At the end of 2014, SAP announced that their core ERP solutions (ECC, …) will only be supported until 2025. This currently triggers many decision-makers to design their organisation’s strategy to move to SAP S/4HANA. One of this strategy’s key components is to decide how to implement SAP S/4HANA:
- Either to convert the current system landscape to SAP S/4HANA (= Brownfield Approach)
- Or to adopt the Greenfield Approach, pretending the organisation has never used SAP before and start from scratch.
In this article, you will learn why and how we implemented SAP S/4HANA with the Greenfield Approach at one of our customers in the machinery industry. These lessons-learned and best-practices will help you when you decide to adopt the S/4HANA Greenfield Approach at your organisation as well.
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
Global Business Blueprint vs Local Business Blueprint
In the case of a Greenfield implementation, we recommend you pay special attention to the blueprint phase. We even recommend you create both a Global Business Blueprint and a Local Business Blueprint. This has the advantage of bringing clarity to organisational structures, processes and functions at a relatively early stage of the project. Also, possible enhancements to the SAP Standard can be discussed relatively early in the project. Our customer’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.
Why the human factor was a critical success factor
Some of the critical factors in the success of any implementation project are hardly affected by technology but by the people at work. This is no different during the implementation of SAP S/4HANA.
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 method of working 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.
I highly recommend you create a communication template of this type because it provides you with:
- 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.
How to implement SAP S/4HANA
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
- Functional testing
- 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 a universal 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.
- Migration test.
- Go Live in April 2017.
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.
Early project acceptance by all involved parties
Solid basis for cooperation between the individual subsidiaries
Early clarification of any open issues
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 a HANA 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.
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.
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.