S/4HANA: Here`s why companies should start the migration process

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By MR BLUEFIELD - October 02, 2020

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Thousands of companies worldwide have yet to migrate to SAP S/4HANA – for most of them the migration is an enormous feat. But how complex is the project really and what aspects should be considered during the migration? MR BLUEFIELD answers frequently asked questions about the new product generation of SAP enterprise software.

 

This article is the first part of the series "Migration to SAP S/4HANA – answers to your questions". For the second part, please click here.

 

Why do companies need to migrate to SAP S/4HANA?

With the new real-time ERP solution, SAP is responding to current and future digital market demands imposed on modern companies. The existing software has undergone a fundamental technological change.

As the digital core of the IT architecture, SAP S/4HANA is intended to support the companies that use it in tackling the challenges and opportunities of the digital age flexibly, quickly and well-informed. Further, business processes can be illustrated in a lean and secure manner. SAP S/4HANA is therefore much more than just a successor to the older SAP enterprise software, which is why migration is far more complex than a pure software upgrade. Companies are faced with a comprehensive transformation that holds great potential for innovation and optimization.

 

What is the added value of switching?

Companies are preparing for the future by switching to the new SAP Business Suite. SAP S/4HANA is one of the most modern ERP systems of our time and provides the technological basis for the digitization of business processes. Real-time analyses, the connection of operational and analytical functions and a considerably lower total storage requirement of the database are just some of the advantages.

The new ERP suite is designed to provide the best possible support for the digital transformation of companies. Complex IT landscapes or manually controlled processes, which are often associated with older ERP applications, are to be overcome in order to make companies future-ready and competitive. This pays off especially in times of crisis, as decision-makers can react more flexibly and agilely to constantly changing requirements.

 

By what time does the migration have to be completed ?

SAP has extended the maintenance expiration of existing ERP systems: By December 31, 2027, at the latest, every company that wants to continue using SAP should have switched to SAP S/4HANA. Optionally, extended maintenance is offered until 2030 for an additional charge. This gives companies more time for the transformation project. They should use this freedom effectively: In order to fully exploit the potential of S/4HANA, a major redesign of existing ERP landscapes and processes is usually necessary. If you commence with the migration project early, you also secure a competitive advantage and can benefit from the strengths that S/4HANA offers earlier than the competition.

 

How do companies migrate their data to SAP S/4HANA?

The question of which migration option fits the individual status quo and future corporate strategy is a major concern for many decision-makers. According to a trend survey conducted by IT online magazine, for 60 percent of respondents, defining the ideal migration strategy is the greatest challenge concerned with the changeover. 

Two approaches have been established in the past: A completely new implementation (Greenfield) or a transformation of the existing SAP system (Brownfield). However, both approaches require large companies in particular to refurbish their often heterogeneous legacy systems. And that increases the already enormous effort involved concerning far-reaching changes in ERP landscapes..

Decision-makers are therefore well advised to look for an alternative that will accelerate the S/4HANA introduction: With the BLUEFIELD approach, functions and data are migrated and updated within a single go-live project. This effectively saves time and reduces the costs.

 

Which SAP S/4HANA operating model is the right one?

There are different ways for companies to operate S/4HANA. You can choose the classic software solution that runs on your own servers (On-Premises). Alternatively, servers, storage and network resources – and thus the entire infrastructure for operating SAP S/4HANA – can be outsourced to a service provider (hosting). In addition, there are various options for operating SAP S/4HANA flexibly from the cloud.

Before companies decide on a new operating model, they should consult with their IT experts about the architecture model they have used in order to date and discuss future-relevant decision criteria.

 

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MR BLUEFIELD SUMMARIZES

  • SAP S/4HANA should support the transformation of companies in the best possible way.
  • The new ERP software suite forms the technological basis for the digitization of business processes.
  • The switch to SAP S/4HANA is more than just a software upgrade and should be completed by the end of 2027.
  • The transition can be complex and costly if companies opt for traditional approaches (Greenfield or Brownfield).
  • With the BLUEFIELD approach, migration is accelerated and therefore more cost-effective.