The good news is that regardless of the path chosen, SAP provides customers with a solid framework and generic tools for a successful migration. SAP partner Data Migration International (DMI) knows how to prepare existing ERP systems for the impending release change and how to keep future S/4 Hana systems lean, agile and efficient.
Thomas Failer, Group CEO of Data Migration International (DMI), talked to E-3 Editor-in-Chief Peter M. Faerbinger about the best way to Hana and S/4 as well as how DMI can help SAP customers manage their projects and accomplish their goals.
It’s hard to deny the necessity of an SAP ERP release change – even though there are also some in the SAP community arguing against it. Existing systems and business processes have had years if not decades to reach today’s technological maturity. Processes have been perfected, and users are familiar with them. Systems are stable, running at low operating costs in customers’ own datacenters. It’s easy to be lured into a sense of complacency, given how nicely everything seems to be working. However, most legacy systems are not ready to tackle the challenge of digital transformation.
SAP has acknowledged the need to transform. Its decision to provide customers with a new software generation is therefore a logical and necessary next step. Experts in the SAP community largely seem to agree. There is one challenge customers are facing, though: migrating to the new software generation is no ordinary release change.
S/4 Hana transformations threaten to require as many resources as a completely new ERP implementation – unless customers have an SAP partner and expert like Data Migration International (DMI) by their side. It would be irresponsible – careless almost – to forego the chance to benefit from this vast know-how and experience.
“The upcoming system transformation, the migration to S/4 and Hana database, is a challenging task,” DMI CEO Thomas Failer tells E-3 Magazine at the beginning of the conversation. “The more data and business objects you migrate from legacy systems, the more expensive the migration becomes, and the more time and effort you have to invest – during and after the move.”
From experience and many successful customer projects, Thomas Failer knows that the new SAP software generation offers the possibility to reduce the number of business objects from potentially 180 to 40 or 50.
New, innovative and different
Additionally, S/4 offers new and improved business objects. For example, formerly separate objects customer and supplier are now combined into one business object called business partner. Furthermore, the migration to SAP’s new software generation gives customers a unique opportunity to adapt and newly define their processes.
“SAP Hana and S/4 do not only provide the technological basis for digital processes and business models, but also actively enable and support them. Considering the new digital possibilities this brings, it seems nonsensical to migrate each and every business object, whether that be a standard object or an individually created one,” adds Failer.
This is not only true for business objects, however. The validity of data and documents needs to be evaluated as well. 90 to 95 percent of legacy information is kept due to legal, but also sometimes economic reasons. For example, let’s take engineering or construction. Instead of days, weeks or months, some customer projects take years and even decades to be completed. Even if their economic value justifies keeping them, most of these documents and data in SAP customers’ databases aren’t subject to change anymore. Compliance is the main reason to continue to store them.
“However, just because being compliant dictates to keep the documents unchanged doesn’t mean they have to be stored in legacy systems,” the DMI CEO explains. Hana is not fit for the task, since SAP’s new database generation requires completely new data structures, meaning data and documents lose their validity once they’re transferred. Only data needed in daily operations should be transformed and migrated to the new system environment.
Failer continues, “The rest of the data should be stored on a legally compliant platform with lower operational costs than existing SAP systems that guarantees access to legacy information in SAP S/4.”
Migrating to SAP S/4 Hana is a challenge on all levels of business and technology. Experts and SAP partners know that after years of corporate restructurings and modernizations, mergers, divestments, acquisitions and other events, ERP environments are complex, to say the least. SAP customers know that ERP systems become more and more complex with every market change, every new requirement, and, last but not least, every new release.
Consequently, the migration to S/4 Hana is a complex project. Without the right partner, the transformation could even be risky for companies.
Keeping all these things in mind, companies have to consolidate data and systems – involving all departments. They have to ensure transparency, comprehensive reporting, and compliance with tax regulations and legal requirements.
A common side effect of organizational transformation in general (but especially in the case of an S/4 Hana transformation) is that companies struggle with discontinuity concerning compliance. If information gets lost, cannot be accessed, or doesn’t correlate with new processes during audits, companies face hefty fines or criminal proceedings.
According to recent studies on the topic, data and system security are important topics for companies right now. The concerns of SAP customers are very valid, considering potential damage limitation efforts, system downtimes and subsequent costs.
Interfaces and data protection
An up-to-date and complete documentation of interfaces is a prerequisite for monitoring interfaces as well as for planning and implementing changes in system environments due to technological and business transformation projects. Experienced IT professionals always say that interfaces are critical for business processes because they ensure exchange of information inside the system and with external communication partners.
Considering the EU General Data Protection Regulation (GDPR), analyzing and monitoring interfaces becomes crucial for S/4 transformations. Evaluating interfaces before the actual migration requires accuracy and speed.
DMI’s analyses and preparations are indispensable for S/4 transformations because only holistic planning and comprehensive task evaluation guarantee success. DMI’s platform furthermore offers customers the possibility of cleaning and optimizing information, e.g. through combining or harmonizing data, before the actual migration.
“This is a huge chance for customers,” says Thomas Failer. “Only correct and meaningful data can serve as foundation for big data business cases. What is more, protecting legacy systems from cyberattacks and simultaneously complying with new data protection regulations requires a lot of organizational effort and monetary resources.”
In this context, it is important to mention the European General Data Protection Regulation (EU GDPR), says Failer during his conversation with E-3 Magazine. This new regulation means that companies have to be able to delete individual information purposefully. However, not all SAP customers have the necessary retention management functionalities to comply with it. Retrofitting systems would be laborious and time consuming – if it is even possible in the first place.
“A platform for storing legacy information can be so much more than just an archiving solution,” explains DMI CEO Failer. “It has to be able to manage the entire lifecycle of data and documents not needed in daily operations – from their migration up until their eventual deletion.”
Migrating to S/4 and Hana offers SAP customers a unique opportunity to tackle digital transformation, define new processes and establish digital business models. This pertains to all areas of business, whether it is about technological, organizational, business or licensing topics. Companies cannot let this opportunity to reduce business objects and operative information go to waste if they want to stay successful in the digital age.
Migration platform for S/4
“Our Information Management Platform JiVS IMP offers practical benefits for customers: operational costs are typically reduced by 80 percent compared to the continued operation of legacy systems; necessary financial resources and associated migration efforts can be cut in half; information stays 100 percent accessible; customers have 100 percent legal certainty; and JiVS IMP saves 25 percent of the total cost of ownership (TCO) of SAP’s new software generation. As part of the future system landscape, customers can continuously transfer data and documents not required in daily operations anymore to JiVS IMP. SAP S/4 and Hana consequently remain lean in the long term, which not only means increases in agility, but also reduced licensing, hardware and operational costs,” Thomas Failer explains.
SAP users and experts in the community know that every operational SAP ERP/ECC system is different due to countless modifications and numerous addons. Can there even be a general approach to S/4 transformation, then? Failer presses on, “As different as ERP systems may be, there are similarities in strategy. Hana and S/4 act as foundation for SAP customers’ digital transformation efforts. The common goal all companies share is to become more agile, as agile as big and famous digital service providers operating exclusively online. IT systems have to become faster in implementing and providing such digital services, often in combination with the existing portfolio of products and services.”
SAP users really do expect S/4 to bring higher levels of agility in different departments and in management, as they are used to them from public cloud deployments and even their own mobile phones. According to Failer, more agility also means to realize corporate strategies and business cases faster.
Digital transformation leads to corporate restructuring and reorganization, to divestments of business and departments, and to strategic mergers and acquisitions. IT systems are scrambling to keep up with all these changes, struggling to quickly and flexibly implement and support these measures in the systems or applications.
Agility and digitalization
On the challenges of digital transformation, the DMI CEO shares that, “Agile business scenarios, new digital processes and business models first and foremost need to be supported on the application and business object levels. They are subject to continuous changes – they have to be, now more than ever. On the data level, quite the opposite is true. Data needs stability.”
The question therefore isn’t how many business objects customers will transfer to the new software generation, how many objects exist in old and new application landscapes or how often these business objects are going to be changed and adapted in the future.
The question is, is there a standardized solution for all SAP customers? Yes, says Thomas Failer, adding, “There is a single best way for customers to migrate to S/4 Hana: separating applications and data. With JiVS IMP, our customers accomplish this separation primarily with data and documents not needed in daily operations anymore.”
SAP customers focus most on the core topics of data and business objects. “This is indeed the case,” reaffirms DMI’s leader. “From a business perspective, business objects are the most important topic, of course. This is where corporate agility develops and blossoms. Data, however, need stability more than anything. Up until now, many companies have tried to resolve this conflict the traditional way – their endeavors were doomed from the start. For example, they try to archive as many documents and data as possible through an ADK interface. They soon notice that the results fail to measure up to their expectations. SAP users who tried deleting material masters this way know what I’m talking about.”
SAP customers then only have two options: they either invest a lot of time and money in a laborious consulting project to reduce the data volume after all, or they transfer all data and documents that have accumulated over the years to the new solution. In any case, they have to continue to operate their legacy systems next to S/4 Hana.
A different approach
Traditional approaches like archiving or transferring all data in migrations cannot resolve the underlying conflict. A different approach becomes necessary.
Thomas Failer explains, “The strict separation of historical information and applications is the only viable way forward. S/4’s architecture is an ideal example of this approach – the different levels of data, applications and interfaces are more clearly separated from each other than ever before. This approach is not only optimally suited to support customers during the migration, but also before and after.”
Leveraging DMI’s approach, customers can reduce operational costs by 80 percent and more compared to the continued operation of legacy systems (which can be decommissioned completely, by the way). Migration efforts are cut in half, and the amount of data that has to be transferred can be reduced to a minimum – meaning, zero migration. The total cost of ownership (TCO) of the new SAP environment is reduced by 25 percent because outdated operational data and documents can continuously be transferred to the separate platform for legacy information.
At the same time, JiVS IMP guarantees 100 percent access to legacy data and documents including their business context while ensuring 100 percent legal certainty.
Acquisitions, mergers and divestments
When it comes to mergers or acquisitions, JiVS IMP users don’t have to transfer data from acquired systems. Information is stored and displayed in the operational systems. Regarding divestments of business, the information that needs to be transferred is selected on the level of historical data and is delivered in a neutral format. Rightsizing of SAP landscapes doesn’t require laborious projects anymore, but is indeed part of the system environment.
“The transfer of the complete information inventory from the legacy systems to our platform for information management JiVS IMP and the separation of the data that is no longer needed in daily operations which is to be transferred to the new systems are the link to the business object level,” Failer explains.
JiVS IMP defines the rules for this selective transfer of legacy data and documents and sends them to third-party solutions as whitelists. “We call this method ‘Separate first, migrate later.’ Between these two steps is where transformation happens, which is one of our software’s core competencies. Customers only have to define the business objects they need for supporting their processes in their new system and application landscapes,” says Thomas Failer.
A must for SAP customers
The success of big IT projects – undoubtedly also including the migration to S/4 Hana – relies on the right analyses, planning and execution methods. Having experienced partners by their side is a must for SAP customers. This is true for all IT projects but especially for S/4 transformations and when dealing with very heterogeneous systems which have been continuously modified and over the years have grown into colossal giants. Of course, there are risks involved in S/4 migrations like various recent examples show – companies have lost millions because of insufficient planning for their IT and business transformations.
Keys to success are thorough analyses and a comprehensive transformation approach based on modern and highly automated software solutions. The resulting risk reduction and gains in efficiency cannot be achieved with any other approach. Furthermore, the complete conversion of historical data is another security perk, since it guarantees compliance with tax regulations and data protection laws with minimal disruption of daily operations.
High levels of automation, fast migration and minimal downtimes simplify transformation. JiVS IMP reduces project durations and costs by up to 50 percent. With its analytical and strategic functionalities, the standardized DMI software offers thorough planning of future business scenarios and a comprehensive estimate of project costs.
Transformation of legacy data
But how should (and can) legacy data be technologically transformed? “The most important thing is the preparation, which we call Housekeeping,” Thomas Failer says about the roadmap.
“To ensure a clean and efficient transformation, all legacy data has to be migrated to a system-independent platform for information management. Let me use our own platform JiVS IMP as an example to be able to more precisely answer your question. With JiVS IMP, customers can automatically transfer data at the click of a button and are consequently able to completely decommission their legacy SAP systems. SAP data have to be stored with their business context, which is why the JiVS IMP platform has more than 1,200 predefined business objects, for example: FI documents, customer order, invoice, HR master records and so on, for relevant SAP modules. Data remain complete and unchanged, including tables and fields. Integrated JiVS IMP functionalities take care of configuration of data access.”
The most important thing to consider in these basic preparations is that historicized information remains accessible. Then and only then are companies able to only migrate data they need in daily operations, like open orders, to S/4. JiVS IMP offers customers a tool for analyses with various possibilities for parametrization.
For example, customers can sort information in the legacy system by how recent orders are (to guarantee that they are already completed) or by company codes and plants that aren’t in use anymore.
Master data and transactional data
Further selection criteria for an analysis of data reduction potential are organizational units, various kinds of master and transactional data, modules like MM/PP that are no longer needed, and basic or specific business objects. This analyses of potential results in whitelists or blacklists for management detailing which tables or fields should be transferred and which are no longer required.
“In this phase we call Identify, JiVS IMP simplifies the decision-making process by providing a precise argument for or against S/4 transformation. Numerous successful SAP customer projects mean that JiVS IMP is familiar with the data structures of different SAP releases, ranging from version 3.0 of R/3 all the way up to SAP ECC 6.0. Customers do not have to create selection criteria of their own, but only have to configure them in JiVS IMP,” Thomas Failer explains.
If companies have decided which data to keep operational and which to historicize, they can move on to the third phase after Housekeeping and Identify: Design. The Design phase entails more detailed planning of the impending data selection and migration which also happens on JiVS IMP. Selection criteria defined in the Identify phase are fine-tuned and tested so that data selection can be fully automated and SAP data are accessible in real time.
The Design phase offers customers even more benefits. For example, it gives companies a chance to decide whether they want to reduce the number of business objects in S/4 by either changing their processes or reverting back to the SAP standard. In general, this leads the 180 possible business objects to be reduced to maybe 40 or 50.
“After completing the Design phase, JiVS IMP provides customers with precise and tested selection criteria as whitelists and blacklists,” CEO Failer says, describing the workflow. “Customers therefore are free to choose whether they want to leverage SAP’s own conversion tool or third-party solutions for the transformation and migration of information. Alternatively, JiVS IMP can hand the complete data package over to SAP’s Migration Cockpit and third-party tools for extraction, transformation and (down-)loading (ETL). We call this handover the Transform phase.”
Greenfield or brownfield
In the past, the willingness to switch to S/4 has been greatly diminished by only offering two migration options: greenfield and brownfield. Time is running out: today, between 30,000 and 50,000 companies around the globe have yet to transform their systems. This results in a necessary migration rate of 100 companies a week for everybody to make it in time for SAP’s fromer end of support deadline 2025 – and this number is only growing.
However, numerous companies in the SAP community are already struggling with the lack of qualified S/4 Hana consultants in the market. Consequently, it becomes even more important to develop solutions that can support companies in their migration efforts and save valuable time and money in the process.
SAP itself is offering various solutions, like the program Move and suitable transformation software which can create system copies. SAP, Data Migration International and other IT experts are working closely together and making necessary changes to prepare the new S/4 systems for complete or selective data sets of SAP customers.
The ability to separate systems from data enables customers to develop an intelligent and low-risk transformation journey towards S/4 Hana. Leveraging this migration strategy, SAP customers are able to tackle business as well as technological transformation and enjoy the benefits of both greenfield and brownfield while cutting consulting needs and project durations in half. Furthermore, companies can integrate and continue to use existing solutions as well as data in S/4 systems.
Planning for S/4 has changed
Planning approaches for SAP S/4 implementations have changed. At the beginning of 2019, most surveys still indicated that customers preferred greenfield. Now, it is becoming ever more obvious that they actually favor manageable brownfield projects.
Following a brownfield approach, customers do not have to define new templates but instead can continue to use tried-and-tested solutions in S/4. Additionally, they can bundle project packages to reduce the number of projects and the timeframe of roadmaps.
“It makes sense that SAP customers would want to transfer their valuable legacy data. They need a flexible transformation approach to fulfill all of their requirements,” Failer adds, as he recounts from numerous successful projects.
Data selection and housekeeping are important in preparing for successful S/4 transformations. Are these two tasks a one-time thing or do customers have to expect to continuously repeat them with every new batch of legacy data in S/4? Failer chimes in, “This is the fifth phase of our model. We call it Operate. JiVS IMP is a platform that manages the entire lifecycle of historical data and documents, which means that it is designed to be a central, integral component of the new system landscapes with Hana and S/4.”
Avoid problems from the start
With JiVS IMP, customers can avoid many problems typical for existing SAP environments in S/4 right from the start. This includes continuously increasing resource requirements. As soon as data and documents are not needed in daily operations anymore, they can be historicized via JiVS IMP.
“S/4 consequently remains agile which reduces operational costs in the long term,” DMI CEO Thomas Failer affirms.
The information stored on JiVS IMP is not only valuable because of legal reasons, however. It also provides economical value. Different industries have different terms. The longer orders and projects take to complete, the more often do employees have to access historical information. A 360-degree view of customers furthermore also only becomes possible if users know how much information exists in total.
Switching between environments to accomplish a simple task is taboo in the cloud age, which is why Data Migration International is working on integrating JiVS IMP and new system landscapes even more closely. Whether they use SAP Fiori, S/4 or C/4, SAP users should always be able to access all available information. Furthermore, it should be possible to access this data directly through the respective SAP interface.
The earlier, the better
One last question for Thomas Failer: how much time do SAP customers have left to successfully migrate to S/4? The earlier companies start thinking about the implementation the better, as the SAP community knows. The transformation requires comprehensive planning and analyses phases. Beyond the actual migration, companies have to think about corporate culture and how to get employees on board to ensure acceptance of the newly implemented system. Only then can companies realize the full potential of S/4.
The migration project per se is therefore not the only construction site that companies are dealing with. If SAP customers are hesitant to follow through with S/4 transformation because of time, money or resource concerns, they can still achieve their goals if they at least start planning soon.
Thomas Failer exclaims, “It is of utmost importance that companies start planning the migration to SAP’s new software generation this year. Migration projects of major SAP landscapes have to begin in 2021 at the latest. Always a good point to start: consolidate and harmonize existing SAP landscapes. Legacy systems and archives can be decommissioned and gotten rid of. This consequently lays the groundwork for subsequent analyses of data reduction potential. Based on the results of said analyses, the design of the new process landscape as well as the necessary changes to business objects, the right dimensioning for S/4 is completed. Then, there’s nothing stopping the implementation from being a huge success.”
DMI CEO Thomas Failer highlights that the JiVS IMP approach can help even big and bigger SAP landscapes to make the deadline. “It’s definitely possible, but it’s too late now to take things slow.”
This is the first part of a two-part series. If you want to read the second one, click here.