SAP S/4HANA Overview

SAP S/4HANA Overview

What is SAP S/4HANA?

  •  SAP S/4HANA (Suite for HANA) is designed to standardize business processes of enterprises to meet one prime objective—run end-to-end business. Built on top of a sophisticated in-memory database, HANA (High-performance ANalytic Appliance), and a revamped data model, S/4HANA promises customers what they are looking for—business innovation and process optimization.

Evolution of SAP S/4HANA:

  • SAP stands for Systems, Applications and Products in Data Processing. It is founded in 1972 by a group of five individuals;
  • Dietmar Hopp
    Hans-Werner Hector
    Hasso Plattner
    Klaus Tschira
    Claus Wellen Reuther
  • SAP SE is one of the world’s leading enterprise software companies.
  • It has been ruling the world of business software for over 50 years and has had many releases over that span.
Evolution of SAP S/4hana
  • Single Tier – All three layers Presentation, Application, and Database were in a one tier
Evolution of SAP S/4hana
  • Two- Tier – the presentation layer was in one tier and the application and database layers were in another tier.
Evolution of SAP S/4HANA
  • Three-tier – The presentation, Application, and Database layers are placed in separate tiers.

SAP Enhancement Package 8 (EHP8) is the newest version of SAP ECC for SAP ERP 6.0. This package is released in 2016. SAP ERP and SAP ECC are being used interchangeably. This is called a legacy system and a predecessor to SAP S/4HANA (Suite 4 High-performance ANalytic Application).


SAP S/4HANA, called the biggest release by SAP in over two decades is launched in 2015. SAP S/4HANA runs only on the SAP HANA database which is released in the year 2010.

SAP S/4HANA Overview:

  • SAP S/4HANA, the fourth generation of SAP Business suite, is constructed to run on an Intelligent Enterprise and is a real game changer in the ERP world.
  • It has built-in advanced technologies such as Artificial Intelligence, Machine learning, embedded analytics, etc., and runs on its own in-memory database SAP HANA.
  • SAP S/4HANA constitutes the digital core of the organization
  • SAP S/4HANA brings everything together in a single system on a single platform and a single database, reducing complexity & cost for the system landscape.
  • It integrates all business functions with the line of business in real-time. It has applications that are capable of making any extensions and customizations that are needed for the business process.

Difference Between SAP ECC and SAP S/4HANA:

  • SAP ECC is the central component of the SAP Business suite (a collection of business applications such as CRM, PLM, SCM, SRM, and others along with ERP) whereas SAP S/4HANA is a business suite in itself.
  • SAP ECC runs on any databases such as Oracle, Db2, SAP HANA, etc. but SAP S/4HANA operates only on the SAP HANA database which is its in-memory database.
Apart from these fundamental differences, there are other key differences across various criteria as discussed below.
  • A new General Ledger
  • Universal Journal
  • CO – PA (Cntrolling-Profit Analysis)
  • Business Partner
  • Extension of Material Number
  • Credit Management
  • Available-To-Promise (ATP)
  • Advanced Planner and Optimizer (APO)
  • Material Requirement Planning (MRP)
  • Warehouse Management (WM)
  • Material Ledger (ML)
  • Foreign Trade
  • Revenue Recognition
  • SD Pricing
  • Rebates
  • Output management

Features of SAP S/4HANA

SAP S/4HANA, a business suite has various advanced features when compared to earlier SAP products making it the best release in the history of SAP. A few capabilities of SAP S/4HANA which make it stand out are discussed below.


  • SAP HANA Database
  • User Interface
  • Deployment Options
  • Implementation Methodology
  • SSOT (Single Source of Truth) Architecture
  • Material Document
  • Custom Code
  • Replacement with SAP LOB Solutions
  • Standalone Solutions
  • New Functional Capabilities
  • Embedded SAP Analytic Cloud (SAC)

SAP HANA Database:

  • As we discussed above, SAP S/4HANA runs on its own in-memory database called SAP HANA which enables in-memory computing. With the in-memory database, the data is stored in the main memory rather than on a hard disk making it easily available.
  • SAP HANA database supports column-based storage enabling better compression as there are only a few distinct values compared to rows.
  • Column-based storage helps in parallel processing.
  • It combines the functionality of OLTP (Online Transactional Processing) and OLAP (Online Analytical Processing) thereby eliminating the need to reconcile them and enabling real-time reporting.
  • Aggregates, indices, and history tables are removed from SAP S/4HANA.

User Interface:

SAP S/4HANA uses SAP Fiori because of which the user experience of SAP has been made simple. SAP Fiori enables faster access to data from any device regardless of location. With Fiori, it’s now easy to build or customize your own applications.

Deployment Options:

SAP S/4HANA comes with various deployment options. Businesses can now deploy this suite either On-Premise or on the cloud; and with the cloud, they have the freedom to choose between private, public, or hybrid.

Implementation Methodology:

  • SAP S/4HANA has no concept of blueprinting but comes with an implementation guide.
  • SAP S/4HANA has a new “Activate Methodology” which contains the built-in demonstration system of SAP’s best practices for the particular business process.
  • This allows businesses to use the demonstration system to evaluate if it meets their business requirements. It is also possible to do a fit-gap analysis after the initial trial period.

SSOT (Single Source of Truth) Architecture:

SAP S/4HANA has a standard General Ledger Accounting Transparent Table called ACDOCA (Universal Journal) which stores all the universal journal entry line items data (data of FI, AA, CO, CO-PA, and ML) thereby eliminating the usage of several tables including several aggregate and indices (Index) tables.

Material Document:

SAP S/4HANA has a transparent table called MATDOC (Material Document) eliminating 26 plus tables, where all the documents related to Material Management are stored. Therefore, the MKPF or MSEG tables need not be used in SAP S/4HANA.

Custom Code:

For the custom reports to function without any interruption, read operations of Custom Code are directed to compatibility views by a special setting at the database interface level. This code will not be visible to the source code. For instance: V_COEP for CO line-item table COEP.

Replacement with SAP LOB Solutions:

A few functionalities of on-premise have been replaced with new functions in SAP S/4HANA. For Example,


  • SuccessFactors replaces Human Capital Management
  • Ariba replaces Supplier Relationship Management.

Standalone Solutions:

SAP TM and SAP EWM are two stand-alone solutions that are incorporated in SAP S/4HANA to its core.

New Functional Capabilities:

SAP S/4HANA and its in-memory computing support new functionalities released by SAP such as Central FINance (cFIN) and SAP Cash Management. An additional license is required for these functionalities.

Embedded SAP Analytic Cloud (SAC):

SAP S/4HANA manages the embedded SAC by itself. Therefore, there is no need to log on to the embedded SAC separately. It is not possible even if we try.

Benefits of SAP S/4HANA for Businesses:

SAP S/4HANA has many distinctive features. They are largely advantageous to the businesses. A few important business benefits are discussed here.


  • The implementation of a simplified data model has led to a decrease in the size of the data footprint, which in turn has increased data throughput.
  • The increased flexibility of businesses will enable them to conceptualize and construct new business models, which will likely result in a substantial increase in revenue. (The ability to reinvent business models is likely to result in a substantial increase in revenue)
  • The incorporation of an in-memory computing feature facilitates the optimization of planning, execution, and productivity, thereby resulting in faster and more efficient business operations.
  • SAP S/4HANA is upgraded for better integration with other SAP solutions.
  • The IT infrastructure is simplified by the integration of all applications in a single system resulting in the reduction of IT costs and savings in operation time.
  • In-memory data provides anytime, anywhere access to data, thus aiding the
    decision-making process with real-time data.

SAP S/4HANA Deployment Options:


As discussed above, SAP S/4HANA comes with various deployment options. Businesses can now deploy this SAP S/4HANA suite either On-Premise or on the cloud; and with the cloud, they have the freedom to choose between private, public, or hybrid.


  • SAP S/4HANA On-Premise
  • SAP S/4HANA Cloud Edition

SAP S/4HANA On-Premise

With On-Premise deployment, customers have more flexibility and freedom to customize according to their business needs. It is highly beneficial for industries with complex operations.

The customizations and upgrades required for the business process require extensive planning and testing. Therefore, the time taken for On-Premise deployment can be higher.


  • SAP S/4HANA On-Premise managed by SAP HEC (HANA Enterprise Cloud)
  • SAP S/4HANA On-Premise managed by Customer or Cloud Provider Hyperscalers

Managed by SAP HEC (HANA Enterprise Cloud):

In SAP S/4HANA On-Premise deployment managed by SAP HEC, license for the software is obtained by Bring Your Own license model with an infrastructure subscription.


The infrastructure is hosted by a customer specific landscape on SAP HANA Enterprise Cloud or at hyperscalers (Microsoft Azure, AWS, Google cloud).


The scope covers full SAP S/4HANA functional, country, and industry scope and partner add-ons.


Customization, modification, and extensible possibility are supported in this edition as with ERP.


The configuration is done using the IMG (Implement Guide) based on fit-to-standard workshops in the explore phase.


SAP releases SAP S/4HANA on-premise once a year but it can be upgraded by the customer on their own time frames.


Enterprises looking for new implementation, conversion or selective data transition can opt for On-Premise deployment by SAP HEC.

Managed by Customer or Cloud Providers Hyperscaler:

In On-Premise deployment managed by customer or cloud providers hyperscaler, the license is obtained on a Perpetual license, or Bring Your Own license model.


The infrastructure is hosted by a customer data center (if managed by the customer) or by hyperscalers like Microsoft Azure, AWS, Google cloud (if managed by a third party).


The scope covers full SAP S/4HANA functional, country, and industry scope and partner add-ons. The upgrades are managed by the customers, and they have the freedom to do it in their own time frames.


Customization, modification, and extensible possibility are supported in this edition as with ERP. In the explore phase, the IMG (Implement Guide) is used to do the configuration based on fit-to-standard workshops.


Enterprises looking for new implementation, conversion, or selective data transition can opt for this deployment.

SAP S/4HANA Cloud Editions:

  • SAP S/4HANA Public Cloud Edition
  • SAP S/4HANA Private Cloud Edition

SAP S/4HANA Public Cloud Edition:

With the rise of cloud computing, SaaS is being applied to software products. SAP, a leading software product company, is not an exception.


In the words of SAP, “they have more than 1000 solutions covering all business functions and the largest cloud portfolio of any provider”.


SAP S/4HANA public cloud edition is one such SaaS product of SAP and is a subscription-based service where license for the software as a service is obtained through subscription.


This edition is also available as Rise with SAP. SAP S/4HANA public cloud edition was formerly called
SAP S/4HANA Cloud Essentials editions and multi-tenant edition.

SAP S/4HANA public cloud edition is based on a multi-tenant server. In this edition, two or more tenants share the cloud space. SAP hosts and operates the cloud infrastructure. The upgrades are mandated by SAP.


It is the most cost-effective mode of deployment and has less total cost of ownership compared to the private cloud version as the cost of server is shared by multiple customers and no IT support cost is required.


The Cloud edition has two releases each year where new features and upgrades to existing functionalities are released. These get updated in customer’s software automatically and the option to choose among the updates is not available.

SAP S/4HANA public cloud edition scope extends to the core of ERP and subset full of ERP, covering 42 countries and is feasible only for new implementation.


So, companies planning for migration/conversion shall look for other options of deployment. This edition supports key user extensibility, developer extensibility and extensions through SAP Business Technology Platform (BTP) Extension Suite (side-by-side extensibility) with whitelisted APIs.


The configuration in public cloud is done through SAP Central Business Configuration and Self-Service Configuration User Interfaces (SSCUIs) based on fit-to-standard workshops in the Explore phase.


SAP S/4HANA Private Cloud Edition:

The private cloud is nothing but the cloud version of on-prem. The customer will have their software on the cloud rather than On-Premise.


The license for SAP S/4HANA private cloud is done through a subscription for software but not SaaS (available as RISE with SAP). SAP S/4HANA private cloud edition is based on a single-tenant server. Here, only one tenant uses the server and hence customization is highly possible.


In this version, the SAP offers a landscape on cloud infrastructure provided by hyperscalers like AWS, Microsoft Azure, Google Cloud

The upgrades are fully managed by the customer (Certain technical aspects of the upgrades only are done by SAP) at their own time frame and their own speed.

SAP S/4HANA private cloud edition scope extends to the On-Premise functional scope including some third-party add-on limitations, covering 64 countries, 25 industries, and 39 languages.

Any enterprise looking for a new implementation/conversion to SAP S/4HANA can opt for a private cloud edition.


It is an optimal solution for enterprises looking to migrate to private cloud as they can retain the investments they have already made in their existing system.

SAP S/4HANA Industries:

SAP S/4HANA covers the following industries:

Consumer Industries

  • Last Mile Distribution
  • Agricultural Contract Management
  • Retail
  • Fashion
  • Life Sciences
  • Consumer Products


Discrete Manufacturing Industries

  • Automotive
  • Aerospace and Defense
  • High Tech
  • Industry Machinery and Components


Energy and Natural resources

  • Mill Products
  • Chemicals
  • Mining
  • Oil & Gas
  • Utilities


Financial Services

  • Banking
  • Insurance


Public Services

  • Defense & Security
  • Defense Forces & Public Security
  • Health Care
  • Higher Education and Research
  • Public Sector


Services Industries

  • Engineering, Construction, and Operations
  • Professional Services
  • Media
  • Sports & Entertainement
  • Telecommunications
  • Cargo Transportation and Logistics
  • Passenger Travel and Leisure

SAP S/4HANA Modules:

SAP S/4HANA modules supports various lines of business across different industries. A detailed analysis of major areas covered by SAP S/4HANA is discussed here.

  • Finance
  • Sourcing and Procurement
  • Manufacturing
  • Supply Chain
  • Asset Management
  • Sales
  • R&D/Engineering
  • Human Resources
  • Service


Finance in SAP S/4HANA includes the following-

  • Financial Planning and Analysis
  • Financial Operations
  • Accounting and Financial Close
  • Billing and Revenue Innovation Management
  • Treasury Management
  • Governance, Risk, and Compliance for Finance
  • Product Footprint Management

Sourcing and Procurement:

The information that was previously included in Material Management is now covered by Sourcing and Procurement in SAP S/4HANA along with other functions. They are as follows.

  • Mapping of Business Areas to Application Components
  • Invoice Management
  • Introductory Information
  • Supplier Management
  • Generic Features
  • Extensibility
  • Procurement Analysis
  • Services Interfaces (APIs)
  • Sourcing and Contract Management
  • Data Management
  • Operational Procurement
  • Further Functions
  • Central Procurement
  • Integration with SAP Ariba


Manufacturing in SAP S/4HANA includes solutions for the following areas:

  • Production Engineering
  • Production Planning
  • Productions Operations (Execution and Control)
  • Extended Production Planning and Scheduling
  • Extended Production Engineering and Operations
  • Quality Management
  • Environment, Health, and Safety

Supply Chain:

Supply Chain covers the following:

  • Inventory
  • Delivery and Transportation
  • Warehousing
  • Advanced Order Promising
  • Business Process Scheduling
  • Logistics Material Identification
  • Data Management in Supply Chain

Asset Management:

Asset Management in SAP S/4HANA has solutions for the following:

  • Maintenance Management
  • Resource Rescheduling


Sales area under SAP S/4HANA enables capabilities required for the sales process and includes:

  • Order and Contract Management
  • Sales Force Support


R&D/Engineering comprises the following:

  • Enterprise Portfolio and Project Management
  • Product Lifecycle Management
  • Product Safety and Stewardship
  • Product Compliance

Human Resources:

Human Resources in SAP S/4HANA has solutions as SAP Human Capital Management for managing workforce. Some of such solutions are as follows:

  • Personnel Management
  • Talent Management
  • Personnel Time Management
  • Work Schedule
  • Payroll
  • Training and Event Management


A few of the business capabilities supported by SAP S/4HANA in the service area are discussed below.

  • Service Contract Management
  • Service Order Management
  • Service Request Management
  • Customer Engagement
  • Subscription Order Management and various industry solutions.

Challenges of SAP S/4HANA Migration:

Digital transformation is not an easy task for any enterprise, and it can be a nightmare for large companies with complex business processes. Migrating from an existing ERP to SAP S/4HANA is no less challenging than any other digital transformation. ERP is the core of a business operation and covers the enterprise’s end-to-end processes. Any changes to be made in the ERP system are a difficult task and come with multiple challenges.

A few of the challenges an enterprise could face during its conversion cycle are discussed below:

  • Budget

The primary concern for any major transformation is investment. SAP S/4HANA requires a high amount of investment which could be a problem for companies facing a financial crunch but is necessary to proceed with the conversion.

  • Lack of Planning

As discussed above, digital transformation is not a cakewalk. It requires careful planning to devise a strategy for successful conversion without any major disruption. There should be a proper mapping for conversion. Any mistakes or lack of knowledge in the planning could result in substantial losses in money, time, and effort.

  • Transition Period

The transition period to SAP S/4HANA depends mainly on the size of the business and other factors. Some companies may take more than three years, and some may complete it within two years. The period of transition might be extended when there is no proper plan or any interruption during the execution of the plan.

  • Synchronization

Companies may involve an external team in the migration process. Both the internal IT team and the external team should be on the same page for a smooth transition and any lack of synchronization between the teams could create chaos and interrupt the process.

  • IT Infrastructure

A large company with complex operations will have a number of applications for facilitating the business process. SAP S/4HANA is an all-in-one system covering all applications on a single platform. The existing IT infrastructure and landscape would not be suitable for adopting this new system.

  • Data Migration

Another significant process in conversion is moving the database from the old system to the new system. Companies with a sizeable amount of data may lose their data in the migration process to the target system. It might not be an immediate problem. But it can be a problem once the company is fully operational and needs the data, only to find it missing.

  • Custom Code Intricacy

SAP customers will have many custom codes related to their business requirements. Regardless of whether SAP S/4HANA meets such business requirements, it is necessary to review the custom code. It can be quite challenging to check for any revisions or deletions that need to be made to the custom codes.

SAP S/4HANA Readiness Check:

A readiness check is needed to understand the changes to be made to the existing system while converting to the new system and if the existing system is ready to accommodate the envisioned changes. The purpose of the check is to assess the developments and impacts of the changes. SAP has a separate tool called SAP Readiness Check Tool for SAP S/4HANA which can be executed in your current SAP system and helps in SAP S/4HANA conversions and upgrades. This tool checks and analyses the following:

  • Simplification Items

From the simplification item catalog, SAP provides simplification items that contain information about changes that might have an impact during the transition to SAP S/4HANA

  • Compatibility Scope Analysis

This analysis check contains details relating to compatibility scope status and simplification items related to compatibility packages. Compatibility packages in SAP provide limited usage rights to run specific classic SAP ERP solutions on SAP S/4HANA. The customers should have necessary license for the relevant solutions as stated in the license agreement.

  • Activities Related to Simplification Items

This section provides project-related activities for simplification items which include activities relevant to specific roles and responsibilities within the organization.

  • Add-On Compatibility

A compatibility check is required for add-ons because when the software manager is executed during the transition process, incompatible add-ons could cause disruption.

  • Active Business Functions

This check is required to identify any probable incompatibility of the business function with the new system which could cause a problem during conversion.

  • SAP S/4HANA Sizing

The sizing check allows us to run a sizing simulation. It provides insights relating to the sizing values and possible data volume management.

  • Custom Code Analysis

SAP S/4HANA has simplified architecture. To fit into this simplified system, custom codes should be checked for any impact they may have on the target system. This check shows the results of the custom code analyzer (SYCM) and the ABAP Test Cockpit (ATC) or the SAP Fiori Custom Code Migration app.

  • Integration

Integration focuses on assessing the interfaces between the existing system and another system both external & internal. During this process, any potential challenges that might arise during the integration with the SAP S/4HANA system are identified.

  • Customer Vendor Integration Analysis

Since the business partner in SAP S/4HANA replaced customer and vendor master of SAP ECC, all customers, and vendors must be aligned with the Business partners before making the transition. This analysis provides the status of customer-vendor integration and issues related to data quality.

  • Planned Downtime Calculator

It is certain that there will be possible downtime during the conversion process and this calculator gives an outline of such expected downtime. However, the displayed runtimes only apply to a standard conversion through Software Update Manager (SUM) within a single data center.

  • Financial Data Quality

Financial data is required to be checked for any inconsistencies. If any inconsistencies are found, then a decision must be made to resolve them before converting to SAP S/4HANA. Financial Data Quality check analyzes General Ledger, Asset Accounting, and Material Ledger Data.

  • Recommended SAP Fiori Apps

In this analysis, we will be able to identify and enable the Fiori Apps that are suitable for the business.

  • SAP Innovative Business Solutions

Before converting to SAP S/4HANA, it is necessary to ensure that the SAP Innovative Business solutions developments are compatible with SAP S/4HANA. Based on the existing maintenance contract, it is also significant to check the compatibility of the developments with the validity of transitioning to SAP S/4HANA. i.e., decide if it is worth moving these developments to SAP S/4HANA.

  • Business Process Discovery

To ascertain any possible improvements that could be made to an existing Business Process, an as-is analysis of key figures is conducted by Business Process Discovery.

  • Innovation Potential

The innovation Potential dashboard helps to recognize any potential innovations that are available in SAP S/4HANA system to enhance the implemented business process performance. These innovations could be anything that aligns with the business needs such as Artificial Intelligence, Machine Learning, Internet of Things, etc.

SAP S/4HANA Conversion:

In order to have a smooth transition, it’s vital to have a coherent roadmap in place. SAP conversion involves various steps starting with understanding the company’s needs, studying the IT infrastructure of the company, deciding the suitable method of conversion in accordance with data size, etc.

SAP S/4HANA Conversion Cycle:

An organization looking to move to SAP S/4HANA shall go through the three phases for the project to succeed.

  • Pre-conversion phase
  • Conversion phase
  • Post-conversion phase

Pre-conversion phase:

The following activities are required to be carried out before converting to SAP S/4HANA system.

System Check

It is important to analyze the existing system for its compatibility to move to the new system in terms of its Operating System, Database, stack, Version etc.

  • The system to be converted should be of the latest version i.e., ECC 6.0 or higher
  • The S/4 kernel has a technical restriction, so Unicode is needed. Therefore, perform Unicode conversion if the legacy system is not Unicode.
  • Dual stack split should be done as dual stack is not supported by SAP HANA.
  • Database and Operating system should be checked to ensure that they meet the minimum version requirements before converting to SAP S/4HANA

Maintenance Planner

  • A solution by SAP helps to plan and maintain the system. It is possible to schedule the changes to be made and deploy them at a convenient time to minimize downtime.
  • The Maintenance planner checks the system for any uncertified add-ons before conversion.
  • If any uncertified add-ons are identified by the maintenance planner, then the conversion process will be stopped.

Simplification Item-check

  • The SI check is done to identify the simplification item relevant for the conversion. Basically, to check the data inconsistency or if any mandatory preparation activity is missing.

Custom code analysis

  • Custom code that is to be migrated shall be checked against the SAP S/4HANA simplifications before converting to SAP S/4HANA.
  • The tools and activities that help in migrating custom code are explained in this process.

Conversion phase:

During this phase, the actual conversion begins. Software update Manager (SUM) is used in this phase for Database Migration and SAP S/4HANA conversion. The uptime processing and downtime processing activities are segregated using SUM tool.


Uptime processing is a phase where shadow repository is migrated and downtime processing is a phase where application data, customization data, and user master records will be migrated.

Post Conversion phase:

After the conversion phase, application specific modifications and adjustments are done in the post conversion phase.

Custom Code Adaptation

  • Adopt custom code to SAP S/4HANA related changes.
  • The standard transactions SPDD, SPAU, SPAU_ENH shall be used to adjust any modifications and enhancements.
  • Fix any issues that are raised due to SAP S/4HANA simplification.

Functional Adaptation

  • Based on ATC (ABAP Test Cockpit) results, functional adaptation is carried out.
  • Modify the custom ABAP code as per the findings of SAP S/4HANA check related to SAP S/4HANA simplifications (ATC results).

Performance Tunning

  • After conversion, identify the Business Process that can be optimized on SAP HANA database. This is done to get the full advantages of SAP HANA capabilities.
  • Also, it is important to check which SQL can be optimized. For this, ABAP SQL monitor can be used.
  • ABAP SQL monitor gives data on how fast SQL statements run in production. This helps us to understand the performance, usage and cost of SQL statements.
  • These monitored SQL statements can now be linked to the business processes.

Follow up

  • After the conversion to SAP S/4HANA system, any obsolete data that may remain shall be deleted.
  • Follow-on shall be carried out for any cross-application activities, such as
    • Adapting database extensions – adjust database extension to function properly in SAP S/4HANA
    • Adapting the user interface – adapt user interfaces to the new interface SAP FIORI
    • Output management
  • Follow-on shall be carried out for Application-specific activities as well to adapt any modifications such as for
    • Finance
    • Human Resources
    • SAP Credit Management
    • Retail
    • Sales – Order and Contract Management
    • Environment, Health and Safety
    • Integration
    • Product Safety and Stewardship

SAP S/4HANA Conversion Approach:

SAP S/4HANA Conversion Approach

There are three common methods of transition that are being adopted. They are

  • Bluefield Approach (Selective data transition to SAP S/4HANA or Hybrid Transition)

Greenfield Approach aka New Implementation:

The term Greenfield means constructing from the ground level. A system that is developed in a new environment, with no constraints from the previous systems. So, the greenfield approach can be called a new implementation rather than a conversion method as it involves complete restructuring of the entire system where all your data from the existing legacy system is moved into a new system (SAP S/4HANA).

Companies using SAP legacy systems with a number of customizations may find this a complex method. But it can be a simplified approach for the systems with no such customizations. It is also relatively easy for the system that need not carry forward such customizations to the new system.

An advantage of this approach is that the users can predefine their migration objects and custom code with respect to their business operations.

Even though it’s an approach that begins with clean slate which may sound as an easy approach, it possesses high risk. The organizations may have to formulate new customizations that are required for smooth business processes and integration which is time consuming.

Brownfield Approach aka System Conversion:

Brownfield Approach means alterations or re-design considering other system in place. A system where development or upgrade is being made to the existing system. A brownfield approach is an upgrade made to the existing legacy system (SAP ECC) and that’s why it is also called system conversion. In this approach, the new system will co-exist with the system that’s already in place. The company can carry forward all existing business processes and customizations to the new system.

It may look like hindering the whole concept of adopting an innovative system, but, if the existing system is up to date, follows the best workflows, and reevaluated for any concerns in the business process before porting to the new system, then it could result in a successful implementation.

This approach is suitable for customers who want to scale up to the new system by retaining their SAP landscape, business process, and workflows. This implementation is not as time consuming as greenfield and is cost-effective comparatively.

Bluefield Approach aka Selective Data Transition (Hybrid Transition):

As the name says, this conversion method is a combination of Greenfield and Brownfield. It takes the best of both methods. Enterprises with huge volumes of data and complex systems may adopt hybrid models. For the companies wanting to retain their legacy SAP ERP system but having restrictions on system conversion methods, Bluefield is a comfortable fit as it is a more flexible method. This method was used to be called “Landscape Transformation” earlier. It has two possibilities such as

  • Shell Creation
  • Mix and match

Shell Creation:

The shell creation is the option where a shell of the production system is created without master and transactional data while retaining ABAP repository and configuration data. Any necessary configuration required in the ECC system to convert to SAP S/4HANA system can be done in this empty system. The master and transaction data can then be migrated to the new SAP S/4HANA system.

Mix and match:

In this option, a new SAP S/4HANA system is installed and the existing configuration and ABAP repository is transferred or transported. Then the master and transaction data are migrated to the new system.

SAP S/4HANA Implementation:

Implementation of SAP S/4HANA requires extensive planning, reliable resources, technical expertise, and effective project management. Few of key steps to be considered in the implementation process are as follows:

Project Scope

A suitable project scope is necessary to identify the key business processes that will be affected by the implementation.

Identification of Business requirements

During this step, the functional and technical system requirements needed in the current legacy system are identified.

Finding the Right Method

With three methods of implementation such as Greenfield, Brownfield, and Bluefield implementation available, it is necessary to choose which one best fits your business.

Realigning IT infrastructure

After deciding on the implementation method, the next step is to analyze the existing system landscape to determine if it is suitable for adopting the new SAP S/4HANA system, or if any integration is required with other systems, or if any additional hardware or software is needed.

Data Migration

A proper data migration plan is necessary to inspect which data needs to be migrated. The identified data should be cleansed and validated for migration.


Wherever possible, the converting system shall be customized to meet the specific business requirements.


Next step is to test the converted system to make sure that it meets the purpose of the conversion. It is required to verify if the new system is in line with business requirements. This is done to address the issues that may arise.


The users of the new system shall be trained to ensure that they use the system optimally.


Once the training is done, the system can go-live.


Post-live support is required to ensure the system runs smoothly and to assist in case of any difficulties.

SAP S/4HANA Implementation Framework

SAP Activate Framework

As discussed in the above sections, SAP S/4HANA can be implemented in any of the three methods and can be deployed On-Premise or on clouds (private and public). But this whole process is a difficult task for everyone involved.


But SAP has SAP Activate framework to help the organization, project managers, and consultants to understand the SAP S/4HANA and for better delivery of the project with ease and clarity.


SAP Activate framework has 3 components

  • SAP Best Practices
  • Guided Configurations
  • SAP Activate Methodology


SAP Best Practices:


SAP has ‘ready to run best business processes’ that are optimized for SAP S/4HANA. These processes can be viewed in SAP Best Practice Explorer. It has best practices across LoBs for integration, migration, and extensibility to expand the existing processes with the customer’s own processes. The best practice explorer provides the best practices in the form of Business Process flows, roles and responsibilities. It also provides standard test scripts that work as a user manual.

Guided Configuration:

SAP provides standard configurations that are used to run business processes. It also provides configurations as per customer-specific requirements. It is a self-service configuring experience provided by SAP. The content lifecycle management is also offered by guided configuration to make sure that the settings in the solution are not changed by new versions of best practices or processes. This is important in the cloud where updates happen quickly.

SAP S/4HANA Public Cloud/Multi-Tenant Edition has upgraded every quarter, while the Private Cloud/Single-Tenant Edition has one optional and one mandatory upgrade every year. The On-Premise version has a yearly upgrade. Since the cloud variants have more upgrades than the On-Premise version, it is very important to ensure standardization by using configuration tools provided by SAP.

SAP Activate Methodology:

SAP Activate Methodology

SAP has general SAP Activate Methodology for cloud implementations and On-Premise implementations. SAP has solution specific SAP Activate Methodology such as for SAP SuccessFactors, SAP Data Warehouse Cloud, etc.

SAP Activate methodology provides a structured approach to manage the entire project lifecycle. This methodology is based on agile principles and best practices, enabling organizations to quickly implement and adapt SAP solutions to meet their business needs.

The SAP Activate Methodology has six phases in the implementation of the SAP solution. Since it follows a ‘do and show’ concept, each phase has tangible tasks to be completed and provides visible results. They are as follows:




The customer finalizes the required solution in this phase. This is the phase where the customer is familiarized with the SAP S/4HANA. They can apply and try the free trial version themselves to check if it meets their requirements.

This is the phase where we the customers are provided with access to a free trial version. The features and the capabilities of SAP S/4HANA




During this phase, a project plan is devised, and key activities related to the project are identified. The key activities are defining project scope, budget, finding the right people from both the partner (SAP Consultants) and customer side (Business Process Owners), their roles and responsibilities, timeline for the project, and trainings.




This phase involves finalizing the business process. A fit-to-standard analysis is done to explore the SAP Best Practices. A change impact analysis is performed to understand the benefits of the new system. The key users of the system are also identified during this phase and an end user learning plan is devised.




The system is configured using the requirements identified in the explore phase. It is done iteratively through sprints aligning with backlog. The testing and preparation for deployment is also carried out in this phase.




During this phase, once the system readiness is checked, the system goes live with a planned downtime. The cutover process is done, and a post-go-live support plan is formulated.




This is the post go-live phase which involves optimization and maintenance for the solution, addressing issues, providing support, and making necessary updates.

SAP S/4hana Implementation Benefits:

SAP S/4HANA Greenfield Implementation:

  • New implementation provides a fresh start and an opportunity to address long-standing issues.
  • A possibility to re-design business process, integrations and landscape.
  • The business process can be redefined with SAP S/4HANA best practices.
  • A complete re-engineering of SAP process and workflows helps to achieve greater operational efficiency.

SAP S/4HANA Brownfield Implementation:

  • Minimal disruption to the existing process and landscape.
  • The timeline for the project is short when compared to the greenfield implementation.
  • The data loss from the legacy system is minimal and a cost-effective approach compared to the greenfield implementation.
  • Components from SAP S/4HANA like TM, EWM, AATP etc. can be picked selectively when migrating from SAP ECC to SAP S/4HANA.
  • Historic data can be carried forward.

SAP S/4HANA Bluefield Implementation:

  • The most significant advantage of Bluefield is that it combines the best of the greenfield and brownfield approaches.

Disadvantages of SAP S/4HANA Implementation:

SAP S/4HANA Greenfield Implementation Implementation Cons:

  • It is the most expensive alternative when compared to the other methods of implementation
  • Historic data cannot be carried forward in the implementation.
  • Time taken for implementation is longer than other approaches.
  • People can be reluctant to adopt a new system, due to the loss of their comfort zone, and thus significant changes in management can occur.

SAP S/4HANA Brownfield Implementation Cons:

  • As the existing system is upgraded to SAP S/4HANA, all the existing business processes will only be migrated, so re-engineering of business processes is not possible.
  • Technical difficulties and maintenance are high when compared to the greenfield implementation.
  • It is essentially a transition from an old legacy system to a new system, thus limiting the realization of the full potential of SAP S/4HANA.


SAP S/4HANA Bluefield Implementation Cons:

  • It can be difficult to differentiate what should be taken into consideration in adopting
    SAP S/4HANA and what should be left behind.


SAP S/4HANA Pain Points:

  • Novelty of the System making it difficult to understand how it works.
  • Another drawback is with respect to Cost, time and the complex nature.
  • S/4HANA runs exclusively on SAP HANA database restricting the organizations from using other databases.
  • Challenges it possesses in reinventing business models and revamping an entire ERP.
  • Limited customization options make it difficult for the organization.

Where to learn SAP S/4HANA?

SAP S/4HANA is a complex and comprehensive Enterprise Resource Planning (ERP) software solution. The Internet is flooded with a number of blogs and articles where you can learn anything and everything you want about SAP S/4HANA.

SAP Community

To learn SAP S/4HANA, you have several options available, both online and offline like online training platforms, Books, Blogs, LinkedIn forums, paid courses, etc. Here are some popular resources and platforms where you can learn SAP S/4HANA:

A links to the online training platforms is provided below:




openSAP, provided by SAP, is an online learning platform. Free courses on various SAP technologies, including S/4HANA, are available here. SAP experts developed and designed these courses. They cover all kinds of topics such as implementation, functionality, and configuration etc. This has the following other platforms


openSAP Microlearning


openSAP Microlearning has videos of different topics related to SAP solutions and software. These videos are short and provide quick and easily understandable information about a topic.


openSAP Podcasts


openSAP Podcasts is a platform that encourages “get knowledge on the go”. As the name implies, it has various podcasts that you can listen to in order to gain knowledge about SAP related solutions, software and technologies.


SAP Learning


SAP learning by openSAP has various lecture videos and courses which cover the entire SAP technologies. It contains videos on SAP S/4HANA which provide in-depth knowledge of the subject.


SAP Community


SAP community is the place where SAP professionals and experts share their expertise and experiences. You can ask questions, have a debate, and discuss anything related to SAP. Different tutorials and resources related to SAP S/4HANA can be found here.


SAP Help Portal


SAP help portal is provided by SAP. This portal contains all guides and manuals for all their releases along with other documentation. It has a wide range of information on SAP S/4HANA such as implementation, functionality, configuration etc.


SAP Insider Tracks


SAP Insider Tracks is managed by SAP professionals who conduct events with workshops and paper presentations about the latest trends and new technologies. These events provide valuable insights and create opportunities to connect with other experts in the field.


Online Learning Platforms


Other online learning platforms such as Coursera and Udemy offer an array of courses related to SAP technologies including SAP S/4HANA. They have courses that are both paid for and free. The content and lessons for these courses are curated by certified instructors and trainers.


SAP Press Blog


The SAP Press Blog is an ocean of blogs and articles that are informative to the readers. It covers almost all the topics of SAP and related technologies including SAP S/4HANA. This is one of the most valuable platforms that has resources of the SAP ecosystems’ latest trend and developments.

Apart from these platforms, there are many certified training programs for SAP S/4HANA that are provided by authorized training partners.

Continue reading about SAP S/4hana


  • SAP ECC is the Enterprise Central Component of the SAP Business suite (a collection of business applications such as CRM, PLM, SCM, SRM, and others along with ERP) whereas SAP S/4HANA is a business suite in itself.   
  • SAP ECC runs on any databases such as Oracle, Db2, SAP HANA, etc. but SAP S/4HANA operates only on the SAP HANA database which is its own in-memory database.
  • SAP S/4HANA runs on an in-memory database which allows fast data access and has a simplified data model. SAP S/4HANA has various advanced capabilities that makes it stand out among the bunch. 
  • Migration from legacy system or New Implementation of SAP S/4HANA requires extensive assessment and planning. At ERPROOTS, we help you with everything such as detailed assessment, defining your objectiveplanning the budget, and opting for the right solution and deployment option. 
  • Various factors determine the timing for SAP migration, the major one being SAP terminating mainstream support for SAP ECC by 2027. Other factors include business needs, objectives, budget, etc. 
  • SAP NZDT assists with real-time data replication, enables parallel processing, and helps to keep the cutover downtime to a minimum. This way only a few tasks fall into the downtime window.  
  • Rise with SAP is a different product from SAP which provides multiple solutions as a package. SAP S/4HANA Cloud is a part of that package. This offering is to help businesses make a smooth transition to cloud infrastructure with minimal risk. 
  • The first requirement before moving to SAP S/4HANA is to check the readiness of the existing SAP system. It is crucial to re-engineer the business processes to align with the new system’s capabilities. The hardware and infrastructure requirements should also be considered before making the move. 

There are 2 options available to deploy SAP S/4HANA.  

  • One option is On-premise deployment (SAP S/4HANA On-Premise managed by SAP HEC (HANA Enterprise Cloud) and SAP S/4HANA On-Premise managed by Customer or Cloud Provider Hyperscalers) 
  • The other option is Cloud Deployment SAP S/4HANA Public Cloud Edition and SAP S/4HANA Private Cloud Edition. 
  • SAP S/4HANA can be integrated with ChatGPT by using an API-based approach. To retrieve data and interact, API endpoints are used to connect ChatGPT with S/4HANA. This ensures data security and compliance with SAP’s guidelines. 
  • No, SAP HANA and S/4HANA are not the same. SAP HANA is an in-memory database of SAP that stores data in memory rather than on disk. SAP S/4HANA is the fourth generation ERP suite by SAP which runs on SAP HANA. 
  • Large businesses and organizations are continuously transitioning to SAP S/4HANA adopting cloud solutions. SAP S/4HANA is continuously evolving to meet industry-specific needs and accommodate the evergrowing intelligent technologies like Artificial Intelligence, Machine Learning, Block Chain, Internet of Things, etc. 
  • SAP Activate Methodology is a project implementation methodology that provides a structured approach to manage the entire project lifecycle based on agile principles and best practices. 
  • There are different ways to migrate to SAP S/4HANA such as Greenfield Implementation, Brownfield Implementation, and Bluefield Implementation. According to your business needs and objectives, the best way can be chosen. 
  • SAP S/4HANA is a next generation business suite. It has many new capabilities and technological advancements which help in providing real-time analytics and insights aiding in data driven decision making. SAP S/4HANA helps in achieving Streamlined business process and increased operational efficiency. 



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