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Decision-makers faced with the question of implementing SAP S/4HANA in their company have two options: Either the conversion of the existing system landscape to the new SAP database or to adopt the Greenfield Approach, pretending the organisation has never used SAP before and start from scratch.
To give you a little help with your decision, in this article I will show you why and how we implemented SAP S/4HANA with the Greenfield Approach based on a real project that we have implemented at one of our customers in the machinery industry.
Initial Situation: Why SAP S/4HANA was chosen to implement
Our customer is a global machinery and equipment manufacturer and market-leader in the pig-iron production. Their group activities include Engineering, Project Development and Supervision of the installation and commissioning of complete machinery and equipment components. In addition, a division of the group offers tailor-made services, especially in the field of integrated planning and interdisciplinary engineering for urban-development, high-rise building and infrastructure projects.
The Management faced a major challenge in 2015: the company had been strategically reorganised with new business units that would each be answerable for their results. At that time, the organisation was processed in SAP ERP through different systems and clients, each with its own solutions, each of which was segregated from the others. To depict the new structures, a central SAP-ERP system was essential in order to facilitate the creation of centralised solutions covering all the different legal entities, and to drive the harmonisation of processes and routines.
Since we at PIKON were already engaged as a long-standing consultancy partner with a thorough knowledge of business management processes, we were asked to support the customer during the blueprint and implementation phase.
SAP S/4HANA Greenfield implementation: decision factors
Most of our customer’s subsidiaries have been using SAP ERP for many years now; but partly with different releases and clients. There were also subsidiaries that had not yet implemented SAP at all. Due to the heterogeneous system landscape, some regional subsidiaries were using a multiplicity of solutions and there was no standardisation at all. Consequently, our customer was struggling to cope with increased costs, not only in system admin, but also with the roll-outs of other projects. Moreover, the differing systems made co-operation between individual sites, who would often work together on a customer project, more difficult. This made our customer decide to implement SAP S/4HANA (Version 1511), adopting the Greenfield approach.
Implementation S/4HANA: lessons-learned
The S/4HANA implementation was carried out according to the SAP Activate method. It comprises the following phases, which are designed to make the implementation process structured and efficient:
- Discover
- Prepare
- Explore
- Realise
- Deploy
- Run
The “Discover Phase” marked the start of the first project activities with the aim of working out the benefits and potential of an S/4HANA implementation. The focus here was on gathering information on the topic, creating a business case and empowering the project team for the upcoming project.
This was followed by the “Prepare Phase”, which marked the start of the project. The project team was now put together, a concrete project plan was defined and the necessary infrastructure for the systems and tools was made available. A kick-off was also planned and organised.
The two project phases described are very similar for the various migration scenarios of an S/4HANA implementation. They are therefore not discussed in detail here. The first differences only emerge in the “Explore phase”.
The Explore phase: business blueprint, slot leads, key users and communication concept
Global Business Blueprint vs Local Business Blueprint
In the case of a Greenfield implementation, we recommend you pay special attention to the Explore phase. The aim is to define the requirements and business processes. At PIKON, we document these in a central document, the Global Business Blueprint, which describes the company’s business processes, requirements and specifications for the implementation of S/4HANA.
The blueprint serves as a guide for system configuration and development and ensures that all business requirements are captured and taken into account. This has the advantage of bringing clarity to the scope of the project at a relatively early stage: organisational structures, processes and functions and also possible enhancements to the SAP Standard can be discussed relatively early in the project.
At our customer, our S/4HANA project therefore also began with the creation of a global business blueprint. In addition, there was also a local business blueprint for each company, in which deviations from the global business blueprint were described.
In our customer’s project e.g. the company’s policy prescribed that deviations from the Global Business Blueprint would be permissible only where there were legal requirements in particular countries (e.g. Luxembourg, Germany, Italy, Czech Republic) which needed to be implemented in the SAP system. These were then described separately in the Local Business Blueprint. Otherwise, deviations from the global blueprint, e.g. requests for changes to processes/functionalities, had to be approved by a steering committee. This ensured that all companies used the same processes (standardisation and harmonisation was one of the objectives) and that deviations were only possible in exceptional cases (e.g. if it was a competition-critical process).
At the end of the Explore phase, when the final concept has been finalised, a validation of the project plan and the associated cost estimate for the implementation is recommended.
In addition to these more technical activities, particular attention was paid to the people in the organisation during this phase. We are convinced that a project is always successful if, in addition to the business aspects and IT, the people who work with the system are involved in the project at an early stage and are able to contribute.
Why the human factor was a critical success factor
Right from the start of the project, slot-leads and key users who would be involved at the blueprint phase, and who would help define the requirements of the new system, were designated for each subsidiary. This approach ensured a high level of acceptance right from the beginning of the project. We informed the slot-leads and key users on a regular basis about the project progress. Moreover, we created a communication template, in which all the items for project communications were included. This also set out communication guidelines, to ensure that the lines of communication would function in a co-ordinated manner throughout the company.
Such a communication concept offers you
- a solid basis for cooperation between the individual subsidiaries,
- an opportunity to win acceptance of the project from the staff at an early stage,
- an opportunity to address and clarify any remaining issues as early as possible.
The Explore phase was followed by the Realise phase: the aim of this is to implement the blueprints.
The „Realize Phase“ of the SAP S/4HANA Implementation
In terms of Project Management, an implementation of S/4HANA is similar to an SAP ECC implementation. Even though there is a new database technology and there are new data structures, the general procedure to run this project has not changed that much.
As traditionally done in the implementation of an ERP system, we have gone through the following steps for the implementation of SAP S/4HANA at our customer:
- Customisation of the S/4HANA system according to the blueprint
- Functional testing by PIKON consultants
- Development and implementation of extensions and customisations
- Two integration tests, with the integration of all subsidiaries. We conducted these tests within the individual modules and processes (e.g. FI, CO, PS, etc). Once this was done, we did cross-functional tests. These are tests of an end-to-end process through all modules and processes (i.e. from sales, through the project execution, to project controlling).
- User Acceptance Test: our focus was to depict the processes, and to integrate individual modules and departments.
- data migration test
It is also worth mentioning that we conducted the tests centrally at the headquarters. This did admittedly involve a great deal of organisation, since a large number of participants needed to be coordinated together. However, the effort was well worthwhile. The various employees who would in future be working together on a particular project got to know each other. The cross-departmental tests provided an opportunity to clarify any open issues on the spot, with everyone taking part.
Well-considered enhancements to custom developments as a critical success factor
Together with our customer, we paid special attention to custom developments. We find again and again we find that our customers can never benefit from the full potential for optimisations of an SAP S/4HANA migration, unless the necessary adjustments to custom developments are properly analysed. The adjustments required in this customer situation emerged after an analysis which entailed the following questions:
- First and foremost, have database reading operations been optimised, or are further improvements still required here?
- Are there any errors in the current code, such as implicit classifications that emerge only after the migration?
- Are there any structures, objects or modules used that will no longer exist in this form after the implementation of S/4HANA?
If performance does not play a vital role, will custom developments still run on S/4HANA? Therefore, a review relating to points 2 and 3 should be carried out. The ability to run programs that are a legacy from “old” structures could if necessary be achieved using compatibility views. These will continue for example to make “old” tables available.
Deploy phase: the go-live
After the realise phase, the go-live was prepared and the cut-over activities started. This is where the final data migration to the production system took place. The go-live took place in April 2017. Further roll-outs followed over the next few years.
Run phase: ongoing operations
The run phase marks the end of the actual project. It ensures stable and efficient system operation as well as continuous improvements. In this specific case, these tasks were taken over by the customer’s IT department. We at PIKON only provide support here if required.
Finally, it should be mentioned that these phases are iterative and need to be customised depending on the project requirements and the needs of the company. For our customer, this approach was coherent and led to a successful S/4HANA implementation.
Conclusion
The implementation of SAP S/4HANA with a Greenfield Approach offers many opportunities to optimise your historically-evolved processes and to get more standardised processes, thereby making your organisation higher-performing and fit for the future. Don’t waste this opportunity. Before you start your own SAP S/4HANA implementation, we recommend you allow time for a reflective phase in order to put the spotlight on these matters.
Our reflection questions provide orientation and impetus for internal discussion. We shed light on the following areas
- Systems, structures, data
- processes
- IT and corporate strategy
Download our reflection questions here and discuss with us how the initial situation for an S/4HANA implementation in your company is shaping up.
Or arrange your workshop on the greenfield approach or the workshop from our range that suits your situation:
S/4HANA workshop offers
Are you just starting out with S/4HANA? We will give you an initial overview.
You will learn about the innovations in S/4HANA in logistics, accounting and the user interface. In addition, migration scenarios and appropriate project approaches.
Time required: 0,5 days
You have the task to develop the S/4HANA strategy in your company? We teach you the cornerstones of the S/4HANA implementation.
Effects on business processes, organizations, master data and employees are topics of the workshop as well as migration scenarios and target architectures.
Time required: 1 day
You have already gained an initial overview, but have further questions on various points? You can put together your own workshop from a modular system of possible in-depth topics. As the workshop is put together individually for you, the required time is not fixed.
Time required: 0,5 – 2 days depending on individual arrangement.
The S/4HANA implementation “on the greenfield” is already set for your company?
In the workshop, we develop together with you the appropriate roadmap with time and budget planning and address topics such as data transfer, preliminary work, etc.
Time required: 1 – 2 days, depending on individual arrangement.
You have decided on Conversion as the scenario for your migration? Learn in the workshop how to best approach your SAP S/4HANA conversion project and develop your digital roadmap.
Time required: 0,5 – 2 days depending on individual arrangement.
1 thought on “SAP S/4HANA Greenfield implementation to be fit for the future”
Hi Jochen
Interesting article and good read on S4Hana Greenfield implementation.
Please do share with me your experience in S4 Hana Implementations with a presentation about your organization. Detailed Plan on how do you go forward with S4Hana Implementation, with timelines and high level pricing.
Once I receive this, lets take the discussion forward.
Regards
Mukund KS
Associate Director – IT
mukundks@drreddys.com
mukundks07@gmail.com
(Do Copy your response to both my mail id’s)