Ready for Your SAP S/4 Upgrade? 5 Things to Consider
If you are like most current SAP ERP customers, you are probably feeling the pressure to upgrade to S/4 (S/4). You probably have heard a lot about the business benefits of HANA, particularly its analytics capabilities.
It is possible to realize some benefits of a HANA business warehouse without upgrading your business suite of applications. But there are some definite advantages of moving to S/4. The focus of the new applications is simplification of business processes and data reduction.
In an interview, SAP CEO Hasso Plattner explained that simplification of S/4’s finance app can result in a huge data reduction. 593 GB can be reduced to 42 GB. And only 8.4 GB is dynamic, current-year data that requires high availability and backups.
There are also potential financial benefits for your organization, thanks to the ability to simplify. A survey by Forrester Research found that when companies move to the SAP HANA platform, they can save over 70% on software costs and 15% on hardware costs.
Upgrading to S/4 does require a technology boost, but the wide-ranging effects on all areas of your organization make it worth it. But like any upgrade to a business-critical system, there are some large-scale considerations. Here we examine 5 main considerations before making the upgrade.
1. How will the upgrade affect your business processes?
S/4 applications run on a HANA backbone. HANA is a high-speed, in-memory, column relational database management system (RDBMS) that delivers major performance advantages. While moving to S/4 involves a technology upgrade, it has wide-reaching business impacts on all areas of your organization.
In order to take full advantage of the powerful database, business processes have to be simplified. Every business unit that relies on your ERP system will be affected by the upgrade. This includes HR, logistics, sales, and as mentioned above, finance. The key stakeholders need to be on-board with the upgrade and learn how it will alter their day-to-day operations.
2. Do you currently have a lot of customizations?
Organizations do not typically run ERP out of the box. There are usually extensive customizations and coding needed to make the applications function the way your organization operates. And those customizations may not translate to the new environment.
S/4 is a Unicode based system. If you are currently running a previous version, such as SAP ECC 6.0, you will need to do a Unicode conversion first before migrating to S/4. SAP speaks about this on their blog here.
3. Have you clearly defined the goals and business case for the migration?
The business case examines the benefits of the migration along with the budget required for the project. This is key for any migration project and even more critical for an ERP system that will touch many lines of business. During this part of the project, resources need to be assigned and roles designated so there is no question about who has authority over and responsibility for a given task.
4. On which infrastructure will you run the new systems?
The infrastructure that you are going to use for the new S/4 platform can be a complicated decision. You have the choice of running on-premise with SAP-approved hardware. Or you can you run the system in a cloud environment. We look deeper into the infrastructure decision and the on-premise vs. cloud debate here.
5. How will you execute your S/4 migration strategy?
Once you have created your migration strategy, you must execute it. This can be costly and time-consuming. And because migration is a one-time event, you should work with a trusted partner who has successfully completed multiple S4 migrations to ensure a smooth transition for your organization.
Remember to consider the code optimization and customizations that we previously discussed. To make those adjustments, migrate to a sandbox to discover potential challenges. Test the new system extensively. Then, when you do cutover, plan for downtime based on your test results.
Your migration to S/4 HANA is at its core a technology transition. However, it is also a business transformation. You should take the time and effort to work with everyone in the organization who will be affected in order to ensure a smooth transition.
Originally published at convergeone.com on May 17, 2017.