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SAP S/4HANA Journey: 8 Key Considerations to Decide Between System Conversion or a New Implementation

Despite the SAP’s announcement on last February 4 about the extension of the mainstream maintenance for core applications of SAP Business Suite 7 software until the end of 2027 followed by optional extended maintenance until the end of 2030, the migration to S/4HANA, the SAP’s ERP next generation, seems to be the natural choice for those who want to get the advantage of automation (supported by the internet of things, artificial intelligence and robotic process automation), stat-of-the-art decision support tools (with embedded analytics, conversational interface and digital assistants), amongst many more innovations and capabilities that this new product brings.

Deciding the Path

With this in mind, many companies face now the challenge to decide which is the best approach to get S/4HANA running in their yard (or cloud). The way you plan and execute the SAP S/4HANA program will substantially influence your ability to adopt next-generation business processes and use the new capabilities of SAP products:

  1. With a new implementation, you build a new SAP S/4HANA system and either cut over to the new system (the so-called “big bang” scenario) or migrate the individual business units sequentially from your legacy SAP ERP application to the new system (“a phased rollout”).
  2. With a system conversion, you turn your existing SAP ERP system into an SAP S/4HANA system.

Note: only about 5% choose other options (landscape consolidation, shell approach, central finance, etc) because of their specific situations. These options will not be covered here.

In practice, the choice between conversion and a new implementation is largely determined by the eight questions below:

Conclusion

Not all of the points above may be equally important in every case. However, they help you understand the essential trade-offs. In the end, there is no right or wrong. Each customer needs to choose the option that best allows them to continuously adopt SAP innovations in the future.

You can find much more detailed information in the document Mapping Your Journey to SAP S/4HANA – A Practical Guide for Senior IT Leadership, a practical handbook for executives, project managers, decision-makers, and senior IT leaders that summarizes experience from over 5,000 SAP S/4HANA migration projects.

The guide has been composed by members of SAP product teams, subject-matter experts, and consultants – in collaboration with ASUG (Americas’ SAP User Group) and DSAG (the German-speaking SAP User Group).

 

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Sources:
https://www.sap.com/products/s4hana-erp.html
https://www.sap.com/documents/2019/05/44b3ebd5-4b7d-0010-87a3-c30de2ffd8ff.html
Images credit: SAP
2 Comments
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  • Many thinks to say about this theme. We are thinking about this and it is a long story with big financial impacts. Good to pick this theme to discuss.

     

    Thanks

    • Hi Manuel,

      Yes, it’s a challenge indeed and there’s a lot to discuss. The thing is, S/4HANA is where SAP is putting all the effort for innovation, and in medium-term, the only one that will be supported, so the adoption is a natural path for everyone. But how to do it can be a huge challenge depending on the landscape size and complexity.

      In fact, I think we should pick two or three of these points that are most relevant to the company’s reality to concentrate the arguments and build the strategy. Technical indicators are always simpler to start (all pre-requisites are in place? Is there any landscape consolidation planned, etc).

      Thanks for the comment.