Introduction

SAP S/4HANA is next-generation enterprise resource planning software for digitally transforming businesses. It provides intelligent, modern, scalable, automated processes and integrated platforms that enable organizations to enhance their processes by providing real-time insights using artificial intelligence.

Organizations should consider the most suitable strategy for migrating their existing business processes, strategic objectives, and IT infrastructure from the previous SAP ERP system (ECC).

There are several approaches for migrating the SAP system.

Greenfield implementation in SAP is a recommended and unique approach that serves as a clean slate transformation, such as a fresh implementation with a new design and standardized process from the ground up.

Other methods include Brownfield implementation, which involves upgrading an existing SAP ERP system to a modern SAP S/4HANA ERP solution.

The Hybrid approach combines elements of both Greenfield and Brownfield, which are adopted by large and complex environments.

A more nuanced approach known as Bluefield implementation, often called selective data transition, enables organizations to migrate specific business processes to SAP S/4HANA while leaving other entities untouched.

Regardless of your path, migration to SAP S/4HANA is a complex process that may present many challenges. It requires extreme planning, analysis, and expert involvement to ensure a successful transition or new implementation using the SAP Greenfield approach.

This blog will focus on the SAP Greenfield implementation approach, its characteristics, advantages, disadvantages, key considerations, and some details on Brownfield and Hybrid implementations.

What Is Greenfield Implementation?

The Greenfield implementation of SAP S/4HANA is a strategic approach in which an organization sets up a brand-new system in a fresh environment independent of the existing SAP system, e.g., SAP ECC. This fundamental approach leverages SAP S/4HANA’s standard functionality, standards, and best practices.

The desired outcome of Greenfield SAP implementation is a clean, standardized, and modern SAP S/4HANA system, where necessary customizations and configurations can be strategically added to a core system that adheres to SAP standards.

Greenfield Implementation: A Clean Slate Approach

Migrating from SAP ECC to SAP S/4HANA with the Greenfield SAP approach involves completely reengineering an organization’s SAP system processes and workflows.

This approach targets minimum custom development and keeps the core system clean. The Greenfield approach is adopted when organizations implement the SAP system for the first time, completely overhaul their existing SAP system, set up a new IT system for a new SAP environment, such as a subsidiary, or acquire a new company.

Greenfield only refers to a fresh start in building an ERP solution from the ground up, free from the complexities and constraints of legacy systems, like a clean piece of undeveloped land.

SAP architects play a key role in the Greenfield implementation. They analyze the business requirements of organizations and scenarios, design the target S/4HANA architecture, and define the implementation road map. Their analysis ensures that the approach aligns with an organization’s strategic goals and has the maximum benefits of SAP S/4HANA.

Advantages of Greenfield Implementation

The Greenfield implementation approach to SAP S/4HANA provides several benefits, making it a future-proof IT landscape for organizations seeking significant transformation.

• It provides complete re-engineering of SAP workflows and processes, fundamentally redesigns and rethinks existing processes, not constrained by the complexities and limitations of their legacy SAP ECC system. 

• Starting fresh with a clean slate for system design and independence from the existing system means the implementation team and architects have complete freedom in designing the S/4HANA architecture, not bound by the customizations or data models of the previous system.  

• Organizations can leverage SAP S/4HANA’s innovative features and functionalities to drive simplified transformation, which includes adapting new technologies like analytics, machine learning, and intelligent automation. 

• The Greenfield approach allows organizations to eliminate unnecessary custom code and streamline processes to reduce operational costs and maintenance efforts over time. The initial implementation investment and efforts with a Greenfield approach can be substantial. They can take longer initial phases than the Brownfield approach, but the long-term benefits and future-proof system can contribute to lower total cost of ownership and faster implementation. 

• Greenfield implementations encourage the adoption of SAP standard processes and data models, which can lead to additional benefits, including improved data consistency, easier integration with other systems, reporting quality, reduced complexity, and simplified maintenance and upgrades in the long run. 

Disadvantages and Challenges of Greenfield Implementation

While considering the benefits of the Greenfield implementation approach, organizations must carefully consider some significant disadvantages and challenges to ensure a successful transformation.

• As Greenfield projects require building an SAP S/4HANA system from scratch, which makes them more complex than converting an existing one, it needs configuring the system from the ground up, defining new processes, migrating relevant data, and integrating any external systems, which typically translates to longer implementation timelines and higher initial efforts. 

• While the goal could be a simplified future clean state, the initial phases can be risky due to increased complexity. Determining target processes and system architecture and ensuring data integrity during migration processes require extensive planning and execution. 

• The downside of the Greenfield approach is that thorough analysis of existing data, transformation, cleansing, rebuilding of processes, and creating new data models for SAP S/4HANA may require additional tools and resources, unlike the Brownfield approach, which carries over existing data and processes. 

• Adhering to SAP standards is one of the core principles of the Greenfield approach. This means extensive custom code and configurations may not be adopted from the existing SAP ECC system to SAP S/4HANA. Organizations either need to adopt new processes and standards or redevelop only the essential customizations in the new system. 

• The Greenfield approach may require a more comprehensive change management program due to the significant changes in business processes and user workflows. Users should be trained in new processes and systems. When the familiar processes are replaced completely, resistance to adopting the change could be higher. 

Roadmap and Processes 

For successful Greenfield implementation, organizations should follow a structured roadmap that involves several vital processes, as follows:

Detailed Analysis and Roadmap Conception 

• Drafting a detailed project blueprint with resource allocation, timelines, milestones, and responsibilities, outlining the different phases of the implementation. 

• Detailed analysis of the current system state and collaboration between the SAP consultants, stakeholders, and end users.  

• Understanding the strategic objectives, current state, and desired future state of the organization, as well as a clear outline of the scope of SAP S/4HANA implementation, including modules implementation, geographical locations, and business units to be involved. 

• Analyze target process and technical architecture design aligned with SAP S/4HANA best practices and organizations’ specific needs, such as planning the system landscape, security considerations, and integration requirements with other systems. 

Implementation 

After the roadmap blueprint is defined in the previous phase, the implementation phase begins, which involves building and configuring a new SAP S/4HANA system.

Essential factors to consider include:

• Setting up the organizational structure, system parameters, business rules, processes, and master data definitions. 

• Development of required custom functions, conversions, interfaces, reports, forms, and enhancements. 

• Setting up data exchange mechanisms and connection with external SAP and non-SAP systems. 

• As system building is ongoing, initial training sessions should be conducted for key users and stakeholders to familiarize them with new processes and systems. 

• Extensive testing involving unit, integration, UAT, and performance testing is important to ensure the new system functions as intended and meets the requirements. 

• Data migration from the existing system: Greenfield implementation often involves selecting and cleaning important data and mapping it to the new system’s data structure. 

• Going live with the final data migration, system cutover activities, and the provision of a new live system to end users. 

• Monitor the new system’s performance, support end users, and adjust and optimize based on user feedback. 

Optimal Use Cases for Greenfield 

The Greenfield implementation is well-suited for the following scenarios:

• Organizations currently using different non-ERP systems and manual processes, non-SAP ERP systems, or SAP systems for the first time can benefit from the Greenfield approach. This allows them to adopt best practices and standards from SAP S/4HANA with a brand-new implementation. 

• Organizations using legacy systems such as SAP R/3 or SAP ERP 6.0 and migration from existing SAP systems with heavily customized and complex environments, which makes direct conversion or migration challenging and can cause potential inefficiencies. They focus on re-engineering the process and creating a clean core system to leverage the innovative features of SAP S/4HANA fully. 

New Implementation SAP S/4HANA Cloud. Highly Standardized 

A new SAP S/4HANA cloud edition implementation using the Greenfield approach provides a highly standardized pathway and customized business processes model for specific lines of business (LOBs) such as Finance, Procurement, or Sales.

It is based on SAP’s experience and the industry’s best practices, accelerating the implementation timeline for organizations to realize the value of quickly adopting SAP S/4HANA.

SAP S/4HANA is a multi-tenant cloud platform delivered as a SaaS model, which means multiple customers share the same underlying infrastructure running in SAP’s secure data centers.

SAP cloud deployment enforces clean core concepts by design, encouraging organizations to leverage pre-configured processes and functions for any unique requirement.

SAP cloud provides extensible options with Business Technology Platform (BTP) for any requirements beyond the standard scope, providing suites and tools for building and integrating custom applications, extensions, and integrations without modifying the S/4HANA cloud core.

SAP S/4HANA benefits from rapid and regular innovation cycles. New features and updates ensure organizations can quickly adapt to evolving market demands for advanced technology. The SAP cloud commercial model is typically a subscription-based contract.

New Implementation SAP S/4HANA (On-Premises). Refine Processes. 

Greenfield implementation approach for deploying a new instance of SAP S/4HANA within the customer’s own data center or on a hosted environment (on-premises) offers great customization and control as compared to SAP public cloud, while still providing the benefits of a fresh start.

Those customers who are either new to SAP or migrating from an existing SAP system to SAP S/4HANA can benefit from the new environment using Greenfield. Organizations can use this approach to refine their business processes and strategically incorporate SAP S/4HANA key innovations such as a simplified data model, intelligent automation, SAP Fiori, an enhanced user interface, and AI-based analytics.

This approach provides a foundation for a hybrid strategy, where organizations can decide in the future to start adopting new cloud-based solutions from SAP. Greenfield’s on-premises implementation enables organizations to transfer only essential master data and a limited amount of transactional data from their existing solution.

New Implementation SAP S/4HANA Cloud, Private Edition. Investment Protection. 

The SAP S/4HANA private cloud edition (PCE) combines the flexibility of an on-premises system with the advantages of cloud infrastructure, making it ideal for a Greenfield implementation approach for organizations looking for investment protection.

PCE provides the complete feature set of S/4HANA, which includes specific line-of-business support and industry-specific processes, without the limitations of the SAP public cloud.

Primarily suitable for Greenfield implementation, SAP PCE supports Brownfield migrations and system conversions, enabling organizations to migrate in the best-suited way. SAP PCE combines infrastructure operations and applications with one contract, simplifying governance and support with one hand to shake.

SAP private cloud edition enables organizations to secure their previous investment, including custom code, configurations, and integrations, while transitioning to modern S/4HANA hosted on a private cloud infrastructure such as AWS, Azure, or Google Cloud. Unlike the public cloud, the SAP private cloud edition offers a dedicated cloud environment with greater control over security, performance, and compliance.

Brownfield Approach: Evolution, Not Revolution

Unlike the Greenfield approach, which starts from scratch, the Brownfield approach is a systematic conversion. It involves upgrading the existing ERP system, SAP ECC, to SAP S/4HANA, where you can set up SAP S/4HANA and get it up and running. This way, you can migrate your existing SAP ERP workflows and processes to the new ERP version.

The Brownfield implementation approach for a new SAP S/4HANA adoption is a system conversion strategy that enables organizations to directly upgrade from existing SAP ERP (ECC) to SAP S/4HANA.

Brownfield Implementation: Leveraging Existing Investments

Brownfield draws an analogy from construction terminology for redeveloping or renovating an existing building or an established IT environment. For example, the foundational structure of an existing SAP ECC system still exists but undergoes modifications and upgrades to gain the new features of SAP S/4HANA.

The primary characteristic of this approach is system conversion or upgrade, enabling migration to SAP S/4HANA mostly without re-implementing and disrupting existing processes, custom developments, and workflows. It also migrates existing data, customizations, and configurations to the new system without redesigning.

The primary aim is to keep existing proven business processes and customizations used to manage the organization’s data, but carry over as many components of the source system, SAP ECC, to the target system, SAP S/4HANA.

The primary assets of the Brownfield implementation are the migration of existing custom developments, configurations, processes, historical data, and user knowledge of existing methods.

Advantages of Brownfield Implementation

• Upgrading an existing system gives you an overall shorter project timeline than a Greenfield implementation, retaining the configuration and system structure, minimizing the need for re-design and build activities, and reducing disruption to business processes.  

• Leveraging the existing infrastructure leads to lower initial costs than the Greenfield implementation, less extensive resource implementation, and a focus on necessary adjustments rather than a complete system rebuild. 

• Preserving existing, well-established business processes and system customizations in the new SAP S/4HANA environment benefits organizations that have just fine-tuned their SAP ECC system according to their specific needs and do not want to undergo a new implementation. 

• The Brownfield approach provides a direct migration pathway to S/4HANA without requiring complete re-implementation. 

• SAP offers methods and tools such as SAP readiness check, SUM with DMO (Data Migration Option), and SAP simplification item checks, which are specifically designed for system migrations, making the migration process more automated, which reduces manual effort and risk of errors. 

Disadvantages and Challenges of Brownfield Implementation

• By preserving existing processes, organizations may miss the opportunity to rethink and optimize their workflows according to SAP S/4HANA’s innovations, which might cause inefficiencies. 

• Brownfield conversion might carry over the complexity and heterogeneity of old SAP ECC systems if they are highly customized, complex, and have a technical burden. This can make future maintenance, upgrades, and adoption of new features more challenging. 

• Organizations may not fully leverage embedded best practices and standards of S/4HANA since the focus is on the conversion instead of re-design, which could result in missed opportunities. 

• Organizations could face a more complex transition to the SAP S/4HANA public or private cloud if they have chosen the Brownfield on-premises approach and later decided to move to the cloud. Their on-premises data structures and customizations might not align with the cloud environment. 

Optimal Use Cases for Brownfield

• Organizations that are generally satisfied and continue using their existing SAP ERP solutions and processes, and primarily intend to use the performance improvements and new features of S/4HANA, use the Brownfield implementation approach. 

• For organizations prioritizing an efficient and rapid conversion from SAP ECC to S/4HANA with minimal downtime and disruption, the Brownfield approach provides a faster transition than the extensive effort required by a Greenfield implementation. 

Hybrid Approach: Blending Greenfield and Brownfield for Strategic Advantage

A Hybrid approach strategically combines the most beneficial elements of both Greenfield and Brownfield implementations. It does not strictly adhere to either a completely new implementation or an entire system migration but instead adopts a blended, customized methodology that addresses organizations’ specific needs. This approach enables organizations to redesign selective processes for a new SAP system while preserving valuable components of the existing SAP system.

Hybrid Implementation: A Balanced Strategy

A Hybrid implementation suits large enterprises with more complex data and SAP ERP systems. It allows them phased migration, minimizes disruption, and maximizes value.

A Hybrid implementation lets organizations mitigate many risks of transitioning to SAP S/4HANA by avoiding a full-scale overhaul. They can select which system components they want to redesign or which parts of the existing system they want to work on simultaneously. This means cleansing and moving data simultaneously to the new system. This approach also provides cost efficiency with infrastructure preservation and custom development.

Advantages of Hybrid Implementation 

Choosing different approaches for different parts of the SAP system can help you mitigate the risks involved in pure Greenfield and pure Brownfield implementations. For example, critical but well-functioning components can go under less disruptive Brownfield conversion, and less efficient or strategically crucial elements can be re-engineered using the Greenfield Approach. It also gives flexibility to identify specific processes that would benefit most from redesigning, and simultaneously, organizations can migrate to other areas, preserving valuable customizations and necessary data.

Disadvantages of Hybrid Implementation 

Orchestrating a Hybrid implementation approach can be complex. Identifying processes suitable for Greenfield and Brownfield approaches requires extensive planning and analysis and may require third-party tools.

Choosing the Right Approach: A Strategic Decision

It is critical to strategically select an optimal SAP S/4HANA implementation approach, which will significantly impact an organization’s future IT landscape. This is not a one-size-fits-all journey; it requires evaluating the goals, system landscape, and readiness check.

Key Factors Influencing the Choice

Before deciding between Greenfield, Brownfield, and Hybrid approaches, a thorough understanding of the current and future state of an organization’s IT setup and SAP implementation should be taken.

Key factors include:

• Is the organization a startup with no prior ERP solution? Or with a long-standing SAP ERP system looking for growth and restructuring? Analyze the current implementation stage and desired future state, such as cloud, hybrid, or on-premises. 

• An old legacy system with a highly customized implementation, with complexity and heterogeneity, could pose significant challenges for Brownfield migration, potentially making it a good candidate for a Greenfield or Hybrid approach. A well-maintained and clean existing system could be a suitable candidate for the Brownfield conversion.  

• An old SAP ECC system with sound technical architecture that closely adheres to SAP standards and functions will be easier to upgrade via the Brownfield approach. However, non-standard and complex technical landscapes could increase the complexity and risks of a Brownfield conversion. 

• An organization’s objectives, such as data volume and quality, deployment choice, e.g., cloud, on-premises, or hybrid, radical business processes transformation, and future needs, will guide the choice and play an important role in determining the suitable implementation approach. 

LeanIX and PwC Study on SAP S/4HANA Transformation

LeanIX and PwC have studied SAP S/4HANA transformation, which provides real-world information on the adopted implementation approach. According to their research, only 14% of organizations have decided to go for a complete Greenfield approach, which is relatively rare. This implies that even when a clean slate is appealing, potential disruption and practicalities lead organizations to choose other options.

The study states that 44% of organizations plan to take the Brownfield approach, and 42% decide on the Hybrid implementation approach. This shows a preference for leveraging existing investments and minimum disruption, such as the Brownfield approach, or a more nuanced and balanced strategy with innovation and continuity, such as the Hybrid approach.

Table Comparison (Greenfield vs. Brownfield)

Feature / Question	Greenfield	Brownfield
Want to keep Solution Enhancements?	No, focuses on re-engineering and redesigning significant enhancements with SAP standards as a clean slate.	Yes, focuses on carrying over as many compatible and relevant enhancements as possible.
Want to keep the Transaction Data History?	No, it only migrates the necessary master data and relevant limited history.	Yes, migrates the complete transaction data history.
Does your system fulfil the Conversion Requirement?	There is no need for conversion pre-requisites; it is a new system build.	Yes, technical conversion requirements must be met for successful migration.
Do you want a Phased Business Roll-out?	Yes, suitable for phased rollouts concerning modules, geography, and business units.	No, it is unsuitable due to conversion, which can be challenging for core phased rollout.
Want Renewal of Complete ERP Solution?	Yes, a complete architecture overhaul and rebuilding of the ERP system.	No, it only focuses on upgrading to S/4HANA from the current ERP system.
Do you want Existing System Perception?	Usually seen as a potential innovation enabler but a perception blocker, full adoption of SAP S/4HANA.	It is often seen as an innovation blocker and perception enabler, with migration of configurations, custom development, user knowledge, and valuable data.
Do you want Business Process Transformation?	High opportunity for re-engineering and optimization as a transformation.	There is a low scope for process changes, and the primary focus is on adapting existing processes with limited transformation.
Do you want to adopt SAP S/4HANA Best Practices?	Strong opportunity to adopt standard processes and best practices of SAP S/4HANA.	Limited adoption of SAP standards and best practices, as existing non-standard processes may be retained.
Data Migration Complexity	Significant data cleansing may require complex data to fit into the new system.	Automated tools can be used to migrate complex technical existing data structures.
Initial Implementation Timeline	The initial implementation process timeline can be longer due to extensive design, deployment, and testing phases.	The initial implementation timeline is shorter due to the focus being on limited adjustments and conversion.
Initial Implementation Cost	Higher cost of initial implementation due to new software, infrastructure, and extensive consulting.	Lower initial implementation costs are due to keeping the existing infrastructure and focusing only on upgrading efforts.
Long-Term Total Cost of Ownership (TCO)	Potentially lower TCO based on clean core, easier upgrades, and fewer customizations.	Potentially higher TCO due to existing processes and data migrated.
Post-Implementation System Landscape Complexity	Simplified and standardized system landscape due to the new implementation.	Complexity and heterogeneity of the existing system may persist post-implementation.
Existing Business Operations Disruption	Higher disruption due to significant changes in the system and processes.	Potentially lower disruption as the system and processes are retained, and users are familiar with them.
Flexibility for Future Innovation	Higher flexibility for future innovation and adapting modern technologies with the clean core.	Limited or no flexibility due to complexities and customizations retained.

Best Practices and Key Takeaways

Best practices are the key to successful SAP implementation and continuous improvement that considers all aspects of the project.

Emphasis on the Importance of Thorough Testing

Regular and thorough testing is not a final step, but is important throughout each implementation phase. Develop a comprehensive testing plan that covers all critical business processes and functionalities. This includes unit testing, integration testing, user acceptance testing, regression testing, and performance testing. Involve end-users in testing to ensure the system meets the desired requirements.

Prescribed Phase Order Implementation

SAP projects should adhere to a prescribed phase order: planning, design, build, test, Go-Live, optimization, and support. Create a clear project plan with well-defined deliverables and milestones for each phase. It is a good approach to manage risks and track progress using project management methodologies such as SAP Activate (e.g., Discover, Prepare, Explore, Realize, Deploy, Run), Agile, or Waterfall.

Holistic Perspective of SAP Implementation

Establish a cross-functional project team from all important business areas with representatives to maintain a holistic perspective of SAP implementation, such as considering all areas of the project, including business processes alignment, system integration strategy, data governance and migration, organizational change management, security and compliance, long-term vision, and user training. Ensure all team members understand the project’s goals, roles, and responsibilities.

Conclusion: Final Thoughts and Strategic Considerations

In conclusion, Greenfield implementation provides a powerful opportunity for organizations to re-engineer their business processes and modernize their IT architecture, which provides a strong foundation for future growth and innovation with SAP S/4HANA. They can start as a clean slate, despite the limitations and constraints of their legacy ERP systems. By using a clean core implementation, organizations can leverage the standards and best practices of the new SAP system to optimize their re-engineered processes and workflows. The nature of the Greenfield approach, its comprehensive transformative potential, and scope mark the significance of a well-defined implementation strategy.

We strongly recommend that organizations carefully plan the changeover to SAP S/4HANA by considering the following factors.

• Evaluate the existing business processes and identify areas for improvement and transformation. 

• Assess the desired future state and specific business outcomes expected from the new S/4HANA implementation. 

• Establish a realistic project timeline, milestones, and budget that will account for the extensive nature of Greenfield implementation. 

• Assemble a skilled internal project team with strong cross-functional leadership and engage experienced SAP implementation consultants or partners. 

• Develop a comprehensive change management strategy to ensure minimal business operation disruption. 

• Establish a detailed plan for migration and cleansing of the critical and relevant data. 

• Establish a well-known regular testing strategy to ensure the functionality and stability of the system throughout all implementation phases. 

• Create a Center of Excellence for ongoing support, innovation, and governance for the SAP S/4HANA system. 

• Monitor new SAP S/4HANA system performance and identify areas for improvement and optimization. Stay updated with the latest SAP innovations, enhancements, and future updates. 

FAQs

What Is a Greenfield Approach?

A Greenfield approach is a fresh start. Building a brand-new SAP S/4HANA system from the ground up, completely independent of existing SAP or non-SAP legacy systems, means completely re-engineering existing business processes to adopt SAP standards and best practices.

What Is a Brownfield Approach?

A Brownfield approach, called system conversion, involves upgrading an existing SAP ERP ECC system directly to the SAP S/4HANA system. This approach focuses on leveraging existing investments, transforming the existing system instead of starting fresh, carrying over existing configurations, historical data, and custom developments to the new SAP platform.

What Are the Advantages of Implementing SAP Greenfield?

• It completely re-engineers existing SAP business processes and workflows, redesigning them from the ground up. 

• Provides a clean core of an efficient system, customized architecture without legacy system constraints. 

•  Enables organizations to adopt new SAP S/4HANA innovations, functionalities, and simplification of IT infrastructure. 

• Provides opportunities to clean and migrate relevant historic data only. 

• Provides more straightforward adaptation of cloud-based technologies and solutions. 

• Provides long-term lower total cost of ownership. 

What Are the Advantages of SAP Brownfield Implementation?

• Provides a faster implementation process compared to Greenfield with shorter project runtime. 

• Initial cost is lower, less expensive, as it uses existing infrastructure and data. 

• Provides opportunities to preserve legacy business processes and custom developments, without re-implementation and redesign. 

• Provides less disruption to business processes as users are familiar with the legacy system structure. 

• Retention of all historic data with migration. 

• As users know the processes, it provides lower change management and training efforts. 

What Is SAP Implementation in ERP?

SAP implementation in enterprise resource planning (ERP) is the process of planning, configuring, deploying, and integrating SAP software products into an organization’s existing IT infrastructure and business operations, such as finance, logistics, human resources, customer relationship management, and supply chain.

Successful SAP implementation requires careful planning, understanding business processes, data migration, system configuration, testing, and optimization. This process involves implementation approaches like new setup (Greenfield), system conversion (Brownfield), or a combination of both (Hybrid), depending on the needs of the existing infrastructure and business needs.