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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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