Businesses have until the end of 2027 to migrate from their legacy SAP ECC systems to the new and improved SAP S4 HANA.
During that time, SAP will be offering assistance with maintenance and offboarding for SAP Business Suite 7, with an optional extension until 2030.
This is a massive undertaking for any team that requires a concrete plan and a thorough understanding of the new system and the best method to move across. This overview will tell you everything you need to know about how to migrating with detailed steps for before, during and after and details on how Accounts Payable teams especially are affected.
We also have a detailed step-by-step guide on how to migrate your ERP system to S4 HANA so you can ensure your transition is as seamless as possible.
SAP S4HANA is a next-generation enterprise resource planning (ERP) suite that runs on SAP HANA and leverages the older tool’s in-memory database platform. Many businesses are choosing to switch over for its simplified data model and simple and intuitive user experience with SAP Fiori.
S4 HANA brings a number of performance improvements compared to older ERP systems like faster processing speeds, better analytics and improved decision-making abilities.
Ultimately, as with any software change, the primary motivation for a move to S4 HANA has to do with potential cost and efficiency gains. With S4 HANA, you can make more informed decisions quickly with real-time data and analytics. This in turn makes operations more efficient and reduces complexity in IT departments.
In terms of cost reduction, S4HANA's simplified data model requires less storage space, leading to lower infrastructure costs. Implementing S4HANA also reduces maintenance efforts, lowering the total cost of its operation in the long run.
Accounts Payable teams are often plagued by heavily manual tasks. SAP S4 HANA can automate tasks and provide real-time insights to help you drive process improvements.
The system's advanced features such as in-memory computing, predictive analytics and Machine Learning can also optimise invoice processing, further automate payments and improve accuracy in financial reporting. AP teams in turn will see greater efficiency, reduced manual errors, enhanced visibility into financial data and improved cash flow management.
The difference between migration and conversion depends on the extent to which you’d like to change your existing system.
Conversion is the Brownfield approach to implementing S4 HANA, which involves upgrading an existing SAP system to S4 HANA.
Migration, on the other hand, is the Greenfield approach to implementing S4 HANA, which involves moving from a non-SAP or legacy SAP system to a fresh S4 HANA environment.
You can learn more about the different approaches in an interview with Geyin Lee, Product Manager at Xelix, about the three things to note ahead of your S4 HANA migration.
When a company has invested heavily in tailoring their existing SAP ECC system to fit their specific business requirements, conversion will help carry those customisations over to S4 HANA. This method minimises the risk of losing custom enhancements and configurations.
The Greenfield method allows for a fresh start, simplifying the implementation process without the constraints of existing configurations or data structures. It also allows you to adopt new functionalities and best practices offered by S4 HANA.
Any migration comes with a number of complexities. For one, S4 HANA migrations have multiple layers of technical complexity such as changing system architecture, legacy integrations and additional infrastructure requirements. Cost is also a concern with the possibility of budget overruns and project delays to migrations complexities.
Another common concern is challenges around data migration. With large volumes of data to transfer and legacy systems to contend with, there's a high risk for inaccurate or incomplete data to surface in migration. This is one of the reasons why it's so important to have a clean master data set.
Finally, when moving to any new system, staff need to be trained. You'll need to devote additional resource to upskilling members of your team to ensure you're getting the most out of S4 HANA.
There are a number of solutions businesses can use to address IT resource constraints.
One option is outsourcing or using external consultants and resources to fill skill gaps, instead of spending additional time training your own team. You can also take advantage of automation tools to reduce manual work and alleviate resource pressure.
Another suggestion is to split the migration process into phases to avoid overburdening your IT staff.
Ultimately, the best way to address IT resource constraints is to limit the potential for errors that cause setback and additional resource as you migrate and follow best practices.
There are a few steps you can take to make sure your cloud migration runs as smoothly as possible.
You should first evaluate your network infrastructure and security requirements before cloud migration.
Ensure that before you migrate, you understand the regulations and data privacy laws such as GDPR. You'll need to be compliant with these regulations during migration.
Be sure to choose the right cloud platform that supports S4 HANA and is scalable for future growth. Some examples where you can start are SAP S4HANA Cloud, AWS (Amazon Web Services), and Microsoft Azure.
It's important as you migrate to back up your data regularly and run tests before finalising the migration.
Migrating is also made easier by choosing the right tools that are compatible with your ERP and your business.
There are a number of factors to consider when it comes to choosing data migration tools. These include:
Whatever tools you choose should align with both your legacy and new system, making your migration process smoother on both ends.
When migrating ERP systems like SAP S4HANA, ensuring data security and integrity is crucial. Several tools can support this process, including SAP Solution Manager, SAP Information Steward and SAP Advanced Data Migration.
Wherever possible, you should automate parts of your migration process to help reduce human error. Several things you can automate include data extraction, data mapping, data transformation, data loading, data verification and error handling.
Choose tools that can handle large datasets and multiple data types. This future-proofs your ERP migration so that all your operational needs will be handled both at the moment of migration and as your business grows and evolves in future.
Quality master data can have a big impact on the success and ease of an S4 Hana migration. Accurate and clean data guarantees the new system is populated correctly and minimises the chance of errors during migration.
Clean data ensures better reporting, analytics and operational efficiency in the new ERP system and prevents you spending time cleaning data after the migration.
This is why it’s important to resolve issues like data duplication and inconsistencies that are often caused from a dirty master vendor data file. Xelix helps you cleanse, optimise and secure your master vendor data file so you can be sure your data is up-to-date and accurate. It scans your master vendor file, alerting you to missing data, changes and potential threats.