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With a promise of easy maintenance and lower upfront costs, some companies are tackling an S/4HANA Cloud implementation. Getting it right, however, is now easy.
While the cost to transition is a very important part of the decision process, the benefits far outweigh the initial investment, said Oren Peleg, director of product management at Panaya, an Infosys company based in Hod Hasharon, Israel.
"It's about removing the need to handle the compute resources on the company premises: no need for hardware server experts [and] easy scaling on demand," Peleg said.
Using the SaaS version of S/4HANA means that SAP is handling all the upgrades and back-end maintenance, he said.
While an on-premises deployment is good for an enterprise that wants to use everything that they can in S/4HANA -- particularly compliance with industry-specific requirements and extensive customizations -- SAP S/4HANA public cloud is much more scalable, Peleg said. It can be tailored to grow as a company's needs expand, making it a better fit for smaller companies and companies newer to ERP systems.
1. Understand greenfield vs. brownfield ramifications
Since it's a move to the public cloud, an SAP S/4HANA Cloud implementation differs from on-premises installation in a few ways, such as the levels of customization. When shifting everything to the cloud, it may be difficult -- if not impossible -- to conduct a brownfield implementation, experts say.
"The most important thing [when] moving from ECC to SAP S/4HANA is to make the decision [on] whether it's a brownfield converting the existing ECC system to an S/4HANA system, or [a] greenfield, reimplementing your core ERP system from scratch," said Ekrem Hatip, senior solutions architect at Syntax, an ERP consulting firm based in Montreal.
Ekrem HatipSenior solutions architect, Syntax
If an organization is going with a brownfield implementation and plans to bring over most of its existing business processes and customizations to its S/4HANA implementation, S/4HANA Cloud won't be a viable option in most cases, Hatip said.
S/4HANA Cloud requires re-engineering a lot of business processes, which may be difficult for organizations that have been using ERP systems for decades, he said.
2. Address process and testing requirements
A cloud migration may be easier in some ways, but there are still a number of difficult issues to address.
Organizations that plan an SAP S/4HANA Cloud implementation will need to redesign their entire ERP systems, said Peleg. This includes redefining business processes and validating that everything works before a go-live.
"Make sure you did not forget any business processes and design all of them to perfection in order to make sure the business will run smoothly after the migration," he said.
Proper design and user acceptance testing will be critical at this phase, said Peleg. This is where many organizations stumble, and business user acceptance testing will be a major undertaking to make sure it all works.
3. Plan every step
Planning is a key component of migration. Organizations that want to shift off premises must take several steps, all of which need to be carefully planned in advance.
Create a coherent and clear-cut business case for migration and plan out each step on the migration path carefully, Peleg said.
"Several considerations need to be made ahead of time before deciding to move to the cloud -- licensing models, infrastructure needs, maintenance, customization needs and cost are just a few," Peleg said. "It really depends on what's best for your business."
4. Understand lift and shift vs. other approaches
Understanding the right approach for moving apps to the cloud is a critical component of a successful S/4HANA Cloud migration.
Architecture considerations -- especially regarding costs -- is a key consideration, said Vyom Gupta, executive vice president of enterprise cloud solutions at SmartShift Technologies, an IT company specializing in automated system transfers.
"Lift and shift might get you to a public cloud environment, but a solid understanding of cloud architecture and how to change your legacy applications to make them cloud-ready is critical to saving money," he said.
Additionally, choosing the right size will also help keep costs down, Gupta said.
"Having a thorough understanding of your application resource needs and peak periods is critical in selecting the right size cloud resources," he said. If you are using a resource with more CPU, memory and storage, then you end up losing a significant amount of money."
5. Tighten your security
Security processes will also be critical for any migration, including one to the cloud.
IT developers should be able to manage data access down to the transactional level, said Greg Wendt, executive director of Appsian, a computer software company that specializes in ERP data based in Dallas.
"A major concern with cloud migration, especially for ERP systems, is that you lose a degree of control versus on-premises storage," Wendt said. "With S/4HANA, it's important to acknowledge that enabling mobile access means the static roles managed and governed by GRC [governance, risk and compliance] modules may not be enough to establish security."
As a result, IT teams need to establish contextual controls to manage privileged data access, he said.
Ultimately, the decision of whether or not to transfer to S/4HANA public cloud will boil down to knowing what type of migration is needed, how much data will be moved over to SAP S/4HANA and whether the organization plans to extensively customize the new system. If it's a greenfield migration with clean data, organizations can "lift and shift" into SAP S/4HANA cloud, as long as they plan ahead and look at all the variables, such as infrastructure needs, security, maintenance and licensing models.