Cloud options for your S/4HANA migrations: key considerations before making the move

When it comes to discussing SAP S/4HANA migrations, the topic is inextricably connected to a conversation about the cloud as this is an option for the solution. Knowledge and experience is required around the S/4HANA migration and cloud infrastructure management. The scenario can be further complicated if multiple cloud platforms come into play.

Furthermore, there are different cloud options available for S/4HANA, such as SAP’s own S/4HANA cloud version hosted in their own data centres, and then other cloud service providers that can host the application on their infrastructure. The question is: who can successfully decipher what is best for your business, migrate and manage the risk, while ensuring a return on investment (ROI) through business value?

Getting this right is important. Selecting what type of operating model will best suit an organisation’s needs is one of the most critical decisions when planning an S/4HANA migration. This decision largely depends on whether an enterprise is going greenfield or migrating or transforming its current SAP landscape, which S/4HANA functions it will need, and how they are going to be used.

Hence, the decisions that organisations make, specifically relating to their SAP infrastructure, can be crucially important, so it is key that companies are able to assess these environments to ensure that they have access to the right SAP infrastructure for every application.

This, says Graham Hartlett, specialised sales SAP consultant at T-Systems SA, can be crucial to saving costs and shortening deployment times, especially for customers who are planning their S/4HANA migration, where the cloud benefits of speed, flexibility and cost visibility will become apparent.

However, he says, as S/4HANA is relatively new, organisations could struggle to find experts with the requisite skills to manage this solution effectively, whether it is deployed on premises or in the cloud.

“For companies that decide to deploy S/4HANA on cloud, it’s a good idea to consider using a managed services provider, which would help them sidestep this issue by providing the needed skills to accelerate the migration process and optimise their ERP [enterprise resource planning] environment,” says Hartlett.

Cost increases

Skills availability will become a critical factor, especially for those enterprises that make the switch to S/4HANA later rather than sooner, as the late uptake will lead to huge shortages and cost increases for resources, he says.

“Considering that there are about 900 customers in SA that have SAP solutions deployed, there is a sizeable chunk that will need to plan for the S/4HANA migration by 2030. SAP S/4HANA migration skills are relatively scarce in SA and the later the migration, the higher the cost of these skills is likely to be due to the increased demand over a short period of time,” says Hartlett.

“The price per SAP consultant is going to spike horrendously closer to the deadline, while the availability of consultants is also expected to become an issue.”

Hartlett says the uptake of S/4HANA should not be underestimated, as an increasing number of organisations are seeing the flexibility and the benefits the platform offers.

According to an IDC survey, across a multitude of industries, 73% of the surveyed businesses were planning to deploy and 18% are currently deploying SAP S/4HANA. In the study, 9% of the companies said they already have SAP S/4HANA in production.

Making the right decision

Hartlett points out that organisations have the option of deploying S/4HANA on-premise, in the private cloud, the public cloud, or take a hybrid approach, with all these models presenting their own pros and cons. However, organisations should carefully weigh up these pros and cons and consider how their choice will affect their business.

“An on-premise deployment gives organisations full control of the hardware and software of their application and maintenance schedules, meaning that companies are not forced to upgrade in step with SAP’s annual innovation cycle. This is a good option for those looking for flexibility in terms of integration with other systems and custom enhancements,” he says.

The private cloud option is an on-premise implementation hosted in a secure private cloud. Software enhancement is allowed, but will increase the fees to run systems, as it’s harder to manage. This operating model allows organisations to use all available functions of S/4HANA on-premise, including maintenance schedules and enhancement options.

Hartlett says that for the public cloud model, SAP offers a pure Software as a Service (SaaS) option, hosted and managed by SAP with quarterly updates. This offering is somewhat limited and focused on specific industries, but the implementation time is shorter, and requires far less effort.

The hybrid approach is one of most practical ones for large organisations, as they can choose to deploy hybrid scenarios that combine on-premise and cloud models. This accelerates innovation and reduces IT resources in certain business areas, while keeping core systems robust and customisable.

Choosing the right partner can maximise the value of an organisation’s SAP deployment, Hartlett says, adding that not all managed service providers offer the same level of service. Enterprises that do not choose wisely could end up with levels of infrastructure and application maintenance that do not keep pace with their IT transformation goals.

A partner with the right experience will have tools to integrate the SAP ECC6 solution and determine the best way forward in terms of a greenfield vs brownfield approach, or an option in between:

Greenfield 

• essentially a new implementation;
• uses S/4HANA best practices to do business process reorganisation;
• best practice means less customisation;
• easier to maintain/upgrade; and
• current ECC6 solution is considered the “legacy” solution.
• •  

Brownfield

• conversion from ECC6;
• probably quicker process for most;
• software upgrade and migration/transformation of data;
• use the developments in the current solution,
• history is migrated; and
• consideration must be given to the degree of customisation in the current system and the affect this will have on S/4HANA. 
• •  

“Choosing the best approach requires discussion with the partner to identify operational objectives in terms of the move, your preference for cloud vs on-premise, and your needs in terms of customisation vs the ability to adopt SAP’s best business practices,” says Hartlett.

“Brownfield gives you the option of retaining some of the developments in the current environment, greenfield drives towards the adoption of SAP S/4HANA best business practices. The right partner can guide you through the decision-making process considering the point above, as well as the go-live process — phased vs big bang and the amount of downtime and, therefore, risk to the operation.”

Whatever decision criteria ultimately play a role in the design of an organisation’s SAP environment — choosing the right implementation partner is crucial to your operations. It comes down to choosing a partner with experience that — together with you — will find the right infrastructure and assist you with the implementation of new systems or the migration of legacy systems with the least risk and highest ROI.

For more information, e-mail communications specialist Thamsanqa Malinga on Thami.Malinga@t-systems.co.za, call 011-254-7400/083-301-7878 or visit the T-Systems website.

This article was paid for by T-Systems SA.