Considerations for SAP S/4 HANA Implementations and Upgrades

Why are organizations considering S/4HANA implementations and upgrades now? If you’re operating in an SAP environment, you must. An upgrade may be your only choice. SAP has made it clear since the launch of S/4HANA in 2015 that while your ECC instances will not stop working, support for them will end in 2027. This means that you will not be able to rely on or access SAP expertise after that date. 

Some additional benefits that your enterprise will obtain by upgrading to S/4 HANA include a simplified and intuitive user interface via FIORI, enhanced system performance due to the fact that S/4 HANA is an in-memory platform, access to real-time embedded analytics and dashboards, opening the door to mobile and collaborative capabilities.  

All these enhancements contribute to increased user satisfaction, productivity, and effectiveness. The recommendation, therefore, is for organizations to consider an upgrade as soon as possible.  

Below, we outline common S/4HANA upgrade strategies and what you need to consider before an upgrade project, including why a Brownfield implementation might be a good option for your organization.  

SAP S/4 HANA IMPLEMENTATIONS AND UPGRADES

SAP S/4HANA implementations and upgrades generally fall under three categories: Greenfield, Brownfield, and Hybrid implementations.  

• Greenfield implementations are new implementations. Organizations usually go through a complete business re-engineering process. A major benefit to this is that the organization gets to define new business processes with a new system that has not been encumbered by years of complex, custom in-house solutions or fixes that are not only difficult and expensive to maintain but also have no possibility of meeting future business requirements or catching up with the technological advances.  

With a Greenfield implementation, you get an opportunity to standardize and reduce business complexities as well as, improve data quality through cleansing and validation. These kinds of implementations are more costly and take a longer time to implement because you need to start new and re-develop what you had earlier in your ECC system to the new S/4HANA environment. We have, however, seen fewer of these implementations over the years. 

• A Brownfield implementation is an exercise in upgrading your current SAP ECC landscape to S/4HANA. Upgrading your existing SAP landscape means keeping most of your existing business processes or slightly altering them, updating to the latest software, and undergoing a little bit of data transformation. The infrastructure of your legacy or external systems, components, and interfaces will remain the same, taking into consideration the S/4HANA connectivity and communication requirements. According to SAP Insider, more organizations now favor Brownfield implementations – SAP ECC to S/4HANA upgrades. Why this methodology then?   

The main reasons that organizations have upgraded to S/4 HANA using a Brownfield approach are cost-effectiveness, shorter project timelines, and minimum business disruption of day-to-day operations by ensuring compatibility with existing interfaces, custom developments, and third-party applications. Upgrading risks are also minimized given the known expectations, and the change management effort isn’t as time-consuming exercise, compared to a Greenfield implementation.  

• Hybrid (bluefield) implementations are used widely by larger, global organizations that have very complex systems and lots of data to manage. Hybrid implementations combine the best parts of Greenfield and Brownfield implementations, preserving the value of the current solution while allowing for flexibility during implementation by allowing organizations to selectively adopt new functionalities, modules, or best practices while retaining certain aspects of their existing system. 
   
  For this type of migration, companies are able to reassess the data and customizations already in place and, where needed, reconfigure their systems in accordance with the new business principles by S/4HANA. For companies looking to make significant modifications to their systems without losing data – and prioritize short project durations of low risk – hybrid implementations could be a right fit; however, oftentimes cost and timelines are the biggest concerns here.  

WHICH TO CHOOSE?

We've seen clients leaning toward brownfield implementations for a number of reasons. A brownfield implementation can offer: 

• Preservation/maximization of your earlier investment. 

• Minimal disruption to the business processes and continuity of operations because of minimal changes/re-design in processes. 

• Project timeline reduction, as the existing system's structure, configurations, and data provide a solid foundation, reducing the time required for system setup and data migration. 

• Cost-effective change management, as current resources are already familiar with the business processes and the environment, especially with the existing and or additional customization done through the years. 

Another extremely important element in minimizing S/4HANA upgrade risks is working with an experienced partner. Wherever you are on your SAP journey, Crescense can help. 

Written by Anand Nataraj and Paulo Sanchez