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Best Practices for SAP S/4HANA Migration and Business Process Transformation

Transforming your business entirely through the convoluted SAP S/4HANA migration might require advance planning and structuring. Furthermore, you’ll also need to know about all the key migration approaches and ideal practices that’ll make the process even smoother.

So, let’s get our journey to business transformation started with that.

SAP S/4HANA Transformation – What’s the Catch?

Although it may sound like a grand state of schemes, the theoretical approach of a S/4HANA migration is quite simple and straightforward. 

It’s all about migrating your system from an old SAP ERP infrastructure, like SAP ECC, to a more simplified option, such as S/4HANA. 

But, the question is – why would you do that?

Well, the most obvious reason for migrating from SAP ECC to S/4HANA is the efficiency or productivity the latter offers. The first one usually runs on an on-premise infrastructure. Thus, it might get a little tricky if you ever want to upgrade it accordingly.

In the case of the latter, though – you can host SAP S/4HANA either in the close, on-premise, or as a hybrid system. Therefore, with it, you’ll get a range of flexibility and adaptability that can do a world of good to your business while increasing its effectiveness.

Nonetheless, there’s a catch, though.

Migrating all of your data and operations from the previous system to S/4HANA will be quite difficult. However, this is something you will need to do anyway in the end. 

So, you might as well learn about the challenges and find a way to take care of them.

SAP S/4HANA Migration – The Challenges

System conversions, especially from one technology into another, often lead to great anxiety amongst the corporate leadership and users. And, it’s quite natural too.

After all, using a brand new infrastructure, instead of the old one, can be challenging.
During the initial stage of the migration, it is important to acknowledge that there may be certain challenges or unplanned outcomes that could arise. These challenges can be seen as planned risks that need to be managed effectively. That’s why, it is important to know about the challenges so that you can overcome them when the time’s right.

So, let’s take a look at the common issues first before moving on to something else.

Challenge – 1: Confusion and Disorganization

Truth be told, this isn’t really a technical problem, per se. But, most of the conversion-related issues can be traced back to disorganization related to the project plan.

People, who are responsible for these, tend to fail ostensibly when communicating what they are going to do. This, in turn, can raise a sense of confusion amongst the staff of the office.

Consultants working on the project must have a thorough quality on how and when the entire plan is going to be executed. They should have an idea about the roadmap as well.

This way, they will offer their own output regarding the same and accelerate the downtime of the process even more. So before you begin with the project, make sure that you and the other people in your team are on the same page. It will make the entire system simpler and easier.

Challenge – 2: Improper Preparation

No matter how big or small the project is, a lack of preparation for the same can be hurtful for the progression of the same. And, if you don’t do it by yourself, your conversion partner may overlook some related steps too. Unfortunately, this can come back to haunt you later on.

In essence, the success of a complicated SAP S/4HANA conversion process lies upon how an organization has crafted their source system. So yes, there are a few things that you need to do from your side, such as preparing the source folder. However, that’s not the only thing though.

Besides, your conversion partner will also need to proffer you a step-by-step checklist of how the project will proceed from their side. If you find something that’s not included in your plan, you will need to prepare the same from your side efficiently.

Challenge – 3: Understanding that data and system validity is crucial in a migration project, testing and professional validation is fundamental

Continuous testing is crucial throughout the conversion project, requiring a significant portion of the consultant’s time, approximately seventy percent (70%). 

It is not recommended to introduce new features during the conversion project. 

If the objective is to maintain existing functionality, comparing outputs is sufficient to assess the validity of the S/4HANA system being targeted.

The implementation of new functionality should occur only after the conversion activities have been completed and the target system has achieved stability. 

Even if the functionality remains unchanged, alterations in hardware, operating systems, or databases could lead to inconsistent outputs for the same features. 

Thus, these important considerations must be addressed within the testing process so that you don’t falter while the migration is in progress.

Bonus: Complications Related to Data Transfer in Your Source System

The process of migrating data from SAP ERP (ECC) to S/4HANA can be challenging without proper preparation. Handling millions of records introduces complexities, and data loss may occur during the transfer. Here is an example of how it may happen –

Often, the missing data remains unnoticed until it is requested by a user or application and is found to be unavailable in the target system. Although the data is not permanently lost, it becomes inaccessible to the business in their desired system. 

In addition to prolonged system downtime, data loss can result in diminished performance and increased costs. While some companies opt for in-house conversion projects to save money, this “do-it-yourself” approach is generally not advisable. 

Conversion is a high-risk activity with significant business implications that requires expert attention. During the Preparation Phase, it is crucial to thoroughly reconcile all sub ledgers and address any identified errors.

For example, many organizations face the challenge of migrating a large volume of records when transitioning to S/4HANA. The process is not as straightforward as merely transferring data from one disk to another. For situations involving more than 300 million records, SAP recommends partitioning the data as a best practice.

Importance of Change Management for S/4HANA Migration

When it comes to migrating to SAP S/4HANA, change management plays a vital role in ensuring a smooth transition. Let’s dive into why it’s so important.

Addressing the Cultural and Behavioral Shift

First and foremost, change management addresses the cultural and behavioral shift that accompanies the migration. Moving from legacy systems to S/4HANA often involves significant changes in processes, workflows, and user interfaces. People may resist these changes or feel anxious about learning new ways of working. By implementing effective change management, you can help employees embrace the transformation, understand the benefits, and alleviate their concerns.

User Adoption and Training

A successful migration relies on widespread user adoption of the new system. It’s not just about installing the software; it’s about ensuring that employees are equipped with the knowledge and skills to use S/4HANA effectively. 

Change management facilitates comprehensive training programs that cater to different user groups, ensuring they understand the new system and can navigate it confidently. User training helps minimize disruptions and accelerates the adoption process.

Stakeholder Engagement and Communication

Engaging stakeholders throughout the migration journey is critical. Change management may provide a structured approach to identify and involve key stakeholders, including – 

  • Business leaders, 
  • Department heads, 
  • IT teams, and 
  • End-users. 

Effective communication strategies help you in conveying the vision, benefits, and progress of the S/4HANA migration, addressing concerns, managing expectations, and fostering a keen sense of involvement and ownership among stakeholders.

Process Alignment and Optimization

Migrating to S/4HANA often involves process reengineering and optimization. 

Change management facilitates a thorough analysis of existing processes, identifies areas for improvement, and enables the redesign of workflows to align with the capabilities of SAP S/4HANA. It ensures that the migration is not just a technology-related upgradation but also an opportunity to streamline operations and enhance business performance.

Mitigating Risks and Resistance

Change can be met with resistance and uncertainties. 

So, with proper management, you can proactively identify and address potential risks and resistance factors that may arise during the migration. 

It allows organizations to develop strategies to mitigate these risks, such as –

  • Creating a change network, 
  • Fostering a supportive culture, and 
  • Addressing concerns through ongoing communication and feedback channels.

Best Practices SAP S/4HANA Migration

In this section, we have given a heads-up on the best practices related to S/4HANA migration. So, without any further ado, let’s get started with it.

Ensure Excellent Data Quality

Regardless of the established timeline, data quality can disrupt the progress. To ensure a smooth system migration, it is crucial to have a well-defined process and a dedicated organizational team responsible for managing both the process and data components. This approach enhances the speed and success of the migration.

Obtain Early Buy-In From Executives:

To mitigate risks, it is important to involve key executives in the strategy phase of the large-scale move at an early stage. Delayed involvement of technology business unit leaders can jeopardize the entire program if there is a lack of agreement later on. Therefore, securing executive buy-in from the beginning is essential.

Establish Agreement On Business Rules, Processes, And Goals

Consistency is key. Establishing a unified approach for defining data rules and taxonomies throughout the migration process ensures that there is only one structure moving forward. This alignment with overall corporate goals enhances efficiency and effectiveness.

Designate “Champions” Within Each Department To Enforce Decisions:

Identify subject-matter experts within each department or unit who are respected and knowledgeable. These champions can effectively communicate decisions regarding new processes or business rules to their respective teams, promoting faster adoption and compliance.

Utilize Available Tools:

If the organization already has a governance program or SAP data service in place, leverage it as a bridge during the migration process. Utilizing these tools can expedite the transfer of master data from the old system to the new operating environment.

Identify Quick Wins:

Conduct a thorough assessment of data assets, their locations, and relevance to the new model. Profile the data to identify early opportunities or benefits aligned with business drivers. For example, if the goal is to increase customers by 50 percent, leverage clean data to strengthen existing relationships and maintain a positive customer experience.

Develop A Plan For Post-Migration:

Defining what constitutes “good” data is essential. Without proper data governance, an organization may regress to its previous state within 18 to 24 months. It is advisable to combine data transformation with data governance and establish a plan to maintain clean data once the golden record is created.

The Final Say!

When it comes to migrating to something new, there can be a lot of risks associated with it. So it might be best to understand how you want to progress in this matter and plan accordingly.

Take help from an expert if you can.