SAP S/4HANA - conversions, greenfield and variability

Profile picture for user gonzodaddy By Den Howlett May 20, 2019
Summary:
Making the business case for SAP S/4HANA conversion is a fraction of what's needed to achieve success. Scoping and roadmaps come into play along with the variability of landscapes. In short - we need more stories.

Last week I reported on the IESA S/4HANA conversion. It was well received as our top story of the week but as I watched the Tweetstream I became increasingly frustrated and bemused at some of the comments. Before getting into that I want to step back three years. 

Vision, roadmaps and practices

At SapphireNow 2016, we were critical of SAP's pushing customers towards S/4 and not because of the howls coming from user groups about the lack of S/4HANA business case issue. While we accepted that business cases always need making and also recognizing the relatively weak position that SAP occupied at the time, we yelled most loudly about the lack of roadmaps and blueprints, a theme that continued through to 2017 to my knowledge.

At the time and from a conversation with Hasso Plattner, co-founder and chair of the SAP supervisory board:

I noted the knowledge transfer problem above and part of Plattner's response to me is that SAP has commitments from five of the top SIs and is creating programs for that group. That sounds familiar, representing a pattern we've seen before. Plattner gave a shout out to one (under non-disclosure) but it was only afterwards that I remembered the company to which he referred was one of the most commonly cited in older implementation failures.

I have no clue what has changed but I have to take SAP at its word that it is skilling up as quickly as it can. The problem comes in tracking down resources in the public domain.

To its credit, SAP got on the case pretty quickly as the business people realized that IT wasn't going anywhere without understanding the roadmaps.

Based on what we have heard in the market, and the most recent reports coming from both SAP and iTelligence, then yes - there's still a long way to go to get the main bulk of SAP customers on the S/4HANA train, but that train is in motion. But that leads to today's problem of scoping and variability. Depending on which number you choose, SAP has about 45,000 R/3-ECC customers who are candidates for S/4. In many cases, these will be conversions or, as some like to call them, upgrade candidates. 

Questions raised

And this is where my frustration/bemusement starts to kick in. On the one hand I saw this:

And this:

Then this:

Followed by:

As I worked my way through these Tweets and their inevitable retweets I started to ask myself the following questions:

  • Did people absorb the context of the IESA story?
  • How much of this matters?
  • Isn't it more important to know that I was listening to a beaming and delighted CFO talking about his 14 year old SAP system getting a refresh that works and was delivered on time and under budget?
  • Why all this stuff about Fiori?

More context

As I sifted through the questions, the obvious thing that came to mind is that Twitter isn't a great place for disseminating this kind of material. Then I questioned whether I'd done the best job I could in articulating what I heard and saw. The answer to that second question was 'sort of.' The questions about modules and Fiori use (or the lack thereof) are certainly pertinent and so I went back to iTelligence for more information. Here is what I learned:

  • ECC ERP 6.0 EHP0 to S/4HANA 1809 conversion
  • Classic FI/CO, SD, MM modules
  • 1,800 custom objects
  • Large estate of in-house applications, integrating to BAP|I's, DB extracts etc.

 

Two benefits I should have mentioned but which were not articulated in the first story:

  • Allowed expansion to the US market, gained from real-time S/4HANA capabilities where timezone differences were collapsing overnight processing timeframes
  • Reduced reliance on key personnel by bringing functionality back to the core

 

I make no excuses other than to say I needed to dash off to catch a train and didn't have time to pose those questions. 

A key reason for NOT reimplementing as greenfield rather than conversion was that after nearly 15 years running, the system was fundamentally sound but, as stated, this was always going to be a first step project. 

In short, while the company is NOT your F500/G2000 well-known logo brand, it has a typically complex yet stable landscape that serves business needs both now and into the foreseeable future. What it didn't have but for which the foundation is now in place was innovation led enhancements that add value to the service offering.

I consider that a perfectly valid approach and one I have successfully followed in the past because...the foundations that FI/CO. SD and MM that have been developed over 45+ years are not going away, regardless of innovation elsewhere. The way you process a transaction once that transaction is in motion is fundamentally the same across all businesses and that's not something anyone is likely to tinker with anytime soon. 

Variability

On the other hand, the manner in which those same processes are surfaced for current and future use can be innovated, but only where it makes sense. For example, playing around with Fiori tiles is great when you're at a desktop but if you're looking at stores replenishment on the shop floor then would that necessarily provide a better experience?

And did you notice that during SapphireNow 2019, the video of the futuristic, Matrix style screen showing a glittering array of dashboard components was one of the most popular? What they didn't tell you is you can't buy that setup. As always at these and other events, it was a concept designed to illustrate the art of the possible in a future state. If you are on the road to everything that S/4HANA promises, is it wise to take the time to consider ALL that's possible when you are as time constrained as IESA? 

In THAT context and with little visibility into its own customer landscapes, it is hard to see how SAP can offer a great deal of assistance beyond generalized best practice methodologies. But that can come through shared experience exposed either as case studies or SI prognostication. The question comes - who will jump first and how?

Final words

For our part, we congratulate both IESA on their project and iTelligence for doing 'the needful.' But at the same time, we are mindful that however customers arrive at their starting point for a S/4HANA project, the reality is that there is enormous variability in the customer ecosystem and, as my colleague, Jon Reed said on a debriefing call:

Assuming that one size fits all is a big mistake. 

Equally, taking advantage of components within the S/4HANA panoply is not something that you can set into a timeslot without recognizing the consequences for your project. 

And with that, Reed tells me that he has a clutch of S/4HANA related stories coming soon. Look out for those. And if you have other S/4HANA stories that help us establish a set of patterns then we're all ears and both happy to publish and discuss the same. 

In the meantime, I leave readers with this slide which I captured from the IESA story, which, I hope adds context as to the reasons why the project was treated as a conversion:

S/4HANA conversion
S/4HANA greenfield versus conversion