SAP PRESS :: SAP S/4HANA - Adopting SAP S/4HANA

9.5 System Conversion Considerations

Prior to starting the conversion to SAP S/4HANA, you need to assess a few considerations to ensure that this is the best transformation path for your organization. Given the three paths that are available (refer to Figure 9.1)—new implementation, system conversion, and landscape transformation—it’s important to understand the benefits and challenges of choosing one option over another.

Although SAP provides three transformation paths, there are really only two main implementation options available, often referred to as greenfield for new implementations or brownfield for system conversions.

Within a greenfield approach, you have to start a fresh implementation from scratch, which covers the new implementation and landscape transformation scenarios that entail a data migration from an existing or multiple SAP ERP or non-SAP ERP systems.

Alternatively, you may decide to convert your existing SAP ERP system, which allows you to keep your configuration, custom development, and data. In this section, we’ll compare and contrast the two implementation options to help you decide which will work best for your organization.

9.5.1 Greenfield Implementation

The move to SAP S/4HANA is a great opportunity to simplify certain business processes and ways of working in your organization and redesign the way you do business. If this is something that you’re considering, and you have a high level of business process reengineering, a greenfield implementation may be the right option for your organization. Although starting with a new implementation may seem a bit daunting, SAP provides a set of accelerators based on SAP Activate that provides configuration packs and best practices to set up the new system and complete the data migration required to get the new system up and running.

You must also take into consideration your current release level. SAP S/4HANA, on-premise edition, currently runs on SAP NetWeaver 7.5 on an SAP HANA database. For some organizations on older releases such as SAP R/3 4.6c, a new implementation to SAP S/4HANA could be the perfect option to get back to the latest release while avoiding the challenges faced during the upgrade process and conversion to SAP S/4HANA. For organizations on SAP ERP 6.0, a one-step approach is available for system conversion, but a greenfield approach may still be preferable due to business considerations.

Custom code should also be factored into the decision on whether to choose a greenfield of brownfield implementation. In an average SAP ERP system, between 25% and 75% of custom code isn’t used and up to 50% of modifications are considered obsolete. Adapting the code to SAP S/4HANA can be very time-consuming and results in few benefits.

For a greenfield implementation, this is a good opportunity to start again by leveraging SAP best practices and standard functionality. SAP Activate supports these activities (more information on SAP Activate is available in Chapter 10). Any custom code that is still required can be leveraged from the legacy system and adapted on the fly to be incorporated into the new SAP S/4HANA system.

In certain cases, specific functionalities and features, such as industry solutions or SAP add-ons, may no longer be available or required. If clear business benefits have been identified that are driving the immediate move to SAP S/4HANA, it may be an opportunity to consider redesigning some of the existing business processes and start with a new implementation rather than waiting for the technology restrictions to be resolved. For functional restrictions, see Section 9.3.3; report R_S4_PRE_TRANSITION_CHECKS, discussed in Section 9.2.3 will let you know if any of your current functionality will be impacted.

Finally, you must consider the impact on your data with a greenfield implementation:

You’ll have more flexibility to cleanse your data during the implementation if you decide to go down the new implementation route. It is an opportunity to restore data quality as a key part of your organization’s governance procedures.
If the effort and time associated with cleansing the data in your systems seems excessive to make your SAP environment “conversion ready,” again, a new implementation may be the best option for you because it provides greater flexibility around data cleansing during the migration process. You’ll also be able to define the amount of data you want to move to the new SAP S/4HANA system. This option can considerably reduce the effort associated with the move to SAP S/4HANA based on the volume of data that requires cleansing.
If you have a large volume of data, and don’t want to undergo a data archiving project, you may want to follow the new implementation route and perform your data migration on a select set of data based on your future business and system requirements.

9.5.2 Brownfield Implementation

A system conversion will provide you with less flexibility to enhance your business processes compared to a greenfield implementation; however, you’ll still benefit from the simplifications SAP provides as part of the move to SAP S/4HANA. This can be a difficult decision to make, especially for customers who have spent many years investing in their existing SAP ERP environment; for others, it will be a no-brainer.

On the subject of release level, as mentioned earlier in Section 9.2, a one-step approach is available for customers currently running SAP ERP 6.0, with or without an enhancement pack. Older releases may choose to go with a step-by-step approach, moving to SAP ERP 6.0 EHP 7 or above and then to SAP S/4HANA.

If the majority of your custom code is still in use (unlike in the average SAP ERP system, as you saw in the previous section), a brownfield implementation may be the correct approach for your organization. Under these circumstances, you can pursue a system conversion and implement a small code-cleansing project prior to the conversion start to help reduce the system code base and return to SAP’s standard functionality. This also reduces the TCO of your SAP system further down the line.

Functionality restrictions linked to industry solutions or SAP add-ons not yet supported by SAP S/4HANA can be problematic if you’re using these functionalities within your existing SAP environment and looking to convert your existing SAP system to SAP S/4HANA. You may want to delay your system conversion until they are made available. In the meantime. SAP has started to provide the possibility to remove some additional add-ons that will help with the transition to SAP S/4HANA.

Note

More information regarding currently unsupported industry solutions and add-ons is available in SAP Note 2011192 (Uninstalling ABAP Add-Ons).

Note

SAP also provide compatibility packages that allow SAP customers a limited use right to run classic SAP ERP solutions on an SAP S/4HANA installation. The use right currently expires on December 31, 2025.

Additional information and scope matrix on SAP compatibility packages for SAP S/4HANA can be found in SAP Note 2269324 - Compatibility Scope Matrix for SAP S/4HANA on-premise.

Finally, you must consider the impact on your data with a brownfield implementation:

The system conversion requires a high level of data quality and requires you to perform some cleansing activities during the conversion project if you want to successfully migrate your data from the old data structures to the new SAP S/4HANA data structures.

If you’ve been running your SAP ERP system for multiple years and have undertaken many upgrades, the system conversion process will be more complicated. In this case, allocating the right amount of time and effort to data cleansing is key. This data cleansing can be initiated as part of the system conversion phase during the sandbox conversion. You can address any challenges or issues that occur and relate to data during the sandbox conversion. More importantly, these adjustments and cleansing activities need to be replicated accordingly into the production environment to ensure that the data issues don’t occur when performing the same activities on the other environments post-refresh—especially in production.

While performing a system conversion, there is no way to limit the amount of data that will be moved from the old data structures to the new ones. If you’ve been running your SAP systems with no data archiving policy for several years, this can add up to a lot of data! The amount of data in your system impacts the downtime required to perform the system conversion, in addition to other factors such as number of company codes for batch parallelization. To alleviate this, you must introduce a data archiving project prior to starting your system conversion to reduce data volumes.

Both greenfield and brownfield implementations have their benefits and downsides in regard to time, effort, and speed to implementing SAP S/4HANA. However, because organizations will have invested differently in their existing SAP environments, this will be a key part of the decision making.