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Tuesday, 19 March 2019 16:54

Leveraging best of 'Green' and 'Brown' with Hybrid adoption approach for SAP S/4HANA

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Choosing the right adoption approach which maximizesbusiness value at reduced TCO is key

for enterprises embarking on a SAP S/4HANAdriven transformation. Depending on the extent of retention of currentinvestments and extent of redesign, the most commonly adopted approaches are Greenfield and Brownfield, representing the two extreme ends of a spectrum.

In a layman's terms greenfieldcould be compared to building a new house while brownfield could be compared to refurbishing existing house. Agreenfield approach primarily involves redesigning existing business processesin a new SAP S/4HANA system with SAP Best practices and Model company as areference. Business transformation along with business process/ modelreinvention are the key drivers. There is minimal or no reuse of existinginvestments on processes and solutions. Transaction and Master Data migrationis limited to open items and balances with no need of historical data. Deploymentcan be staggered or Big bang. Compared to this a brownfield approach representssimilar to technical upgrade and involves system conversion of existing SAP ECCto SAP S/4HANA based on a SAP guided tool based procedure with primarilymandated innovations. Existing enterprise structures, business processes,custom developments and historical data are retained. Deployment needs to bemandatorily big bang. The approach is preferred by enterprises who have amature process template with limited need of process redesign and would like toleverage existing investments while adopting the new innovations with S/4HANA

However, many large enterprises have a need of combining selectivebusiness process redesign in certain areas with high value realizationpotential along with reuse of existing investments/processes in areas withmature template and solutions. E.g. a enterprise has a mature finance processtemplate with Shared services setup and would like to reuse most of it whilefor production planning and procurement they would like to redesign/reengineerexisting business processes and template. Also in order to mitigate risk ofbusiness disruption such enterprises would like to go for a wave based rolloutapproach for deployment instead of big bang. All these requirements cannot befully met by either the greenfield or brownfield adoption approaches. Suchenterprises need a 'Hybrid' approach for S/4HANA adoption which combines the'best of green and brown worlds'. A Hybrid approach could also be looked asfurther variation of brownfield approach with more flexibility to decide theprocesses and solutions which need to be redesigned and those which should bereused.

How does Hybridapproach for S/4HANA adoption work?

While there can be multiple variations of thisapproach based on whether enterprises have a single instance or distributedlandscape, in this blog I will focus on explaining this approach for a enterprisewith single instance SAP ECC system.

Hybrid Approach for S/4HANA adoption with Shell copy

High level steps involved in this approach shown in Figureabove as below

Step 1: Create ashell copy of existing SAP ECC system leveraging tools like SAP LandscapeTransformation (LT) or third party tools like SNP. The shell copy contains onlyconfiguration, custom code from existing ECC system but no transaction andmaster data

Step 2: In theSAP ECC target shell, selectively modify or delete configuration to redesign orenhance the process template for specific areas. Also if required enterprisestructure elements like operating concern, controlling area, Chart of Accounts,plants etc. can be harmonized. Unused custom code can be deleted. Since thereis no transaction and master data in this system these changes are not complex

Step 3: Systemconversion of the ECC shell to S/4HANA using the standard SAP guided procedurefor system conversion with tools like SAP DMO and SUM. The custom code needs tobe remediated to meet the S/4HANA data model requirements. Again since there isno transaction and master data involved the conversion is pretty fast with lowdowntime. Perform delta configuration for S/4HANA specific innovations toenhance the process template for selective areas e.g. New Asset accounting inFinance

Step 4: MigrateMaster Data and Transaction Data to the S/4HANA target system leveragingstandard SAP tools like SAP Migration Cockpit, SAP Data Services. If historicaldata for past years needs to be migrated then additionally SAP LandscapeTransformation (LT) or third party tools like SNP need to be used. Themigration of data can also be done in staggered manner for thecountries/company codes Going Live in each Wave/Phase

The Hybrid approach leveraging SAP LT had also been referredby SAP as 'Blackfield' in the past. Similar approach with its variationsleveraging third party SNP is referred as 'Bluefield'.

Now, let us look at some of the key drivers andconsiderations for enterprises while evaluating the Hybrid approach for S/4HANAadoption as compared to Greenfield or Brownfield approach

  1. SelectiveValue based Process Reengineering: Enterprises who want to do selectiveredesign of their process template while reusing the existing template for mostof their processes should consider Hybrid approach. However, if majority of theprocesses need to be redesigned then a Greenfield would be more feasible thenHybrid.

  2. Staggereddeployment with Brownfield: Large enterprises with single SAP instance, operationsin multiple countries across the globe and a mature process template. Big bangwith Brownfield is a high risk option for such enterprises due to risk of businessdisruption across the globe. Hybrid approach provides flexibility for suchenterprises to safeguard their existing investments with reuse and alsomitigate the risk of Big Bang with a rollout approach phased by BusinessUnit/Org unit etc.

    However, on the flip side such enterprisesshould consider the additional cost and complexity of maintenance of duallandscape based solution with interfaces (ECC and S/4HANA) in the interimperiod

  3. StructuralSimplifications: Harmonization and simplification of existing enterprisestructure elements like Operating Concern, Controlling area, company codes,plants etc. in SAP while reusing the existing process template is also driverfor adoption of Hybrid approach. In a Brownfield approach such harmonizationwould need to be handled either in a pre or post system conversion phase

  4. SelectiveData Transformation: A brownfield involves full retention of historicaldata, while a greenfield primarily involves only migration of master data andopen items. Enterprises with need for selective historical data migration andtransformation based on various parameters should consider Hybrid approach

  5. Organizationalrestructuring: Enterprises embarking on Divestiture, Carve outs, mergersand acquisitions with a target S/4HANA system based on selective processreengineering and largely reuse of existing process template/solutions withselective transformation of historical data

  6. Multi-tenant Cloud Deployment: Enterprises adopting a S/4HANA Cloud multi-tenant(public) deployment option would necessarily have to adopt Greenfield approachonly. Hybrid and Brownfield approaches are not supported

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