SAP Brownfield Implementation in SAP S/4HANA Transition

SAP-S4hana-transition

SAP From R/1 to S/4HANA

SAP has been the trusted Enterprise Resource Planning (ERP) software supplier by helping businesses stay current. One factor that made SAP unique, over these years, is the way it used technology and data to run their customers’ business efficiently. 

However, the rapid advancements in technology have forced businesses to quickly adapt to different technologies and changing market dynamics. SAP has embraced this change into its business suite application—from the decades-old R/1 to the most recent S/4HANA.

Helping Hand!!!

Being mindful of these definitions will be of great help in understanding this blog. 

Conversion: Transformation of an entire system from one environment/landscape to another. 

Migration: Movement of database from a source system to a target system. 

Upgradation: Upgrading the older version of a system, which includes updates such as fixing bugs, adding new features, both minor and major, via enhancement packages, to a newer version. 

Why Transition to SAP S/4HANA?

Released in the year 2015, SAP S/4HANA 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, SAP S/4HANA promises customers what they are looking for—business innovation and process optimization.

 

Over these years, SAP S/4HANA has seen several enhancements to its functional and technical capabilities. These enhancements make SAP S/4HANA the most sought-after ERP application in the market today. Adding to this advantage, the end of maintenance support for SAP ECC 6 in 2027 also forces enterprises to accelerate their transition to SAP S/4HANA. A recent LeanIX survey  cited the following drivers further proof the move.

SAP S/4HANA Implementation Approaches 

Regardless of the implementation approach, it is crucial to have a well-measured cutover plan before go-live of a project. A cutover plan defines the tasks and resources that need to be moved from a source system (system to be converted) to the target system (the converted system), along with the project timeline.

Considering the enterprise customer profiles wanting to adopt S/4HANA into their IT infrastructure, SAP allows them to choose any of these implementation approaches.

SAP Greenfield vs Brownfield

SAP Greenfield implementation essentially means setting up a completely new ERP environment—starting from scratch—to run their business operations. In SAP, S/4HANA is the latest in the line-up of enterprise business software products helping enterprises run their operations end to end. 

SAP Brownfield implementation refers to a system conversion—conversion from an existing ERP landscape to a more advanced ERP landscape—to seamlessly run their business operations in an ERP ecosystem. 

In both the implementations, SAP stands firm in its rhetoric to transform their enterprise customers to cloud, thereby helping them stay agile and nimble for the foreseeable future and beyond. 

SAP Brownfield Implementation 

SAP Brownfield implementation is the transition from an older system landscape (as-is) to a modern landscape (to-be). This involves both data migration and system conversion, where system conversion is the larger picture. In SAP’s case, this is about transitioning from SAP ECC, as most of their existing customers are running on legacy SAP ECC systems.

Technical Prerequisites to move your legacy system to SAP S/4HANA 

Business Fit 

Unlike greenfield implementation, brownfield approach helps enterprises retain their legacy data. This perfectly suits enterprises with well-tested and flexible business processes, and a ton of business- and industry-specific best practices. 

 

Raise these questions before charting out your conversion journey.  

If your answer is a straight YES to all these above questions, you are on the right track.

Phases of Brownfield Implementation

brownfield-implementation-phases

 Image: SAP S/4HANA Brownfield Implementation 

 Brownfield approach helps enterprises reduce their downtime, ensuring the target system can be up and running almost instantaneously. These phases involved in performing a system conversion make brownfield differ from the rest. 

1.PREPARE: This phase helps the implementation team do a brief plan on system conversion to find the available inconsistencies in aligning the source system with target system. 

The implementation team performs the following. 

2.  EXPLORE: The implementation team reviews the solution scenarios to ensure business requirements are met within the boundaries of solution and project scope. The requirements are then converted into reports and are used to detail cross-application and application-specific activities. 

 

This phase performs the following key activities. 

A Few Readily Available SAP Tools 

Maintenance Planner: Helps enterprises in each stage of their digital transformation. This includes checking the compatibility of installed components, add-ons, and business functions.

Pre-Checks: Pre-checks tool generates a report that needs to be executed in the source system. This report identifies the mandatory step to be followed before a system conversion.

Custom Code Management: Identifies the unused custom code present in the source system before transition. It is worth noting that, on average, around 40-60% custom code is unused in a production environment.

Results from SAP conversion tools are significant to ensure that the source system is ready to go live. Thus, the collective report is called Simplification List.


3.REALIZE: In this phase, the implementation team does multiple planned runs using Software Update Manager (SUM) before the target system goes live. SUM automatically executes the pre-check and custom-code reports to ensure the completeness of database migration, data conversion, and software update. This phase will help the implementation team to find a definitive cutover plan. 


4.DEPLOY: This phase deploys SAP S/4HANA resulting in business disruption or downtime. In brownfield, deployment gets carried out only during weekend or non-productive hours. Once deployed, users can use the system and flag issues that concern them. 


5.RUN: This phase ensures that the target system is up to date with the latest innovation and technologies of SAP. Once the source system is all set to be converted, the implementation team can turn their focus towards managing risk and continuously improving the business processes. 

SAP S/4HANA Uplifting the Existing ERP Ecosystem 

Transitioning to S/4HANA poses several challenges to the existing ERP landscape. This asks for well-defined change management in place, as enterprises looking to evolve their business consider this a crucial step. This change management, however, poses a challenge to an enterprise’s existing IT and ERP ecosystem. Too many parameters come into play while defining the function, look and feel of a new system, as SAP S/4HANA encompasses almost all fundamental modules of an enterprise.

The below table lists out a few functional enhancements of SAP S/4HANA and limitations of SAP ECC.

 Enhancements in SAP S/4HANA   Limitations of SAP ECC 
Delayed analysis resulting in slower decision-making. Generates insights based only on operational data. This factors only the financial side of the business. 
Integrated Business Partner master data, which includes data of both Customer and Vendor.  Isolated master data for Customer and Vendor. 
Generates insights based on both operational and experiential data. This factors in experiential data that can add value to the existing business.  In the FICO module, the ACDOCA (Universal table) table unifies Financial Accounting (FI), Controlling (CO), Asset Accounting (AA), Material Ledger (ML), and Profitability Analysis, providing a comprehensive view of the financial performance.  
 A new centralized general ledger for accounting.  Classic or new General Ledger for accounting. 
 In FICO module, the ACDOCA (Universal table) table unifies Financial Accounting (FI), Controlling (CO), Asset Accounting (AA), Material Ledger (ML), and Profitability Analysis, providing a comprehensive view of the financial performance.   The BSEG table in ECC provides limited visibility into the financial performance of an enterprise. 

 

Real-Time Benefits of Transitioning to SAP S/4HANA

There are now more than 11,500 S/4HANA customers planning to transition to SAP S/4HANA, and the number is still counting. Of this, close to 3,200 customers are live customers and 6,100 customers are before go-live and have deployed SAP S/4HANA.  

 

These data from SAP’s longtime customers highlight the real-time business benefits. The customers include Bosch, CENTRIA, Toyota, La Liga, Lufthansa Group, ENGIE, and many more.

SAP S/4HANA is a Business Imperative 

With a high-level view into how SAP S/4HANA can help transform your business, it is fair to conclude that moving to SAP S/4HANA is a business imperative to uphold—be it Greenfield or Brownfield or Bluefield. 

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