SAP

Discuss business intelligence, integration, compliance and a host of other SAP-related topics – implementation, best practices and resources to negotiate the world of SAP better!

July 4, 2019

Moving to S/4HANA - What've you thought about MDG?

Metaphorically speaking, if digital core of S/4HANA is the nerve center of the enterprise then what is data? 

Answer-Nerve. Nerve needed to keep business process running in the enterprise within and across its organs (within digital core and across applications involved in the solution).

 

Good quality master data gives a solid foundation to a successful S/4HANA implementation. Further to propel enterprise throughout the lifetime it is critical to ensure consistent, current and relevant data supply and usage. Ensuring good quality master data can prove to be a keystone habit that can initiate a chain of positive outcomes for years to come.


If we analyze business processes running in today's enterprise (ECC) we will find these biggest challenges among other

  1. inaccurate or inconsistent data (example - inaccurate supplier master data in case of Procurement and Sourcing)
  2. Lack of Data ownership and process governance - questions such as who will manage, what data, and when
  3. Absence of data trace-ability and analytics
  4. Data not harmonized / information stored in multiple information systems


SAP MDG can help you overcome these data challenge associated with Business Partner, Supplier, Customer, Material and other domain specific solutions. Examples in Financials are CoA, G/L Account, Profit center, Cost Center etc. and Enterprise Asset Management (EAM) Via MDG Solution extension from Utopia along with SAP MDG's extensible application framework. SAP MDG act as "Single Source of Truth" for Master Data which provides centralized governance to keep one version of data flowing across the enterprise.  Capabilities in these data domains to author, collaborate between data owners and achieve highest data quality by using cleansing of data are important ones. You can take advantage of master data consolidation framework from MDG which provides an ability to identify, match and merge records and to create best record. Mass processing functionality helps you in handling bulk changes in much simpler and efficient way.

 

Inbuilt Data Replication framework (DRF) help you replicate data from MDG to other downstream SAP or Non SAP applications. Standard out of the box rule based workflow templates are available. Also ready to use integration with Business rule Framework (BRF+) helps setting up varied validation and derivation rules.


SAP NW MDM is on its way to sun set as per SAP's roadmap. NW MDM is a java based tool and SAP MDG is a business suit component of SAP S/4HANA which is on ABAP stack. We have observed that customers are moving from NW MDM to MDG as a preferred master data governance solution.There is no direct migration from SAP NW MDM to SAP MDG. The framework is completely different and there are no re-usable components between the two solutions. 


Standard data Migration approaches to be used to migrate data from NW MDM to MDG. Depending upon complexity, volume, target system etc. considerations ETL tool can be decided. What is important here is to identify which of these applications are playing source system role for initial data load to MDG in your target system landscape. 


There can be different starting points for Customers who wish to use SAP MDG in their target S/4HANA system landscape. Some of these are mentioned in picture below.


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With S/4HANA, customers use Standalone Deployment or Co-deployed on S/4HANA deployment options for SAP MDG. Each deployment option has its own advantages. A careful evaluation need to be done prior to deciding on strategy.



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MDG Hub deployment:


In this deployment, the standalone S/4HANA (or Suit on HANA system) is used for the activation of business suite component - MDG. This refers to the centralized HUB mode for the master data creation. This deployment is usually preferred option in case of heterogeneous environment where there is no single global system which can be representative of the entire set of systems.


The MDG hub will be the central system as "Single Source of Truth" where organization will have the Cleansed, harmonized and consolidated reference data and master data from the system landscape. Pros and cons of MDG Hub deployment are summarized as follows



Pros

Cons

MDG upgrade is not dependent on Global ERP upgrade

A separate HANA database and system  for MDG is required

Decoupled from Global ERP system maintenance cycles

Data migration to MDG hub from source systems is required (Initial data load at the time of implementation)

Allows fresh start with cleansed data (No prerequisite to cleanse data in downstream application first before implementing MDG)

Configurations needs to be migrated from Global ERP. Further, it is required to be maintained in sync (ongoing Customizing Synchronization)


Co-deployed Mode:


In co-deployed mode, MDG is activated on S/4HANA system itself. This option is well suited in simple system landscape involving an S/4HANA system and few downstream applications which receive their data from the former. S/4HANA system will have the global set of the reference data for the entire landscape receiving data.


Co-deployment option will bring benefits of out of box reports and analytics capabilities. The upgrade will happen hand-in-hand with S/4HANA system but customer can take advantages of integrated data models. Below table gives Pros and Cons of this mode.


Pros

Cons

No separate System (Hardware) for SAP MDG required.

MDG upgrade will be dependent on S/4HANA system

No replication of master data to S/4HANA (No cost of implementation and monitoring of replication interfaces)

Additional efforts needed to cleanse and consolidate existing data

No separate HANA DB required for search & Duplicate check

 

No additional Data migration to MDG, since it gets data from S/4HANA 

 



Lastly, these three important aspects you need to consider as well -  


SAP MDG product versions and availability SAP MDG is a business suite application and can be activated on SAP S/4HANA or SAP ECC. There is a product availability matrix provided by SAP to decide applicable version as per the current version of SAP ECC or S/4HANA.

Reporting or analytics for MDG: SAP MDG in any deployment option has 2 types of reporting associated with
  • In-built standard MDG Change Request based Analytics- This requires the standard BI content activation within MDG system which would enable MDG Change request based analytics activated. Out of the box MDG analytics offer reporting based on time and status of Change Requests
  • Reporting capability based on HANA analytics - MDG reports can be designed and modeled using HANA Analytics. HANA Analytics requires additional software component.

Integration scenarios for MDG: MDG as a business suit component offers Web Services which can be consumed by the inbound interfacing system to trigger change request in MDG. Outbound system integration - MDG offers services in form of Data Replication Framework (DRF) which uses the standard ALE functionality of S/4HANA. It also offers outbound web services. When MDG is on S/4HANA system it can replicate all the data to the active table in S/4HANA system. Thereafter, the standard integration methods of  S/4HANA can be leveraged (Point-to-Point or Middleware based).

Co-Author : Amit Patil (Amit_Patil03@infosys.com)

June 28, 2019

How SAP has evolved its flagship EWM product to be one of the leader in magic quadrant of WMS market

Once again in May 2019, SAP has made it to the top-tier quadrant of leaders offering WMS product in Gartner's 2019 Magic Quadrant of Warehouse Management Systems. This endeavor to become top-tier supplier of WMS product by SAP has long evolution story of about 2.5 decades.

Continue reading " How SAP has evolved its flagship EWM product to be one of the leader in magic quadrant of WMS market " »

June 21, 2019

Historic Data - Carry what you need in S/4HANA

Customers in their digital journey with S/4HANA are often perplexed on various questions pertaining to historic data. Such as how much history data is needed in future system? History data required at all in future system or only open transaction data will suffice? What are different ways to carry historic data from legacy system to future system? etc.


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In S/4HANA there are various opportunities to elevate current processes to next-generation processes. As we can imagine with popular examples of next-generation processes in front of us such as automatic invoice matching, predictive maintenance, managing stock in transit historic data is very essential. In this example of automatic invoice matching process utilizes artificial intelligence to automate the invoice to payment matching. AI uses matching criteria by learning from the historical financial clearing information. If sufficient history is not available, automation will not work as expected. Therefore, you need to transition history data to your new system to take full benefit from day 1 of operation in new system or wait for couple of years till sufficient history builds up in the new system.  

Running current processes in new system after transformation may need historic data, too. This can be further supported by process or compliance constraints. Service history, Spare Part consumption, and historic consumption data for forecast are few examples of processes which require history data. 


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While data is important and its importance is growing in digital world where this enterprise asset is often regarded as 'new gold' or 'new oil', it is also important to know what are the options available. Here are the options -



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  1. Open/Current Transaction Data in S/4HANA and keep legacy ERP on in read-only mode: In this option only open and current transaction data is migrated to Target system. Often we have history data belonging to these open transactions which we still need to be migrate. Example invoices already posted, partial good receipt against a Purchase order, delivery already made for an open Sales order. Data migration to S/4HANA can be handled using data migration tools which work in S/4HANA. Normally there is no impact on project timeline with this approach. This process has basic requirement on data reconciliation.

Users can be granted a read-only only access to refer any historic data they may need. Legacy system can be re-platformed to cheaper hardware to save cost.


  1. Open/Current Transaction Data and entire History Data in S/4HANA :  In a Hybrid or new implementation project, where open and current transaction data plus entire transaction data history migration to target system is required, customer need to get specialized Service for required tool and knowledge to achieve this. The historical data for entire duration (all fiscal years) belonging to the considered business can be part of scope. (E.g. - All closed Sales Orders, 5-10 years old  Projects/Sales Contracts etc.). Complexity in migration and data reconciliation will grow with differences in process design (process dissimilarity) in source and target system. Testing scope will be higher in this case.

Note: In case of System Conversion, Software Update Manager tool takes care to convert the legacy data in place during S/4HANA conversion.     

  1. Open/Current Transaction Data and Selective History Data in S/4HANA: Open and current transaction data plus selective data such as time sliced History (for example 2 or 3 fiscal years of data). The historical data for desired duration belonging to the considered Business is migrated. (e.g. open sales orders plus all closed Sales Orders within last 2-3 fiscal years.). Such project require deep knowledge of data models of source and target system, relationship and dependencies between different business objects in the scope. This scenario requires high level of alignment between various domains (finance, logistics) to give business rules for selection of data to minimize risk of data inconsistencies in migrated data. It will add to data reconciliation effort mainly. 
  2. Open/Current Data in transaction system and History Data in data retention solutions: Open and current transaction data is migrated to target system. Whereas, the historical data (complete or selective) belonging to the considered Business is migrated to inexpensive data retention platform. Example - Open sales orders in this example will be migrated to S/4HANA and all closed sales orders will be accessible from data retention platform). Archive technologies such as system decommissioning solution can be used on current ERP to make a snapshot available to access history data from an inexpensive platform. Alternatively, Business Data Warehouse can be leveraged. This reduces data foot print in target system and at the same time makes history data available to users on a data retention Platform.

May 31, 2019

Navigate your next to decision centric digital finance with SAP S/4HANA and disruptive technologies- Part 1 of 2

In today's dynamic business environment decreasing revenue growth, rising economic uncertainties, regulatory compliance and competition has created tremendous business challenges across industries. These challenges have put increasing demands on the Finance function to evolve from a transaction processing, historical reporting focus to a strategic advisor and valued business partner responsible for driving growth and profitability.  The role of CFO is continuously evolving to move from 'policeman' to 'entrepreneurial partner' accompanying the business evolution and adding value to both group and finance function brand by moving strategically towards a World Class Finance.  A truly world class future finance function in this digital world which is more agile, forward looking and decision centric should primarily meet most of the below objectives

  • True partner to business with customer centric focus

  • Business value centric and engaged with data

  • Leveraging innovation as a competitive advantage

  • Ensuring Healthy cash position enabling M&A strategy

  • Sustainable profit realization and productivity gains

  • Proactive risk mitigation and governance

  • Integrate Finance and non Finance information

  • Embark on new business models, become agile and up- skill teams

Such a future finance function of enterprises should include both basic capabilities and also differentiator capabilities below to transition from being accounting centric to decision centric


Figure 1: Differentiator capabilities for future of extended finance


SAP S/4HANA with its digital core and intelligent technologies like AI and Automation will play a major role in enabling these differentiator finance capabilities and to enable enterprises move up on the digital finance maturity scale.


Infosys with portfolio of AI and Automation services leveraging combination of In-house solutions like Infosys NIA and Assist Edge, 3rd party solutions like UI Path, Automation Anywhere  and SAP solutions like Leonardo is also enabling clients to realize their vision of future digital finance

Figure 2: Infosys AI & Automation services and credentials for digital finance

In the first part of this blog series, based on my recent experiences with some of the global corporations who have advanced on their journey of transformation to future digital finance, I will highlight some of the key future trends and solutions with SAP S/4HANA and other disruptive technologies in below three key Finance sub-functions:

  • Financial Planning and Forecasting
  • Reporting and Analytics
  • Period end closing and consolidation 

I. Financial Planning and Forecasting

Key trends:

  • Dynamic planning based on cognitive tools with predictive/prescriptive insights. Real time evaluation and analysis of new business models and M&A
  • Driver based modeling of 'what-if' scenarios and simulations to model and test the impact of changes to profitability before commiting to plans
  • Flexible frequencies of planning cycle with integrated financial and operational planning processes
  • Personalized KPIs, dashboards, processes and stories for simulative, collaborative and predictive planning
  • Detailed analysis of board level strategies and plans against any version of actual, plan, prior year or rolling forecast

Key SAP Solutions: SAP Analytics Cloud, BPC Optimized for S/4HANA, BPC for BW4/HANA, SAP Digital Boardroom

Other Intelligent technologies and automation solutions: Infosys NIA and SAP Leonardo based AI solutions for predictive planning and forecasting

II. Reporting and Analytics

Key trends:

  • Transformed board room experience with real time business intelligence and what if analysis to make decisions
  • Real time and multi-dimensional revenue, COGS, EBIT and profitability analysis
  • Predictive models for forward looking revenue and margin insights
  • Actionable insights embedded in business process analytics
  • Flexible adaptation of organization restructuring changes into analytics
  • Smart Alerts on budget overruns and to autonomously detect unusual business situations in revenue and cost accounts
  • Automated AI based reports mimicking human actions and analytics based 'what-if' simulations using structured and Big data

Key SAP Solutions: S/4HANA Account Based Profitability Analysis, S/4HANA Embedded analytics with Fiori, Design Studio and Lumira, SAP Digital Boardroom cloud, ML based smart alerts for P&L analysis on SAP Cloud Platform

Other Intelligent technologies and automation solutions: Infosys NIA based automated reports mimicking human actions based on AI, Infosys NIA based simulation and insights based on Cognitive analytics and Natural Language processing (NLP)


III. Period End Closing and Consolidation

Key trends:

  • Digital close with automated close execution and monitoring even in remote systems with real time insight into closing status and comprehensive analytics
  • Soft and continuous close capabilities with event triggered execution and real time reconciliations and derivations
  • Alert mechanisms and recommendations enabled by AI-based reports
  • Controls and internal audit executed by BOTS
  • Predictive accounting and close capabilities for quick corrections and data adjustments
  • Continuous Intercompany reconciliations with elimination of peaks during period end
  • Automation of repetitive period end close tasks with RPA BOTs
  • Coherent automated processes for GR/IR Clearing and Accruals Management with Machine Learning
  • Real time consolidation with full auditability and traceability to transaction data
  • Flexibility for local adjustments reflected in real time for consolidation
  • Multi-dimensional consolidated data analysis with Embedded Analytics for operational accounting and consolidation

Key SAP Solutions: S/4HANA Financial Closing Cockpit,S/4HANA Predictive accounting, Intercompany Reconciliation Tool,ML based Accruals Management and GR/IR Reconciliation in S/4HANA, S/4HANA for Group Reporting, SAP Analytics Cloud, SAP Disclosure Management, SAP Group Reporting Data Collection

Other Intelligent technologies and automation solutions: Infosys Hawkeye Cloud solution for business problem diagnostic capability for speeding period end close, Infosys Assistedge based robotics and process automation for period end close, Automation Anywhere RPA, Blackline Smartclose for close automation and reconciliation

In the second part of this blog I will highlight key future trends and next gen solutions in Finance sub functions of Treasury, Accounts Payables, Accounts Receivables, Cost Management, Taxation and Localization and Audit and Compliance


April 26, 2019

Become an Intelligent Enterprise without front-loading costs

Today, every enterprise wants to become more intelligent through digital transformation. Infosys, along with partners Microsoft and SAP, has built a composite technology stack for enabling this objective.

 

Drawing upon our collective knowledge and experience, we thoroughly analyze an organization, bearing in mind its size, industry, future imperatives and challenges to evolve a suitable business model and technology stack that will make it more intelligent. The end-to-end solution and services stack is developed on Azure infrastructure, and is built using the SAP S/4 Hana application and Infosys implementation methodology. The Infosys methodology covers the creation of an innovation environment, designing an appropriate business model, defining next-generation processes, implementing the ERP solution, and understanding how intelligent applications may be built on top of the ERP stack to deliver the desired outcomes.

 

A standout feature is that unlike in most transformations, where there are huge expenses in the initial years, here the cost is almost flat lined. This means client enterprises incur more or less similar expenditure throughout the duration of the project. What's more, the implementation partners share the client's risk by providing outcome-based services. All this lowers the entry barriers to transformation.

 

In the speaker session on May 7 at 4:00pm at Microsoft booth 729, Shyam Vijayan and I will explain the solution in detail and showcase its impact on a multibillion dollar life sciences company with 4 to 6 TB of data. We look forward to seeing you there.

 

 

Regional SAP NOW events present excellent opportunities

For the past several years, SAP has been hosting regional "mini SAPPHIRES" called SAP NOW in various countries. Their aim is to create awareness among customers and prospects about the latest innovations and provide a platform for interactions amongst customers as well as a forum for discussions between customers and partners.

 

SAP NOW Moscow is the largest annual SAP business forum in the CIS region. Over 6,000 professionals gather at SAP NOW Moscow to discuss innovative technologies and solutions that can help enterprises get the competitive edge and build smarter businesses for tomorrow.

 

SAP and its partners presented a large exposition with practical examples of how big data, machine learning, blockchain, IoT, cloud technologies, and SAP S/4HANA can enable greater efficiencies in business.

 

This year, the 1-day SAP NOW in Moscow (www.sapnow.ru) was followed by a 2-day technology conference called SAP Digital Exchange (www.sapdx.ru).

 

I had the privilege to host the SAP S/4HANA break-out forum on Day 2 and conduct 3 out of 6 sessions on that day. These included:

 

- SAP S/4HANA Cloud - The Intelligent ERP

- SAP S/4HANA - What's New in 1809

- S/4HANA Migration Tools and Migration Best Practices

 

After 19 years as an SAP veteran, it was for the first time that I was standing on stage wearing the Infosys "hat" and promoting S/4HANA from the perspective of a premium SI and implementation partner.

 

The impact of such conferences can be huge, especially if one delivers keynotes and speeches - and customers hear you talking. Customers are constantly looking for best practices, examples and guidance for their transition to SAP S/4HANA -- they are hungry for solid information that goes well beyond marketing messages.

 

As an S/4HANA expert, I was able to give customers both guidance and confidence for a successful transition. I also convinced many of them on the various benefits and quick wins of SAP S/4HANA.

 

To achieve this, I used selective live demos on an S/4HANA Public Cloud system (Advanced Financial Closing Cockpit; ML Cash Application; Demand-Driven Replenishment) to highlight the power and potential of this superior next-generation ERP. I follow the motto: "action speaks louder than words"; so, it is my firm belief, if you can show it, don't use slides to explain it.

 

Several Russian prospects approached me after my presentation and wanted to know more about Infosys. They sought to know how extensive was our presence in their market and the best practices we offer. In addition to these queries, two small local technology players approached me and asked whether they could do business with Infosys for add-ons and migration services.

 

I think these "small" regional SAP conferences provide an excellent platform for a direct and fast entry into new markets. While SAPPHIRE and TechEd conferences are certainly important, these regional events offer insights into the local customer base.

 

The CIS customers who attended SAP NOW Moscow see Infosys as a powerful strategic implementation partner for their digital journey . This was also endorsed by speakers from SAP and Metalloinvest, both of whom referred to Infosys as a leading implementation partner.


by Stefan Batzdorf, Senior Practice Engagement Manager, SAP Digital Sales, Europe

April 25, 2019

LARGE BRAZILIAN PHARMACEUTICAL COMPANY MOVES FROM SAP ECC TO S/4HANA

Infosys achieves successful conversion with smooth functioning from Day 1

 

Migration or conversion from SAP ECC to S/4HANA is an implementation method that it´s gaining increasing interest among SAP customers. Up until this Brazilian pharmaceutical company's SAP S/4HANA went live in Brazil and 12 other countries, there were doubts about the feasibility of such a change. SAP S/4HANA has mostly been implemented from scratch (greenfield), but rarely through a conversion process (brownfield). Despite of the complexity of this kind of project, Infosys and SAP together scripted our client's success story.

 

Of the few SAP S/4HANA conversion projects worldwide, none had been carried out in Brazil before. While pioneers always face challenges, client and Infosys made a clear commitment to innovation. On the first day of system go-live, client carried out operations smoothly across 13 countries. And today, after two months, everything still works perfectly. The client has already experienced performance benefits. A closing process that used to stretch over 12 hours now takes only 2 hours.

 

Infosys has always believed that conversion of SAP ECC to SAP S/4HANA was possible. The client's project has proved that conversion is not only feasible, but it is also an important transition scenario. Moreover, it could be a viable option for many enterprises. It can reduce cost and implementation time, as well as the involvement of business areas and impact on operations. With the expertise Infosys developed through this engagement, it is possible to execute similar projects with significantly lower risk and effort for clients.

 

SAP has already announced that the maintenance window for ECC will close by 2025 and this was one of the decision drivers for the client. The S/4HANA conversion involved 1,500 global users from the areas of finance, controlling, human resources, procurement, warehousing, production, maintenance, and quality. It required migrating about 2,400 programs and more than 70,000 ECC tables to S/4HANA. The change enabled, among other things, the use of in-memory computing for analytics, IoT for predictive maintenance, and AI/ML for fiscal compliance.

To know more about this journey, please attend my session on May 7 at SAPPHIRE NOW and meet our experts at Infosys booth no. 632.

How global eye care leader transformed its S&OP processes with a successful SAP IBP implementation

Our client is a global eye care leader with over 19,000 employees serving patients across more than 140 countries. Client offers a complete line of ophthalmic surgical devices, differentiated contact lens and lens care products to help patients with vision disorders.

The company was under pressure to reduce cost, replace antiquated systems, streamline processes, drive revenue growth, and recharge the customer experience. It was clear that merely a change in business model would not be enough. There was a strong need for business transformation to simplify and standardize business processes across all divisions and geographies.

Client decided to transform their global supply chain planning processes by implementing SAP Integrated Business Planning (IBP). This powerful cloud-based tool provides capabilities for demand planning, network deployment and requirements planning, constrained capacity planning, inventory optimization, and overall S&OP process management. A modern, user-friendly Excel-based front-end tool, IBP integrates disparate back-end systems and standardizes interface models to achieve end-to-end visibility across the entire supply chain.

For the implementation of this transformation program, Infosys was selected as their partner. We had a clear mandate to build templates and roll out demand planning (DP) and supply planning (SP) across over 60 affiliates and 10 manufacturing sites. Our goal was to optimize, integrate and standardize processes while reducing complexity and cost. By creating the right template, we could enable Alcon to meet their objectives.

For this Global scope and scale of the Program, strong Governance structure was essential. We achieved this by setting up work stream wise Onsite, offshore teams (located in 15 countries across the globe). To manage interface complexity (with localized and multiple JDE systems), Program had to setup stronger integration team.

Post the successful completion of the program toward the end of 2018, the client's  supply chain was transformed into a state-of-the-art planning platform.  There were huge improvements in balancing demand and supply, optimizing inventory, and proactively handling inefficiencies. 

The biggest benefit achieved is that all entities (affiliates, DC, S&OP, and plants) work with the same database and have visibility across the entire supply chain.  This in turn has helped supply chain planning users to leverage IBP effectively for better decisions that help patients in a timely manner.

I will present this success story at SAPPHIRE NOW along with client, this year on May 8 at 12:00pm -12:20pm in room NE512 (Network and Spend Management).

To share our lessons and experiences, I look forward to connecting with you at the Infosys booth 632


Future-proofing digital investments with SAP Cloud Platform

As businesses evolve, the IT landscape becomes increasingly complex. Today, the IT landscape and all enterprise applications need to provide greater agility  and keep pace with emerging technology trends and demands. SAP-based applications are no exception. With many larger corporations running their core ERP on SAP, the associated applications must be more intelligent, flexible, faster, and future-proof.

 

SAP Cloud Platform (SCP) is a comprehensive technology platform from SAP. Built on the latest technologies and an open source foundation, SCP provides enormous opportunities for organizations to develop digital solutions faster and more cost-effectively. SCP encompasses many technology components and services and provides support for different application development scenarios. Some of these are:

§  Building innovative applications using the latest technologies like AI, blockchain, IOT, etc.

§  Building mobile and portal applications that can connect seamlessly with on-premises and cloud applications

§  Extending cloud or on-premises applications

§  Integrating b/w cloud and on-premises applications

 One of our clients, a large US-based retail chain, wanted to implement a supplier self-service portal to streamline their supplier collaboration. Following due diligence, the client chose SCP portal services. The new supplier portal on SCP has resulted in over 90% effort saving on sharing of reports and 100% reduction in information delays. It has also significantly improved supplier collaboration and satisfaction.

 

To know more about this success story, please join me at the Network and Spend Management NE512 on May 7 at 12:30 pm ET.

 

We look forward seeing you there.

March 20, 2019

Leveraging best of 'Green' and 'Brown' with Hybrid adoption approach for SAP S/4HANA

 

Choosing the right adoption approach which maximizes business value at reduced TCO is key for enterprises embarking on a SAP S/4HANA driven transformation. Depending on the extent of retention of current investments and extent of redesign, the most commonly adopted approaches are Greenfield and Brownfield, representing the two extreme ends of a spectrum.

In a layman's terms greenfield could be compared to building a new house while brownfield could be compared to refurbishing existing house. A greenfield approach primarily involves redesigning existing business processes in a new SAP S/4HANA system with SAP Best practices and Model company as a reference. Business transformation along with business process/ model reinvention are the key drivers. There is minimal or no reuse of existing investments on processes and solutions. Transaction and Master Data migration is limited to open items and balances with no need of historical data. Deployment can be staggered or Big bang. Compared to this a brownfield approach represents similar to technical upgrade and involves system conversion of existing SAP ECC to SAP S/4HANA based on a SAP guided tool based procedure with primarily mandated innovations. Existing enterprise structures, business processes, custom developments and historical data are retained. Deployment needs to be mandatorily big bang. The approach is preferred by enterprises who have a mature process template with limited need of process redesign and would like to leverage existing investments while adopting the new innovations with S/4HANA

However, many large enterprises have a need of combining selective business process redesign in certain areas with high value realization potential along with reuse of existing investments/processes in areas with mature template and solutions. E.g. a enterprise has a mature finance process template with Shared services setup and would like to reuse most of it while for production planning and procurement they would like to redesign/reengineer existing business processes and template. Also in order to mitigate risk of business disruption such enterprises would like to go for a wave based rollout approach for deployment instead of big bang. All these requirements cannot be fully met by either the greenfield or brownfield adoption approaches. Such enterprises need a 'Hybrid' approach for S/4HANA adoption which combines the 'best of green and brown worlds'. A Hybrid approach could also be looked as further variation of brownfield approach with more flexibility to decide the processes and solutions which need to be redesigned and those which should be reused.

How does Hybrid approach for S/4HANA adoption work?

While there can be multiple variations of this approach based on whether enterprises have a single instance or distributed landscape, in this blog I will focus on explaining this approach for a enterprise with single instance SAP ECC system.



 

Hybrid Approach for S/4HANA adoption with Shell copy


High level steps involved in this approach shown in Figure above as below

Step 1: Create a shell copy of existing SAP ECC system leveraging tools like SAP Landscape Transformation (LT) or third party tools like SNP. The shell copy contains only configuration, custom code from existing ECC system but no transaction and master data

Step 2: In the SAP ECC target shell, selectively modify or delete configuration to redesign or enhance the process template for specific areas. Also if required enterprise structure elements like operating concern, controlling area, Chart of Accounts, plants etc. can be harmonized. Unused custom code can be deleted. Since there is no transaction and master data in this system these changes are not complex

Step 3: System conversion of the ECC shell to S/4HANA using the standard SAP guided procedure for system conversion with tools like SAP DMO and SUM. The custom code needs to be remediated to meet the S/4HANA data model requirements. Again since there is no transaction and master data involved the conversion is pretty fast with low downtime. Perform delta configuration for S/4HANA specific innovations to enhance the process template for selective areas e.g. New Asset accounting in Finance

Step 4: Migrate Master Data and Transaction Data to the S/4HANA target system leveraging standard SAP tools like SAP Migration Cockpit, SAP Data Services. If historical data for past years needs to be migrated then additionally SAP Landscape Transformation (LT) or third party tools like SNP need to be used. The migration of data can also be done in staggered manner for the countries/company codes Going Live in each Wave/Phase

The Hybrid approach leveraging SAP LT had also been referred by SAP as 'Blackfield' in the past. Similar approach with its variations leveraging third party SNP is referred as 'Bluefield'.

Now, let us look at some of the key drivers and considerations for enterprises while evaluating the Hybrid approach for S/4HANA adoption as compared to Greenfield or Brownfield approach


  1. Selective Value based Process Reengineering: Enterprises who want to do selective redesign of their process template while reusing the existing template for most of their processes should consider Hybrid approach. However, if majority of the processes need to be redesigned then a Greenfield would be more feasible then Hybrid.

  2. Staggered deployment with Brownfield: Large enterprises with single SAP instance, operations in multiple countries across the globe and a mature process template. Big bang with Brownfield is a high risk option for such enterprises due to risk of business disruption across the globe. Hybrid approach provides flexibility for such enterprises to safeguard their existing investments with reuse and also mitigate the risk of Big Bang with a rollout approach phased by Business Unit/Org unit etc.

    However, on the flip side such enterprises should consider the additional cost and complexity of maintenance of dual landscape based solution with interfaces (ECC and S/4HANA) in the interim period

  3. Structural Simplifications: Harmonization and simplification of existing enterprise structure elements like Operating Concern, Controlling area, company codes, plants etc. in SAP while reusing the existing process template is also driver for adoption of Hybrid approach. In a Brownfield approach such harmonization would need to be handled either in a pre or post system conversion phase

  4. Selective Data Transformation: A brownfield involves full retention of historical data, while a greenfield primarily involves only migration of master data and open items. Enterprises with need for selective historical data migration and transformation based on various parameters should consider Hybrid approach

  5. Organizational restructuring: Enterprises embarking on Divestiture, Carve outs, mergers and acquisitions with a target S/4HANA system based on selective process reengineering and largely reuse of existing process template/solutions with selective transformation of historical data

  6. Multi- tenant Cloud Deployment: Enterprises adopting a S/4HANA Cloud multi-tenant (public) deployment option would necessarily have to adopt Greenfield approach only. Hybrid and Brownfield approaches are not supported

 


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