For those of us in the world of IT and ERP we are well aware of the push SAP is doing to deploy SAP HANA and SAP S/4HANA. This blog will examine the critical success factors for your upgrade project strategy and execution of a successful SAP HANA migration with the intent of being a technical guide for your success.
To begin its key to understand that when people discuss "moving to HANA" there are two scenarios. The first is called Suite on HANA which is essentially taking one of your Business Suite applications such as ECC and migrating it an SAP HANA database. The second is moving to S/4HANA which in addition to moving to the HANA database you are also upgrading to the latest SAP ERP version, S/4 HANA.
Note that the recently announced 2027 HANA deadline, is to actually get to SAP S/4HANA.
Key Considerations for Your SAP S/4HANA Journey
There are many business benefits to running on SAP S/4HANA making the move to S/4HANA very advantageous to get completed sooner rather than later. So with that in mind, here are the key strategies to be aware of when building your roadmap to SAP S/4HANA and helping make it a successful upgrade journey for you and your company.
Understanding Your Business Need for SAP S/4HANA
The first consideration is what is your company's actual need to go to SAP S/4HANA. Be sure to do your homework! Understanding what your business needs are and the functional requirements of SAP S/4HANA will aid in developing a solid business case to cost justify an upgrade project. This may seem basic, but it is critical for you and your technical teams to understand what your challenges are today and how by implementing SAP S/4HANA these issues can be resolved or new functionality added.
Many customers who are running SAP believe they currently have fairly simple business practices. So many struggle with the new features of SAP S/4HANA and how they would impact their business. This is a critical hurdle you must overcome. Without a business case your project won't get off the ground. There several new features and functions to SAP S/4HANA that could provide great business benefits to your company. As an SAP customer this is where you need to take a deep look into this functionality from both the technical perspective and the business functions, to truly understand what the business drivers to upgrade to S/4HANA are. For SAP customers, this is where you need to spend most of your time, think outside the box, understand the new feature of S/4 and validate the business functionality your company can take advantage of. As we all know going to your management team, CEO, CIO or board of directors with an investment request of a couple million dollars just to perform a database upgrade is not going to get approved. You must have a business need and justification. Be sure you understand what the business value is for your company beyond the IT function SAP serves.
To build this business case for your management team, I encourage existing SAP customers to leverage one of the many digital tools that are available online. One such resource is America SAP User Group (ASUG), as they have a many educational events and assets available for SAP customers to understand the greater business value that SAP S/4HANA provides. Also, SAP has their own value engineering team that can also help you identify where are some of the functional needs your systems are lacking today and how the new functionality could benefit your business.
If you hold an internal IT role within the company, reach out directly to your business units and ask directly what SAP functionality they feel is still missing. Ask for big lofty ideas too, anything around finance, warehouse management, production planning what they don't have today, it may be likely some of those ideas could easily be implemented within S/4. Finding just a few business process improvements may be all that's needed to justify the project.
Do you know your current licensing structure?
The second very important consideration is licensing. You probably know by now but SAP S/4HANA is actually a separate licensed product. It is not free as part of your maintenance costs that you pay, so having a solid understanding of the actual license cost is critical. I advise you to work with your SAP account executive very early on, so you know what cost to expect. This will help ensure you have the costs appropriately budgeted. SAP did offer a few programs where you could receive a SAP S/4HANA starter pack, which would at least help you get started but may not be all the licensing required. Be sure to find out what your SAP licensing status is today and how much it would take to secure all the SAP S/4HANA licensing required. You need to have a clear understanding of that purchase process and associated costs.
Speaking of licensing, the Managecore team often receives questions regarding licenses in the cloud. If you are considering a platform change along with your SAP S/4HANA upgrade project, know that you can go to a public cloud environment with your on-premise license. They call it bring your own SAP license, often referred to as bring your own license - BYOL. Your on-premise licenses will work in the public cloud. So if you want to migrate from an on-premise environment today, upgrade to S/4HANA and move to a public cloud platform such as Google Cloud, AWS, or Azure, your SAP licenses are transferable.
SaaS vs. Cloud
Please also be aware, as there is some confusion because SAP uses the word 'cloud' interchangeably with a lot of other services, SAP does offer SaaS (software as a service) based cloud versions of SAP S/4HANA. Your SAP account executive might be trying to sell you a SaaS version of the product instead of just upgrading you to the on-premise version of SAP S/4HANA. The SaaS version maybe a viable option for you, if not you don't have to worry because the on-premise licenses are portable to move into the cloud. You will want to have a clear understanding of where your SAP S/4HANA systems will be hosted.
What should your architecture be?
Another consideration is the architecture and the underlying platform that will run your SAP S/4HANA environment. Be sure to think about "where is the upgraded landscape going to live"? Managecore sees more and more customers that have an on-premise SAP footprint today are considering the cloud. As they look to upgrade to SAP HANA they are taking this time to see if now is the right time to get this out of their data center and migrate to the cloud. In addition, they are considering the option to have the architecture supported by somebody else.
If your company decides to explore a cloud hosting model, there are a lot of questions to get answered before you start. If you have just started the evaluation process to choose a cloud provider and you're open to understanding what those differences are, I highly suggest taking time to understand all of your options. At a high level it may seem like all cloud vendors are created equal, which on the surface that may be true, but the reality is like most things 'the devil's in the details' and you will find differences in architecture availability, and in pricing models. How those pricing models actually work, which includes understanding beyond just the basics of getting a discount for signing a 3-year contract. More about what happens when there are incremental changes after the initial build that will impact costs. For example, your need for temporary servers for testing or seasonal performance needs could have a huge impact on your monthly price. Be sure to think in-depth regarding how your SAP landscape operates, with the need to do frequent refreshes or transfer data to other clouds or to other applications and all of those activities have the potential to have implications on the costs that you would pay per month.
I have spoken with SAP customers that were early adopters of the cloud for their systems and the initial sticker shock of the pricing model was too high. However, it was most likely because they weren't taking advantage of some of the pricing models that are available, as well as they didn't understand the architecture, so they were configuring their systems in the cloud in a way that was very expensive. Working with a skilled cloud and SAP team such as Managecore can alleviate those issues by being fully knowledgeable in public cloud and SAP architecture to build your systems for optimal performance and most cost efficiencies.
Your Project Plan is Your Success
The final key consideration in your SAP S/4HANA journey is the actual project planning. Basically, be sure you are taking your requirements and marrying them with what your long-term strategy ultimately is. Start by including the topics discussed in this blog post, what is the need to go to SAP S/4HANA, what licenses are required, where will this new landscape live (on-premise or in the cloud), and will that cloud migration be part of this upgrade project. Having answers to these questions will help you formulate your plan and ultimately dictate what your project requirements will need to be. In addition, understanding what your source environment consists of in terms of your operating system, database platform, physically where it's located, even where you bought your database licensing and operating system licensing are vital to understand. Changing databases and operating systems as part of your move to the cloud can get a little complex depending upon which cloud you are moving to. You will want to be sure you complete the investigation phase to have a clear understanding of the 'to be' state and those requirements vs. where you are today. This could have a big impact on your project as the scope could vary greatly. Managecore has some customers with a relatively current SAP landscape, so migrating to the cloud is relatively straightforward in conjunction with a HANA or S/HANA upgrade. However, we have other customers that have not patched their SAP systems regularly, while others are still non-Unicode or running an old version of operating systems and databases. For these customers it still can be possible to complete the project in 'one step' in one outage as a singular project, however in a many of cases it makes more sense to take several smaller steps to get there.
As an example, if you're on AIX and Oracle as well as an older enhancement pack of SAP ECC you may want to upgrade your EHP first, (which actually might be a requirement depending upon what version you're on), then start your migration project.
Another example is if you're already on SQL server in Windows, your first step could be to move to the cloud because your operating system and database are already supported in the public cloud. Then you could complete the S/4HANA upgrade post cloud migration. Also, know how long of an outage your business can sustain. If you're on an old version of SAP and want to go to SAP S/4HANA all in one outage, that might be several days of just run time to get through all the steps that are necessary. That most likely will not be feasible for many customers. To explain further, if your business can only handle a 36-hour outage window over a weekend, then you will need to consideration alternatives in your project plan and divide your project into multiple smaller phases just for the outage constraint alone. As you can see there are a lot of variables that go into the proper planning of your SAP S/4HANA migration project and must be considered for a successful project.
In most cases be aware that to migrate your SAP systems you will likely need some sort of outside support services, especially to get to SAP S/4HANA. It's rare that I see customers going to SAP S/4HANA or completing a cloud migration without any outside support.
Along with understanding the high-level project, you will also need to evaluate what type of support structure and consulting services will your team need to successful complete the project. As is relates to your project execution the partner your chose should come in with their own detailed project plan as an expert guide for you to leverage.
In conclusion, as you begin planning your SAP S/4HANA project and further evaluating if the cloud is the right choice for your organize be sure to plan ahead for success. The Managecore team is here to help you with these project tasks, we have a lot of experience in helping customers move to S/4HANA as well as moving systems to the cloud.
>>> For SAP HANA and SAP S/4HANA project support assistance contact Managecore the leader in SAP HANA transformations!
Frank is an experienced Information Technology executive that excels in high-level strategic and operational guidance to help manage and grow businesses. With 25 years experience in IT and over 19 of those years specifically in SAP, his thought leadership on industry trends, process improvement and best practices at SAP events, conferences and educational webinars are invaluable assets for companies. Frank provides his past experience in developing new technology initiatives with ever-evolving innovations to grow businesses and achieve high-performing solutions at a lower cost of ownership for your company.