For many organizations, migrating mission-critical legacy ERP applications and data to the cloud can be a daunting prospect. Migrating to the SAP ERP system, SAP S/4HANA is no exception. Recently, the American SAP Users Group (ASUG) asked SAP customers how many had completed an SAP S/4HANA migration. Only 16% had made the move to either SAP S/4HANA in the cloud or on-premises.
In this blog post, we’ll examine the obstacles preventing many organizations from launching an SAP S/4HANA migration, especially when migrating from an existing system on-premises to the cloud.
SAP S/4HANA in the Cloud: What’s Holding You Back?
Migrating workloads to the cloud lies at the heart of the digital transformation strategy for many enterprises. The latest Cloud Computing Study from IDG found that 81% of organizations house at least some applications in the cloud.
By late 2021, 59% of enterprises plan to house the majority or all of their workloads in the cloud. Only 5% plan not to leverage any cloud-based resources. Given the importance of digital transformation to business processes and today’s digital business models, we’ll see how long this tiny minority can hold out.
The study didn’t report on which workloads were still on-premises for these organizations, but it’s a safe bet many of them involve heavily integrated ERP (enterprise resource planning) systems. In a corporate fact sheet dated August 2020, SAP claimed that 77% of all business transactions worldwide touch an SAP system.
With so many touchpoints throughout the enterprise and into the supply chain, migrating to a cloud-based ERP software system is one of the most challenging digital transformation initiatives an enterprise can undertake. It’s understandable if SAP users haven’t yet jumped at the opportunity to migrate their core ERP to SAP S/4HANA in the cloud.
Here are three obstacles that often cause business and IT leaders to think twice about moving SAP S/4HANA workloads to the cloud.
1. Platform launch-related delays
SAP S/4HANA was first released in 2015. Early on, confusion regarding the migration path created some hesitancy. SAP also said they would be discontinuing support for SAP ECC, the predecessor to S/4HANA, in 2025.
Later, the date was changed to the end of 2027, with the option to pay higher maintenance premiums to receive support through 2030.
This gave users a little breathing room but also a reason to delay data migration planning. Still, experienced SAP administrators know the clock is ticking. Migrating to a new version of SAP can be a multi-year proposition. To go live before support ends, they will need to kick off a migration planning project soon.
2. SAP Cloud concerns
SAP solutions include a SaaS version of S/4HANA. This can be deployed in an SAP single or multitenant cloud. While SAP is the undisputed leader in ERP solutions, not every business or IT leader is ready to trust them with their cloud environment. For example, those organizations that leverage multiple clouds might have concerns about connectivity and latency between an SAP-managed cloud and dependent solutions running on AWS or Azure.
SAP’s cloud offerings have also created some concerns over control of the environment and applications. In an SAP cloud, the vendor maintains control over when new releases and upgrades are implemented. This can create concerns for enterprises when they have non-SAP business systems tightly integrated to their ERP backbone. Without the time to test the impact of a new release, they could find themselves scrambling to restore these connections.
3. Gap in talent and resources
SAP S/4HANA can also be deployed in a hyperscale cloud environment, like AWS, or in a proprietary cloud. However, these options require the enterprise to have both application, user experience, and environment expertise. It’s rare to find an in-house IT team with those skill sets, especially for an ERP system that’s been completely rearchitected.
Businesses often ask themselves: Has my team migrated an SAP instance before? Can my team manage a Brownfield or Greenfield deployment? Would my deployment require a third-party provider’s assistance?
In addition, unless using a third-party data center, a proprietary cloud deployment carries with it the same overhead burden as any other on-premises deployment. Most organizations migrate to the cloud to reduce or eliminate costs such as facility maintenance, investments in hardware, and staff expenses.
Brownfield vs. Greenfield: What’s the difference?
SAP S/4HANA migration projects typically fit into one of three types:
- Greenfield approach – This is one in which the organization is migrating from a non-SAP ERP application.
- Brownfield approach – A brownfield migration refers to a migration from SAP ECC to S/4HANA in which existing datasets are migrated.
- There is a third option that goes even deeper called Selective Data Transition. This usually refers to a migration in which the company is an existing SAP customer (like SAP HANA or ECC), but the SAP implementation is fresh. In this migration path, only select data sets are migrated.
Plan for and overcome SAP migration risks
Migrating to SAP S/4HANA requires planning, and application and environmental expertise. Unfortunately, many organizations that provide SAP migration services focus on one or the other. Working with a managed service provider helps organizations overcome many of the risks of an SAP migration and on-going management of their production environment. Providers work closely with your internal team to help overcome bandwidth issues and skill set gaps.
List of questions to ask for your SAP S/4HANA migration
During your migration planning phase, you need to answer these vital migration questions:
- Is this the right time to upgrade?
- Do we have the right system architecture for a smooth implementation and adoption?
- Will our data migrate as is? Or do we need to scrub/recreate some data sets?
- Should the migration be completed in phases?
- How long will it take to complete, and what are the milestones?
- How much downtime should we expect? How can we minimize the impact on business operations?
- How will we keep our data secure during the migration? How will we keep it secure once we go live?
By nature, ERP migrations are a project that involves many different individuals with unique skill sets from across the organization. Ensuring vital responsibilities are covered and assigning people to the right roles is essential to an effective, surprise-free transition.
TierPoint’s Managed SAP S/4HANA offering is an innovative and comprehensive solution for the modern enterprise that combines a best-in-class, high-availability private cloud platform with SAP Managed Cloud expertise. Managed SAP S/4HANA provides the benefits of the cloud (converting CapEx to OpEx, lowering overhead, reducing IT burden, real-time monitoring, etc.) combined with greater flexibility and control over your environment as well as expert SAP and cloud services.
To learn more about Managed SAP S/4HANA and our other managed services offerings, visit us on the web. You can also download our Managed SAP S/4HANA fact sheet and schedule a consultation with one of our SAP migration specialists.