As we continue to build our experience with early adopter SAP S/4HANA migrations, and more broadly engage our customer base on their S/4HANA strategies, a clear migration path is emerging for those with complex and heavily customized ERP systems.
Modern CIOs know that the future will be built on maximizing the use of standard commoditized (cheap) software while minimizing the use of custom, bespoke (expensive) software. As our customers contemplate how they will use S/4HANA their objective is to dramatically simplify and standardize their SAP systems. That said, they must rationalize what to do with their current inventory of major software customizations that are heavily embedded in their day-to-day critical operations. For our large customers, a ‘Greenfield’ ERP reimplementation is overwhelming for a number of reasons, including:
The conventional ‘Brownfield’ migration is also potentially flawed as it requires a significant investment in migrating current ERP customizations to the S/4HANA architecture, essentially investing heavily in an approach that is not consistent with the organization’s future vision.
As we work through this problem with leading organizations, we are finding a common architecture and approach that is consistent with the CIO’s future vision, while eliminating the major barriers to immediate and meaningful progress. There is one basic premise - consider the digital ERP core and ERP customizations as two separate and distinct software stacks. Thinking about the problem this way we come up with a different approach for each stack.
This diagram displays the separation of the system into the 2 logical stacks, core Cloud ERP and Customer Specific Customizations:
For the digital ERP core, the organization will do an all-out migration to S/4HANA adopting the new and improved processes, UI and feature sets like Leonardo. While this is essentially a ‘Greenfield’ approach, SAP has mapped standard ERP features from ECC to S/4HANA minimizing the disruption to the business in this migration.
For example, Executives should consider the following benefits of the S/4HANA finance solution:
SAP talks about these concepts in the context of the "digital boardroom". Instead of arguing about accuracy and sources, the business should be able to focus on the bare facts the numbers show. i.e. stop arguing about what you think you know and start taking action with real information.
For the customer specific customizations we take a different approach. In the long run, many of these customizations may be phased out, subsumed into standard S/4HANA functionality or replaced with other commoditized software. Our requirements here are to minimize investment while keeping this functionality interoperable and accessible from the digital S/4HANA core. We also want to make sure this functionality is modular meaning that it exists in small, logical and discrete ‘chunks’ that can be replaced or shut down one at a time., leveraged across multiple systems and centrally managed. The architectural solution to this problem exists today: we move the current SAP customizations out of ECC to microservices running on the HANA database. With the architecture understood, the challenge becomes finding a process that gets us there reliably and efficiently.
The following diagram shows the inventory of the SAP customizations within the Microservices framework, with the plan to migrate the customization to standard functionality over time.
smartShift’s S/4 migration program can be thought of according to the diagram below:
Finding a process that allows us to migrate the customizations to this new architecture efficiently with minimal risk is based on three principles:
Applying these principles is the key to implementing manageable and affordable migration of the customizations, rather than something that looks like a massive project rewriting custom software. At smartShift we have extensive experience in automating HANA upgrades of the world’s most complex SAP customizations as well as containerizing and re-deploying legacy systems as cloud-based micro-services. We consistently deliver these programs in single-digit months as opposed to custom development programs that span years.
Approaching the S/4HANA move with this framework provides SAP customers a progressive approach that is consistent with a future vision of cloud native software, is actionable and has no significant barriers to entry. This approach also allows key resources and investments to be directed at the SAP digital core with customizations efficiently modularized and sequestered for future phase-out. Finally, this approach combines the upside of conventional ‘Greenfield’ and ‘Brownfield’ approaches into a hybrid allowing SAP users to move forward immediately on SAP’s roadmap.