Migrating to SAP S/4HANA is an ongoing headache for many. Even big-budgeted corporations struggle to move their systems and ERP-related disasters are haunting CTO’s worldwide. Take Lidl, which cancelled its ERP migration project and lost seven years and almost half a billion euros of investment in sunken costs. Having merged with Elizabeth Arden, Revlon’s disastrous implementation of SAP HANA led to a $64m loss of sales and lawsuit with its own investors. Fears are justified; SAP S/4HANA implementation is complex and affects the entire enterprise, from production and merchandise management to finance and human resources. With the maintenance cut off date of 2027 rushing closer, getting it right is mission critical. Here are five ways to get there.
Don’t underestimate the effort involved
The transition from SAP ECC to SAP S/4HANA requires technical and strategic precision. To date, less than a third (24 percent) of SAP ECC customers have completed the migration to SAP S/4HANA. Migrating takes an average of 67 hours of development work per interface and up to thousands of integrations. Interfaces connect the SAP system with a variety of other systems and applications, both internally and externally, including CRM systems, supply chain management tools, databases, cloud services and even customised, in-house applications. Each integration needs to be carefully analysed, redesigned and transferred to the S/4HANA system.
The whole process requires careful planning and a deep understanding of the system landscape, including the transformation of custom ECC code to S/4 compliant code, as well as integration across various environments. Transformation teams also need to consider the flexibility between different operating environments, spanning on-premise and in the cloud.
Spoilt for choice
The choice between the cloud and on-premise version of SAP S/4HANA shows the variety of modern business software. SAP largely prioritises cloud solutions and is promoting cloud-specific AI innovations, but on-premise options are still strong. Companies, particularly those in safety-critical industries such as healthcare, will value the control and security provided on-premise. Whereas the cloud offers efficiency, cost benefits and smoother compliance. Those who want simple integration are gradually replacing all business applications with cloud versions. If you want to continue using stable on-premises applications without sacrificing cloud benefits, you need an integration platform that offers provider-independent connectors for all business applications.
Successful migrations
WWZ AG in Switzerland launched a comprehensive SAP migration to develop a self-service portal for its customers in the telecommunications and utility services sectors. The portal enabled services to be booked independently. WWZ’s IT team was faced with the challenge of continuously extracting a large amount of data from the SAP S/4HANA ERP system in order to bundle various third-party technical planning applications within the ecosystem. WWZ needed a modern, programmer-friendly and API-based approach for extracting and exchanging data from and into SAP and third-party applications. The IT team implemented an iPaaS solution to accelerate data extraction from their SAP R/3 system to efficiently connect the existing systems to a new customer self-service portal. The result was a nine-fold acceleration of the extraction process and faster and more flexible data delivery. This speed led to a significant improvement in business processes, including rapidly introducing new services for their 60,000 cable internet customers. With that in mind, here are some of the best tips for SAP S/4HANA migration:
Risk and cost management
Conduct a detailed analysis of both technical and financial risks. Watch out for technical risks like compatibility issues with current systems and data integration challenges. Financially, prepare for potential cost overruns and unexpected expenses. A comprehensive risk assessment allows for preventive measures and strategies for cost control. Focus on efficient resource planning, set realistic budgets, and maintain continuous monitoring to run a low-risk, cost-effective migration process.
Operating model selection
When choosing on-premises, public cloud, or private cloud, prioritise a comprehensive Total Cost of Ownership (TCO) analysis. Include not only initial investments but also ongoing expenses, covering maintenance, upgrades, support, and scalability. Don’t overlook indirect costs like system downtime, security measures, and employee training, as these can significantly skew your financial planning.
Efficient data extraction and Data modelling
Prioritise a data extraction method that natively connects to the SAP application layer, allowing for the exposure of SAP tables and views. By utilising this method, you can selectively expose only the necessary fields from tables and model your data before migration, which can save time and reduce costs by minimising the amount of data transferred to the cloud. Additionally, this approach facilitates smoother system integrations and simplifies data exchange, enhancing the flow of information between SAP and third-party systems.
EDI solutions
Consider the scalability and flexibility of cloud-based EDI solutions. Cloud solutions are ideal for responding quickly to changing business requirements, allowing for evolving business models or seasonal variations, and making the migration faster and more efficient. But do still weigh up the benefits when dealing with older EDI systems. If they are deeply embedded in existing, critical legacy systems, retaining them to reduce operational risk may be the better option.
Data quality and maintenance
Begin your migration with a thorough assessment of data quality, defining clear criteria according to your data policy and governance. Then, prioritise and concentrate on the most relevant data. A comprehensive understanding of fundamental data structures, databases, and how data flows within your organisation will be essential, as well as establishing strict quality standards across all data processing phases.
Above all, SAP S/4HANA migration needs to be rooted in thorough and strategic planning. Past migration successes show us that things can go smoothly with a targeted strategy, effective data maintenance and focus on risk management. iPaaS partners can provide support and solutions to help manage most parts of the migration as smoothly as possible, driving transformation forward, step by step.
