Deciding the Right Approach to SAP S/4HANA Migration and Implementation

Published: July 25, 2022

The multifold benefits of the Cloud platform are becoming the driving force for businesses to adopt Cloud-hosted ERP suites. With greater security, scalability and lowered TCO when compared to on-prem solution deployments, Cloud-hosted ERPs are fast replacing siloed and disparate solutions.

Amongst the current ERP solutions, SAP S/4HANA is one of the most comprehensive cloud-hosted ERP suites and is a preferred choice while transitioning from legacy ERP systems. The RISE with SAP solution offering can be a good starting point to move towards the S/4HANA cloud.

Before embarking on the shift to S/4HANA, businesses must have definite clarity on the below aspects, which will influence the choice of the transition model. These aspects form the basis for the Strategy and Assessment phase of the transition, leading to a well-defined and all-inclusive Roadmap, specific to the choice of the transition model.

  • Does the existing ERP system meet the current business requirements and future goals?
  • Do existing processes serve their purpose entirely, or do they need a redesign?
  • Are current customizations vital to the business operations, or have they mainly turned ineffective?
  • How much downtime can the business bear during the transition?
  • Do the business operations require consolidating SAP and third-party systems?
  • Is legacy data vital, or could it be discarded

In this blog, we will cover the various implementation models-Greenfield, Brownfield, Bluefield, and the Hybrid approach, with their use-cases and benefits. The choice of a particular model is the outcome of the Strategy and Assessment phase of the transition process.

The Greenfield Approach

The Greenfield Implementation model involves the creation of an entirely new deployment of SAP S/4HANA, without the existing systems and processes that are currently being used. This model rebuilds the existing processes from scratch, driving optimization and innovation. It uses the wide range of pre-built SAP processes included in SAP S/4HANA, enabling standardization of operations, and eliminating the challenges in the current ERP system.

This model best suits organizations looking to start afresh or from a non-SAP ERP usage environment. There is a faster technology adoption if supplemented by a comprehensive change management exercise. Businesses that run on complex legacy systems that cannot support future growth, requiring them to remodel their existing processes-will stand to gain from the Greenfield implementation model.

The major factor to be considered in this implementation model is that it involves completely restructuring processes and business operations. This requires considerable time to build the new systems and drive user adoption. It also needs a change in the skillsets and human-driven processes within the system and comes with a high implementation cost.

The Brownfield Approach

The Brownfield Migration Approach, also called system conversion, involves retaining the components of the existing ERP environment and can also be termed a limited transformation. This model suits a situation where there are a lot of customizations in the current ERP solution, with a need to retain them as they give the intended benefits-both for current sustenance and future growth.

When compared to the Greenfield approach, this model gives the distinct advantage of having a faster migration with minimal disruptions to the business operations. It also offers a cost advantage, as the prior ERP customizations are retained and need not be redone. This model allows re-evaluation of existing systems and processes, with minimal changes to optimize and streamline them.

The Brownfield model also includes easy data migration to S/4HANA, for organizations using a different ERP system. It supports future extensibility and capability enhancement. However, there is a limitation on the extent of changes made to the existing processes. This is a significant factor when opting for the Brownfield model.

The Bluefield Approach

The Bluefield Approach is a selective migration approach that gives the flexibility of migrating select data and configurations to the new implementation with a basic S/5 Shell built. It’s useful for enterprises having processes that need to be compliant with legacy regulatory norms by retaining them in the existing platform.

The Bluefield approach ensures minimal downtime and protects the existing investments. It also ensures that the S/4HANA system is free from unnecessary data, code, and configuration.

However, this approach comes with a complex process to ETL data and migrate the existing code and configuration. There is a need for specialized resources and tools to carry out the migration and requires business processes to be parallelly run during the migratory phase.

Landscape Transformation

The Landscape Transformation suits enterprises with multiple SAP or non-SAP ERP suites, looking for consolidation into a global S/4HANA system or having selective data migrations. It can also be used in scenarios where selected business units are carved out from the existing ERP systems and migrated to the new S/4HANA implementation.

Landscape Transformation is a gradual shift to S/4HANA innovation in the timeline that businesses have set for the transition. It improves the operational efficiency of the business units being transformed and ensures a limited impact on the retained business units.

However, this approach is technically and functionally complex to implement and needs specialized resources for data migration activities.

The above aspects cover the utilities of the four approaches in an SAP S/4HANA transition. The choice of a particular model involves an assessment of the current technology landscape, future goals, and determining the intended benefits of the transition exercise. Each of the models requires a definite change management process, which will drive easier user adoption, and maximize the ROI from the transition.

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