Why the Migration to SAP S/4HANA Doesn’t (Only) Need a Color

CXO THOUGHTS
DataMigration-5229 Why the Migration to SAP S/4HANA Doesn’t (Only) Need a Color
Thomas Failer, Group CEO of Data Migration International

What is the ideal migration approach? Many SAP customers aren’t sure of the answer and find it a challenge to decide between brownfield and greenfield. And no wonder. The right approach is less a question of color than of system-independent information management involving the separation of historical from operational data.

That’s not to say the color question is wrong – it’s just incomplete. Any company looking for the best approach for its needs won’t only base its decision on the configuration and custom development level. This level would just mean choosing between the full (brownfield) adoption of the company’s existing customizations or a return to the SAP process standard (greenfield) when it implements SAP S/4HANA. Instead, the enterprise will need to take other aspects into consideration. In particular, these include the huge mountain of data and documents, along with their business logic, that’s built up over years or even decades and is stored in legacy systems. This is the second decisive level of a migration project.

The answers to questions on this second level make it easier for companies to decide on the first level. Existing SAP customers know that the migration to SAP S/4HANA, and the digitalization plans based on it, are more likely to succeed if they only start and use the new generation of software with the operational data and documents they need for their everyday business. This is a prerequisite for achieving their long-term and strategic goal of migration: an agile application environment.

But what’s entirely right for the application level may not be 100 percent right for the data level. Data in enterprise applications is used in a business context that needs to be stored together with the data for legal reasons, especially due to regulatory requirements governing conservation periods. This business context also contains important complementary information, such as details of the history and quality of a business relationship with a customer or supplier, which could come in useful several years later. So, on the data level, the focus is more on stability than agility.

When companies move to SAP S/4HANA, they may also have the problem of legacy systems that they need to keep operating and updating for legal reasons – even more than before.  From the cost perspective alone, it doesn’t make sense to move all the data and documents from the existing systems into the HANA database.

The right approach

So what’s the best way for companies to reconcile the seemingly contradictory goals of agility and stability? With a new approach: dedicated environments for agility on the application level and stability on the data level.

The key element in this new architecture is a dedicated, system-independent environment for data, documents and the relevant business contexts that are no longer required in systems supporting everyday business operations. This environment ensures the stability required on the data level, while increasing legal and IT-related security – unlike many legacy systems, it can continue to be patched and backed up. And its retention management functionality enables companies to manage the entire lifecycle of their legacy data and documents on the individual dataset and document level.  The function expressly enables companies to undertake the targeted disposal of specific data and documents, which is one of the key requirements of the EU’s General Data Protection Regulation (GDPR). That makes it relevant to all US companies that have customers in the EU.

The result: companies can turn off their legacy applications and systems, delivering savings of about 80 percent or more compared to the costs of continued operation. Yet the information is still 100% accessible, providing the foundation for full legal compliance. In addition, experience shows that this approach helps companies halve the time and effort of SAP S/4HANA migration projects. They can also reduce the quantity of data to be migrated to SAP S/4HANA by up to 90 percent. Additionally, these firms can expect a significant reduction in total cost of ownership (TCO), estimated at up to 25 percent, because they will be able to keep the new systems lean over the long term.

The right platform

As an integral part of the future environment, this type of system-independent platform for information management also provides companies with more financial and staff-related options to speed up the migration and meet the 2025 deadline. This is just as important for greenfield supporters as for companies that don’t want to lose the advantages of their customized applications, even in SAP’s new generation of software, and lean towards a brownfield approach for that reason. With SAP S/4HANA migration, it’s clear that what counts is the right information management platform at least as much as the color.