by Mithun Gaur, SAP S/4HANA Sales & SAP S/4HANA Cloud-Sales Implementation certified SAP Senior technical Consultant, LTI

Introduction

Ever-transforming IT environments, increasing spend on cloud-based applications, and the ever-growing power of digital transformation is forcing companies to embrace change. Digital transformation is the process of undergoing multiple changes—internal and external—and leveraging digital technologies to become more agile, optimized, and efficient. Digital business transformation is ubiquitous, and the ERP market is no exception. ERP is at the core of an enterprise’s IT landscape which is witnessing a seismic shift due to cloud services adoption and the pursuit to attain competitive advantage by leveraging big data analytics, IoT, & machine learning technologies.

The digital transformation wave is pervasive across industries & geographies. SAP preempted this shift and launched SAP HANA in 2010 and SAP S/4HANA came in 2015. SAP S/4HANA is the new digital core of business transformation that offers on cloud, on-premise, or a hybrid alternative to SAP’s huge install base. SAP S/4HANA rewrites ECC’s core functionality on SAP HANA database to leverage its in memory capabilities, performs analytics in real time, and hence gives it the unique positioning in the ERP market. SAP has decided to phase out support for SAP ECC in the next few years and its existing install base customers are bewildered in deciding how they should migrate from earlier versions to SAP S/4HANA. Even non-cloud-native ERP systems have multi-year contracts with their clients to move to the latest generation platforms which are either on-premise or on the cloud. Customers have no option but to transform and embrace migrating to SAP S/4HANA to harness the in-memory computing power of SAP HANA for greater agility, improved user experience, real time data, flexible APIs, and streamlined processes. A lot of customers are still wary of this conversion/transformation due to its high cost and the meticulous planning that is required to undertake this journey. This article addresses the challenges that an organization may face when migrating to SAP S/4HANA and what approach it should take to make the transition seamless & successful.

 SAP S/4HANA Migration Challenges

Migration gives the organization a chance to streamline its processes, rationalize interfaces, decommission custom code, and enforce standard SAP modules to become more efficient. However, migration from any ERP for that matter—SAP or non-SAP—to SAP S/4HANA comes with its own set of unique challenges. Migration could be done for various reasons, such as consolidation of existing operations, moving to a new cloud service provider from existing one, company mergers, data center relocations, etc. The switch to SAP S/4HANA could be performed for a new system altogether where the customer is doing new implementation on SAP S4/HANA and the initial data is being loaded (greenfield), or an existing customer could be doing a conversion from SAP Business Suite to SAP S/4HANA (brownfield) or consolidating its regional SAP systems to global SAP S/4HANA. In all the scenarios, greenfield implementation, brownfield conversion or consolidation, organizations need to overcome the challenges listed in the following sections.

Challenge #1: Fear of Shutting Down Legacy Systems

Legacy systems are the backbone of heterogeneous IT landscapes of most organizations which have been in business for many years. Legacy systems are often customized and tailor made which makes it cumbersome and increases the complexity in implementing the same features which the business doesn’t want to discard. The quest for attaining greater efficiency, newer business models, agility, and enhanced productivity gets clouted by legacy IT infrastructure which can’t be migrated. The legacy system data needs to be cleaned, collected, and transferred in a way that makes it usable for businesses. The thought of shutting down legacy systems is so horrifying that it will need not just a compelling business justification for migration but a fool-proof plan that could guarantee every bit of data is successfully moved, and its integrity is not compromised. Getting users to move over from legacy systems to a new way, new strategic direction is a herculean task which is often easier said than done.

Solution: Legacy Data Readiness & Preparation

“Failing to prepare is preparing to fail” a quote from Benjamin Franklin, summarizes the importance of data readiness & preparation to handle legacy data migration. Ensuring that we have a clear roadmap on data readiness and preparing in advance is the mantra of the successful migration journey. The data preparation should start 4-6 months before the migration project starts. Ensuring single source of truth needs master data clean-up for business partners and materials. Well documented as-is processes and configuration in a single style of documentation to ensure we have a common understanding and minimal data duplication. Uncovering and understanding hidden issues and pain points in Legacy systems upfront will help in factoring these in project scope. This is the key to have migration ready data and documentation at any given point in time. If any SAP company code data needs to be carved out for any business reason such as divestiture that needs to be handled upfront too. The decision to migrate to SAP S/4HANA rests on the meticulous planning and execution of legacy data migration and hence data readiness is essential to overcome the fear of shutting down legacy systems.

Challenge #2: Making Custom Code “HANA Ready”

Making the custom ABAP code “HANA ready” is a challenging task that most organizations worry about. The amount of custom code an organization has and the changes that are required to make it work with SAP S/4HANA will vary from company to company. SAP HANA database differs from traditional row-based databases which means the code needs clean up wherever we are using row-based tables beforehand to avail the speed and simplification benefits provided by SAP S/4HANA.

Solution: Use Production Monitoring Tools to Filter Out Dead Custom Code

Every organization has custom code which must be made HANA ready to leverage the performance improvements provided by SAP S/4HANA. There are tools such as ABAP test cockpits, ABAP SQL monitor, and ABAP call monitors that help in finding compatibility issues, usage patterns, and productive usage monitoring. The main thing to keep in mind here is that the onus of fixing those discrepancies and code cleanup rests with the organization and its team. The project team needs to identify the ABAP code which is being used in production by looking at the usage monitoring. Any ABAP custom code that is not being used in production can be excluded straightaway, allowing teams’ time and effort to be channeled toward making the affected custom code HANA ready.

Challenge #3: Stakeholder Consensus and Buy-in

Knowing the risks associated with migration, most stakeholders are paranoid if the organization is highly reliant on systems created over many years of operations. Most stakeholders fear that the migration challenges will outweigh the forecasted benefits. They believe if the existing system is not broken why change it? Getting all stakeholders involved and committed from the beginning is critical as this is a classic scenario of organizational change management where expectations and apprehensions are the biggest challenge an organization needs to overcome.

Solution: Understanding the Purpose and Business Case for Stakeholder Consensus

First step is to understand the reason why we want to migrate and what is our business case. Some organizations may want to migrate to S/4HANA but would only do it with minimal cost and effort. On the other hand, some may want to simplify their IT architecture and add enhancements and implement Fiori apps for their user groups. The purpose & business case serves like a compass and hence needs to be clearly understood upfront. Stakeholder buy-in needs creating a convincing business case with appropriate justification which will be the baseline to start. Implementation cost, security issues with cloud, flexibility and functionality tradeoff needs to be addressed before hand. Most stakeholders are also looking at an economic value analysis of this migration from existing ERP to SAP S/4HANA. And the business case should include not just the benefits but how the existing system falls short on delivering the benefits that we are envisioning with SAP S/4HANA migration. Unless there is a buy in from all involved stakeholders, there won’ t be clear sense of ownership and responsibility. And stakeholder commitment and ownership, is a prerequisite without which migration cannot succeed. It is also essential that business case and detailed scope are validated by consultants and architects, who have a better understanding of what is required. They could refine the focus and detail out the scope based on their expertise to ensure we deliver on what is being promised to all the stakeholders.

Challenge #4: Data Migration

Data is the most critical part of the migration process. Whether it’s a greenfield (new implementation) or brownfield (already a customer and upgrading) project, quality of data that needs to be migrated is at the core of this endeavor. Data validation and data integrity are quintessential parts of the whole migration process. An organization needs to ensure the migrated data is not just transformed but is of high quality, solves the purpose of enabling decision making and supports business processes. Challenges around data migration include data migration planning challenges, data migration platform challenges, information stewardship challenges, data extraction challenges, data transformation challenges, and data loading challenges which together make the migration process a nightmare.

Solution: Data Migration Using SAP Migration Cockpit

Once the data readiness and preparation is completed, we can start with a data migration strategy for each object to reduce any development effort. SAP does provide data migration cockpit, pre-delivered data migration templates for data migration activity, or the organization can use the good old LSMW or any other custom third-party migration tool depending on the limitation of each option and data specific requirement. Tools such as SAP migration data cockpit help in identifying any object dependencies which need to be kept in mind. SAP Rapid data migration should be used for accelerating data cleansing, data validation, and data transformation. If there are any objects for which we don’t have migration template or SAP data service RDS solution, then a custom template needs to be created. Decision-making pertaining to data governance processes to ensure data quality and data integrity should be kept in mind while migration planning & execution.

Challenge #5: Finding the Right Vendor Partner

Finding an experienced partner who has expertise, experience, and the right resources to help an organization transition to SAP S/4HANA is quintessential. Staying on timeline, within budget, and without disrupting existing business operations are the main questions that the organization needs to think and plan for.

Solution: Partner Expertise, Mutual Trust and Fitment

Selecting a right vendor partner who has the required expertise, resources, and mutual trust is extremely important to ensure the organization is set up for success. Starting from business case understanding, data preparation and readiness to data migration, validation, UAT, final cutover and hyper-care, vendor team will closely work with the organization’s IT and business teams. Hence, finding the right expertise and fitment will decide if the migration would be successful or not.

Challenge #6: User Skepticism

Business users will compare the new system (SAP S/4HANA) to the legacy system and often complain of lack of certain features and rigid structure. It is not easy for business users to accept that the functionalities they are used to working with, have changed. If the users are not able to appreciate the new system and test it thoroughly during UAT because of their lack of understanding of the various functionalities and benefits that the S/4HANA system provides, then it defeats the purpose of UAT and the overall migration project.

Solution: User Training

End-user training is the most essential element which has the power to make a project successful or force it to be written off. Therefore, the organization needs to rethink how such a transition will be handled from people management perspective and not just process perspective alone, as this migration is a chance for the organization to move to better, simpler practices than the complex ones that have been inherited over years of operation. Such grass root changes need extensive user training as system users are the ones who are going to make this transition successful by accepting newer ways of performing different business processes. Starting with a pilot project for SAP S/4HANA migration in one business unit and then replicating it in others would not work for SAP S/4HANA migration, as in this methodology the real experts or functional users get to see the system only when user acceptance testing starts. Instead, we need to involve cross functional team for global standard approach to migration to ensure the real expertise of various team members is utilized right from the planning stage. These team members will serve not just as experts representing their domain area but will also serve as change agents advocating and driving change to the larger business user community.

Conclusion

The SAP S/4HANA migration is a huge investment in terms of time and resources, aimed at transforming an organization to be more agile and effective. Hence, all the key building blocks need to be in place, such as buy in from all stakeholders, legacy data preparation and readiness, creating a data migration strategy, team involvement and strategic partnership with a vendor who has the required expertise and fits into the organizational style of working. Guaranteeing current system and processes are well understood and documented, any business issues being accounted for in scope definition, detailed requirement gathering and elicitation, gap analysis, rigorous testing /data validation and extensive user training will go a long way in setting up the migration endeavor for success and ensuring the SAP S/4HANA migration journey is seamless for the organization.