To drive digital transformation and better business outcomes, upgrading or replacing legacy software is inevitable. After all, it is not possible supporting the business models of tomorrow — on-demand, digital, mobile-first, and global — with yesterday's technology and operational foundations.

In practice, many businesses rely on mission-critical applications like SAP for their daily operations. To effectively advance digital transformation ambitions, businesses running on SAP are moving their critical workloads and applications to cloud; convert legacy ECC assets to SAP S/4HANA and move to cloud. Given the many advantages of the cloud, this should come as no surprise, since SAP has announced to stop supporting SAP ECC and legacy systems by 2027.

With the power of HANA's in-memory database combined with the size and flexibility of the cloud, SAP S/4HANA can offer the speed, flexibility, simplicity, and quicker analytics that today's highly agile business models require. Yet, amid this promise, lies a challenging journey that every organization contemplating SAP S/4HANA migration on cloud must embark upon.

In this blog, we will discuss the challenges that organizations face during SAP S/4HANA migration and modernization on cloud and how to avoid them. We will also discuss the rewards of S/4HANA migration, strategies for avoiding common pitfalls, and finally, the advantages of taking fully managed partners along the journey.

Benefits of S/4HANA Migration and Modernization on Cloud

Efficient Data Processing:

S/4HANA is built on the SAP HANA in-memory database, which provides faster performance and improved scalability. This paired with the benefits of cloud allows organizations to process large amounts of data quickly and efficiently, enabling faster decision-making and improved productivity. Effective data management is also essential during the migration process to maintain data synchronization and accuracy across all SAP S/4HANA modules.

Streamlined Business Processes:

This is possible due to the simplification of data structures and operational procedures which aid enterprises in streamlining their business processes. This can be accomplished by having access to the most recent technologies, such as AI, chatbots, and IoT, as well as automated upgrades every quarter, process automation, and business models that are simpler to change. Additionally, moving SAP S/4HANA to the cloud helps improve analytical decision-making across key business ecosystems, a boon for any modern enterprise.

User-friendly Design:

S/4HANA comes with a significant step forward in terms of product and end-user experience. The migration on cloud provides a modern, intuitive user interface that is easy to navigate. SAP S/4HANA migration on cloud basically makes it simpler for all of its users to operate the system, which in turn helps in better user adoption, higher productivity, and reduced training costs.

Optimized Resource Utilization:

By converting SAP S/4HANA on the cloud, businesses can consolidate their disparate resources and improve their IT infrastructure by utilizing public or private cloud installations. Businesses can simply scale their resources up or down based on their needs at the time, pay only for the resources they use, and access SAP S/4HANA from anywhere, at any time, using any device.

Better Security:

Migrating SAP S/4HANA to the cloud can help organizations become more risk-proofed by taking advantage of the security features offered by cloud service providers. Data encryption, intrusion detection, and threat management are all features that make cloud infrastructure a more secure technology. Additionally, this migration helps businesses to greatly improve their disaster recovery capabilities.

Common Pitfalls in S/4HANA Migration on cloud and Modernization

For most businesses, a SAP S/4HANA migration on cloud can be a complex project and can take months to accomplish. Hence, understanding all the potential roadblocks is critical to eventual success. Here are some of the possible pitfalls:

Unrealistic Expectations

One common pitfall is having unrealistic expectations about the migration process and the benefits of it. The attempt by many businesses to modernize everything at once or do so in a fragmented manner might cause delays and expense overruns. Understanding the technical objectives, the process's requirements and potential rewards realistically is crucial.

Lack of Business Case

Another common pitfall is a lack of a clear business vision for the migration. CXOs or IT leaders might feel pressurized to migrate their S/4HANA systems on cloud, without fully blueprinting the long-term benefits or risks. It is important to have a clear understanding to ensure that it aligns with the organization's current and future goals.

Inadequate Planning and Preparation

During the migration process, poor planning and preparation can cause delays, less-than-ideal results, cost overruns, and other problems. Organizations need to create a thorough migration plan that includes schedules, budgets, and resource requirements to prevent this pitfall. Employing seasoned cloud service providers and adhering to best practices for SAP S/4HANA migration on cloud are the best ways for businesses to avoid unnecessary and most importantly, avoidable risks.

Insufficient Testing

Incomplete and insufficient testing may lead to disruption or inefficiencies, and this can cause a serious business impact. Creating a thorough testing plan that includes unit testing, integration testing, and user acceptability testing is absolutely crucial to avoid this pitfall. The testing units can create a test environment that is like the production environment or as close as possible. This will offer a chance to resolve problems beforehand.

Data Migration Issues

Perhaps the most important and error-prone stage is migration of the data, and even a minor technical failure can set off a chain reaction that affects several business divisions. Issues such as stale source data, master data cleansing, complications from customized fields of data can arise. Incomplete data migration is also an issue, it can lead to missing data in the new system, which can cause problems down the line. To avoid this, organizations should develop a SAP migration plan that includes data mapping between source and target systems, developing data migration scripts, and testing data migration scripts. Organizations can avoid these typical mistakes and successfully migrate by guaranteeing both, data quality and completeness during the migration process.

Lack of Expertise and Skills

Migrating S/4HANA on cloud requires specialized expertise and skills that may not be available in-house. To avoid this pitfall, organizations can engage with skilled cloud service providers and qualified SAP managed service partners. There can also be some internal training and development programs involved to educate about the essential skills and knowledge required.

Integration Challenges

Integrating S/4HANA with other systems can be challenging, especially if the systems are not compatible. To avoid this pitfall, organizations should develop an integration plan that includes identifying integration points, developing integration interfaces, and testing integration interfaces.

Custom Code Adaptation

During the migration process, custom ABAP source code needs to be adapted, since a lot of SAP code within SAP S/4HANA was simplified. Custom code analysis and custom code remediation are the two main stages of the custom code adaptation process. While custom code repair entails changing the code to ensure compatibility with SAP S/4HANA, custom code analysis examines the compliance with SAP S/4HANA. Organizations can take advantage of cloud-based infrastructure, such as scalability, cost savings, and increased security, by altering custom code during the migration process to make sure it is compatible with SAP S/4HANA on the cloud.

Data Security and Compliance

Both data security and compliance are critical during the migration process to avoid data breaches and regulatory violations. To avoid this, organizations need to develop a plan that covers things end to end, like identifying data security and compliance requirements, forming policies and procedures, and testing of those policies and procedures and more. A privacy-compliant organization provides solid administrative, technical, and physical security safeguards to ensure confidentiality, integrity, and availability of data.

Vendor Lock-In

In the context of SAP S/4HANA migration to the cloud, vendor lock-in can occur when organizations become dependent on a single cloud provider for a specific service or a bunch of them. Because of problems like excessive costs, regulatory restrictions, different SLAs, or technical incompatibilities, it may be challenging for businesses to switch to a different vendor in the future. Organizations should use best practices to avoid vendor lock-in, such as recognizing complicated dependencies, stakeholder involvement, training, and choosing solutions that follow open, industry-wide standards.

Knowing the Right Migration Foundation

Knowing the right migration foundation is crucial to the success of the S/4HANA migration on cloud. Organizations must decide whether to migrate to a private cloud, public cloud or on-premises environment, whichever cloud foundation that suits best. They must also decide whether to use a greenfield or brownfield approach. To avoid this pitfall, organizations should carefully evaluate their needs and goals and choose the migration foundation that best meets their requirements

Navigating Around Common SAP S/4HANA Migration Missteps

Importance of Planning and Preparation

Planning and preparation are critical to the success of S/4HANA migration. Organizations should create a detailed plan that outlines the steps, timelines, and resources required for the migration, including testing and data quality activities. They should also identify potential risks and develop a risk management strategy to mitigate them.

Best Practices for SAP S/4HANA Migration on Cloud

Businesses should adhere to the following best practices to ensure a successful migration of SAP S/4HANA to the cloud:

Defining Migration Goals: Prior to moving to the cloud, businesses must establish their migration goals and objectives. This entails comprehending the extent of the move, figuring out what resources are required, and creating a detailed migration plan. This thorough migration plan should also include a timeframe, a risk assessment, and a backup strategy.

Assessing the Current Infrastructure: It is important to evaluate the current infrastructure to determine whether the apps and data are compatible with the cloud environment. This includes:

  • Assessment of Cloud Readiness (CRA): The Cloud Readiness Assessment (CRA), which evaluates the current infrastructure's cloud readiness, is the initial stage in any cloud transformation process.
  • Technology preparedness: The company's present levels of IT maturity should be formalized, together with the project's vision, capacity requirements, and a compelling business case for cloud migration.
  • Determine dependencies: To prevent data transfer concerns and to guarantee data integrity and security throughout the migration process, organizations should identify complex dependencies.
  • Conformity with laws and regulations: To prevent data breaches and regulatory infractions, organizations should verify legal and regulatory compliance during the migration process.

Selecting the Best Cloud Service Provider: Businesses must select a cloud service provider that best suits their unique requirements. This entails looking at the cloud provider's SAP S/4HANA migration experience and knowledge. Analyzing the security precautions taken is important, such as data encryption, intrusion detection, and threat management. Even examining the cloud provider's adherence to all applicable laws and regulations, their ease of scaling up or down in response to company needs, dependability while taking into account uptime and downtime information is necessary.

Conducting testing and training: It is very crucial to make sure that post the process, even during, the systems are operating effectively, and that the personnel to be involved are taught about the new environment, businesses must do both testing and training without fail.

Ensuring Data Quality: To ensure data quality during the migration process, organizations should develop a data quality plan, and also make use of tools that can help to locate and fix any identified issues.

Cybersecurity: This must be maintained throughout the migration process to avoid data breaches and other security threats. Organizations should develop a cybersecurity strategy that includes identifying risks, developing cybersecurity policies and procedures, and testing of those policies and procedures.

Managed SAP S/4HANA Migration Services

Migrating SAP S/4HANA on cloud is a transformative journey that holds immense promise for organizations, but as we learned, it is also laden with complexities and potential pitfalls. To successfully navigate this intricate path, many businesses are turning to managed SAP S/4HANA migration services. These services offer a holistic approach to migration, addressing every facet from planning to ongoing management. Cloud4C, with its dedicated suite of managed SAP S/4HANA migration services, can be your unwavering partner on this journey.

Trusted by 60 of the Fortune 500 companies, Cloud4C, a global cloud managed services provider, offers a range of services to help businesses avoid the pitfalls above, and ensure a successful migration on cloud. Cloud4C's team of experts can guide businesses to move to SAP on cloud with the RISE with SAP approach, delivering fully managed services, data transformation offerings, and SAP application management services (AMS). We can ensure a seamless and efficient transition, offering in-depth development, architecture consuting, and solutions expertise to customize your cloud environments further. Furthering our support in risk-proofed digital transformation, we offer a range of services, including cloud strategy services, cloud readiness and assessment processes, advanced cybersecurity, and much more.

The road from S/4HANA on cloud may appear difficult, but those who’ve completed the journey agree that it is worth the work! Contact us today to build an optimized roadmap to SAP S/4HANA transformation on cloud.

Key Takeaways

Importance of SAP S/4HANA Migration:

Upgrading or replacing legacy software like SAP becomes inevitable to support the business models of tomorrow.

SAP's Deadline:

The immediacy of the SAP S/4HANA migration is highlighted by SAP's 2027 decision to stop supporting ECC and legacy systems.

Great Benefits:

Effective data processing, faster business operations, user-friendly design, optimum resource utilization, and improved security are some of the main benefits.

Complex Migration Process:

Despite its promises, SAP S/4HANA migration on cloud is a complex journey with pitfalls that can impact the organization's future.

Be mindful of Pitfalls:

Such as unreasonable expectations, a lack of a strong business case, poor planning, inadequate testing, problems with data quality, and integration difficulties.

Striking The Right Balance:

Juggling the risks and rewards of SAP S/4HANA migration on cloud requires meticulous planning, skilled resources, and focus on compliance and scalability.

Best Practices to be Follow:

Choosing the best cloud service provider, defining migration goals, evaluating the current infrastructure, conducting testing, training, assuring data quality, and preserving cybersecurity.

Consider Managed SAP S/4HANA Migration Services:

Work with experts like Cloud4C to navigate the migration journey successfully and overcome risks associated with expertise and skills gaps.

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Team Cloud4C
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Team Cloud4C

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