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What are the biggest or top challenges during Migration from SAP ECC to SAP S/4HANA?

Migrating from SAP ECC (ERP Central Component) to SAP S/4HANA is a significant undertaking for any organization. While S/4HANA offers numerous benefits, there are several challenges that organizations may face during the migration process. Some of the biggest challenges include:

1. S/4HANA Adoption Strategy and Implementation methodology selection for migration to S/4HANA:

Organizations need to carefully plan their S/4HANA adoption strategy. They can choose between greenfield (starting from scratch) or brownfield (system conversion) or Blue field (Selective data) approaches. Each approach has its benefits and challenges, and selecting the right one for the organization is crucial.

This is not truly a technical issue. Consultants working on the conversion projects must have clarity on a source and target system architecture and should also have clarity on different approaches so they can recommend best for you. Selecting an implementation methodology and preparing a conversion plan should always be the first step in any SAP S/4HANA conversion project. Consultants must understand the state of the existing application configuration, transactional and master data in the source system to develop a conversion plan that will be the least disruptive to the business. People involved in this analysis must have the appropriate skills set. Potential problem areas should be identified ahead of time to effectively mitigate the risk. Readiness Assessments and pre-analysis of the source system is a critical part.

The Migration approach to S/4HANA is different for every organization, but there are three main methodologies, and it is bit difficult for any organization to select that which one is suitable for him or her organization. This depends on the size and complexity of your current landscape. A Proper case study should be done to select right implementation methodology as it has huge impact on future. 1st wrong step can cost high.

2. Improper and Insufficient Preparation of the Source System:

Some time Consultants or User overlook some steps. They miss to execute few steps and lead to frustration in case need to revisit processes and it led to project timeline extension. The success of a conversion project is dependent on how carefully the source system is prepared, and how detailed planning is done.

3. Data Migration Complexity:

Data migration is one of the most critical and complex tasks in the migration process. ECC and S/4HANA have different data models and structures, which require careful planning and mapping to ensure a smooth data transition without any loss or corruption of data.

The process of transferring data from a source system to a target system is a core task for any conversion project. This activity must be completed very effectively to ensure data integrity.

Moving millions of records from SAP ERP (ECC) to S/4HANA is challenging in case conversion is not planned in well manner. Improper data transfer can lead to data loss. Or some time missing data goes unnoticed until a user or application calls for it – and it’s not there. Data might not be missing, but business cannot access it in target system. Data loss may increase budget, extend timelines and result in poor performance. During the Preparation Phase, all the sub ledgers must be fully reconciled and errors during reconciliation, must be cleaned up.

4. Custom Code Adaptation Complexity:

Custom code, enhancements, and modifications developed in ECC may need to be transformed to work with S/4HANA. The migration may require code adjustments or re-implementation of certain code and functionalities, which can be time-consuming and resource intensive.

Migrating any custom code to S/4HANA is one of the complex tasks in the conversion. During the conversion preparation phase, an intensive study must be conducted to identify and assess the use of custom code. This analysis is an important and major key point in deciding if the system should be converted or it should be re-implemented. It is important factor to decide on Migration approach.

If custom code that significantly resists modification and adaptation, then the source system must be analyzed. Custom code might be the backbone of information that flows within an organization or the main code that consolidates information. So, failure to adopt custom code may lead to serious business impact.

5. Functional and Business Process Changes:

S/4HANA brings significant changes to business processes and functionalities compared to ECC. Organizations need to reevaluate their existing processes and adapt to the new features and capabilities offered by S/4HANA. This requires thorough testing and training for end-users.

6. Hardware and Infrastructure Requirements:

S/4HANA has specific hardware and infrastructure requirements due to its in-memory computing capabilities. Organizations may need to upgrade their hardware to support S/4HANA, which can be a significant cost. Even though functionality has not changed, factors such as a change in the hardware, operating system, or database, may result in inconsistent output for the same functionality. All these important factors need to be addressed in the during upgrade and a through testing should be done considering hardware and infrastructure update.

7. Integration and Interfaces:

Integrations with other systems and third-party applications need to be re-evaluated and adjusted to work with S/4HANA. This requires careful testing and validation to ensure seamless data exchange between systems. In case integration stop working then it led to business loss and may cause major outage. Interface study should be done properly in term of adoption of interface with new system or to omit interface during migration.

8. User Acceptance and Training:

Moving to a new system requires user acceptance and training. End-users must be trained on the new functionalities to ensure smooth adoption and minimal disruption to business operations. Thorough testing is essential to identify and resolve any issues or bugs that may arise during the migration process. Enough testing ensures a stable and reliable S/4HANA system post the migration.

Testing must start from day 1 till go live. Consultant’s maximum time should be allocated to testing. It is not advisable to implement new functionality as part of the conversion project. If the goal is simply to retain existing functionality, comparison of outputs is good enough to determine the validity of the target S/4HANA system.

New functionality should be implemented only after conversion is successful and the target system is stabilized.

9. Timeline and Resource Constraints:

The migration process can be time-consuming and resource intensive. Organizations need to allocate sufficient budget, time and resources to complete the migration successfully.

10. Regulatory Compliance:

Organizations operating in regulated industries may face additional challenges related to compliance requirements when migrating to S/4HANA. Ensuring that the new system meets all regulatory standards is crucial.

11. Managing more than One system or technologies:

Different technologies are involved in the SAP S/4. Alongside the traditional ABAP development and customizing changes, need to consider changes to HANA, Fiori, Different interfaces, and BW system. So, it is crucial to understand the dependencies between different system and deploy them in sync. Without successful orchestration, the business may lead to risk that some of applications are not working partly or fully. This is worst situation and lead to panic outage.

12. Maintenance of existing and new system:

Double maintenance mean maintenance of ECC and S/4HANA both. Dual maintenance in SAP is crucial for organizations who can’t afford to pause critical business innovation during the migration to S/4HANA – a project that will take months or more likely years.

Delivering change to multiple landscapes simultaneously is challenging enough under normal circumstances but need to ensure that S/4HANA landscapes are kept up to date with any changes made in ECC. No matter which S/4 approach you take, dual maintenance is a must, and many organizations will need to continue maintaining both platforms simultaneously for years.

13. Legacy System Decommissioning:

After the migration, organizations need to plan the decommissioning of the old ECC system. This includes archiving and retaining historical data as required by regulations or business needs.

Successfully navigating these challenges requires careful planning, collaboration between business and IT teams, and engaging with experienced SAP consultants or partners who have expertise in S/4HANA migration. It is essential to assess the organization's readiness, set realistic expectations, and create a comprehensive migration plan to ensure a successful transition to SAP S/4HANA.

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