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SAP’s announcement in 2018 mandated enterprises using SAP ERP to migrate to S/4HANA by 2025, a deadline that has been revised due to slow adoption and limited SAP consultants. Currently, around 35,000 companies are either using or implementing SAP S/4HANA, making it a top discussion among CIOs, IT leaders, and CFOs. While the shift from SAP ECC to S/4HANA is inevitable for many due to end-of-life support on ECC, it’s crucial not to approach the migration blindly. 

The process of migrating systems, whether to S/4HANA or other platforms like Oracle Fusion or Workday, presents numerous challenges and risks to business operations and value realization, even with SAP’s new offering SAP RISE. Additionally, SAP plans to end support for legacy ERP applications on SAP NetWeaver by 2027, promoting the adoption of SAP HANA and SAP S/4HANA while discontinuing support for other databases.

Why Migrate to S/4HANA?

Migrating to SAP S/4HANA offers many advantages for organizations, including enhanced real-time analytics, quicker financial closings, access to cutting-edge technologies like AI and process automation, and more manageable business model updates. Deciding to move to SAP S/4HANA is fundamentally about aligning with a company’s strategic goals and maintaining a competitive edge.

Before creating a business case, thorough research into the challenges of the current SAP ECC system is crucial for SAP Architects or enterprise architects. This step enables a comprehensive assessment of the benefits SAP S/4HANA can bring to the business, allowing them to effectively communicate the transformation’s advantages and return on investment to management. Some of these benefits include:

Faster and More Powerful Database: This is primarily due to adopting SAP HANA. This in-memory database accelerates queries and enables powerful analytics using massive external and internal data pools. The common thread through many of these advantages is the increased speed compared to traditional ERP systems based on conventional databases.

Better Integration: Another set of benefits derives from the multi-tenancy of SAP S/4HANA Cloud. It has a software-as-a-service (SaaS), enabling deep integration with various cloud-based technologies like SAP Business Network. Other S/4HANA cloud deployments can also access these services.

Enables Business Transformation: S/4HANA supports faster financial closings and real-time data analytics. It provides access to new technologies such as IoT, AI, and chatbots. It allows organizations to automate business processes, facilitating the creation of flexible business models, which are easier to update, and offers automatic quarterly updates. Finally, S/4HANA has a simpler user interface than previous SAP ERP systems.

When Should You Start the S/4HANA Migration Process?

SAP suggests that the migration process from a traditional SAP environment to a S/4HANA system generally takes between a year and a year and a half. However, many organizations take much longer to transition to SAP S/4HANA fully. In some cases, complex migration steps can take as long as the expected timeframe for the whole migration project.

With the unpredictability of the migration journey, it is advisable to begin migrating to the appropriate ERP solution as soon as possible. Starting the migration process early helps ensure the organization has more time to implement the transition and save money. Some observers believe that SAP will increase S/4HANA implementation costs by the 2027 deadline, so completing the process earlier may allow businesses to avoid higher fees.

Common S4/HANA Migration Approaches

The suitability of S/4HANA migration strategies varies for each organization, and there is no one-size-fits-all approach. Some opt for a greenfield project, which basically means from scratch, while others prefer a brownfield project involving a complete system conversion to avoid disrupting existing business processes. Additionally, the hybrid approach is suited for those seeking to consolidate their current system landscape into SAP S/4HANA, combining the strengths of both greenfield and brownfield implementations. This strategy proves most effective for large enterprises dealing with extensive data and complex systems. Here are three approaches for SAP ECC migrations to S/4HANA:

Greenfield Approach

The greenfield approach or re-implementation approach enables organizations to redesign undesirable processes according to the latest S/4HANA innovations. It is ideal for organizations that need a new implementation of SAP S/4HANA and can use their existing ECC system as a legacy.

However, the significant changes brought about by adopting the greenfield approach may be unsettling for some. The re-implementation process can be both arduous and time-consuming, particularly when managing change effectively. Therefore, it is essential to be fully prepared for a rigorous and comprehensive re-engineering process before embarking on the greenfield path.

Brownfield Approach

The brownfield approach, or upgrade approach, is a database migration and application conversion. It is ideal for organizations using legacy systems, such as SAP R/3 or ECC, and are satisfied with existing data management and business processes but require quicker adoption and innovation.

This approach enables migration from SAP ECC to S/4HANA by converting an existing SAP environment without reimplementing or disrupting current business processes. While a Brownfield project carries the risk of potential technical issues during and after the conversion, SAP offers dedicated conversion tools and guidelines designed to proactively address and minimize such problems from the outset.

Hybrid Approach or Selective Data Transition

Selective data transition is a technical migration performed at the table level. It involves using preconfigured transformation rules to extract specific master and transactional datasets.

This approach enables organizations to define new configuration settings to improve business processes. For example, applying selective data migration to S/4HANA by setting various organizational elements, such as legal entities. It also enables keeping historical data so organizations can convert and transform it as needed to fit a new S/4HANA configuration.

Top S/4HANA Migration Challenges

Organizations preparing for SAP S/4HANA migration should be aware of the following challenges:

Complex Data Migration: Transferring data from legacy systems to SAP S/4HANA requires careful planning and execution, especially when dealing with large volumes of data. Ensuring data accuracy, integrity, and completeness during the migration process is critical.

Customization Compatibility: Organizations often have customized their existing systems to meet specific business needs. Adapting these customizations to work seamlessly with SAP S/4HANA may require significant effort, as the underlying architecture and data models differ.

Technical Integration: Integrating SAP S/4HANA with other systems, applications, and processes within the organization can be technically challenging. Ensuring smooth interoperability is essential to avoid disruptions to existing workflows.

Cost and Resources: The migration process can be costly, not only in terms of software licensing and implementation but also due to the need for skilled consultants, technical experts, and project resources. Adequate funding and resource allocation are essential for a successful migration.

Complex Business Processes: SAP S/4HANA brings new functionalities and process changes, which may require organizations to re-evaluate and redesign their existing business processes. Adapting to these changes can be time-consuming and complex.

Testing and Quality Assurance: Thorough testing is crucial to validate the accuracy and functionality of the migrated system. Organizations need to allocate sufficient time and resources for testing to avoid post-migration issues.

Downtime and Disruption: The migration process may involve downtime, which can impact regular business operations. Minimizing disruption and ensuring a smooth transition is vital for business continuity.

Change Management: Introducing a new ERP system like SAP S/4HANA requires effective change management. Employees need to be trained and prepared for the new system to ensure its successful adoption.

S/4HANA Migration: Automated Role Re-design Solution Brief

Learn how Pathlock automates the role design and testing process, allowing security teams to complete the role re-design project significantly faster, saving both time and costs.

S/4HANA Migration Considerations and Best Practices

Get Executive Buy-In

Employees and stakeholders are often reluctant to undertake a complex project like S/4HANA migration. IT leaders, CIOs, and CFOs might be wary of the costs, efforts, and risks. However, migration initiatives are sometimes necessary to meet changing business requirements.

Organizations should treat migration as a company-wide strategy rather than a tactical project. Everyone in the organization must understand the strategy to ensure adequate planning and implementation. Management should establish a roadmap that IT and business teams can understand and support.

Leverage Outsourced Expertise

Many challenges are involved in migrating to S/4HANA, with many organizations lacking the required in-house expertise to migrate. Many businesses choose to partner with external migration experts to support various aspects of the migration process, including workload assessments, planning, process mapping, implementation, and management.

Internal IT support is essential, but consulting with external specialists often provides more business value. However, it is also important to ensure the external and internal teams collaborate effectively.

Determine the Right Migration Strategy

Before initiating the SAP S/4HANA migration, the organization must make several key decisions about the overall migration strategy. Different approaches may better suit different S/4HANA systems (for example, on-premise vs cloud).

It is also useful to consider simply converting the data and settings from the existing ECC system. However, sometimes it makes more sense to establish an entirely new SAP ERP system to avoid future problems. A successful migration requires proper planning based on a clear strategy.

Archive Legacy Data

A crucial preparatory step for businesses transitioning to SAP S/4HANA is archiving legacy ERP custom code. Research indicates that a significant portion of ABAP code is customer-specific and often goes unused after creation. Performing this clean-up before migration presents an excellent opportunity to optimize the ERP system. By doing so, you can achieve a reduced migration volume, leading to lower financial and time costs.

Focus on Security

In light of the ever-evolving business application threat landscape and the increasing sophistication of threat actors, it has become imperative for organizations to integrate security from the outset of transformation projects and application development. Neglecting SAP security at the application level can lead to significant business impacts that cannot be overlooked.

By adopting a “shifting left” approach, which involves incorporating security validation during code creation rather than deployment or testing, enterprises can proactively prevent potential risks from materializing during production or leaving the development environment altogether. This proactive stance enables businesses to identify and address security issues early on, mitigating the risk of security breaches and their detrimental consequences.

Secure Your SAP S/4HANA Migration with Pathlock

SAP S/4HANA migration can be a massive undertaking that requires careful planning and preparation. Far too often, companies forget to think about how their access control and security strategies will change until they are getting close to going live on a new platform. S4 HANA will often require a new approach to access control that can adapt to the new landscape and challenges.

With Pathlock, organizations using SAP S4 HANA can automate many of their SAP security processes to provide 360-degree protection across the SAP system landscape. The Pathlock platform can provide complete capabilities, including:

Automated Role Design: Pathlock automates the design of SAP roles by analyzing a user’s existing authorizations, their historical usage patterns, and their job function groupings, as well as segregation of duties (SOD) rules and sensitive access concerns. The solution ensures that roles adhere to defined naming conventions, are adequately reviewed, and are properly documented for a smooth migration to S/4HANA. Learn more

Vulnerability Management: Migrating to a new environment is never going to be perfect. It takes time to get your configurations and security right. Pathlock continuously scans your SAP applications to identify critical vulnerabilities. It dynamically visualizes your SAP landscape, shows you where your vulnerabilities are, automatically prioritizes them, and then shows you how to remove the weaknesses in your applications. Learn more

Threat Detection: The Threat Detection and Response module from Pathlock provides SAP security and application teams with focused visibility into threats facing critical business systems. It analyzes logs from over 60 data sources to identify critical events and combinations of non-critical/complex events to identify threats in your application environment. Learn more

Apart from the above modules, Pathlock offers many other solutions like License Optimization, Access Analysis, Provisioning, and more to help make your S/4HANA migration process more efficient.

Interested to learn how Pathlock can help automate your SAP Security program while keeping your landscape secure and compliant? Request a demo of Pathlock today!

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