A Program Managers Guide to an S/4 HANA Conversion

Embarking on an S/4 HANA Upgrade can be a daunting task, as it involves a major transformation of an organization's core ERP system. However, through careful planning and execution, it can become an achievable goal that brings significant benefits to the organization. At my company, we approached the S/4 HANA Upgrade by breaking it down into smaller efforts that could bring incremental value. The journey took approximately 4 years to fully realize our goals. Through this process, we learned a lot about what it takes to successfully complete an S/4 HANA Upgrade, and I want to share some insights and experiences in this blog post. I hope these 12 points with a few of our lessons learned can help other organizations embarking on an S/4 HANA Upgrade to achieve success and maximize the benefits of this powerful platform.

1. Invest in Determining the Right Strategy

Before embarking on an SAP S/4HANA conversion, it's important to determine the right strategy. This means evaluating whether a greenfield or brownfield approach is best for your organization. A greenfield approach involves starting from scratch, or a “re-implementation” of your system. This is best suited for companies who might be consolidating ERP’s or have too much customization and want a chance for clean-up. A brownfield approach involves migrating existing data and processes to SAP S/4HANA. This approach is best used when you have limited customizations, a “clean” system and want to retain the investment you already have in your system configuration. Careful consideration of the pros and cons of each approach is essential to make the right decision for your organization.

2. Break Down the Program into Smaller Project Efforts

An SAP S/4HANA conversion is a large-scale program that can take several years to complete. To make this program more manageable, it's important to break down the program into smaller project efforts that can bring incremental value to the organization. This approach can help you achieve quick wins and build momentum for the larger program. It also allows you to reduce the complexity of too much change management at one time. You will find that supporting these production releases will become much more manageable as well.

3. Get Executive Team Buy-In and Support

It's essential to have executive team buy-in and support across the organization. This support is critical to secure the resources and funding needed to complete the conversion successfully. However, getting leadership buy-in was not always easy, especially considering some of the horror stories that circulated about S/4 conversions gone bad. In our case, our board members had heard about such cases and were understandably cautious about embarking on a similar journey. As a result, we had to develop a clear risk mitigation plan and communication strategy about the benefits of the upgrade to bring them along and address any concerns they may have had. Determine the value of doing the conversion and tell it in a story. Speak in terms of deliverables and outcomes. By doing so, you will be able to secure the necessary support and resources to move forward with the project.

4. Build a Strong Communication Plan

Clear communication is crucial for the success of an SAP S/4HANA conversion. It's essential to have a strong communication plan in place that includes regular updates to stakeholders, progress reports, and status updates. For executives, you need to focus on the “so what”. Articulate the value and be clear on the support you need from them or their teams to be successful. Your communication plan should also include communication channels, escalation procedures, and contingency plans in case of any issues or delays.

5. Develop a Change Management Plan

An SAP S/4HANA conversion can involve significant changes to existing processes and systems. It's important to develop a change management plan that includes identifying what changes will occur, how they will be communicated, and how they will be managed. This plan should also include a training plan to ensure that everyone is up to speed with any new functionality in the system. As an example, Business Partner is a brand-new concept introduced in S/4 which will require training.

6. Assemble an Empowered Steering Team

It's essential to assemble a steering team that can help prioritize resources and make decisions. They must be empowered to support their decisions and implement changes when needed. This should be the prioritization engine for your effort for how work gets done and how to manage risks as they occur. This team should include representatives from each business unit and IT to ensure that all perspectives are considered.

7. Complete a BSR Report

Before embarking on an SAP S/4HANA conversion, it's important to complete a Business Scenario Recommendations (BSR) report. This report can help identify what customizations need to be remediated beforehand or as part of the upgrade. This report can also help identify areas where the organization can optimize its processes and shows where the most change will occur for your organization.

8. Identify Risk

Identifying risk is a critical step in any project. One area of focus for risk identification on an S/4 upgrade should be the Business Partner functionality, as this has seen significant changes in S/4 compared to ECC 6.0. Organizations should ensure that they have a comprehensive understanding of their current Master data and processes, and that they have a clear plan for how to migrate and maintain this data in S/4 (cleanly). Another area of focus for risk identification should be security, as S/4 HANA introduces new security roles and controls that may not have been present in ECC 6.0 (specifically Fiori). Organizations should ensure that they have a comprehensive security plan that addresses all areas of the system, including access controls, authorizations, and data protection. Both Business Partner functionality and security are "watch" areas that require ongoing attention throughout the project to ensure that risks are identified and tested in a timely manner.

9. Incorporate a Strong Testing Plan & Multiple "Mock Runs"

Test, test, test, and then test again. It's important to incorporate a strong regression testing plan to ensure that all existing functionality remains intact after the upgrade. You should also complete performance testing. In our case we were already using HANA as the underlying database and saw the performance increases in a previous upgrade. When we tested the performance after moving to S/4 we found some function modules were impacted and slower. This caused additional development for us to optimize these processes. Looking back, I wish we had invested more in automated testing. While it doesn't replace the need for testing, it would have helped streamline the project. We had over 2600+ scripts that we managed during the S/4 conversion itself.

Completing multiple mock runs before the actual go-live day is a critical step in ensuring success. These mock runs are essential to test the implementation "run book", validate the accuracy of the steps outlined in the plan, and ensure that everything works as expected. These mock runs should be treated as if they were the actual production runs, with all steps and procedures followed as precisely as possible. Through the mock runs, you can identify any gaps, omissions or issues, and refine the implementation plan accordingly. Remember, the implementation plan is gold, and having a well-designed plan is essential to ensuring a successful conversion. By putting in the effort to complete multiple mock runs, you will be able to identify and resolve any issues beforehand, which will increase the chances of a smooth and successful go-live.

10. Ensure Compatibility with Vendors, Bolt-On Applications, and Interfaces

An SAP S/4HANA conversion can involve changes to interfaces with other systems and applications. It's important to ensure that all your vendors are aware of the upgrade and are ready to support it. Ensure that your bolt-on applications and interfaces provide compatibility information and that you comply and test. Any necessary changes should be incorporated into the conversion plan. If you're interfaced with another product internally supported by another team, you may need their resources to spin up a project to support compatibility with S/4.

11. Ensure Data Integrity

Another critical consideration when upgrading to SAP S/4 HANA is data integrity. You must ensure that your data is accurate, complete, and consistent before you start the conversion process. Any errors in your data can cause problems during the conversion, and these issues can be difficult and time-consuming to fix after the upgrade.

To ensure data integrity, you should conduct a thorough data analysis and clean-up process. You will want business champions engaged for this. This process involves identifying and correcting any data errors, inconsistencies, and redundancies in your existing data. You can use data cleansing tools and techniques to streamline this process and ensure that your data is ready for the SAP S/4 HANA conversion. This is also a good opportunity for archiving!

12. Limit New Functionality for the Actual S/4 Upgrade

Limiting new functionality during the actual S/4 upgrade is important to ensure a smooth transition. Adding new features or functionalities during the upgrade process can create additional complexities and may lead to issues during or after the upgrade. This can become hard to troubleshoot and lead to unnecessary downtime. I recommend prioritizing new functionalities and adding them in phases after the upgrade is completed. This approach allows for a more manageable implementation and also allows the organization to fully leverage the benefits of the S/4 platform before moving on to additional functionality. It's important to remember that the first goal of the upgrade is to transition to S/4 and stabilize the system. Once this is done, organizations can focus on enhancing the platform with new capabilities.

Conclusion

In conclusion, starting an SAP S/4 HANA Conversion can feel overwhelming, but with careful planning, preparation, and execution, it can be a success. Ensure you have the right strategy in place while securing executive buy-in and dedicated resources with the right talent. As you move forward, it's crucial to understand the scope of change and develop a strong change management plan. Testing and compatibility with vendors are important factors to consider, along with limiting the introduction of new functionality when possible. I can relate to the stress of this process, as I have been through it myself. Having a clear risk mitigation plan and communications to bring the organization along was essential in getting leadership buy-in to the effort. I cannot stress enough the importance of completing multiple mock runs and having a backout strategy in place that you’ve tested before going live. I hope sharing my personal experience and high-level recommendations can be helpful as you prepare for your own journey.