Introduction
As we know the S/4HANA is picking the speed and many customers started evaluating the S/4HANA transition requirement.
The S/4HANA transition can be done with 3 different options as explained in the blog: S/4HANA – Path to Digital Transformation
But the main question comes is which option is good from the customer point of view and what is the option as a S/4 consultant I can give it to my customer so that they can en-cash the benefits of S/4HANA and get the optimal return what the business is looking for.
Frankly speaking there is no right or wrong answer about which option a customer should consider for S/4 transformation, however based on my limited work experience in S/4 space, I have some point of view which I learnt over the period.
Again as I mentioned earlier there is no right or wrong answer in selecting the option and it’s completely driven by business decisions.
So as we know there are 3 options for S/4 transition, as per my view the “greenfield” implementation is the more suitable and easy to adopt option for any of the customer. I have put down certain points to support my view and I welcome others to add any additional viewpoints they might have,
From the “greenfield” implementation perspective if I divide the various tasks which are required for S/4HANA implementation vs the list of tasks required to go with the system conversion option then we will find quite a huge list of activities required in order to perform the conversion of existing system as against fresh implementation.
So let’s compare both these options with certain parameters,
S/4HANA “greenfield” Implementation:
Planning
The S/4HANA “greenfield” implementation means the new implementation of SAP S/4HANA, e.g. for customers migrating a legacy system, also known as ““greenfield”” approach.
Basically for any “greenfield” HANA implementation there are certain activities which are very important and needs to be considered while doing the new implementation,
It’s very important to have robust planning done for S/4 implementation. The planning activities mainly consist of,
- Choosing the implementation option: If you want to go for on-premise edition of S/4 or cloud edition of S/4
- Selection of hardware vendor or cloud partner
- Choosing the right deployment option for both non-prod and prod systems
- Doing the right sizing for your S/4 based on the amount of data which will be moved from legacy/SAP systems
- Designing the landscape: Number of environments for S/4 (Sandbox, Dev, QA, Prod etc)
- Any requirement for HA/DR setup
- Strategies around backup, HA/DR, network, hostname, SID name etc
- Data migration strategy
- Integration strategy with existing SAP/legacy landscape and with any 3rd party providers
- Security requirement etc
Basically these are the most common activities for any of the “greenfield” implementation but from the S/4HANA perspective the important aspect would be to consider the strategy around moving the data from legacy/SAP systems
Timelines
Based on the Demo 21 implementation as well as the on-premise implementation which I did the “greenfield” implementation has shorter timelines due to faster implementation cycle
The additional activity of data migration planning and strategy which is required for “greenfield” implementation and which might be little time consuming based on the below considerations,
- If you have existing SAP data services landscape then you can use it for data migration and it will save some more time.
- If you don’t have existing data services in your landscape then additional time required for setting up the SAP data services landscape
- The re-engineering and process simplification for business processes
Cost
The cost parameter is driven by lots of factors, but based on my experience I can see the new implementation cost is less as compared to system conversion due to shorter timelines and the number of resources which will be involved in implementation
Number of Steps
Earlier we saw few basic steps as part of planning activity, so mainly the high level steps which are required for “greenfield” implementation are,
- Landscape planning – Details as given in the planning phase
- System installations – Installation for application server and HANA DB. Additional system installations for SAP data services or SLT are based on the consideration if these components are present in the landscape or not.
- Data migration – Initial data migration from ERP or legacy systems. The predefined migration objects are available which makes data migration very easy and fast from existing ERP or legacy systems.
- Functional configurations – Business process configurations as per business requirements. Also, the best practices are available along with the required guided configurations
- Custom code requirements (optional) – If any custom functionality needs to be implemented on top of S/4HANA functionality
- Testing – Regular testing cycles which includes Unit, integration and user acceptance testing
Team Involvement
PMO - It’s very important to have a strong technical Project manager involved for your S/4HANA green filed implementation. The technical project manager is the one who can understand and co-ordinate very well between SAP, HW vendors, Infrastructure team, and basis team, as these are the major components in the HANA implementation projects
Infrastructure – You should have infrastructure resources from data centre setup, network, operating system etc aligned to your project
Basis – Basis team plays very important role throughout the project and they have major activity during the installation using the SWPM – software provisioning manager tool
Functional (Limited – Based on business functions which needs to be adopted)
ABAP Technical (If any custom development needs to be done on top of S/4 functionality)
Tools
Below are the main tools which are required for “greenfield” implementation,
- SAP QuickSizer
- SAP Software provisioning Manager (SWPM) – SAP SWPM is used for the system installation. The SWPM is available as part of sltoolset
- SAP data services (BODS) – SAP DS plays very important role in “greenfield” implementation as its required to migrate the data from legacy SAP ERP or non-SAP systems
Impact on existing Landscape
With “greenfield” implementation there is minimum impact on your existing landscape and only new S/4HANA landscape needs to be setup along with SAP data services system for data migration
Data Strategy
Robust data migration strategy is required to load the initial data. It’s very important to use the ETL tool such as SAP DS. Also, the data strategy helps in archiving the older data and load only required data into newly implemented S/4HANA system so that it will have reduced data footprint, optimal performance and good return on investment
Business Process Optimization
Simplified and easy to adopt business process due to new implementation
S/4HANA System Conversion:
Planning
The S/4HANA system conversion is good for the customers who want to convert their current system into SAP S/4 system
The initial planning activities which needs to be considered for the system conversion is similar to that of “greenfield” implementation as below,
- Choosing the implementation option: If you want to go for on-premise edition of S/4 or cloud edition of S/4
- Selection of hardware vendor or cloud partner
- Choosing the right deployment option for both non-prod and prod systems (TDI, MCOD, MCOS etc)
- Doing the right sizing for your S/4 based on the amount of data which will be moved from legacy/SAP systems
- Designing the landscape: Number of environments for S/4 (Sandbox, Dev, QA, Prod etc)
- Any requirement for HA/DR setup
- Strategies around backup, HA/DR, network, hostname, SID name etc
- Data migration strategy
- Integration strategy with existing SAP/legacy landscape and with any 3rd party providers
- Security requirement etc
Addition to this the major steps for system conversion starts with the analysis of your existing system, compatibility checks, custom development checks and rectification and making sure the source system is ready for conversion.
The additional activities which we are talking about here are very time consuming and needs to have proper analysis, deep thinking of various dependencies and thought process to make the conversion project successful
Timelines
Currently I am in process of doing the system conversion for one of our ERP system. Based on the process the system conversion timelines is very long due to various activities which are involved for system conversion,
- Source system pre-requisites checks and readiness
- Technical preparation steps
- Functional conversion activities
- Conversion execution using DMO tool
- Post conversion activities
Cost
More cost as compared to “greenfield” implementation as longer timelines to implement and many teams are involved
Sometimes the source system is not compatible and pre-requisites are not mate for S/4HANA conversion. So to make your source system compatible you need to perform various activities which adds up the cost to overall system conversion project
Number of Steps
For the system conversion scenarios the requirement is to have all the steps which are mentioned for “greenfield” and additionally the steps which are required from the initial system readiness from business functions as well as custom code adjustment perspective
Please refer the below blog series to get an idea about different S/4HANA system conversion processes,
S/4HANA – Path to Digital Transformation
- Landscape planning – For system conversion scenario also you need to have proper landscape planning as mentioned earlier in the blog
- System conversion checks – This is the very important step in the system conversion process. Please refer blog How to use Maintenance Planner for S/4HANA Conversion
- Business function checks – Review the simplification list made available for S/4HANA against the existing business function scenarios. Please refer blog, S/4HANA Conversion 2nd Step – Code and Compatibility Check
- Custom code checks and adjustments - For the SAP system conversion to SAP S/4HANA, any modification/simplifications made to SAP objects need to be considered in your customer objects. The Custom Code Migration work list helps to provide the details of all customer objects and provide the reference to simplified SAP objects and links to information about how to adopt these customer objects.
- System installation and migration – Installation of S/4HANA system and migration using the DMO operation
- Functional configurations – Post migration functional configurations as per the business requirements
- Custom code requirements – Additional custom development if required (Optional)
- Testing – Regular testing cycles which includes Unit, integration and user acceptance testing
Team Involvement
For the system conversion scenarios, it’s very important to have technical project manager along with the functional leads from the respective business functions which are enabled in your source systems.
The functional consultant’s needs to analyse and make sure the business functions are validated against the existing processes to make your conversion successful
Additionally, it’s very important to involve the strong ABAP technical resource who will be able to analyse the custom code against the simplification list of S/4HANA
Tools
Tools required are,
- SAP Quicksizer + ABAP sizing reports for HANA for sizing the landscape – From the sizing perspective, it’s very important to consider the existing database size and comp up with the sizing
- Maintenance Planner – This is the first step in S/4HANA conversion is to analyse the source system using the Maintenance planner tool.
- Business functions checks – Simplification list provided by SAP for S/4HANA. The list is available with the required changes in PDF and XLS format for customer reviews for better planning and estimation for the S/4HANA conversion programs
- Custom code analyzer – The tool is available for doing the comparison with custom code and the S/4HANA simplified code. This needs to be implemented on system which should have NW7.5 ABAP stack
- SUM – Software update manager for DMO operation
- Solution Manager – Solution manager plays very important role in system conversion projects. The SAP activate methodology can be implemented and used for S/4HANA conversion projects.
- SAP data services, SAP SLT – These tools are optional and required if any data movement is required from legacy system to S/4HANA
Impact on existing Landscape
For the system conversion projects, it’s always recommended to have n+1 landscape. So additional landscape planning is required, the parallel landscape helps to avoid business disruptions
Additionally the requirement is to have NW7.5 ABAP stack to do the custom code analysis, this is temporary server requirement
Data Strategy
For system conversion it’s very important to complete the analysis required to migrate the data before we start the conversion activities
It’s recommended to put together the strategy to get rid of unwanted data, have archiving strategy in place to reduce the data footprint on S/4HANA. It helps to make sure there is no data loss during migration process and the migration activities are faster
Business Process Optimization
Even though SAP claims system conversion as Migration without re-implementation, still as part of conversion process, functional team will end up doing the review the existing business process as those needs to be map with the S/4HANA business processes as you need to re-evaluate the existing process flows.
Conclusion:
So based on the above data points what we can conclude is the “greenfield” option is very viable for the customers,
- Who has very complex business scenarios configured and want to look for simplified business processes based on the S/4HANA
- The customers who has huge customization done and want to adopt SAP standard application and get rid of custom developments
- The customers who want to archive their legacy data and utilize S/4HANA only for the data which is required from their day to day operations perspective and can liaise on archival or NLS solutions for older data
- Customers who are looking for rapid turn around and faster path for S/4HANA adoption
Whereas system conversion is viable option for the customers,
- Who has very less business processes configured in their existing ERP system
- There is very less amount of customization in existing environment
- Customers who still want to utilize their data and don’t want to adopt archival or NLS solutions (This point is true with either of the option, so not exactly the comparison)
Recommendations
So finally, as we stated earlier there is no right or wrong answer for the option and it’s very much driven by the business requirements. However the recommendation is to opt for the “greenfield” implementation due to below upfront benefits,
- Re-engineering and process simplification based on ready to run business processes
- Predefined migration objects & best practices available with guided configuration
- Reduce time to value and customer total cost of ownership
- Rapid adoption of new innovations
Lastly I want to put a quote from one of the famous businessman “I don’t believe in taking right decisions, I believe in taking decisions and making them right”.
So whatever path you choose for your S/4HANA transitions just take the decision and make it right with right procedure.
Hope this blog helps you with your S/4HANA transition, good luck!
Reference Links
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