By Prabhakar Lal, Director, SAP S/4HANA Portfolio Lead, Capgemini

SAP launched SAP S/4HANA in 2015 with three migration approaches for existing SAP customers: new implementation, system conversion, and landscape transformation. The landscape transformation migration approach was targeted at customers with multiple ERP systems in their landscape. Because the term “landscape transformation” had already been in use for multi-ERP consolidation projects for many years, SAP decided to rename the approach “selective data transition,” which it unveiled at the SAPPHIRE 2019 event.

SAP also announced the formation of a working group called “selective data transition engagement” together with selected partners to support specialized data migration requirements for such projects. SAP and its partners bring specialized software and services to support SAP S/4HANA migration scenarios based on the selective data transition approach. The announcement has put more focus on the capabilities of member companies and their role in migrating to SAP S/4HANA using the selective data transition approach. There were no such specialized software requirements for the new implementation and system conversion approaches. Customers contemplating a migration to SAP S/4HANA using the selective data transition approach must work with their system integrators and these partner companies. The system integrators are tying up with members of this working group to bring combined offering to the customers. There is an upward tick in the SAP S/4HANA adoption using the selective data transition approach as compared to previous years. More and more customers with complex SAP landscapes are migrating to SAP S/4HANA.

It is important for customers to understand the selective data transition approach in detail to not only communicate the requirements but also to understand the responsibilities of each partner in such projects. I get to hear questions from customers on this quite often in my interaction with them. In this article, I have tried to answer those queries and provide clarifications to the best of understanding and abilities.

What Is this Selective Data Transition Approach?

Selective data transition is all about bringing relevant business data from SAP ERP to SAP S/4HANA. Putting this in context, with system conversion, there is a possibility of full reuse; and with new implementation, you can fully redesign your processes. Selective data transition is the middle path, which allows you to take advantage of both system conversion and new implementation. This approach equips you with the flexibility to decide what to reuse and which business processes to redesign.

Selective data transition is the best approach if you do not want to either fully redesign or fully reuse your processes. For example, you can opt for selective reuse of logistics processes and selective redesign to harmonize finance processes. This approach enables you to migrate a selection of data based on various criteria — such as organization units, time slices, or application-specific data — into the target system.

What Exactly Is Data in Selective Data Transition?

Data in selective data transition is much more than master data, transactional data, or historical data. Your data in the existing ERP system could be your custom developments, processes, roles, and applications, or your master, transactional, and historical data. With the selective data transition approach, it is important to select relevant data from your existing implementation to your target SAP S/4HANA system. Migration to SAP S/4HANA is a once-in-a-lifetime opportunity to harmonize, consolidate, and transform your business platform.

What Is in It for Customers?

Selective data transition enables customers to balance between process redesign and reuse of existing functionalities and helps accelerate the adoption of SAP S/4HANA with the right sets of data in the target environment. Customers know very well what works in their existing system and can be carried forward easily. The approach helps the customers decide how to setup their target system based on decisions they make about what data to carry over.

Selective data transition is the right approach for combining a business transformation with an SAP S/4HANA migration. If you require to merge entities such as company codes, plants, and so on, or carve out only certain parts of the business, these can be combined with the migration to SAP S/4HANA.

Many customers are using their SAP ERP system for over a decade and their ERP landscape expanded as the company grew. Many times, if growth came via acquisition, it would result in having multiple ERP systems in the IT landscape. Diversification into another business is another reason a customer might have a multi-ERP landscape as the organization tries to keep businesses separate by having independent sets of systems. With the growing cost of operations, and challenges in managing IT complexities, it is imperative to start on a simplification journey.

The selective data transition approach provides a software-based implementation approach for optimizing and consolidating business transformation requirements.

What are the Implementation Methods Available with Selective Data Transition?

Selective data transition can be implemented in two ways: shell copy conversion or mix and match. Shell copy conversion is copying the existing SAP ERP system with only customizing data and repository and converting that system to SAP S/4HANA. For a customer with multiple ERP systems in the landscape, the first job is to identify the primary or leading ERP system. This system is copied using the shell copy conversion approach and then relevant data migration is performed from all the source systems after the harmonization and transformation exercise.

In the other mix-and-match approach, customers can choose to set up a target SAP S/4HANA system by performing a new installation. This provides a possibility to set up the new system with SAP Model Company or best practices for increased adoption of standard and an accelerated transformation to SAP S/4HANA.

The shell copy conversion approach is suitable for customers that already have robust business processes in one of their ERP systems or if the implementation itself is a recent one and doesn’t require transformation. If there is a requirement to consolidate completely disparate business processes with little or no overlap of data, the mix-and-match approach can be evaluated for the SAP S/4HANA transformation.

What Should Be Our Approach: Consolidate First on SAP ERP or Directly on SAP S/4HANA?

Process or data harmonization is the key to the success of multi ERP transformations to SAP S/4HANA using the selective data transition approach. I have been asked often: Should we harmonize in the existing SAP ERP system or in the target SAP S/4HANA system?

There is no one answer to this question as every customer is different. If you have recently been on a long journey of an ERP implementation and rollout, you will prefer to use one of the existing SAP ERP systems to get started on process harmonization activities across business units. If your implementation is old and if there is an urgent need to overhaul the processes across business units, consolidation can be directly implemented on SAP S/4HANA.

What Are the Preparatory Projects Required to Get Started with the Selective Data Transition Approach?

Be it selective data transition or any other approach for migration to SAP S/4HANA, first thing a customer should do is to embark on a short project to assess the as-is situation — impacts on the existing systems, business processes, integrations, custom developments, data, and so on — as well as to finalize a to-be solution and an approach for SAP S/4HANA adoption. Customers should carefully evaluate the data in their existing landscape and what they really need to operate the business in the target environment. How much of the historical data is required in the SAP S/4HANA system? Data cleansing and archiving should be key initiatives that can be done in existing systems. One of the outcomes of the assessment should be a list of preparatory projects to be done before starting the SAP S/4HANA transformation program.

For a customer with multi-ERP source systems, a process harmonization study will be an important exercise to study processes across business units or systems, identify gaps, and finalize the to-be process design. The study will also provide an opportunity to evaluate innovation options available with SAP S/4HANA and build a roadmap for its adoption. The exercise will identify leading systems among existing the ERP systems or recommend starting from scratch by setting up a new SAP S/4HANA installation.

Similarly, there could be a requirement to cleanse and harmonize master data across systems.

These preparatory projects will play an important role in the overall business transformation and migration to SAP S/4HANA.

Is the Selective Data Transition Approach Only Applicable for Customers with Multiple ERP Systems?

Recently a customer asked me: How can I leverage the selective data transition approach if I am migrating my only SAP ERP system to SAP S/4HANA by system conversion approach?

This customer can easily leverage the selective data transition approach if there is a requirement of a business transformation (e.g., merging organizational units) or a phased transition. If the customer isn’t ready across the enterprise to go-live with a big-bang approach, the selective data transition approach will help in doing a phased go-live. In this period, customers will have to operate two landscapes, manage intercompany processes across old and new SAP ERP systems, and manage all the integrations.

Similar principles of phased transitions can be applied for the new implementation scenario as well.

In the End

Every SAP S/4HANA project must be driven by certain design principles irrespective of the approach. Harmonizing business processes across the enterprise, harmonizing data, adopting fit-to-standard, having a clean core, and leveraging innovative and intelligent technologies are some of the drivers considered by customers across industries. The selective data transition approach helps you follow these design principles in an effective manner. This may require you to work with your existing systems integrator and a member of selective data transition engagement working group. It is important for you to consider one team approach if you have decided to use the selective data transition approach. You should bring your systems integrator and selective data transition partner together if you already have a preferred partner for specialized software around selective data transition. For the project duration, it is important to consider them as one entity driven by a common governance and clearly defined responsibility matrix.