Why Companies Should Be Proactive about S/4HANA Migration

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The clock is ticking for SAP customers, who must migrate to SAP S/4HANA by 2027. This is a change from the original deadline of 2025. SAP recently announced they are extending mainstream maintenance for core applications of SAP Business Suite 7 software until the end of 2027, with optional extended maintenance until the end of 2030. (The maintenance commitment for SAP S/4HANA will be in place until the end of 2040).

This deadline extension is not a big surprise as migration to SAP S/4HANA isn’t just a technical upgrade. It’s also about reinventing business models and processes, creating new business operations, and enhancing customer and employee experiences. Therefore, customers and employees need the time to transition during these SAP S/4HANA transformations. 

The sense of urgency around migration is still there, however. Consider this analogy. There’s great value in being proactive about getting Real ID now, which Homeland Security will soon require. Instead of waiting until the October 2020 deadline, people who start the process early can avoid painful long lines at the DMV that may ultimately result in lost wages or other hidden increased costs. Likewise, by starting SAP S/4HANA migration early, customers can secure the best resources and strategies to realize their business transformations, saving tremendously on cost and time in the process.

Another important factor is that customers that are running SAP on top of third-party databases such as Oracle, DB2, SQL have until 2025 to move to SAP Suite on HANA; then eventually to SAP S/4HANA. However, avoiding the unnecessary multi-step process by migrating directly to SAP S/4HANA will help customers realize tremendous savings.

According to an IDC survey of 300 SAP customers, 18 percent of businesses already deploy SAP S/4HANA, and 73 percent are planning to make the switch. With the 2027 deadline looming, it’s a matter of when, not if, SAP customers will migrate.

Why wait for 2027? The sooner you implement your SAP S/4HANA migration strategy, the sooner you can start innovating with a modern environment and the more you’ll save on time, costs and resources. Let’s take a closer look at why being proactive about the migration will benefit your business, as well as various strategies and tips on the migration process itself.

The business case for SAP S/4HANA

By accelerating the switch to SAP S/4HANA, enterprises can enjoy the benefits of the right platform for the intelligent enterprise. The intelligent enterprise enables businesses to turn insights from data into action, in real-time. By using real-time data, businesses can make the best possible decisions regarding mergers and acquisitions, divestitures, company restructuring, and so on.

SAP S/4HANA is built to handle all the data that the intelligent enterprise requires. By using SAP HANA, a columnar, in-memory database, S/4HANA crunches the numbers and presents the data in an easy-to-navigate Fiori user interface, so businesses have everything they need for decision-making at their fingertips.

Choosing the right migration strategy and approach

Despite knowing the benefits of migrating to SAP S/4HANA, talking about S/4 migration is often met with questions. There are many nuances that need to be considered, since the systems are often heavily customized and hold massive data sets. Enterprises tend to approach migration cautiously because they know it can be a highly complex, risky, costly process. But, the degree of complexity and risk all comes down to how well the migration process is planned and managed, as well as which migration approach you choose.

Migrating successfully requires strategic planning and forethought. Enterprises should start out by developing a strategy, creating a cross-functional internal team, partnering with a migration expert, and carefully considering the nitty gritty details when planning the scope of the project. That includes examining the transformation approaches and choosing the one that best suits your needs.

There are two traditional S/4 migration approaches enterprises tend to choose from: greenfield and brownfield. The greenfield approach creates an entirely new system with new business processes and configurations. Brownfield, on the other hand, simply updates your software infrastructure without innovation and business processes updates. These approaches don’t always instill confidence, since they’re not equipped to handle the requirements of a complex transformation.

The greenfield and brownfield approaches each require tradeoffs and compromises. Since the greenfield approach requires moving into an entirely new system, you’re not only implementing a new platform from the ground up, but you’re also required to rewrite all of your business processes. The brownfield approach does move your data, objects and customizations to the new platform, but it’s not selective. But, because you can’t upgrade your business processes, brownfield makes it impossible to leverage the full capabilities and advanced technology of SAP S/4HANA.

There are more than just these two approaches to migrating to SAP S/4HANA. Another approach allows the best of both worlds where enterprises take a more customized, selective approach while taking advantage of updating both the new technology and business processes.  That third option is the Bluefield approach.

Leveraging software-driven transformation technology

Migration can be a complex process. Leveraging software-driven transformation technology takes the guesswork out of the process, making it faster, simpler, and more pain-free overall. It also helps close the gap between business and technology to minimize downtime and shorten the timeline of the project overall. Here’s an example.

The New South Wales Land Registry Services (NSW LRS) needed to migrate, update and enhance features and data in a single go-live project. The timeline was incredibly tight, and they couldn’t afford anything beyond the absolute minimum business downtime. By using a software-driven approach, NSW LRS was able to complete their SAP S/4HANA migration project in under six months, with just 36 hours of business downtime.

Looking ahead

As enterprises evaluate the various migration options and strategies, it’s important to remember that complex migrations can take time, from initial planning through to final execution. Start the migration process now to get ahead of the curve and gain the advantages of SAP S/4HANA long before the 2027 deadline.

About the Author

Derek Oats, CEO and President of SNP. Derek is responsible for the expansion and strategy of the SNP software business that includes sales, marketing, services and operations while leading the North America organization. He has a successful track record of Global and American leadership roles. Prior to SNP, he was Global Vice President of Database and Data Management for SAP, the world’s largest provider of enterprise application software with over 110 million cloud subscribers around the world and has held various leadership roles for other software companies, including Tata Consultancy Services, IBM and Oracle.

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