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7 SAP S/4HANA implementation issues to address

A move to S/4HANA is critical for SAP users, but getting it right is difficult. Here's a look at seven issues to address.

A move to SAP S/4HANA is fraught with issues, and taking a proactive approach is key to success.

When it comes to an S/4HANA implementation, data migration typically tops the list of concerns -- but it's not the only issue. Before customers can begin to mitigate data migration issues that could arise, some experts say that other factors need to be considered and incorporated into any S/4HANA implementation plan. These issues include aspects of deployment, such as greenfield vs. brownfield, cloud vs. on-premises, and big bang vs. phased approaches, among others.

1. Choosing a greenfield vs. brownfield migration

To go greenfield or brownfield -- that is the big question for SAP customer companies.

"This is likely one of the most important and early decisions that will need to be made," said John Belden, project execution advisory services practice leader at Boston-based consultancy UpperEdge.

A greenfield scenario could be much more expensive and disruptive because the organization will have to redefine its business processes from the bottom up.

While a greenfield migration will necessitate a more extensive data transformation process that includes extensive archiving for data that can't be cleansed, it could also provide much more in terms of optimizing business processes and moving closer to a digital transformation vision, Belden said.

2. Deciding on an SAP Model Company adoption approach

The subject of industry accelerators is another issue related to an S/4HANA implementation.

SAP is making a strong push for companies to adopt SAP Model Company configurations, Belden said. These Model Company configurations include a set of standardized processes for different industries, which are designed to help customers focus on lowering their operating costs and reducing maintenance time for processes.

Project teams that use Model Company configurations may have to spend more time on their data migration if the standard processes provided by SAP aren't close to their own processes, Belden said.

"However, these costs may be slightly offset by automation as SAP partner companies develop tool sets that are aligned with Model Company and can provide efficient conversions," he said.

3. Selecting cloud vs. on-premises deployment

Choosing to adopt S/4HANA in the cloud or deploy it on-site or in a hosted model is still a bone of contention for businesses.

While there is momentum shifting customers to the cloud because they could lower their costs and achieve faster time to value, leaders will need to weigh these benefits against the increased security risks posed by the cloud, as well as availability issues and a possible loss of independence, Belden said.

4. Understanding risks

Companies that already use a single instance of SAP or have their technology stacks well integrated will find it difficult to decide between a big bang vs. a phased approach to implementation, Belden said. The financial costs of a big bang migration can be lower, but in terms of operational continuity, companies are taking a big risk.

On the other hand, companies that take a phased approach will need to introduce modified master data governance for processes as short-term bridges to manage the organization's hybrid data model while they're implementing S/4HANA, he said. This relates to the problem of data transformation and conversion.

5. Negotiating partner terms

Even before implementation, companies should make sure that the implementation partner is in it for the long haul.

Companies often bring in consultants that offer structured models and methods to build a roadmap for the migration, and the assumption is that the consultant will be around for the entire implementation, Belden said. However, companies need to make sure they negotiate the terms of these agreements so that they don't get pulled in by a deal that's great for only 10 to 12 weeks and then have to pay extensively over the next 18 months.

6. Identifying technical issues early

Since an S/4HANA implementation is so technically complicated, the planning stage is critical.

Being proactive is probably one of the best ways to head off a lot of implementation issues, said Leonardo De Araujo, CIO and CTO of Beyond Technologies. Typically, technical issues, such as custom code, will be pain points from the conversion perspective, he said.

The cleanup work can be done well before the migration and implementation begin, De Araujo said. Old code needs to be retired, and for companies that are planning to continue with customizations, coding outside the ERP system itself on SAP Cloud Platform will make migration much easier, he said.

SAP has been promoting a "protect the core" approach -- that is, adding around the ERP system but not directly on it.

Project teams need to plan to use S/4HANA as it's designed and, for add-ons, develop them outside S/4HANA, De Araujo said. This will make upgrades easier and avoid the kind of problems that companies have had with custom code on ERP Central Component.

7. Addressing functional issues for the roadmap

Cleaning up functionality such as master data will also be important when project teams are proactively heading off implementation issues.

They'll need to look at their roadmap to determine where they want their S/4HANA implementation to take them, De Araujo said.

For example, project teams will need to align their strategy with modules like transportation management or warehouse management, which have largely been replaced in S/4HANA.

"The discussion belongs to a larger exercise, where you are today and where you want to be," De Araujo said. "S/4HANA is not an end state; it's more of a steppingstone."

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