Every technology will eventually become obsolete and will need to be replaced by new solutions to keep pace with the evolving standards of the industry. While SAP ECC has been the undisputed ERP (Enterprise Resource Planning) solution forming the technological backbone for enterprises across the industry. However, by 2027 SAP ECC will also be going out of support and replaced by the next-generation SAP S/4HANA ERP solution. With the legacy SAP ECC solution going out of support, it has become prudent for enterprises relying on the legacy ERP systems to consider strategies to achieve a seamless SAP ECC to SAP S/4HANA migration.
Of course, the process of S/4HANA migration is anything but easy, and businesses often face various challenges in implementing SAP, such as lack of experts, poor resource management, difficulty in migrating complex customizations, etc. However, with proper planning and consideration, businesses can lay out an effective migration plan, provided they start sooner than later. So to help you better understand the technicalities, here’s a detailed guide with key considerations for a smooth SAP S/4 HANA transition.
Table of Contents
What is SAP S/4HANA?
SAP S/4HANA is a next-generation ERP application offering from SAP that combines the latest technological innovations like Artificial Intelligence (AI) to offer more in-depth analytically driven enterprise resource management. SAP S/4HANA is slated to replace its predecessor, SAP ECC, with official support for the latter ending in 2027. The defining advantage of the new ERP suite over its predecessor is that it runs on a proprietary SAP HANA in-memory database that allows users to run advanced business analytics and achieve faster data transactions. With SAP S/4HANA being able to process and analyze vast volumes of data in real-time, enterprises can also leverage the ERP application to gain personalized customer insights to deliver more effective customer experiences. Additionally, with the application’s flexibility, efficient SAP S/4HANA integrations with other lines of business applications can also be deployed to expand its capabilities and functionalities for the comprehensive automation of all business processes.
Why Make the SAP ECC to SAP S/4HANA Migration Now
The need for SAP ECC to SAP/4HANA migration is an inevitability, with SAP ECC going out of official support in 2027. With a lack of support for the legacy system, enterprises are likely to experience severe bottlenecks across their workflows toward running their business seamlessly. Internal teams and resources would have to be allocated for the maintenance and management of the out-of-date systems and will have less flexibility in responding to changing trends of the industry and new business challenges. The diminishing returns from the application and lack of futureproofing, makes the SAP ECC to SAP S/4HANA migration unavoidable for enterprises eventually.
There are several additional contributing factors that businesses should consider for making the transition to SAP S/4HANA as soon as possible, such as:
Difficulty Finding the Right SAP Experts
Businesses holding on till 2027 to make the jump to SAP S/4HANA will find it difficult to acquire qualified SAP experts to help with the migration due to the sudden spike in requirements across the industry. The escalation in demand for these resources will inevitably lead to a rise in their value, potentially rendering them more costly, even if there is availability.
Last Minute SAP S/4HANA Migration will Disrupt Business
Waiting until the last minute to deploy the SAP ECC to SAP S/4HANA migration can lead to quality issues, oversights, business disruption, and migration issues. Trying to make the transition overnight can result in an overwhelming experience and cause disruption among teams due to the learning curve associated with using a new application. Furthermore, the SAP ECC to SAP S/4HANA migration can take far longer, with major steps often taking as long as the entire migration process. A large-scale migration that involves a major system such as an ERP application needs proper planning and a step-by-step migration to allow teams to get accustomed to the new system.
Migrating Early will Improve Business Efficiency
By taking the leap towards SAP ECC to SAP S/4HANA migration now, enterprises can futureproof their business software ecosystem and stay ahead of competitors making the transition later. Implementing the adoption of SAP S/4HANA early ensures businesses get enough time to deploy a wider range of customizations, integrations, and developments needed to efficiently run a business.
With all those factors in mind, companies operating with SAP ECC should look towards strategies and procedures for migrating to SAP S/4HANA that best fits their digital infrastructure as soon as possible.
Getting Started with SAP ECC to SAP S/4HANA Migration
An ERP application is a core technological pillar for any modern enterprise and is deeply rooted across every workflow within an organization. Thus, the transition from SAP ECC to SAP S/4HANA requires multiple steps to be considered by the business to ensure a secure and seamless migration. The steps to consider for an effective SAP ECC to SAP S/4HANA migration should include:
Identifying the Ideal SAP S/4HANA Deployment
SAP offers multiple deployment options to enable its users with the flexibility to implement the solution that works best for their business infrastructure. The different versions available for SAP S/4HANA implementation include:
- SAP S/4HANA Cloud, public edition
The SAP S/4HANA Cloud, public edition is primarily focused on new customers that require the full cloud approach with regular upgrades. It is a Software as a Service (SaaS) public cloud offering, where the infrastructure is hosted on a public cloud shared with other customers and hosted and managed solely by SAP.
- SAP S/4HANA Cloud, private edition
In the private edition of SAP S/4HANA Cloud, the services are maintained on a private network protected by a firewall. Such an implementation offers efficient SAP ECC to SAP S/4HANA migration to existing customers by allowing them to retain their configuration and extensions using a system conversion. The distinguishing difference between the private and the public edition is that the private editions are single-tenant environments where the services are operated by SAP under a dedicated environment and running under an IaaS such as Microsoft Azure, AWS, or Google Cloud.
- SAP S/4HANA On-Premises managed by SAP (HEC)
For SAP S/4HANA On-Premise managed by SAP (HEC), the solution is hosted on-premises with the individual and private hardware and infrastructure managed by SAP, an IaaS provider, or the user’s own data center. The implementation offers a Bring Your Own License and infrastructure subscription, which enable enterprises to gain more freedom and flexible service offerings.
- SAP S/4HANA On-Premises
Finally, SAP S/4HANA On-Premises is the conventional on-premises deployment of the ERP solution where the implementation is managed by the customer or a third party on behalf of the customer.
With more businesses opting to shift their software infrastructure to the cloud, the SAP S/4HANA Cloud, public and private editions are the most popular options for new SAP customers and are available through a RISE with SAP contract.
Enterprises need to thoroughly analyze the different implementation options to select the version that is ideal for their specific business needs. A hybrid implementation can also be deployed that combines both cloud and on-premises implementations through a hybrid iPaaS platform.
Data Analysis and Classification
The next step is to segregate data into categories of hot, warm, and cold. This is essential for optimizing the migration process, because not all data needs to be migrated. So, deciding how much data needs to be transferred from your ECC database to S/4HANA is a crucial step when preparing for system conversion.
Here’s a quick guide on how to classify data:
- Definition: Frequently accessed, critical data.
- Action: Should be transferred and store in the S/4HANA tenant database.
- Benefits: Ensures high-performance access to essential information.
- Definition: Less frequently accessed but still relevant data.
- Action: Store in the S/4HANA system database.
- Benefits: Balances performance and storage efficiency.
- Definition: Infrequently accessed or historical data.
- Action: Archive as legacy data, reducing the load on the live system.
- Benefits: Optimizes system resources and maintains compliance.
Archiving Legacy Data Prior to Migration
The diverse types of data stored and managed at an enterprise level are unfathomably large. Organizations are often legally required to store and maintain certain types of data over a fixed period. Legacy data may often contain valuable historical information that may be required for future reference. Archiving ensures that this information is preserved and easily accessible when needed. Additionally, customized ERP codes are often needed to meet the unique requirements of individual businesses which may be extremely time and resource intensive to replicate from scratch. Thus, one of the most preparatory steps towards SAP ECC to SAP S/4HANA migration is to archive legacy ERP data and custom codes. During an ERP migration process, having a backup archive of all essential data ensures that the risk of data loss or corruption can also be mitigated.
Fit-Gap Analysis of the SAP ECC to SAP S/4HANA Migration
Fit gap analysis is a process used to identify the difference between the requirements of an organization and the functionality of a new system being implemented. Fit gap analysis helps to identify any gaps in functionalities that may arise between the current system and the newly implemented system. To begin the fit-gap analysis, the new features that SAP S/4HANA brings with it to support the business requirements need to be identified, which can be done by reviewing the system documentation and conducting workshops with the technical team. After identifying the business requirements and the SAP S/4HANA features, the next step is to conduct an analysis that identifies the difference between the requirements of the business and the new features that comes with SAP S/4HANA. Once the gaps have been identified, the next step is to prioritize them based on their impact on the business. This can be done by assessing the risk associated with each gap and the business value that will be achieved by closing the gap. Finally, a plan should be developed to address the identified gaps.
SAP Readiness Check is a tool designed to assess the compatibility and readiness of a system for specific SAP upgrades or migrations. It provides an overview of how well the current system aligns with the target applications, helping organizations plan and execute digital transformation effectively. The tool is used for various SAP solutions, including SAP ERP and SAP S/4HANA upgrades.
Purpose of SAP Readiness Check:
- System Analysis: Analyzes the existing SAP ECC system to evaluate its readiness for migration.
- Simplification Items Identification: Identifies simplification items specific to the S/4HANA version, helping businesses understand the impact on existing processes.
- Custom Code Analysis: Examines custom code to detect incompatibilities and provides insights into necessary adjustments for compatibility.
- Data Volume Management: Assesses data volumes to optimize storage and performance during migration.
- Business Process Analytics: Evaluates current business processes to align them with S/4HANA best practices.
Steps in SAP Readiness Check
- Initiation: Start the readiness check through SAP tools or cloud services.
- Data Collection: Collect system data, including configurations, custom code, and usage statistics.
- Analysis: Utilize the collected data to perform a comprehensive analysis, generating a detailed report.
- Dashboard and Recommendations: Provides a user-friendly dashboard summarizing results and offering recommendations for a successful migration.
SAP Readiness Check offers self-service tools to facilitate efficient planning for the next steps in SAP ECC to SAP S/4HANA migration.
Analyzing and Preparing the Infrastructure
Before beginning the implementation of the SAP ECC to SAP S/4HANA a complete analysis and preparation of the existing infrastructure including hardware, software, and network systems need to be conducted. The analysis’s objective should be to identify any potential issues or limitations that could impact the migration process. The technical feasibility and hardware requirements should also be evaluated to ensure that the minimum requirements for running SAP S/4HANA are met. Some major factors to consider include evaluating server capacity, memory, disk space, and network bandwidth. A data migration planning also needs to be planned to ensure a streamlined data extraction, transformation, and loading from the existing SAP ECC implementation to the new SAP S/4HANA platform. This plan should also address any data quality issues and data consistency checks during the migration process.
Pre-production Implementation of SAP ECC to SAP S/4HANA Migration
Before the actual deployment of the SAP ECC to SAP S/4HANA migration, implementing the system in a pre-production environment is preferable. For deploying the migration from the SAP ECC system to the new SAP S/4HANA implementation, utilizing a Brownfield implementation is one of the best workflows to follow. A Brownfield implementation involves upgrading an existing SAP ECC system to SAP S/4HANA which allows the system to migrate existing data, customizations, and configurations to the new SAP S/4HANA system. Enterprises not looking for a fresh SAP S/4HANA implementation but migration from SAP ECC to it, the Brownfield implementation will enable them to retain their existing system landscape and avoid the need to re-implementing business processes and custom data.
The approach involves a comprehensive assessment of the existing SAP ECC system, including the identification of functional areas that require migration, system conversion using conversion tools, and data validation to ensure data integrity. The implementation migrates the existing SAP ECC version to the SAP S/4HANA platform with selective picking of specific components like Transportation Management (TM), Extended Warehouse Management (EWM), Advanced Available-to-Promise (AATP), etc. from SAP S/4HANA. The Brownfield approach to SAP S/4HANA migration allows organizations to minimize disruption to their business operations and make a seamless transition to the new system.
Cutover Planning for SAP ECC
The next step to consider is developing a cutover plan for the existing SAP ECC implementation. Cutover planning is the process of preparing and executing the final steps of a project before transitioning from an old system or process to a new one. In the context of the SAP ECC to SAP S/4HANA migration, cutover planning should involve defining the tasks, resources, and timelines required to move from an existing system to a new system which includes activities such as data migration, testing, system configuration, and end-user training. Proper communication between all stakeholders should be established regarding the transition and the cutover should be planned to take over a period when the business impact will be minimal, such as a weekend or a holiday. Post-cutover, activities should be conducted such as testing the system, validating the data, and addressing any issues that arise. System performance monitoring and addressing any issues that arise in the post-cutover period should also be conducted.
Enabling Automation for SAP S/4HANA
After the SAP ECC to SAP S/4HANA migration is implemented, a full stack integration of SAP S/4 HANA with the rest of the enterprise’s business software stack needs to be deployed. An ERP application is associated with every workflow within an organization, be it customer relationship management to managing sales and inventory data. Thus, by implementing an SAP S/4HANA integration through an intelligent low-code Business Process Automation (BPA) platform, businesses can achieve seamless bidirectional data flow between different business applications and SAP S/4HANA, enabling the real-time transfer of data between different functional areas of the organization. The SAP S/4HANA integration also offers a unified view of all business operations and analytics under a single platform. Thus, implementing an SAP S/4HANA integration is crucial for organizations to optimize their business processes, improve data quality and consistency, and increase operational efficiency.
By following the above steps, a streamlined, error-free SAP ECC to SAP S/4HANA migration can be deployed without risking the loss of critical data or disrupting business operations.
Key Takeaways – The Successful SAP ECC to SAP S/4HANA Migration
While 2027 may still appear to be a long way away, the process of SAP ECC to SAP S/4HANA migration is a complex undertaking that requires careful planning and timing for execution. While migrating to SAP S/4HANA offers a myriad of new benefits such as improved user experience, real-time analytics, and streamlined business processes, there are also several important considerations to keep in mind. Enterprises undergoing the transition should consider factors such as ensuring data integrity, selecting the appropriate migration path, engaging stakeholders early in the process and investing in the right resources and training. By carefully considering these factors and taking a methodical approach to the migration, organizations can ensure a successful transition to SAP S/4HANA that delivers lasting benefits for years to come.
If you are using multiple business applications to manage your organization and want to seamlessly integrate them through a single platform for all business processes, then employ APPSeCONNECT’s robust integration packages and achieve greater heights of business growth.