As major players in the ERP space know, SAP has made it clear that they plan to cut off support for ECC, as well as 3rd-party databases, by 2025. (NOTE: SAP has updated this to 2027, although customers can pay for support through 2030). This news—not to mention a host of benefits offered by S/4HANA—has prompted companies to take a long hard look at whether they plan to migrate to the solution, the issues they may face during such a move, and how to make their migration successful. A recent report by Saas-provider LeanIX and PwC, “State of SAP S/4HANA Transformation,” illustrates some S/4HANA migration challenges companies in this position need to keep in mind as well as possible solutions. Let’s dig a little deeper into the issue together.
Do You Really Need to Migrate Now? (Or at All?)
Of course, you might be asking whether you need to make the switch to S/4HANA right now, if ever. 60% of companies surveyed are working with legacy SAP systems that are over 10 years old, and in that time, most have heavily invested in customizing their SAP environments. As such, they’re understandably hesitant about dramatically changing things up. A full 20% of companies in the survey, however, have already made the switch to SAP S/4HANA, with another 49% planning on making the transition by 2019-2020. With only 18% not planning on migrating at all, the supermajority sees a clear need to switch solutions. If you decide to change over as well, you’ll be in good company.
Another factor to consider about making the switch—above and beyond the lack of support for ECC by 2025—is to think of the process as more than just a technical upgrade and system conversion. Many companies are taking advantage of the opportunity to also improve their business processes and modernize their solution architecture overall. 83% of companies surveyed combined their technical upgrade along with a renovation of their SAP landscapes, either before or during the migration. Since businesses are often hesitant to touch their core SAP solution under normal circumstances, a migration gives you a chance to streamline processes, rationalize interfaces, decommission custom code, and enforce the use of standard SAP modules.
65% of survey participants indicated that SAP is a critical part of their digital strategy, so it’s clear that many no longer view SAP as simply a system of record—it’s a vital part of how businesses are operating in the digital space. Don’t you want your SAP operation working at peak efficiency?
Major Issues to Watch Out For
Once you’ve made the decision to migrate to S/4HANA, you need to mindful of the pitfalls inherent in such a transition. A significant pain point to watch out for will be the manual collection of application and interface data for use of business capability mapping (a key part of planning transformation efforts). Other challenges reported by the companies in the survey include:
- Complex legacy landscapes (60%)
- High customization (59%)
- Unclean master data (51%)
- Non-harmonized master data (46%)
- Achieving business stakeholder buy-in (31%)
- Lack of skills and knowledge (29%)
- Lack of functionality (13%)
Solving Your S/4HANA Migration Challenges
If these are the challenges companies face when migrating to S/4HANA, what are the solutions? Obviously, there’s no such thing as a silver bullet in this sort of situation, but here’s a closer look at three of the most widely reported issues and some strategies for handling them:
Complex Legacy Landscapes
Companies will need to keep a lot of things in mind when working on a migration like this one, including country-specific configurations, custom modules, manual workflows, interface dependencies, etc.
High Customization
Companies that have heavily invested in custom ABAP developments will find that (unfortunately) a lot of legacy code will no longer be compatible—with the change to S/4HANA, whole database tables have been removed. To avoid syntax errors and other unexpected results, you’ll need to identify and adapt your custom ADAP code objects.
Unclean Master Data
Master data plays a vital role across a number of aspects in your business, including marketing and sales, supply chain management, monthly reporting and business intelligence, and more. Using unclean data during your conversion to S/4HANA (especially in a brownfield approach) is just asking for trouble, so make sure to clean things up ahead of time.
Clearly, companies planning on making the transition to SAP S/4HANA are using this opportunity not only to update their technology, but also combine a system conversion with improving their business processes and modernizing their system architecture overall. It’s important to remember, of course, the challenges these companies are facing with the complexity of the legacy landscape, unclean master data, and more. To mitigate these risks and ensure you come out on the other side of an S/4HANA migration in good shape, you’ll want someone on your side who knows what they’re doing.
Need help figuring out where to start? Our senior-level SAP consultants are knowledgeable about S/4HANA migration challenges and will be able to assist you with deciding what approach (brownfield, greenfield, or a bit of both) makes sense for your business. Contact us today to get started.
