SAP S/4HANA transformation

However, the transition to SAP S/4HANA is not just a necessary system migration, but above all a strategic choice for companies. The transformation offers you the opportunity to modernize processes, utilize data in real time, and create a stable foundation for digital innovation.

The key benefits include:

• Real-time performance through in-memory technology,
• simplified processes and consistent data models,
• modern user experience and simplified use,
• Technological future-proofing with a well-designed ERP platform.

The SAP S/4HANA transformation is therefore not merely a necessary step to ensure the continued maintenance of existing SAP systems, but rather a strategic step that should be viewed as further development and should be planned and implemented strategically from the outset. In this article, we explain which points are important for successfully implementing the SAP S/4HANA transformation and creating sustainable added value for your company.

Switching to SAP S/4HANA makes particular sense if you view the transition not only as a technical obligation, but as a strategic investment and further development.

While the end of maintenance for the old version is a sensible reason to migrate promptly, it is also worthwhile for these reasons:

Changes within the SAP world

It is worthwhile to remain part of the SAP infrastructure – a complete system change is usually associated with significantly higher migration effort, higher risks and profound organizational changes.

Outdated process landscape

If your current ERP system has become so complex due to years of individual customization that updates are hardly possible anymore, switching to S/4HANA allows you to return to the standard (Clean Core).

Need for real-time data and greater transparency

If your company relies on fast analysis, up-to-date reporting, and data-driven decisions, you will benefit significantly from in-memory technology and simplified data models.

Focus on innovation and automation

If you want to advance topics such as cloud operations, process automation, advanced analytics or AI, SAP S/4HANA is the optimal choice as a modern and reliable ERP platform.

Optimizing the User Experience

With SAP Fiori, the transformation to SAP S/4HANA also offers the switch to a modern, role-based, and intuitive user interface. This improves user acceptance and supports more efficient work – including mobile and cross-departmental collaboration.

Scalability and future-proofing

Companies with growth plans, internationalization efforts, or evolving business models benefit from the platform's high scalability. It offers long-term maintenance reliability and a flexible foundation for future requirements.

There is no standard approach to migrating to SAP S/4HANA. The chosen method is always explicitly tailored to your existing system landscape, your business processes, and your goals. 

Three common and flexibly adaptable approaches are: 

Greenfield approach for a completely new beginning

The business processes are redesigned (based on SAP best practice processes) and initially implemented in a clean SAP S/4HANA system. Simultaneously, the migration of legacy data is planned. Migration and functional tests are tested and refined in several iterations. This approach enables a fresh start without legacy issues. Optimization potential can be implemented without restriction. These are the best prerequisites for setting up new standard processes and innovative ideas. 

This approach is usually useful when… 

• Your current SAP system is outdated, 

• You are planning a complete reorganization or restructuring of processes, 

• a switch from a non-SAP system to SAP S/4HANA is planned. 

Brownfield approach for direct transition 

Here, the existing SAP ERP system, including the data it contains, is technically transformed to SAP S/4HANA. If data, processes, and extensions are to be largely retained, the brownfield approach represents a faster, less risky migration. 

The brownfield approach is often used when… 

• the current SAP system is largely satisfactory, 

• There is time pressure (e.g., due to the threat of support being discontinued), 

• investments made in existing systems should be protected, 

• there is little willingness for radical change. 

However, it should be noted that some preparations must be made in the legacy system before the transformation can take place. These include, among other things:

• The introduction of the central business partner,
• the introduction of the new general ledger and the associated new fixed asset accounting, in order to transfer the accounting data into a ledger structure that makes sense for the company and should also remain in SAP S/HANA in the long term.
• Ideal: Archiving old, no longer needed data. This data often causes problems when converting to the Universal Journal.

Bluefield approach as a flexible mixed form 

This solution offers a flexible, phased transformation to SAP S/4HANA. The combination of proven processes and innovative approaches enables selective data cleansing and simultaneous optimization. 

We will put together a customized hybrid for you if… 

• only parts of the business or certain processes are to be transformed, 

• Data should only be transferred selectively, 

• the adjustments should be highly flexible,  

• The rollout should take place in stages (e.g., in groups). 

What initially deters many companies is that, like any migration, the transformation to SAP S/4HANA is a complex undertaking that goes far beyond a purely technical system changeover. During implementation, you will encounter a number of technical, organizational, and strategic challenges.

Lack of strategic goal definition

If the transformation is understood solely as a mandatory project, potential often remains untapped.

Solution: Clear, measurable goals and the early involvement of IT, licensing managers and all relevant departments ensure that SAP S/4HANA is used as a strategic platform.

Inadequate change management

New processes, user interfaces, and usage models often lead to acceptance problems and inefficient use without accompanying measures.

SolutionUtilize targeted training, transparent communication, and involve the relevant stakeholders early on. This will increase acceptance, promote compliant use, and ensure the sustainable success of the transformation.

Underestimated license and usage changes

With SAP S/4HANA, the licensing model also changes. In addition to classic user licenses, digital access from external systems and document-based usage now also play a role.

SolutionAn early analysis of system usage, interfaces and data flows creates transparency before unexpected costs arise – and should take place before implementation anyway.

Compliance and audit risks

Unclear licensing situations, undocumented interfaces, or historically grown in-house developments can lead to compliance violations – especially in the context of SAP audits.

SolutionA structured license and compliance assessment before and during the transformation ensures that usage, contracts and technical implementation are consistent.

Complex system landscapes and custom code

Extensive custom code and special solutions complicate technical migration and can trigger usage patterns relevant to licensing.

SolutionThe SAP S/4HANA transformation offers the opportunity to critically review in-house developments and align them with the SAP standard. Less custom code means lower maintenance costs, reduced licensing risks, and improved update capabilities.

Special challenges in the finance sector

In particular, SAP users who are still using classic profit center accounting should deactivate it at the latest when transforming to SAP S/4HANA.

SAP users who perform their financial data planning in SAP using planning transactions in Controlling (CO) and Financial Accounting (FI) face a number of challenges: SAP's best practice approach shifts the planning process from SAP Core to SAP Analytics Cloud. This is accompanied by the introduction of a new Universal Planning Journal (ACDOCP), running parallel to the Universal Journal for Actual Data (ACDOCA). The existing planning functions in CO can only be used to a limited extent.

Solution: It is necessary to consider redesigning the planning process and scheduling the transition.

With SAP S/4HANA comes a shift regarding the strategic tool for profitability analysis: While previously the cost-based profitability analysis was the recommended and more functionally advanced solution, SAP S/4HANA now introduces the new accounting-based profitability analysis, the so-called Margin Analysis. The latter is fully integrated into the Universal Journal. Cost-based profitability analysis can still be used. However, it will not be further developed, and no data transfer from profitability analysis to the Universal Journal will be provided.

Solution: It is necessary to consider a potential migration to the new Margin Analysis. This migration must be designed and planned separately. SAP does not provide a migration of historical data from the cost accounting system to Margin Analysis.

The aforementioned changes generally require a conversion of the reporting system based on the old data structures – to corresponding modern Fiori apps or at least to New GL reports.

A successful migration requires more than just technical implementation. Crucially, it demands a structured approach that considers strategic, organizational, and technical aspects equally.

Consider these tips before the transformation:

• Strategy before technologyAlways derive the planned implementation from your company's professional and strategic goals – before the transformation. The platform must adapt to you, not the other way around.
• Involve specialist departments from the beginningEarly involvement of your employees ensures that requirements are realistically defined and that the onboarding process can be as efficient as possible.
• Implementing transformation with professional partnersExperienced SAP partners contribute proven methods, technical expertise, and best practices. This helps to minimize risks and meet time and budget targets.

How long will the transformation take?

The time required for implementation varies greatly depending on company size, the complexity of the existing system, and the chosen migration path. For brownfield projects, it can range from six months to one year.

Greenfield approaches are typically more complex, as processes, data structures, and functions are completely redefined. Therefore, the time required is usually significantly higher.

Will my work be restricted during this time?

The ongoing operation of the existing system is generally not restricted during the transformation, as it remains operational until the go-ahead. Live usable in a productive way.

Restrictions may apply in the following areas:

• Resource commitmentStaff from IT and specialist departments are involved in workshops, tests, and acceptance procedures. This requires careful planning to avoid disrupting daily operations.
• Freeze period: Just before the go Live There may be a phase in which no or only limited changes may be made to the legacy system. This is important to ensure the data migration and system changeover is secure – but it usually takes place over the weekend.
• DowntimeEspecially in brownfield projects, where the production system is directly migrated to SAP S/4HANA and the data it contains is subsequently converted, downtime during a (possibly extended) weekend is necessary. Detailed planning and preparation (dress rehearsal) are essential.

Is the transfer of all data possible without any problems?

Technically, yes. However, from a financial data perspective, it's important to note that the conversion process merges data from the general ledger and subledgers (fixed asset accounting, accruals/deferrals, bank accounting, controlling, and material ledger). This naturally requires data consistency both within the subledgers and between the subledgers and the general ledger. Particularly when converting historical data, inconsistencies are generally found that can lead to problems and therefore need to be analyzed beforehand and, if necessary, corrected or archived (see Readiness Check (SAP), test conversions).

When is the best time for SAP S/4HANA transformation?

As early as possible – this way you avoid the time pressure caused by the end of SAP ECC maintenance. Furthermore, this gives you sufficient time to strategically plan the transformation, allocate resources effectively, and strategically leverage additional potential.

Does the SAP S/4HANA transformation only include the migration of SAP systems?

SAP S/4HANA transformation typically refers to the migration from SAP ECC to the newer system. However, switching from other systems is also possible. In this case, it is a new implementation (Greenfield approach).