Option 2: Modernize to SAP S/4HANA
Instead of kicking the problem down the road, savvy IT leaders are using the 2027 deadline as a trigger to explore the business case to move to SAP S/4HANA. While some are choosing to move to SAP S/4HANA while remaining on-premises, an increasing number are combining the move to SAP S/4HANA with a move to the cloud to realize the additional benefits offered by the leading public cloud providers. From scalability and cost optimization to agility and accessing the latest innovations, a cloud-based SAP S/4HANA lays the foundation for a truly digitally transformed business.
But what’s the best way to do this? Do you go all in with a complete transformation, or do you take a staged, incremental approach? Let’s look at the choices:
Greenfield: a fresh start
In many organizations, the SAP environment has grown into a complex beast, with extensive customization and complex coding that is difficult to manage or upgrade and with business processes that may have shifted over time away from best practices. Moving to SAP S/4HANA on cloud is the perfect time to clear the decks and start with a clean slate, getting access to the latest platform and the innovations it enables. Organizations whose businesses have changed and evolved over time and who need to update their business processes will benefit from a greenfield conversion as they can build an ERP system that meets their future business needs, rather than trying to retro fit complex code in a new environment.
The downsides of this option? There’s a hefty upfront cost as everything needs to be redesigned and rebuilt from scratch, even the parts that are currently working well. Companies will also have to plan how they can access their historical data to ensure legal compliance.
Brownfield: same structure, better future potential
In a brownfield conversion, you replicate your ECC in SAP S/4HANA exactly the way it currently is, keeping your existing customizations and adopting some of the new SAP S/4HANA features. This option offers the lowest disruption to the business users but offers minimal business benefits from process improvements. The business process improvements can then be planned to use the more modern and richer platform.
Compromise: incremental transformation
This is a compromise between the two radical greenfield and brownfield options, providing more benefits from the conversion than the brownfield approach, without the sheer scale and associated costs and risks of greenfield. It also enables some of the new advanced SAP S/4HANA features to be used from the start, which could otherwise be difficult to implement after the initial go-live.
In this scenario, the use of Selective Data Transition (SDT) tools can accelerate the data conversion from the old ECC system to the new SAP S/4HANA setup, to support the transformation in scope and its impact on the data in both source and target systems. Subsequent waves of transformation can be added over time in a more agile fashion, with less disruption on the business and faster time to value.
For many, this choice is seen as a good balance, achieving a degree of modernization without re-inventing the wheel, and re-starting from scratch; the increased agility also better aligns with the demands of the business and the ever-changing external conditions in which businesses operate nowadays.