By Robert Holland, VP Research, SAPinsider
SAPinsider research found that 47% of those who are moving to SAP S/4HANA currently plan on performing a system conversion, while 41% plan on a new implementation. However, many organizations make this choice because they believe that their existing ECC system may be too complex, or have too much customization, to allow them to perform a new implementation. But this may not necessarily be the case.
Deployment Choices for SAP S/4HANA
Any organizations running older SAP enterprise ERP systems are in the process of determining whether they will make the transition to SAP S/4HANA, and if so when and how that will happen. Given that this is essentially a migration to a new product, there are many changes that have to be planned for and understood. From a cost perspective the most significant is the potential need for new infrastructure and operating systems to support the new platform, but 61% respondents surveyed by SAPinsider indicated that the main action they were taking in preparing their business case for SAP S/4HANA was in understanding how SAP S/4HANA will affect specific business processes and KPIs. And when it comes to doing the deployment, organizations want to ensure that they are deploying SAP S/4HANA with the approach that minimizes cost.
But having this understanding of how SAP S/4HANA will impact specific business processes and KPIs can be an extremely complex task. While those with existing SAP ECC systems may have custom code that has been developed over the course of many years, knowing which code is actively used can be extremely difficult to determine. This can be further complicated by custom tables as these may need to be recreated in the SAP S/4HANA system. While 40% of survey respondents say they plan to only preserve operationally necessary customizations to the core, many organizations find it easier to pursue a system conversion, or brownfield transition, than spend time and resources identifying exactly which code is required in a new system. To gain a better understanding of some of the complexities facing those considering a move to SAP S/4HANA, SAPinsider sat down with solution experts from Gekkobrain about the transition to SAP S/4HANA, and the trends that they’re seeing from customers around the world.
Using Automation to Understand Customizations
According to Gekkobrain’s Development Lead, Anders Mygind, having an automation tool that can help users understand exactly which customizations are in use in their existing SAP ECC system can have a significant impact on the timeline of an SAP S/4HANA migration. “We had one customer in Indonesia who was able to reduce their SAP S/4HANA timeline by 70% by using our tools,” said Mygind. It’s very important for anyone looking at their existing system to understand what is happening in their systems so that they can better scope the project. “It’s critical for customers to understand the scope of the business process, but forensically that can be difficult,” said Mygind. But determining what has happened historically, where processes have been used, and for what reason is very important when examining code customizations. Being able to view this information so that business users can then indicate which processes need to be moved into SAP S/4HANA significantly streamlines the transition.
Once multiple ERP systems come into the picture, and many organizations are looking to consolidate multiple ERP systems into a single SAP S/4HANA instance, this adds complexity as customizations from multiple systems may need to be included. Further complexity can be added by line of business teams acquiring tools to streamline operations, for example automating data-intensive processes, especially if those business users are using their own logins to authorize any changes. The result of this is that organizations don’t want to take the risk of leaving anything behind and so opt for a system conversion. “The end result for some customers is that they end up running SAP ECC in SAP S/4HANA rather than running the new functionality of SAP S/4HANA,” said Mygind. If organizations cannot simplify what they have and focus on moving only business critical customizations, they won’t be able to fully leverage the new features of SAP S/4HANA.
This has led to a trend that Gekkobrain is seeing where many organizations don’t think that they have a choice when it comes to their SAP S/4HANA transition. “Customers I’ve spoken to don’t think that they have a greenfield choice as it’s just too difficult and has too much risk, especially when they’ve done so much customizing on their SAP system,” said Mygind. They believe the only option open to them is a system transition where they upgrade everything and then try and eliminate some unused pieces. But a new implementation is something that may not only be possible but could, in fact, be preferable. Frequently referred to as a greenfield deployment, this is where organizations perform a new installation of SAP S/4HANA and then take a small number of customizations into their new system. Having an automation tool that helps determine which customizations are being actively used within their existing ERP deployment, and which are critical from a business process standpoint, can open the doors to possibilities that SAPinsiders may not have previously considered.
What Does This Mean for SAPinsiders?
The move to SAP S/4HANA is one that has been considered since the product was first released in 2015. Now that the features in SAP S/4HANA are causing more organizations to evaluate that transition, what steps should you be taking to make sure that you are prepared?
- Determine the scope of which processes and customizations need to be part of the move to SAP S/4HANA. Understanding and identifying the processes that are used in day to day activities is a key task of any move to SAP S/4HANA, and is the main reason why IT and business teams working together is the top requirement when planning any transition. Without input from business teams, it will not be possible to correctly identify which processes are needed from each system, and which can be safely ignored. Both teams must work together to understand what processes exist, and which must be part of any move.
- Educate your teams as much as possible about tools that can be used to scope your SAP S/4HANA transition. To get started on the move to SAP S/4HANA there are multiple free solutions available to help scope your project. This includes resources like SAP Readiness Check, OpenSAP courses, the SAP S/4HANA Movement Program, and material available through SAP S/4HANA Enterprise Support. All of these will help your organization effectively plan at the enterprise level for your transition to SAP S/4HANA, as well as provide a high-level understanding of what you need to do in the project.
- Evaluate automation solutions to help accelerate your move. While free tools provide a starting point in scoping your move to SAP S/4HANA, they may not include all the detail you need—especially around customizations. This is where automation solutions like Gekkobrain for SAP HANA and SAP S/4HANA Migrations can help as they readily identify exactly what is required for the move and thus reduce the overall scope of any deployment. While the same result can be achieved through a manual effort, having a tool that can build a model of the way your system functions based on data within the system and then present that in a graphical manner is much easier.
- Consider whether a new implementation may be a viable option. Even though more organizations making the move to SAP S/4HANA are considering a system conversion as their deployment method than are planning a new implementation according to SAPinsider research, taking the time to understand whether it is possible to reduce the customizations being moved into SAP S/4HANA and pursue a new implementation approach can offer significant advantages. The most important advantage is that the system will be more streamlined from the start, allowing for the performance and efficiency improvements in SAP S/4HANA to be fully leveraged. Even though this evaluation may take longer in the short term, determining whether a new implementation is achievable can offer long term advantages.
Based in Denmark, Gekkobrain creates tools that help organizations find, analyze, and visualize custom and transaction code without the need for manual intervention. Gekkobrain’s product for simplifying SAP S/4HANA migrations, Gekkobrain for SAP HANA and SAP S/4HANA Migrations, is an SAP Certified App and is available in the SAP App Center