The road to S/4HANA.

It seems long and winding – for many existing systems it is not.

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Published on July 31, 2020 – Oliver Blau, Managing Director at Westernacher Consulting

Surveys show that many companies running on SAP ECC see the business case and risk associated with an SAP S/4HANA conversion as one of the top challenges in their strategic IT roadmaps1.
What has been lacking is a low risk, low cost turn-key solution to this problem. Especially for single SAP ECC systems to be converted to an SAP S/4HANA system, there is now a pretty straightforward approach which can solve this dilemma. The main steps are described in the following section.

General approach.

As the end of maintenance is the main driver for change followed by the wish to have a future-proof system enabling to transform business processes, this order of importance already indicates the general approach:
In short: First convert your system technically in a secure and efficient way before you use the new platform for business and process transformations. While the purely technical conversion brings limited business benefits in itself, decoupling of these two major steps ensures minimum cost and disruption in the first phase and full concentration on the respective steps and manageable projects as such. The business innovations and value can then follow in a very rapid and agile approach.

Technical conversion

A successful conversion is prerequisite for the following business innovations.
The technical conversion into an SAP S/4HANA system is a mandatory first step.
The technical conversion keeps data and configuration of an ERP system available in the SAP S/4HANA system.

Business innovations

Business innovations on the new platform bring the real value.

After having the system converted to SAP S/4HANA, business innovations in multiple areas are set up to gain value in business process innovations.

This approach is of highest importance for companies that are short in business resources to support the change and for those that have high need for business continuity.

Technical conversion.

The pure technical conversion of an existing single SAP ECC system to SAP S/4HANA can be split into smaller, independently manageable steps as well. Especially those steps can be done directly which are prerequisites but can be worked through and finalized before you even start to plan a conversion.
1
Space Optimization
2
Technical Prerequisites
3
Sandbox Conversion
4
Productive Conversion
Space Optimization and Technical Prerequisites.
Two examples of key topics in this step are the Unicode conversion and ensuring an archiving concept is in place. While Unicode conversion is a mandatory task to be completed before moving to SAP S/4HANA, you can run the conversion without caring about archiving.
From our experience Unicode conversions are already completed in most of the ECC systems. But if not yet done, you should plan for it immediately in order to make sure you finalize it before your conversion starts.
Regarding archiving systems, we still see there is a remarkable number of especially smaller systems running without archiving concepts in place. In order to target the right-sized SAP HANA-system for your SAP S/4HANA it makes sense to look into archiving. It also makes sense to do that independently from your conversion project and ideally well in advance.
Decoupling these activities from the real technical conversion gives you the freedom to concentrate solely on the limited number of technical conversion steps in your conversion project. You can also run the custom code conversion for SAP HANA-readiness outside your SAP S/4HANA conversion project. No matter if internally or outsourced to a partner – preferably by near- or off-shore resources – working through it in parallel and steered by a local development head, the vast majority of this preparation work can also be done outside of your conversion project.

Conversion project in a sandbox.

Following the described approach there is not that much left to be done in a conversion project: Asset Accounting, New General Ledger and Material Ledger can be switched on in a technical sense without much effort (and for now with limited benefit) just to make the conversion possible. The value resulting from possible process improvements with those components can be generated at any time after the conversion of the productive system.
The business partner is a central component in S/4HANA and needs to be implemented as well. Also, at least some minor adjustments in the authorization concept – e.g. in the Fiori area – need to be considered.
In any case, it is highly recommended to test these remaining conversion steps in a sandbox system. Converting the sandbox, which is a copy of your current productive system, allows you to:
  • very closely simulate the real conversion and gain experience in the technical procedure,
  • eliminate most of the risk associated with the real conversion,
  • ensure that all processes including those supported by custom code and interfaced applications continue to run,
  • ensure that all change management and training needs are identified,
  • have a training system available for the (limited) change management and training needs, and
  • have a system available to identify and prove process and business improvements on S/4HANA with your own data.
Successful conversion of the sandbox system is key for a successful conversion of the productive landscape.
Productive Conversion.
The conversion of the productive landscape is done after intensive testing of the processes in the sandbox. With this approach the productive conversion really only is a technical conversion that needs to be done on your productive landscape: development, quality and production.
However, in complex system landscapes there are of course additional steps to be considered. Transformation of the whole landscape when having more than one ECC system adds complexity, e.g. regarding system and master data harmonization – nevertheless the described structured approach is still valid in general.

If you want to know more, contact me on LinkedIn or visit our webpage.

1 https://www.businesswire.com/news/home/20190619005087/en/Survey-SAP-Licensees-Reveals-Two-ThirdsPlans-Undecided

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