The Journey from SAP ERP to S/4HANA

S/4HANA is SAP’s next generation business suite. Mainstream maintenance for the existing SAP Business Suite 7 (ERP 6.0, CRM 7.0, SCM 7.0, SRM 7.0) has just been extended until end of 2027.

S/4HANA has tremendous innovation potential like the HANA in-memory database, Fiori UI, S/4 Analytics, Internet of Things, Big Data, business networks, and mobile-first. Simplification is the name of the game. Much has changed (see SAP’s 1’000 pages Simplification List). Homegrown overlapping of solutions (e.g. ECC, SRM, and Ariba for procurement) have been removed (SRM functionality has been moved to S/4HANA and Ariba respectively).

SAP’s product strategy is clear: cloud first and this means S/4HANA. Updates and innovations will be released in the cloud first. SAP ERP will lag behind.

SAP is supporting different options to implement S/4HANA (system conversion, landscape transformation, or a new installation). At the same time many SAP customers rightfully consider this move more complex than previous release upgrades. This because so much has changed with S/4HANA and much is unknown territory; even for many seasoned SAP experts.

   Transition to SAP S/4HANA Roadmap (Source: SAP)

Nevertheless, the question is not if to migrate but rather when. How and where to start exactly still remains a question for many. 

An all-in-one go is possible given the many accelerators and modernised tools provided by SAP. Just, this may not be palatable to everyone. Many different topics need to be considered (retention of legacy data vs. full data migration, data harmonisation and process simplification, custom code migration vs. simplification, new UI possibilities, on-premise vs. cloud, real-time analytics vs. ABAP reporting, agile vs. waterfall implementation method, availability of critical skills, etc.).

With enough time each of the above topics can be tackled and explored in various pre-projects prior to moving to S/4HANA itself. Still, the question where and how to start even with such pre-projects remains.

So, how does one best approach the journey from ERP to S/4HANA? An analogy to using a GPS system may help.

In order for the GPS system to find the best route from start to destination a clear enough description of the destination is required. Simply stating: “we want to be on S/4HANA” is as useful as telling the GPS system: “I want to eat Italian”. A more helpful description of where one eventually wants to arrive at would be, for instance, a (high-level) target application and system landscape showing process and data flows across organisational units.

Identifying the exact starting point follows the same logic. A GPS can, for example, use the current location to identify the respective geometric coordinates. Accordingly, for the move to S/4HANA, one needs to understand:

  • Details of currently used applications (release, licensing, cost of operations, etc.).
  • Number and location of respective users.
  • Quality of data.
  • Use and state of current custom code.
  • Legal requirements like data protection and retention rules.

In order for a GPS system to propose a meaningful route, existing constraints (e.g. traffic) and preferences (e.g. avoid toll routes) need to be considered. For the move to S/4HANA this might translate into one or more of the following:

  • What are current and anticipated future market forces?
  • Where is the business strategy heading to?
  • Where are buckets of consumable innovation?
  • What is the state of readiness for a transformational IT project (see my blog on 8 success factors)? How about the support readiness for an S/4HANA application or the corporate willingness to change?
  • Are there obvious candidates (applications, systems) for early decommissioning? Associated cost savings may provide funding for a migration project.

Clearly, no customer situation is the same and caution should be applied when ready-made answers are provided. Analysing the specific and individual aspects of “where are we starting from”, “where do we want to be”, and “what are our preferences and constraints” will answer many questions and naturally develop a tailor-made roadmap for the journey from SAP ERP to S/4HANA. Done well and with the right people such exercise shouldn’t take long.

Carpe diem – get started now; without haste. Use a proven and structured approach towards unpacking the various critical elements that are needed to plan and prepare for a future that has already started.