SAP® S/4HANA migration – when and how?

Main visual : SAP® S/4HANA migration – when and how?

To migrate, or wait to migrate – that is the question facing every organization using SAP® software. Right now, it looks like a game of ‘chicken’ – waiting to see who moves first – going on in the world of S/4HANA migration.

As one of SAP’s foremost partners, we believe that getting this timing wrong has severe implications for your business, as does taking the wrong approach to migration. That’s why I’m outlining the most pragmatic options for low risk, effective migration – based on real-world discussions.

Why are we waiting?

SAP is one of the global software powerhouses, with a client list that includes 92% of the Forbes Global 2000 and 77% of the world’s transaction revenue touching one of its systems. With a heritage stretching back to the 1970s, periodic major updates are essential and the latest – the migration to S/4HANA, now scheduled for completion by 2027 - is underway.

However, the ratio of customers currently running S/4HANA is still very low, at just 4% of total SAP customers by the end of 2020. For Europe, it made sense to wait for the dust to settle on a political settlement when it came to Brexit. And nowadays, worldwide, the COVID pandemic has played a big part here – with so much to be done to adapt to a world in lockdown

Then, we might call the psychological element: many people and organizations are naturally reluctant to make the first move in significant changes, preferring to watch and learn from others’ experiences. It’s a sensible approach but one with its risks: Wait too long and suddenly everyone is chasing the same finite pool of resources. You are no longer in control of your timetable and prices start to rise.

Remember Y2K, anyone?

With COVID vaccines now coming on stream in volume, a Brexit deal in place, and the new S/4 migration deadline now fixed, organizations have important decisions to make.

Minimize risk

Risk is a significant factor in your decision making. SAP underpins so much in the modern, digital enterprise platform that you need to be confident that migration will succeed, on time and on budget.

There are three broad routes you can take for S/4HANA adoption the so-called bluefield, greenfield and brownfield approaches. Even when there is an existing implementation, the greenfield approach asks what your systems and processes should look like if starting afresh. As well as the obvious advantages, this also implies heavy initial consultancy input plus system rebuild costs.

An alternative approach – brownfield – appeals to older SAP environments with a lot of custom development that has made the organization what it is. Unsurprisingly, it’s often considered easier in these circumstances just to apply all necessary updates and then tackle the custom code, line by line, relying on adequate access to low-cost offshore resources.

So far, so good, but if the old system processes are holding you back today, then that’s not going to get any better after migration. It’s a little like deciding to move to a new house, taking everything you’ve accumulated over 30 years out of the attic, and putting it all back in the attic at your new home. The opportunity to clear out the clutter, save space and costs and make a fresh start has been wasted.

And there is the bluefield approach, which acknowledges the vast importance of custom code but does not let it dominate. Is all that code going back to the 1990s or earlier really still needed? What about the one-off report demanded by the then-CFO for a compliance requirement that no longer exists? Or a routine for a subsidiary you sold off a decade ago?

Bluefield scans all your code and the frequency of use, so you can take an intelligent, pragmatic decision on what is essential, what needs to be remediated, and what can be safely left behind. It allows you to isolate the code you need, port it into the cloud and deal with it before moving it into the new system.

This is potentially a considerable saving. Between 60% and 70% of custom code is redundant in our experience, and leaving it behind cuts time, cost, and risk. Because this process is software-driven, there is a significantly lighter management consultancy footprint at the start of the project.

Start small – think big

Put color field theory aside for a moment. The meaningful question is how can you most efficiently leverage S/4HANA as your ERP core and what that means for enhancing the intelligent enterprise – and the ability to lead your sector in the future. In our view, it’s essential to start small – get a complete handle on the situation – and look for the big, transformational opportunities.

We come at this from an agnostic point of view. We are engaged in our S/4HANA migration right now – currently the largest in the world according to SAP – which is best characterized as greenfield. That’s because we fit the pragmatic profile for a greenfield transformation: we are integrating multiple legacy ERP platforms and creating a new, standardized operating model.

With our Global Delivery Center experts, Fujitsu is also well placed for brownfield migrations that involve a lot of code updates. We feel this makes the best sense for customers if they have an SAP ECC v6.0 environment from five or six years ago, probably not too cluttered with custom code.

To be clear, we are not saying it’s bluefield or nothing. But in many cases, bluefield is the most pragmatic, lowest risk choice, and we are well-placed to deliver. Fujitsu is a Global Platinum partner with SNP, the leading provider of the software that assesses and prioritizes real SAP migration needs. Unlike other systems integrators, we have invested in training our SNP team, which will be vital as the S/4HANA migration crunch starts to bite.

We also keep the broader picture in mind. Vital as it is, S/4HANA migration is not the only story. As a system integrator, we look at the whole environment, including interfaces, data, security, and the services you will need to maintain your applications after you go live.

When is too late?

2027 sounds like a long way off, but when should you start planning if you want to complete it by then? I wouldn’t want to be dependent on a completion date beyond 2025. Resources are going to be very hard to guarantee after that. If you accept that as sound advice, then you should be thinking about options now.

What are the things you need to do first? Optimization, for example, so you don’t port across things that will only hold you back in the future. Look at your estate: How much custom code and how many redundant objects do you have. Start to prepare.

Waiting has some advantages, but it’s now a game of chicken. Don’t leave it too late. Find out more at: SAP Services: Fujitsu Global

My thanks to my colleague and co-author of this blog, Gerren Mayne.