure readiness. Contact us to find out more.