Tag: S/4HANA

Building the Business Case for SAP HANA

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Before a company can make the transition to SAP HANA, the business value must be demonstrated to leadership. Business leadership is trying to understand the HANA journey.

Today’s environment is most likely on-premises. Companies are trying to decide between new implementation, conversion, and a hybrid approach.

Demonstrating business case needs doesn’t just involve providing numbers. The business case articulates what you have, how you use it, and what needs to change. These needs should be revisited frequently. Understanding how to get there will change, and the cost will change. Leadership will want to know about the business impact of cost estimates for the move to SAP HANA and the potential benefits.

The Process of Building the Business Case

Process change is a big concern for leadership. Chief executives want justification for this significant effort and the corresponding expenses. Your company will need to document key requirements. Determine how much change you are willing to put up with and what the benefits will be.

SAP Business Scenario Recommendations Report (BSR): SAP will map old business processes to the replacement in SAP HANA.

Technical Assessment: The SAP upgrade manager, readiness report, and third-party assessment will correlate the impact. This process will help you understand how much customization, testing, and training will be necessary.

Assemble the Business Case: Assemble estimates into a real business case that aligns the findings of the BSR and Technical Assessment to the requirements.

SAP HANA benefits include:

  • Analytics for a near real-time decision-making process
  • Integrations through database simplification for faster and easier integration to third-party partners and better customer support
  • Simplification through fewer and more simplified tables than ECC so it is easier to access data
  • Performance through an in-memory database that decreases run times

The BSR should be run against a particular release of SAP HANA. At the end of 2020, the 2009 release will need a new BSR because of deprecation. For the BSR, you submit details from your system to SAP, and it comes back with which transactions will not be available in the next couple of versions.

The Technical Assessment will determine what has been deprecated, code changes, and timelines around data. You don’t want to lose transactional and master data. Details are extracted from your system and compared to S/4HANA Versions. Clear Tech leverages the SAP Readiness Check, Live Compare, and other products. You need to understand what point you want to get to and the magnitude of training and deprecation needed to get there.

The Functional Inventory includes reports, business design documents, and training material. The Technical Inventory includes landscape, security, BC/DR documents, and code and customization documents. Engaging with IT allows the company to find where it can make changes to achieve lower TCO. If infrastructure needs to be resized, you will experience an outage. This is not a concern with IBM Power. Infrastructure includes design, preferences, and directional documents.

You need to combine the findings from the BSR, Assessment, and Infrastructure along with the Inventories to understand your requirements. The Business Case findings are based on best-case implementation, whether Brownfield, Greenfield, or Bluefield.

Subjective vs. Objective

Developing a business case can be difficult because SAP ECC has been implemented and changed over time. Understanding everything requires many people with diverse roles or you can assemble the facts from assessments.

Clients often say their system is highly customized with thousands of objects. They need to determine what they really use, what SAP really provides, what they really know, and what is really lost. This process separates reality from emotion. It may turn out there is one transaction that is used once or twice a year that is holding the whole project up.

Balance

To achieve balance, understand:

1) What business functions you use today

2) What S/4HANA functions exist, augment, and replace what you use

3) Impact of the changes

Gain information, not social opinions, to achieve balance between facts and opinion.

Protection

One of the challenges is quantifying the amount of change. S/4HANA is not compliant with current databases, so the quantity of change looks monumental. You need to quantify how much code really needs to be written.

Quantify change, impact, cost estimates, the impact of customization, landscape changes, and the federated landscape impact, as many applications bring data into SAP HANA. You may have 2000 objects but only use 25%. Of the 25%, you may only use 20% month-to-month. Develop a single report of the “potentials.”

Guide

You need to have a single business impact and technical impact sheet for discussion. Develop a real estimation model based on factual findings for discussion. Without documenting facts, all these discussions become emotional. As humans, we are resistant to change and wait until the last second.

Focus

The BSR provided by SAP will include estimations of business benefits, changes for elimination of customization by S/4HANA features, and process improvements. You want to know how much improvement to expect. The numbers may not be accurate, but they are guidelines.

Technical Assessment

Only 25% of custom objects are needed by most clients. A Technical Assessment will identify line-by-line changes. This is a necessity for understanding the impact of the selected approach. How much of your customization are you really dependent on? When you realize only 25% of 3000 objects are needed, it changes your perception.

Testing Impact

You want to know the total number of testing hours by area. Focus on the functional level.

Functional Transaction Impacts

You want to know what’s been deprecated, merged, and updated. Merged transactions are important in S/4HANA. They will all simplify and give savings. SAP has moved transactions from financial to other areas and renamed them.

All these factors should be combined into a single document to estimate the cost and impact of the overall project.

Licensing Models

Estimating appropriate license costs requires understanding the licensing models. SAP has 4 licensing models:

Option One: The Standard Edition includes most database, integration, and application services.

Option Two: The Enterprise Option extends the Standard Edition with advanced analytics, predictive analytics, big data, and replication. The key for most companies is replication.

Option Three: The Express Edition is a free license version that does not include HA/DR, multi-tier storage, and dynamic tiering.

Option Four: The Runtime Edition is a special version for use with SAP applications.

Most companies end up with the enterprise option. Option 3 and 4 are seldom chosen by customers.

Implementation Approaches

Are all implementation approaches equal? The type of approach will affect business impact and depends on business drivers.

Greenfield: The Greenfield approach is for customers who want to take advantage of S/4HANA to re-engineer their processes and implement a brand-new solution, reducing the level of customization, knowing that they will also lose their historical data.

Brownfield: The Brownfield approach is for customers who want to leverage existing solution, save historical data, and rapidly convert to S/4HANA. This approach impacts business users the least. Over a period of time, you will want to upgrade and move into a hybrid approach.

Bluefield: The Bluefield approach is a hybrid approach that is somewhere between Greenfield and Brownfield. This approach not only saves the value of the existing solution but also gives more flexibility for the definition of the go-live phase, allowing separate go lives for different company codes and for system downtime optimization.

Keep calm and migrate to S/4HANA with Brownfield, putting in place a foundation to adopt innovation at your pace.

Challenging Preconceived Notions

Some companies say that they’ve looked at S/4HANA and can see that it’s not feature-complete. Customers are examining S/4HANA features based on their understanding. However, some functions were aligned with other business processes and renamed.

Ask what functions you use and how frequently. How much testing are you going to need for something you don’t really use? Is your customization included but renamed so you can’t recognize it? Has the use case for your industry determined a best practice that is different? Based on need and use, is this a first-order process or a fourth-order process?

It’s imperative that businesses understand the value brought by the SAP BSR, which identifies required realignment and remapping of business functions. You can run the BSR every time there is a new release and even look ahead to future releases and run a BSR.

The real issue is not the cost of implementation or the licensing for the software. It’s the change to the business and how it impacts the business case ROI due to emotion. Determine what you really use, the business tier for frequency of use, and how things really map to S/4HANA.

Internal discussions can get lost without assessments, documents, and factual detail about your environment. With a bit of diligence, you may find that S/4 doesn’t have a huge impact when a brownfield approach is chosen. At Clear Technologies, we need to be your independent representative. We are knowledgeable about the process and can come up with a recommended approach.

Third-Party Tool Challenge

Are all tools created equal? A maintenance planner may declare that some of your third-party tools are not HANA compliant. Until recently, removing third-party tools was neither possible nor necessary. This may be a brute force effort.

Most third-party providers have HANA-specific versions. These tools are release-specific. Work with the vendor to make sure it is version compliant. Prod the vendor to get the product updated.

Developing a Well-Constructed Business Case

Business leadership can understand the HANA journey through a well-constructed business case. Understanding what S/4HANA provides is a release-by-release effort.

SAP has provided the tools to ascertain the hidden costs. Your selected implementation approach has an impact on the cost and duration of the project. S/4HANA has matured significantly since version 1511. Third-party tools and applications can pose a threat to success.

S/4HANA is going to have a different value for every business. Your company needs to determine the requirements to develop the business case. Clear Tech can help you do this and start a successful SAP HANA journey.

Get help with building your business case for SAP HANA. Request an SAP Readiness Assessment from Clear Tech.

SAP HANA Implementation Approach Options

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Understanding the SAP HANA implementation approach options will help your company avoid costly mistakes. Thoroughly evaluating the different options available will help your company make informed business decisions during each phase.

Part of building a business case for SAP HANA is deciding on an implementation approach. There are 3 options to explore so you can understand them and make the right choice.

Key considerations in choosing an implementation option include: who should determine the approach, the impacts to the business and to IT of selecting one approach over another, the critical differences between approaches, and what SAP says about the selection process.

SAP Big Picture

Traditional SAP ECC customers are asking how they can get to SAP HANA. SAP HANA is the platform. HANA is the database, and S/4 is the generation.

There are typically 3 ways to get to S/4HANA: new implementation, conversion, and a hybrid approach that combines the 2.

Once you get through implementation, you’re going to be faced with where it is going to be hosted: in the public, private, or hybrid cloud. That decision can be just as important because that is the foundation for how the solution is going to run. Clear Tech can help you choose the optimal hosting solution.

Once you move to S/4HANA, it’s going to run on Linux with an Intel or IBM server. The difference between Intel and Power is stark. Intel has a lot of limitations. Power is inherently reliable and flexible.

Business Case

A key part of the business case has to do with your implementation costs and your impact estimates. Estimated benefits will be dictated against a particular approach. There is a difference in cost and scope between Greenfield and Brownfield.

The Business Scenario Recommendations Report (BSR) articulates what is available, what is not, and how it impacts your business. The BSR largely anticipates a Greenfield approach. Clear Tech is independent of the SI, so we will help you make a decision without being influenced by the fact that a Greenfield is a much bigger project for an SI.

It benefits you to run a Technical Assessment. There are a number of tools for running an assessment and they present the details differently. It’s important to figure out which of the tools is the best for your needs. The Technical Assessment gives information on what code needs to change, the impact, and the level of customization needed.

Combine findings of the BSR and Technical Assessment, as well as change impact from business leaders, and a picture will start to emerge.

Importance of the Approach

The approach should be a business decision. The business should define and articulate the need. IT should put forth impacts aligned to the defined process. There has to be a close relationship between IT and the business. A small segment of the business may decry the move to SAP HANA and the need to re-implement and redo everything.

The strategic plan will include process drivers. Why are you choosing one approach over another, and what are the business impacts? Have these decisions been included in the documented requirements? Who owns the documented requirements? They are owned by whoever has the project management role. Not documenting this is a failure on the business side.

ERP systems are built to facilitate and enable business growth, not IT control.

Defining Questions

The first step in choosing an approach is building requirements. To do so, you need to ask some questions:

  • Does your system meet your current and defined future business needs?
  • Are you sensitive to change and the associated costs?
  • Do your current processes meet business and compliance needs?
  • Do you need legacy data for business use?
  • Do you have significant costs for maintaining customization?
  • Do your processes align closely to accepted industry practices?
  • Is your current ECC system ready to move to S/4HANA?

Are all the Approaches Created Equal?

One common thread that runs through all the approaches is that, when you are finished, your SAP system will continue to drive change.

Bluefield Approach is covered first because Clear Tech has never known an implementation that hasn’t eventually gone through change. Even if you started as a Greenfield, you will move to a hybrid approach because the decision to go Greenfield is often colored by emotion. Bluefield is somewhere between the Greenfield and Brownfield approaches. It saves the value of the existing solution but gives more flexibility for the definition of the go-live phase, reducing the downtime needed.

Greenfield Approach is for customers that want to take advantage of S/4HANA to re-engineer their processes and implement a brand-new solution, reducing the level of customization while realizing that they will also lose their historical transaction and master data. This data will be recaptured through daily processes. There is a data migration tool, but it adds cost to your plan.

Brownfield Approach is a migration. It populates the tables with data from your existing systems. This is an approach for customers that want to leverage their existing solution, save their historical data, and rapidly convert to S/4HANA. It minimizes testing. The Brownfield approach will affect business users the least. It puts a foundation in place to adopt innovation at your pace.

Greenfield Is a Revolution

Greenfield is a new implementation. As such, it is the most disruptive approach. It consumes the largest amount of business time. The business must be integrated, and while it is being integrated, the business team can’t do its job.

Greenfield also causes the largest loss of legacy data within the SAP landscape. You can try to move your own data using the data migration tool, but this approach is expensive.

Essentially, your company is starting over. Is your SAP system that bad? Are you out of compliance?

Brownfield Is an Evolution

Brownfield is a migration, so it is more transitional. This approach causes the least amount of disruption. The system is pretty much the same as it was.

Brownfield consumes the smallest amount of business time. You’re not re-engineering your processes, except there will be deprecation with merged transactions. Those must be remediated. Clear Tech can walk you through this.

There is minimal loss of legacy data within the SAP landscape. The Brownfield approach is the least expensive because it has minimal impact. Your company moves what fits into the new S/4HANA environment.

Bluefield Is Managed Evolution

There are 2 ways to take a Bluefield approach. One is hybrid with BPR. This approach is a migration/transition with a Selective Process rework. This approach involves some disruption based on the need. Business time requirements vary. There is some loss of legacy data within the SAP landscape. The cost of this approach could be extensive and close to that of the Greenfield approach. Your company moves what fits into the new S/4HANA redesign processes that improve efficiency or that cost money to maintain customization.

The second — and preferable — way is hybrid phased. This Bluefield implementation begins with a Brownfield approach and goes through a phase 2 redesign of selected business processes. The resource time impact is controlled as is strategic spend. Your company is able to retain legacy data and functionality. Business benefits are quickly realized.

Comparing Paths to SAP S/4HANA

Key questions influence your choice of transition scenario.

Do you want to keep your solution enhancements or your transaction data history? When you ask this question, people get emotional. If yes, you are heading toward Brownfield. If no, you are heading toward a new implementation.

Does your system fulfill all conversion prerequisites? If yes, take a Brownfield approach. Be sure to take care of these prerequisites because, if you don’t, you’re heading for a Greenfield.

Do you need a phased business roll-out? If yes, you need a Greenfield. You’re probably not using ECC much. If no, you can do a migration.

Do you need a renewal of your complete ERP solution? Is it so bad that the IRS is breathing down your neck? Do you need to close your books down numerous times? If yes, then you need to choose Greenfield.

How do you perceive your current system? If you perceive it as an innovation blocker, go Greenfield. If you perceive it as a key asset, choose Brownfield. This perception depends on who you ask. Business perceives it as a key asset, while IT thinks things can be done better.

A Preconceived Notion

Customers think that S/4HANA isn’t feature-complete. They need to consider what version they are looking at. Each time a release happens, you need to rerun the BSR. New features are available and features are renamed and moved to different areas of SAP.

Most customers are only using 25% of their customizations. They need to consider the impact of their testing and how the Brownfield approach requires much less testing than Greenfield.

When deciding on an approach, start considering what needs to be deprecated and customized. Which use cases in your industry require you to do things a certain way and how much testing needs to take place?

S/4HANA Journey

Stage 0: Go through the Business Case. Value crowd insights. It won’t help to have one member of the business advocating for the entire business. You want to get users from each business process area to talk about their experiences. This discussion should be driven by the business or hardware vendor but never the SI.

Stage 1: Move to Unicode. Look at what breaks, how to fix it, and what to test. Enable a new GL. It is simpler to do this before conversion.

Stage 2: ECC6 EMP7 Upgrade. Look at what would break, how to fix it, what to test, and functional testing.

Stage 3: Suite on HANA (SoH). Today, customers shouldn’t go to SoH, because there are no savings as far as a migration. Save the money and put it toward the predecessors.

Stage 4: Implement S/4HANA Simple Finance (sFIN). Take baby steps to get ready for S/4HANA. Many of these steps are not affected by your approach and do not affect your approach.

Key Takeaways

The selection of the implementation approach should be a business decision and should be made by those who face customers.

The impact of the approach is often underestimated. Impacts include transactional data loss, master data loss, extra cost for data migration, and effect on customers when information is left behind.

The 3 approaches are very different. SAP has provided options within the process to assist you in moving safely. Clear Tech understands that the system keeps changing, so a Greenfield approach may not provide much value.

Clear Tech offers no-cost workshops and assessments to help you get started on your SAP HANA journey.

Get unbiased advice on your approach to SAP HANA implementation. Schedule a Readiness Assessment with Clear Tech.

3 Steps to Setting up Your SAP HANA Journey

Posted on by analyticsinbound@gmail.com

Migrating to SAP HANA is a big step. Migrations are complex processes that can interrupt production and create the risk of losing data. Many companies have put off planning for their SAP HANA migration because of the pandemic. PricewaterhouseCoopers found that only 25% of companies surveyed have already migrated to S/4HANA. However, the longer such a major project is delayed, the greater the chance for error.

Preparation is the key to making a successful move to the latest generation of SAP HANA technology, if that is the right path for your company. To prepare for your SAP HANA journey, there are 3 steps you can take: building a business case, performing a technical assessment, and choosing an approach to implementation.

Here’s an overview of the 3 steps to laying the groundwork for SAP HANA migration:

Step 1: Building a Business Case

Before your company moves to SAP HANA, you need to convince business leadership that the move is a good idea. Company leadership wants to understand what the impact of the move will be on the business, what the related costs will be, and how it will benefit the business. Leadership needs to know that all the changes to processes, time, and expense are worth it.

Many organizations have an inflated view of the level of customization they need and mistakenly believe that S/4HANA is functionally incomplete. An SAP Business Scenario Recommendations Report (BSR) will give a more accurate picture of how current business processes map onto the new version of SAP HANA. By combining the findings of the BSR with a Technical Assessment, you can show business leaders how much customization, testing, and training is really necessary to make the transition.

Step 2: Performing a Technical Assessment

Along with the BSR, a Technical Assessment is an important way to prepare for SAP HANA migration. The Technical Assessment determines what customizations your company has and what T-code really needs to be changed based on usage and business impact.

Technical Assessments help remove fear and uncertainty by showing which transactions don’t need customization. Of the thousands of customizations most companies think they need, only 25% are actually required. In S/4HANA, some functions have been associated with other business processes and renamed. Out of the 25% required customizations, many are used infrequently.

By putting the information from the Technical Assessment in a graph or chart, you can visualize the findings, making it easier for business leadership to see where business impacts are going to be felt.

Step 3: Choosing an Approach to Implementation

Before moving to SAP HANA, your company must select the right approach to implementation. Clear Tech calls the 3 main approaches to implementation Bluefield, Greenfield, and Brownfield.

Every time SAP releases a new version, your company needs to perform assessments that extract data from your system and compare it with what is available through SAP HANA to determine the ideal approach to implementation.

The Bluefield approach is a hybrid approach that combines the Greenfield and Brownfield approaches. With the Bluefield approach, your company can retain the value of your existing solution while segmenting the go-live process for less potential disruption.

The Greenfield approach is a new implementation. With Greenfield, your company re-engineers processes and implements a new solution, surrendering all your historical data and starting over. This approach is the most disruptive and potentially expensive and should be undertaken if your current system really isn’t working for you.

The Brownfield approach is a migration that allows your company to leverage its existing solution. Tables are populated with data from your current system for a faster, less disruptive implementation.

Guidance Through the SAP HANA Migration Process

SAP has provided tools to help your company through the 3 steps needed to lay a foundation for an SAP HANA migration. Turning to a technology partner for guidance in choosing an approach and a hosting option may provide an unbiased second opinion about migration.

Clear Tech can take on the role as your trusted advisor. We offer many workshops and assessments related to SAP HANA migration, including an SAP HANA Readiness Assessment. We encourage you to involve your business stakeholders in these workshops.

Get more details on how to prepare for your SAP HANA journey. Read the Clear Tech eBook The Complete Guide to Upgrading to SAP HANA.