Existing SAP ECC customers are faced with a stark choice. When they eventually implement SAP S/4HANA, do they treat their prior investment as a sunk cost and re-implement their business model on S/4HANA (greenfield), or do they largely ignore the market leading business capabilities S/4HANA offers and do a technical conversion of their present ECC system (brownfield), or is there an alternative?
The joy of greenfield or the grief of greenfield?
Greenfield, whether on-premise or cloud, provides customers with a golden opportunity to transform their business. They can take advantage of the speed, innovation, superior user experience and last but not least, the business capabilities of S/4HANA such as:
- Universal Ledger (ensuring that financial and management accounting automatically reconcile)
- Simplified Business Partner management
- Real-time cash flow, financial consolidation and a soft month end close.
Greenfield is an exciting proposition, with quick implementations in an agile format. S/4HANA can be pre-configured with the exact business scenarios specific to your company, what is there not to like? Well… long-term customers of SAP often have a couple of issues:
- "Is it not too risky to move my entire SAP landscape to a re-engineered architecture from both a business and technical perspective?"
- "How about the money I have invested in SAP over the years to establish my competitive advantage and automate my business processes? Will I not be able to benefit from these solutions any longer?"
Brownfield isn’t ideal either
Brownfield preserves your prior investment, and can often reduce implementation costs considerably. Yes, there are new concepts in S/4 preventing you from converting directly, such as Business Partners, however a technical conversion is feasible, with SAP and others providing tools to help. Why are customers still not overjoyed by the brownfield option? Here are a couple of reasons:
- Re-implementing old processes - many customers’ SAP landscapes were originally implemented decades ago and subsequently enhanced on a piecemeal basis. A technical conversion is essentially an implementation of dated business processes. Consider how much your business has evolved over the decades, do you want to continue in to the 2020's with 30 year old processes?
- New capabilities unused – the new exciting capabilities offered by S/4HANA remain largely unused. Yes, you can subsequently re-engineer, nevertheless this will mean untangling converted solutions and you will incur the loss of converted history due to substantial changes to reporting structures and data.
If neither of these options sound attractive, are there any alternatives? There are a couple of options open to long-term SAP ERP users.
Look to the peripheries of S/4HANA
Firstly, the distributed architecture surrounding S/4HANA enables clients to implement by business process rather than the traditional deployment by country or business line.
An increasing number of business processes now have architecture components supporting them that enable them to be implemented as a standalone business process linked to a core ERP system, be that ECC or S/4HANA, via a standard interface. Examples include:
- HR (SuccessFactors)
- Finance, Management Accounting, Cash Management and Financial Consolidation (Central Finance with or without Embedded BPC)
- Procurement (Ariba and Fieldglass)
- Sales, Customer Service and Marketing (Hybris)
- Customer Relationship Management (C4C).
Implementing and digitising these processes as a starting point enables customers to benefit from S/4 and HANA capabilities without necessarily disrupting their underlying core SAP ERP systems, thus offering innovation, superior user experience and lightning speed, while preserving their previous investment. The icing on the cake is that the data within these applications can be replicated and/or run on a Central HANA database, offering powerful analytics across all the customers' SAP applications in real-time.
It is worth noting that you would need to check with an SAP representative in relation to licensing if you choose to take this route. Arguably, this path does not help you move to S/4HANA if there are business processes included in your S/4HANA scope that are not covered by standalone architecture components. This is where the ‘bluefield’ implementation strategy could help. This is something that Bluefin's partner SNP has developed to combat the issues long-term SAP Houses are facing.
The best of both worlds
Essentially, this approach combines innovation, business transformation and previous investment by converting your top performing business processes, your best solutions from your legacy ECC systems and your historical data to S/4HANA. Sounds too good to be true? Here is how it works:
. Begin with the greenfield approach:
- Work with SAP’s Activate methodology and activate the scenarios that fit your business model.
- Conduct a fit/gap analysis, not a traditional blueprint with your business stakeholders.
- In parallel run the Inventy Performer for SAP tools on your legacy systems’ data to produce process, data and compliance KPIs and benchmark them.
This will highlight where your business processes are particularly strong, vis-à-vis your choice of peer group. Combine this with your own evaluation of your current processes, and solutions, and produce an inventory of what you want to convert to S/4HANA.
. Use Bluefin's custom conversion methodology which utilises elements of best practice, SAP analysis tools, some home grown applications and some of our partners 3rd party tools, such as SNP Transformation Backbone.
We aim to analyse which configuration elements and code are associated with the inventory to be converted. Crucially we will also analyse if the configuration elements conflict with, or overwrite, any of the content you activated during step one. Additionally, we look at whether, and how, the code can be converted, be that automatically or with adaptations, for both compliance and performance. This preserves your prior investment in SAP at the same time as fully benefiting from the new S/4 capabilities. Finally, it speeds up your S/4HANA implementation and reduces the costs, too. What is there not to like?