Choosing the Right Migration Strategy Towards S/4HANA

As digital transformation accelerates across industries, the shift from on-premise to cloud and the migration to SAP S/4HANA is at the forefront for many companies. Making the right strategic decisions during this transition is vital to ensuring efficiency, minimizing costs, and securing long-term benefits.

Understanding Migration Complexity and Key Considerations

Migrating an ERP system, particularly one as comprehensive and complex as a SAP implementation, is no small task. It requires a strategic approach that encompasses both technical and business objectives. Organizations need to decide on the scope and phasing of the migration, the resources and tools required… With 74% of projects experiencing significant delays, carefully evaluating migration options and ensuring thorough testing can prevent costly setbacks. Careful testing will also mitigate unforeseen costs, including post-go-live issues, scope reductions, and critical fixes, all requiring hypercare. It’s no surprise then that we often hear from organizations that approximately one-third of a migration budget is often consumed by testing alone.

On-Premise vs. Cloud: an essential decision

Moving from an on-premise system to a cloud-based one is one of the fundamental choices organizations need to make. While cloud environments offer scalability, accessibility, and often reduced hardware costs, certain industries or regions may show hesitation toward cloud adoption, especially where data privacy and regulatory requirements are stringent. Canada, for instance, has shown tendencies toward risk aversion, with organizations often preferring to wait and observe the outcomes of early adopters before making the leap to the cloud.

To bridge the gap, many companies are opting for hybrid solutions that combine on-premise and cloud resources. This approach allows of gradual cloud integration, providing the flexibility to move critical workloads and data over time, while enabling a smoother transition and compliance with regulatory needs.

Greenfield vs. Brownfield: tailoring the migration approach

Choosing between greenfield and brownfield migration is another critical decision. Both approaches offer distinct advantages and drawbacks, and the choice largely depends on the organization’s existing infrastructure and strategic goals.

Greenfield: starting afresh

Greenfield implementations allow organizations to start with a clean slate, configuring SAP S/4HANA according to current and future needs. This approach supports modern, innovative features and customization but requires a significant resource investment. A greenfield migration may extend project timelines due to comprehensive reconfiguration, data migration, and employee training requirements. However, the long-term benefits of aligning the system with evolving business requirements often outweigh the upfront investment.

Brownfield: leveraging existing systems

Brownfield migrations enable companies to retain existing processes while upgrading to SAP S/4HANA. With this approach, timelines tend to be shorter, and there is less disruption, as employees and systems are already familiar with core functionalities. However, companies opting for brownfield migrations may find it challenging to leverage the full capabilities of SAP S/4HANA if their legacy systems are outdated. If their SAP is highly customized, they will spend extra time reworking these customizations for the new platform. For organizations with well-established ERP processes and minimal change requirements, brownfield offers a practical and cost-effective path.

Testing is key to a successful migration

Testing is central to migration success, as it validates data integrity, functional compatibility, and system performance. At TTC Global, we emphasize testing at each stage, including performance, data validation, and infrastructure readiness. Key tools like Tricentis Tosca and qTest offer automated testing solutions and test management that enhance accuracy and reduce human error, while risk-based approaches (for instance through the use of LiveCompare) help pinpoint high-impact areas for focused testing efforts.

One significant testing challenge in migration is ensuring data accuracy during the transition. Even a minor data discrepancy can lead to costly errors, as illustrated by an instance in which a misplaced decimal point caused millions in losses. To avoid such issues, automation tools can minimize manual interventions, reducing the risk of such high-stakes errors while maintaining data integrity throughout the migration.

Performance and security testing

In cloud environments, performance and security concerns require close attention, especially since cloud migrations introduce new variables, such as latency and failover protocols. Testing in cloud-based environments must also align with cloud security standards and data protection requirements, which differ from on-premise environments. Utilizing specialized testing approaches ensures smooth system performance and robust security, addressing any latency or compatibility issues that may arise post-migration.

Business Process Re-evaluation: a golden opportunity

Migration to SAP S/4HANA provides a natural opportunity to revisit and optimize business processes. Tools like SAP Signavio facilitate business process mining, enabling organizations to reassess workflows and eliminate redundancies before transitioning to a new system. By avoiding a ‘lift and shift’ approach and instead optimizing business processes ahead of migration, organizations can streamline workflows, reduce inefficiencies, and improve the overall ROI of the new system.

However, few organizations reach maturity levels that enable such proactive process mining. When I visit organizations, I have the impression that most companies are at intermediate levels of quality maturity. Achieving higher maturity can lead to substantial cost reductions and improved efficiency, emphasizing the value of process optimization in parallel with ERP migrations.

Large-scale migration? Go for a phased approach

Many organizations choose to adopt a phased rollout approach to manage the complexity of large-scale migrations. By migrating specific business units or regions incrementally, companies can implement lessons learned from earlier phases into subsequent rollouts, effectively ‘eating the elephant one bite at a time.’ We have successfully used this approach for a Texas-based energy company with a global network, significantly reducing migration timelines by addressing regional requirements one at a time.

Phased rollouts not only enable early identification of potential issues but also facilitate smoother change management, allowing companies to adjust and recalibrate based on initial outcomes. This strategy is particularly useful for multinational corporations with diverse regulatory and operational needs across different markets.

Best practices for a smooth migration

1. Early planning and phase-zero preparation: Initiating migration discussions early helps align project timelines, budget, and resource allocation with realistic expectations. A phase-zero assessment can uncover potential blockers and prepare the organization for an efficient migration journey.
2. Comprehensive testing: Testing should cover all aspects of the migration, from data accuracy to infrastructure performance. Automated testing tools reduce the burden of manual checks, ensuring consistency and minimizing risks.
3. Engagement with expert partners: Partnering with experienced testing firms, like TTC Global, brings specialized knowledge and a laser focus on quality, offering tailored solutions that align with both global and local needs.
4. Adoption of automated and risk-based testing: Automation accelerates testing processes and supports long-term system maintenance post-migration. A risk-based approach ensures critical functions are prioritized, safeguarding core operations.
5. Change management and training: Providing training and support to employees is essential, particularly in greenfield implementations where new processes are introduced. An incremental rollout approach also helps manage change by reducing the immediate learning curve.

Engagement with expert partners

Choosing the right partner, with the right level of expertise and experience, is crucial when embarking on a migration. With many years of experience in migrations, TTC Global brings unparalleled expertise to SAP S/4HANA transitions. Our focus on testing, paired with our global reach and local approach, allows us to tailor solutions to specific client needs. Unlike larger service providers, we remain committed solely to testing, offering specialized services that support a smooth, reliable migration.

Our proven methodologies and comprehensive toolset, including readiness assessments, automated testing solutions, and a flexible global team, help companies navigate the complexities of migration with confidence. Whether implementing a greenfield or brownfield approach, TTC Global’s testing-centric strategy ensures that clients achieve an optimal balance of cost-efficiency, quality, and long-term ROI.