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SAP S/4HANA Migration Lessons Learned

Technical Insights from Two SAP Customers

by Rizal Ahmed, President and Head of Research SAP S/4HANA and Cloud, SAPinsider and Lauren Bonneau, Senior Editor, SAPinsider

February 18, 2019

With all the SAP ERP customers out there under the looming deadline of upgrading to SAP S/4HANA by the end of 2025, it’s not surprising that more and more of the customers that we speak with are currently planning or already undergoing migrations to SAP S/4HANA. During these conversations, we have heard many commonly recurring lessons learned and tips — such as “be sure to plan well in advance” and “engage an implementation partner early.” However, every once and a while, we come across some advice we haven’t heard before. When we hear these great tidbits, we can’t help but to feel excited and eager to share them with the SAPinsider community.

That’s how we felt after completing a couple recent interviews with two different SAP customers for upcoming features to appear in SAPinsider magazine. We spoke with a CIO from a major construction company overseas (let’s call him Mr. T) and an SAP Program Director from a US-based gas and chemical company that was recently spun off from its parent company (we’ll call her Ms. G). Both companies chose SAP S/4HANA as the platform for future innovation. Mr. T underwent a technical migration from SAP Business Suite on SAP HANA to SAP S/4HANA, and Ms. G went through a greenfield implementation to offer a clean slate for the newly divested business.

Mr. T’s organization recently completed its technical migration in a three-day weekend extravaganza, the culmination of a 10-month project to get its SAP environment ready for the move. This business, which has been growing steadily in recent years due to an aggressive acquisition strategy, currently consists of more than 600 companies and 75,000 employees — and is one of, if not the largest SAP S/4HANA migration that we’ve encountered to date.

Ms. G’s company had to adjust from operating as a $10 billion company to becoming a new $1 billion business. The start-up opted to abandon its parent company’s heavily customized SAP ERP environment and make a fresh start with a big-bang greenfield SAP S/4HANA implementation. Adhering to four guiding principles — standardize, harmonize, simplify, and scalable — the business followed the mantra of consistently asking why standard best practices wouldn’t work for them. And in just 15 months, the newly independent company was able to get off the transition services agreement and stand up its own (hosted) IT infrastructure from scratch.

While Mr. T and Ms. G’s stories and implementations followed very different paths, both individuals were extremely enthusiastic and talkative about the trials, tribulations, and ultimate successes throughout their company’s SAP S/4HANA migrations.

Here are a few highlights of the experiences that both shared and what it means for SAPinsiders:

  • Expect varying system performance improvements based on where you’re upgrading from. Going from SAP ERP to SAP Business Suite on SAP HANA provides a great boost in performance, according to Mr. T, who shared that his business improved transaction response times by 30% when upgrading to SAP HANA originally. So understandably, he expected similar results when moving to SAP S/4HANA, but he was surprised by the results. He said, “We thought we would save another 30% when migrating to SAP S/4HANA, but unfortunately, that was not the case.” He explained that a lot of rework was necessary to redesign the old reports to fit the new SAP S/4HANA data model in order to see any performance improvement. Ultimately, he cautions SAP customers not to underestimate the challenges of deploying the new data model and to be sure to communicate realistic expectations for system performance.

  • Invest time and resources in ensuring data consistency because this work will significantly reduce migration errors. A lesson learned time and time again is “clean your data, clean your data, clean your data,” and this of course it true. But alas, even the squeakiest clean data will be bound to generate migration errors when moving to SAP S/4HANA. According to Mr. T, people should anticipate encountering a lot of migration errors when moving over the financial data. This is due to the fact that SAP S/4HANA combines the separate financial and controlling tables (of SAP ERP) into one single table, and therefore it does not allow for ANY discrepancies — so the effort to clean up the inconsistencies is much bigger than most imagine. “We had nearly 44,000 open items that needed to be resolved and worked with SAP for three weeks — going through each migration error that impacted the business and correcting them — before we got the green light to migrate,” he said. He also recommended that those companies undergoing a migration to SAP S/4HANA perform a minimum of five test migrations before the real deal — in order to allow ample time and opportunity to resolve all of the unexpected errors that he assures will come up.

  • Prepare your team and train on the new data structures. They have a big impact on your data transformation process. When moving to SAP S/4HANA, data cleansing surprisingly wasn’t the biggest data transformation challenge but rather transforming the data structure from SAP ERP to the new hierarchical structure in SAP S/4HANA, according to Ms. G. In SAP ERP, the Customer structure (i.e., ship to, bill to, contact, and vendor) consists of all different data objects. In the new SAP S/4HANA structure, all those different data objects are under a new object (i.e., Business Partner) that contains a hierarchy of sub definitions under it. Ms. G said that, from a load perspective, the customer data was the most difficult and offered a warning not underestimate the data transformation from the old structure to the new. “In the old structure, a customer and a vendor could be the same thing, but they were two different numbers. Whereas, in the new structure, if I sell to a customer but also buy from them, they are a vendor — it’s under one Business Partner record,” she said. “We didn’t know the new hierarchy well when we were making the decisions on how the data was being transformed. Had we known that was the case in advance, we would’ve put more resources on the design and spent more time evaluating what that transformation needed to be — so that it would’ve gone more smoothly.”

  • Use the SAP Product Availability Matrix, and make sure you’re checking for updates consistently. SAP maintains a support portal where it regularly publishes information about SAP software releases types, maintenance durations, planned availability, and upgrade paths for SAP customers with valid credentials, which Ms. G recommended as an extremely valuable resource. “All the module versions of SAP solutions don’t work together — for example, you need a certain version of SAP GRC or SAP Solution Manager to work with the other modules,” she said. “SAP Product Availability Matrix is a helpful tool that evaluates your system and tells you what you need to upgrade or what version of a solution is compatible with another.”

  • Keep focused on getting the technical migration completed first because the business benefits depend on this, and it allows you to set the right expectations on feature and function availability. This advice doesn’t seem to be an earth-shattering tip at first glance. But sometimes it’s the simplest advice that can make the biggest impact. When SAP customers begin to think about the move to SAP S/4HANA, it’s easy for them to get caught up in contemplating all the new and great functionality and capabilities that SAP S/4HANA will provide. Business executives can start getting excited about all the great reporting and analytics they will have at their fingertips. Sales and retail might start demanding better mobile capabilities and SAP Fiori apps. Those are all great functions to want to build into a future strategy, but all those things will come in time — and need to happen at the appropriate time. Mr. T gave a strong warning for folks not to let the business hijack the technical migration with other demands. “Don’t push too far with trying to put all the new fancy SAP S/4HANA capabilities into your migration process,” he said. “Get the technical migration done first, and then afterward you can work on the process improvements and re-engineering and focus on delivering new functions for the business.”

These five tips are just a sampling of the great insights that Mr. T and Ms. G shared during our interviews. In-depth case studies showcasing each company’s experiences are currently under development and will appear in a future edition of SAPinsider magazine. Be on the lookout for those articles to learn the details of their migrations. SAPinsider is also conducting research on SAP customers’ SAP S/4HANA migrations. A report on these findings will be available soon. If you’d like to participate in a survey, you can obtain a free copy of the report.

Rizal Ahmed can be reached at rizal.ahmed@wispubs.com. Lauren Bonneau can be reached at lauren.bonneau@wispubs.com. Follow us on Twitter at @SAPinsider.

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