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SAP ERP IMPLEMENTATION AND Sap migration

Arig
Arig
ArigArig

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SAP ERP IMPLEMENTATION AND Sap migration

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SAP S/4HANAmigration:
greenfield, brownfield, orphased?
Executive summary
S/4HANA is SAP’s next-generation Enterprise Resource
Planning (ERP) Suite. Organizations planning to implement
this real-time digital core to their business need to choose
betweenamigration(brownfield)orstartanew(greenfield).
AR Intelligence Group outlines the pros and cons of each
strategy and extends the choice with a hybrid solution.
Moving to SAP’s latest ERP is not like
any other enterprise software upgrade.
With a new database technology, a
new user experience, and redesigned
business processes, adopting S/4HANA
is a system conversion.
Organizations need to evaluate
their current landscape, technical
prerequisites, target softwareversions,
and business case in order to select
the right migration path: brownfield,
greenfield, or a phased approach.
Our current ERP
systems can only
support today’s business
model; we need a digital
platform to enable
tomorrow’s business.
IT Director of a Fortune 500 US
Contract Manufacturer
SAPS/4HANAmigration 2
Rather than migrating a complete
system, a new environment can be
implementedgradually:countryby
country,division bydivision, etc.
Masterdata willbe convertedfirst,
andthentransactionswillgradually
be transferred to the newsystem.
Hybrid/Phased
Traditional implementation projects
require the complete migration of
the legacy environment, including
master data and transactional data,
as far back as legally required.
Greenfield
In a greenfield environment,
most of the master data will be
converted, but most transactional
datawillbearchivedordiscarded.
Brownfield
SAPS/4HANAmigration 3
S/4HANA migrationpaths
AtARIG, ourspecialist S/4HANAteams areregularly asked the
samequestion:
When considering an S/4HANA implementation, what’s best?
Greenfield (starting fresh) or brownfield (migration)?
Field colors
In integration services language, a ‘greenfield’1
implementation refers to first-time
installations, or so-called ‘net new’ customers. In contrast, upgrades and migrations
are called ‘brownfields’2
. The pros and cons of implementation projects in both
situations can be summarized as follows:
Greenfield Brownfield
Pros • Typically new customers
are smaller, requiring
smaller scope
• Smaller scope means shorter
projects, leading to quicker returns
on investment
• Migration of data subset, leading to
smaller footprint
• Enablementofprocesstransformation
• Leveraging several years of
investment in configuration
and customization
• Workforce already educated
in the current SAP language
and objects
• Architecture is familiar and
predominantly setup
Cons • Workforce needs to be educated in
the SAP language andobjects
• New system needs to be fitted into
the currentarchitecture
• S/4HANA does not coverall
industry-specific features
and functions
• Functional changes still
require retraining and
change management
• Potential impact on unique
configurations and customizations
• Potential requirement
for significantdowntime,
incompatible with business
and operations
SAPS/4HANAmigration 4
“
History can be deceptive
The case studies currently available
on S/4HANA implementations can
be misleading: one might infer from
customer success stories that all
S/4HANA projects are going to be
greenfieldones,butthiswouldsimply
be statistical bias. Since early adopters
were smaller customers, the initial
projects were by default greenfield.
This does not mean that S/4HANA
will never be relevant for brownfield
implementations,itjustindicatesthat
theywillprobably not be the first ones to
start or complete an implementation.
Notjustanupgrade,buta
system conversion
Contrary to upgrade projects from
older releases, e.g. from SAP R/3 4.6C
to SAP ECC 5.0, or from Business Suite
on AnyDB to Business Suite on HANA,
the migration to S/4HANA is not purely
technical. Not only will the underlying
architecture be changed, but so will
various key tables, transactions, and
processes. This system conversion
from release R/3 toS/4 will require both
technical and functional resources in
order tofully retest all transactions and
business processes.
A work in progress
The SAP S/4 development team is going
through fundamental code refactoring
in order to fully transform and leverage
the power and capabilities of the HANA
database. In particular, not all Industry
Solutions have currently been ported
to the S/4HANA platform. You will need
to check the SAP Product Availability
Matrix (PAM) for more information on
your specific Industry Solution3
.
ARIG gave us the
confidence that we were
working with a partner
who’d been down this
road before. Their
experiencewithSAPHANA
implementations meant
they understood the
challengeswewerefacing,
andcouldresolveanyissues
thatemergedalongtheway.
BI Manager, FIEM, FTSE 250 Company
”
SAPS/4HANAmigration 5
Evaluate your situation
Aswitheverysignificantenterpriseproject,therearemultiple
criteriawhichinfluencedecisionslikegreenfieldvs.brownfield.
In thecaseof an S/4HANAconversion,themostimportantcriteria
that Bluefin experts have identified are: the start release, the
technicalprerequisites,theeditionoptions,andthebusinesscase.
Start release
If your current enterprise ERP solution
is not provided by SAP, there is no easy
migrationoptionavailable.Inthiscase,
the only option is to go greenfield.
However, if your ERP solution is
provided by SAP, then you might be
able to upgrade your platform as
brownfield if your system supports
the technical prerequisites.
Technical prerequisites
One of the key requirements for any
migration to the SAP HANA database
is a Unicode encoding system. If your
current database is not Unicode-
compliant, then you would need to
perform a Unicode conversion in order
tosupport a brownfield migration.
This step cannot be bundled with
other migration steps.
In addition to the Unicode system,
yourSAPplatformwillrequireRelease6,
Enhancement Package 7 or higher,and
a HANA database. If these criteria are
notmetalready,don’tworry,youshould
be able to do a one-step conversion to
upgrade your brownfield system.
Some early adopters may have already
installed the Simple Finance add-on.
This is not a prerequisite and doesn’t
prevent the conversion to S/4HANA.
More details can be found in SAP’s
transition white paper4
.
One of the key
requirements for any
migration to the SAP HANA
database is a Unicode
encoding system. If your
current database is not
Unicode-compliant, then
you would need to perform
a Unicodeconversion.
SAPS/4HANAmigration 6
Edition options
Now that you have a better picture of where you stand, let’s take a look at where
you’re going. S/4HANA comes in two editions: on-premise and cloud. Here’s a quick
comparison of the two options.
Licensing model Traditional licensing Subscription licensing
Infrastructure
and maintenance
model
The customer is in control of
deployment and maintenance
with dedicated own IT staff
SAP provides the system
and is responsible for the
system maintenance
Speed of
innovation
Customer has full control
over speed of innovation,
planned downtimes, changes
within the system, changes of
the system
Cloud customers participate
automatically on quarterly
innovation upgrades
Implementation
approach
Highly individual
requirements regarding
business processes and
customization
Predefined best-practice
configurationwithlimited
specialization
Functionalscope Full ERP scope (including
SAP S/4HANA applications),
integrates with SAP
SuccessFactors Employee
Central, SAP Fieldglass, SAP
Hybris Marketing, SAP JAM
and SAP Ariba Network
Key scenarios, embedded
ERP scenarios, integrates
with SAP SuccessFactors
Employee Central, SAP
Fieldglass, SAP Hybris
Marketing, SAP JAM and
SAP Ariba Network
Custom code Full traditional ABAP
extensibility up to core
modification (which is
not recommended for
TCO reasons)
In-app extensibility with
limited ABAP; SAP HANA
Cloud Platform (HCP) as
extension platform for
larger extensions
SAP S/4HANA editions – at a glance. Source: ARIG
SAP
S/4HANA
Cloud
SAP
S/4HANA
On-premise
Ad

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SAP ERP IMPLEMENTATION AND Sap migration

  • 2. Executive summary S/4HANA is SAP’s next-generation Enterprise Resource Planning (ERP) Suite. Organizations planning to implement this real-time digital core to their business need to choose betweenamigration(brownfield)orstartanew(greenfield). AR Intelligence Group outlines the pros and cons of each strategy and extends the choice with a hybrid solution. Moving to SAP’s latest ERP is not like any other enterprise software upgrade. With a new database technology, a new user experience, and redesigned business processes, adopting S/4HANA is a system conversion. Organizations need to evaluate their current landscape, technical prerequisites, target softwareversions, and business case in order to select the right migration path: brownfield, greenfield, or a phased approach. Our current ERP systems can only support today’s business model; we need a digital platform to enable tomorrow’s business. IT Director of a Fortune 500 US Contract Manufacturer SAPS/4HANAmigration 2 Rather than migrating a complete system, a new environment can be implementedgradually:countryby country,division bydivision, etc. Masterdata willbe convertedfirst, andthentransactionswillgradually be transferred to the newsystem. Hybrid/Phased Traditional implementation projects require the complete migration of the legacy environment, including master data and transactional data, as far back as legally required. Greenfield In a greenfield environment, most of the master data will be converted, but most transactional datawillbearchivedordiscarded. Brownfield
  • 3. SAPS/4HANAmigration 3 S/4HANA migrationpaths AtARIG, ourspecialist S/4HANAteams areregularly asked the samequestion: When considering an S/4HANA implementation, what’s best? Greenfield (starting fresh) or brownfield (migration)? Field colors In integration services language, a ‘greenfield’1 implementation refers to first-time installations, or so-called ‘net new’ customers. In contrast, upgrades and migrations are called ‘brownfields’2 . The pros and cons of implementation projects in both situations can be summarized as follows: Greenfield Brownfield Pros • Typically new customers are smaller, requiring smaller scope • Smaller scope means shorter projects, leading to quicker returns on investment • Migration of data subset, leading to smaller footprint • Enablementofprocesstransformation • Leveraging several years of investment in configuration and customization • Workforce already educated in the current SAP language and objects • Architecture is familiar and predominantly setup Cons • Workforce needs to be educated in the SAP language andobjects • New system needs to be fitted into the currentarchitecture • S/4HANA does not coverall industry-specific features and functions • Functional changes still require retraining and change management • Potential impact on unique configurations and customizations • Potential requirement for significantdowntime, incompatible with business and operations
  • 4. SAPS/4HANAmigration 4 “ History can be deceptive The case studies currently available on S/4HANA implementations can be misleading: one might infer from customer success stories that all S/4HANA projects are going to be greenfieldones,butthiswouldsimply be statistical bias. Since early adopters were smaller customers, the initial projects were by default greenfield. This does not mean that S/4HANA will never be relevant for brownfield implementations,itjustindicatesthat theywillprobably not be the first ones to start or complete an implementation. Notjustanupgrade,buta system conversion Contrary to upgrade projects from older releases, e.g. from SAP R/3 4.6C to SAP ECC 5.0, or from Business Suite on AnyDB to Business Suite on HANA, the migration to S/4HANA is not purely technical. Not only will the underlying architecture be changed, but so will various key tables, transactions, and processes. This system conversion from release R/3 toS/4 will require both technical and functional resources in order tofully retest all transactions and business processes. A work in progress The SAP S/4 development team is going through fundamental code refactoring in order to fully transform and leverage the power and capabilities of the HANA database. In particular, not all Industry Solutions have currently been ported to the S/4HANA platform. You will need to check the SAP Product Availability Matrix (PAM) for more information on your specific Industry Solution3 . ARIG gave us the confidence that we were working with a partner who’d been down this road before. Their experiencewithSAPHANA implementations meant they understood the challengeswewerefacing, andcouldresolveanyissues thatemergedalongtheway. BI Manager, FIEM, FTSE 250 Company ”
  • 5. SAPS/4HANAmigration 5 Evaluate your situation Aswitheverysignificantenterpriseproject,therearemultiple criteriawhichinfluencedecisionslikegreenfieldvs.brownfield. In thecaseof an S/4HANAconversion,themostimportantcriteria that Bluefin experts have identified are: the start release, the technicalprerequisites,theeditionoptions,andthebusinesscase. Start release If your current enterprise ERP solution is not provided by SAP, there is no easy migrationoptionavailable.Inthiscase, the only option is to go greenfield. However, if your ERP solution is provided by SAP, then you might be able to upgrade your platform as brownfield if your system supports the technical prerequisites. Technical prerequisites One of the key requirements for any migration to the SAP HANA database is a Unicode encoding system. If your current database is not Unicode- compliant, then you would need to perform a Unicode conversion in order tosupport a brownfield migration. This step cannot be bundled with other migration steps. In addition to the Unicode system, yourSAPplatformwillrequireRelease6, Enhancement Package 7 or higher,and a HANA database. If these criteria are notmetalready,don’tworry,youshould be able to do a one-step conversion to upgrade your brownfield system. Some early adopters may have already installed the Simple Finance add-on. This is not a prerequisite and doesn’t prevent the conversion to S/4HANA. More details can be found in SAP’s transition white paper4 . One of the key requirements for any migration to the SAP HANA database is a Unicode encoding system. If your current database is not Unicode-compliant, then you would need to perform a Unicodeconversion.
  • 6. SAPS/4HANAmigration 6 Edition options Now that you have a better picture of where you stand, let’s take a look at where you’re going. S/4HANA comes in two editions: on-premise and cloud. Here’s a quick comparison of the two options. Licensing model Traditional licensing Subscription licensing Infrastructure and maintenance model The customer is in control of deployment and maintenance with dedicated own IT staff SAP provides the system and is responsible for the system maintenance Speed of innovation Customer has full control over speed of innovation, planned downtimes, changes within the system, changes of the system Cloud customers participate automatically on quarterly innovation upgrades Implementation approach Highly individual requirements regarding business processes and customization Predefined best-practice configurationwithlimited specialization Functionalscope Full ERP scope (including SAP S/4HANA applications), integrates with SAP SuccessFactors Employee Central, SAP Fieldglass, SAP Hybris Marketing, SAP JAM and SAP Ariba Network Key scenarios, embedded ERP scenarios, integrates with SAP SuccessFactors Employee Central, SAP Fieldglass, SAP Hybris Marketing, SAP JAM and SAP Ariba Network Custom code Full traditional ABAP extensibility up to core modification (which is not recommended for TCO reasons) In-app extensibility with limited ABAP; SAP HANA Cloud Platform (HCP) as extension platform for larger extensions SAP S/4HANA editions – at a glance. Source: ARIG SAP S/4HANA Cloud SAP S/4HANA On-premise
  • 7. SAP S/4HANA migration path 1 STARTRELEASE 2 PREREQUISITES 3 SAPERP<6 SAPNW x.x Non-Unicode DB Unicode Conversion SAPERP<6 SAPNW x.x Unicode AnyDB SAP SAPERP6 EHP0+ SAP N W 7.4 Unicode AnyDB SAPERP6EHP7+ SAP NW 7.4 + SAP HANA One-step Migration SAP Simple Finance SAPERP6EHP7+ SAPNW 7.5 SAP HANA Legacy AnyDB EDITIONS 4 0110 1101 S/4HANA On-premise On-premiseorPrivateCloud S/4HANA Cloud Public Cloud BUSINESS CASE 5 PROJECT TYPE Data Migration Custom Code Remediation BROWNFIELD Architecture Comple xity Business Model Changes PHASED Conversion E�ort GREENFIELD
  • 8. SAPS/4HANAmigration 8 It is important to keep in mind that, despite its misleading name, the S/4HANA On-premise edition can be deployed in-house, in your own data center, through a managed hosting partner, in a private cloud or public cloud. All these options support a brownfieldscenario. However, the SAP S/4HANA Cloud edition can only be deployed in SAP’s public cloud and only supports a greenfield option. Business case You now should have a better idea as to whether you can technically perform a conversion to S/4HANA. The next question is “should you convert to S/4HANA?” Therearemultiple criteria that could be taken intoconsideration, depending on your organization. Here are some examples: Data migration The larger the dataset, the more expensive your future S/4HANA system will be. Our experts will guide your teams while assessing your data migration strategy, including early watch reports, data growth and life cycle, and compression factors, etc. This is applicable in both the greenfield and brownfield scenarios. Custom code remediation Most companies that have been running an ERP system for a significant amount of time have had to customize it to a certain extent: missing functionalities, organization specific requirements, integration with other systems, etc. What used to be an advantage, however, could potentially get in the way of a system conversion. Indeed, some custom programs might not work on a HANA-based platform. Some customizing might not even be needed anymore. A conversion to S/4HANA is a good opportunity for re-evaluation. ARIG partners with custom code remediation specialists to effectively clear such hurdles. 0110 1101
  • 9. SAPS/4HANAmigration 9 Architecture complexity In a perfect world, your ERP landscape would contain a pristine platform: a single system, up to date, and out of the box. In the real world though, companies can have multiple ERPs,different releases, integration layers, and heavy customization, etc. This landscape complexity can significantly impact your ability to migrate or affect the project cost. There are potential solutions to reduce such complexity,which willbedescribed in the‘Phased Approach’ section. Changes to the business model Aspreviouslymentioned,theconversiontoS/4HANAisnotjust technical. This move also presents you with a unique opportunity tounlocknewpotentialforyourbusinessand/oraccommodate changes in the way you operate. During the Discovery roadmap workshops we run at ARIG it isn’t uncommon for the business to share with us fundamental changes they have gone through, e.g.: “We used to have 500 employees. Now, we’re less than 120. We need a new platform.” “Our manufacturing footprint used to be huge, however, today our business is focused on outsourcing – alargeportionofourERPisnowdeadweight.” “This industry has changed; nowadays we need to be better and quicker to acquire and integrate new companies.” These factors influence the best strategy for your company. Conversion effort Theabovecriteriaareonlysomeofwhatshouldbetakenintoaccount toevaluatethelevelofeffortrequiredfortheconversionofyoursystem toS/4HANA.Basedon theseresults,youshouldbeabletobuilda well- informedstrategyregardingagreenfieldorbrownfieldproject. For further details, read ‘Building the Business Case for SAP HANA: Engineering Simplicity’ by ARIG’s Rakesh Kumar.5
  • 10. SAPS/4HANAmigration 10 The case fora hybrid/ phased approach Enterprise platforms can grow in complexity depending on the history of the organization (e.g. mergers and acquisitions), the numberand dependencies of businessprocesses,thearchitecture andlandscape,aswellasthebusinessenvironment.Insuchcases, theconversiontoS/4HANAmaynotbepossibleorrealistic. In this scenario, the organization should considerahybridorphasedapproach. By migrating either system by system, or company code by company code, or module by module, the migration becomes more manageable. It is worth keeping in mind, however, that this approach will take longer and could require the temporary setup of a parallel landscape. Consolidation Migration of Business Units (Company Code) Migration of selected applications (centralFinance) Leveraging SAP S/4HANA for Landscape Transformation. Source: ASUG Ifthis solutionpresentsmorecontrollablerisks, itwillalsoprobablybemore expensive. This should be evaluated while building the business case. ARIG has helped us to understand where we are, where we want to be, and what we need to do to clean house.Wearenow layingthe foundationson whichto build andinnovate. Business Analytics Manager, Noble Corporation FI CO SAPS/4 HANA HANA FI CO MM SDSAP S/4 HANA HANA SAPS/4 HANA HANA
  • 11. SAPS/4HANAmigration 11 Summary S/4HANA is SAP’s future. Older versions of the enterprisesoftwarewillrunoutofmaintenanceby2020 (non-HANA DB) or 2025 (HANA DB). Organizations need to start assessing their options and develop a conversion strategy today. Your current release, technical prerequisites, edition options, and business case will all inform what your best S/4 HANA options are: greenfield, brownfield, or hybrid implementation. Our experts at ARIG have in-depth experience of working with companiesthat werein asimilarposition asyou arein today.Wewillhelpyou and your organization develop an unbiased business case. Contact us today for your Discovery roadmapworkshop.
  • 12. Aditi Jaiswal is a recognized expert in the enterprise SAP ABAP HANA Techno Functional domains, having spent more than 5 years in the development, Migration, and implementation of large scale ERP projects. He leverages his global experience to bring a unique perspective on the impact of digital transformation across various industries, including manufacturing, consumer products, and automotive. Aditi Jaiswal holds a Master in Computer Application from the Vanasthali Vidyapith Jaipur -Rajsthan, India. Email: aditi.jaiswal@arig.co.in ARIG is award-winning global SAP consultancy, focused on digital innovation and powered by the scale and agility of SAP. SAP is in our DNA. Our clients’ success is based on our deep understanding of SAP methodologies and processes. You can have confidence in your SAP journey because of our close relationships with SAP product teams, enabling you to create and innovate real-world solutions to meet your business needs. Ensure your project is a success. ARIG was the first to go to market with an SAP HANA practice in 2011, and is seen by SAP as the go-to partner for digitally transforming your SAP portfolio. We have a network of Multiple Client across 3 countries, focused on SAP technology. The depth and breadth of our knowledge and understanding of SAP products, combined with our agile approach, enables our clients to experience results quicker, mitigate risk, and lower their total cost of ownership. SAP S/4HANA migration 13
  • 13. INDIA AR IntelligenceGroup A41 The Corenthum Sector 62 Noida Uttar Pradesh 203101 India Tel:+91 76349-61424 ©2017AR Intelligence Group ,aSAP Service Provider company.Allrightsreserved.Nopartofthispublicationmay bereproducedor transmittedinanyformorforanypurposewithouttheexpresspermissionof AR Intelligence Group. SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP SE (or an SAP affiliate company) in Germany and other countries. Please see http://www.sap.com/ corporate-en/legal/copyright/index.epx#trademark foradditionaltrademarkinformationandnotices. Some software products marketed by SAP SEandits distributors containproprietary software components of other software vendors. www.arig.co.in