Here are the four big steps you should follow to make sure that your transition from SAP to SAP S/4HANA is smooth and successful.
1. Figure Out Which Iteration of S/4HANA is Best For Your Business
Before you even start making the switch to S/4HANA you’ll need to figure out what your business needs from the software, as well as your business’s budget. Once you know the needs and limits of your business, you will be able to choose which platform to go forward with.
The more traditional iteration of S/4HANA is the on-premise version. An on-premise deployment of S/4HANA is based on your own hardware at your headquarters, with all your data stored locally. The other option is cloud-integrated S/4HANA, which hosts your data in the cloud.
How should you choose between the two?
The main advantage of on-premise deployment is that it is much cheaper than cloud integration, and is generally quite convenient, especially if your business’s activity is limited to one location. On-premise deployment is much faster to work with and offers you more control over your software.
The problem is that it’s a one-time installation, and if you ever want to stay up-to-date with the newest versions of S/4HANA, you will need to acquire them yourself and have your team manually install them.
Cloud deployment is all about turning SAP into a Software as a Service. Cloud deployment means that you will be constantly connected to SAP servers, where all your data will be hosted and stored for you.
By opting into a Cloud-based option, you’ll essentially become a long-term SAP client. They will regularly and automatically provide you with quarterly updates and optimizations to the software and will protect your data with backups. Cloud storage will become extremely valuable for your business if you operate in a wide geographical area, with multiple locations working together from a distance. Cloud deployment allows for easy connectivity between all your locations, as all they will need is to have an internet connection and connect to the SAP servers to have access to any and all the data you have stored on the cloud.
The main drawback of Cloud deployment is the cost. Given that Cloud-based SAP is a Software as a Service, you’re going to be paying a subscription to SAP. On-premise deployment is a one-time traditional license purchase (although you will need to purchase annual maintenance if you desire it), which will save you a lot of money as time goes on.
2. Create a Roadmap For Your Transition
A good way to plan ahead and minimize the number of surprises you will face during your transition to S/4HANA is to create a roadmap for your transition.
Create a basic timeline of events to lay out, step-by-step, at each part of the transition. Try to estimate how long each step will take and how expensive it will be. However, as discussed below, estimations do not always work out.
The better thing to do is to try to establish which step will put more pressure on your business. Some processes occur quickly and others take a long time, but a quick process can be more disruptive to your business than a long one. Figure out which steps will be the most disruptive to your company, and you will be better prepared for starting your migration from SAP to SAP S/4HANA.
3. Determine When You Should Start Migrating
SAP estimates that migrating from traditional SAP to SAP S/4HANA takes between 12 and 18 months. However, a study from Gartner shows that some individual transition steps can take as long as SAP’s previous estimation, which means that in practice businesses can take far longer than a year and a half to transition.
This means that you need to plan your transition carefully. SAP’s estimated transition time is a result of in-house testing. In practice, when real-world companies are transitioning, things go wrong, delays and hiccups happen, and estimations get thrown out of the window.
Given the amount of time a transition can take, it is best to start as early as possible. However, it is important not to rush things and get overwhelmed. This will not only lengthen the transition process but will also affect your business. It is important to find a time when you can afford to transition without destabilizing your operations. For example, if your business has significant differences in seasonal activity, then you might want to wait for a time when your business is under less pressure to start transitioning.
Make sure you make use of your roadmap to properly plan for your migration time. For example, if your roadmap shows that the very first steps of the transition will be the most disruptive, then you can easily align your transition start time with a time when your business is under the least pressure. Lining things up perfectly can be hard, but this is the best way to prepare yourself and minimize the negative impact of the transition on your business’s activity.
4. Choose The Right Transition Approach
There are three main approaches to transitioning to SAP S/4HANA:
- The Greenfield Approach
- The Brownfield Approach (system conversion)
- The Bluefield approach
The Greenfield Approach is the most straightforward approach from a technical perspective. There are no legacy systems, custom coding, or ad hoc solutions to worry about when adopting this transition model. You completely get rid of the previous system you were using and fully transition to a new one.
This choice allows for rapid implementation because it is not concerned with leftovers from previous systems. You also will encounter fewer roadblocks as it is much simpler to throw everything out and start again than carefully transitioning from one system to another. This transition approach also avoids inheriting some problems and mistakes that could have been made under previous systems. If you choose a Greenfield transition, you will feel like you are starting all over again with new SAP software.
The main drawback is that Greenfield can be more expensive than other approaches. Starting from scratch typically means wide-scale redesigns and realignments that will require more investment.
The Brownfield Approach will preserve parts of your current system, such as its look and feel, and your historical data, while offering you the option to introduce new UI features through SAP Fiori. Basically, the transition to SAP S/4HANA will happen behind the scenes. It will be a much less noticeable transition than the Greenfield approach. Some team members may not even notice the transition!
If the Greenfield approach is more of a restart, then the Brownfield approach is more of a migration. You are not getting rid of everything and starting again. You are taking what you liked from your previous system and simply moving it to a newer, better, platform.
Naturally, a migration will cost much less than a full restart, which is a big advantage for the Brownfield model. Migration is also much less disruptive to your business than a clean slate restart will be.
The downside of the Brownfield approach is that it has to be done all at once. You cannot do things step by step. You have to migrate in one fell swoop. A lot of businesses can shy away from this because they feel safer with a step-by-step transition, which can be paused at any time and resumed later.
Not starting again with a blank slate also means that your new system will be inheriting whatever issues you chose to preserve from your old system. This might not sound like an issue at first, but you can very quickly encounter technical debt as time goes by. The limits of your old system will also probably stop you from taking full advantage of the newest features that SAP implements, so a Brownfield transition is especially risky if you want to go with a cloud deployment of S/4HANA.
The Bluefield Approach is the newest of the three approaches. You can think of it as an in-between of the Greenfield and Brownfield approaches, or even a best of both worlds. It was designed to combine the best aspects of the two previous approaches: the simplicity of Brownfield together with the future-proofing of Greenfield.
The Bluefield model makes sure that you do not lose anything from your previous system, especially when it comes to things that were previously critical to your business’s functioning. At the same time, this approach focuses on making your SAP system viable in the long term. You can always take advantage of updates and new features that SAP implements in the future.
The Bluefield approach sounds appealing, but it is not without some issues. It is still a very new method, which means that it is less developed than the other two. The novelty also means that very few people, businesses, and software will be able to handle this transition method. The Bluefield method is definitely the future of S/4HANA transition, but it is still in its early stages currently.
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