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Transcript:

Keith Kirkpatrick: Hello, and welcome back to another episode of the Futurum Tech Webcast. I’m your host, Keith Kirkpatrick, Research Director, Enterprise Applications with The Futurum Group. I’m really excited about today’s webcast, which is focused on removing roadblocks from your S/4HANA roadmap. To discuss the steps that organizations should take to migrate their data to HANA, I’m joined by two representatives from global financial automation provider Serrala. Serrala offers a unique portfolio of automated end-to-end solutions to take the finance office into the digital age. So I’d like to welcome Rob Jackson, the Principal Solutions Architect, and Jason Boyer, Cornerstone Customer Success Officer. Welcome, gentlemen.

Rob Jackson: Thank you.

Jason Boyer: Hi.

Keith Kirkpatrick: So why don’t we just jump right in. SAP has set a 2027 deadline, after which its customers must migrate to S/4HANA. So are companies really ready to make this transition?

Jason Boyer: I think they are. I think that they’re starting to adapt to that point. I think some of the complexities that we do see that… moving to S/4HANA is a very big complex project. At the end of the day. A lot of these customers have SAP systems have been homegrown and manipulated for 10, 15 plus years, and to make a big change to the S/4 environment does take a lot of prep and a lot of planning at that point, so having a good plan and being ready prepared for that is pretty much crucial at this point for this type of move.

Rob Jackson: And we’ve seen that a lot of customers haven’t even started their transition yet. We’re coming up soon on 2024, and it’s no small project. A couple of things that we’ve seen from the conferences that we’ve been at recently is that about 80% of the people that we’ve talked with at the last S/4 conference down in Dallas was they haven’t even started it yet. They’re just starting to analyze what they’re going to need to do. So it reminds me of the Y2K days where everybody wanted to put it off until the last minute, but the inevitable year 2000 was coming along anyway, so I think it’s a rehash of that whole Y2K thing.

Keith Kirkpatrick: Yeah, it does sound like it’s one of those deadlines where it’s coming and companies need to get prepared. So if they are in that boat of not quite along the path, where do they start?

Rob Jackson: The big decision that they need to make other than, “Yes, we’re going to do this project and take on the time and expense of it,” is that they need to just figure out, “How are we going to migrate to the new S/4 environment?” So a lot of people have been on SAP for many, many, many years, and what worked for them when they configured SAP 20 years ago might not be what they want to do now. So they may choose to do what’s called a Greenfield implementation, but Greenfield implementation means that we’re going to take and install a brand new clean core of S/4HANA, and then we’re going to migrate our data over to it, just open item type data or a very small part of the data that’s in their legacy ECC system, and go forward from there. In that case, they have two different systems that they’re running in, but it gives them the advantage of maybe restructuring their charts of accounts, their cost structures, enterprise structures, company codes and things like that. So that’s one way of doing it. The flip side of that is a Brownfield, which is really just an upgrade to S/4HANA, and I don’t want to use the word “just” lightly there because it’s not just an upgrade. It’s going to take some of your business processes and make a change. Your user interfaces are going to change and those kinds of things there. So you really have to consider closely which way I’m going to go. “Am I going to do a Greenfield? Am I going to do a Brownfield?” And maybe you’re going to bring in some non-SAP systems divisions in your corporation or company that are not running on SAP and decide to bring them in at the same time with S/4HANA. Then you have to decide, “Well, am I going to do this in a big bang approach or am I going to do this in a phased approach in waves and so forth?” So there’s a lot of things to discover before you even start the project. You’ve really got to do some pre-planning on that.

Keith Kirkpatrick: Yeah, it sounds like there’s a lot to consider. Are there specific steps that companies should think about from the get go? They need to take these three, four, whatever number of steps to prepare for this move?

Rob Jackson: There are.

Jason Boyer: I would say definitely say yes at that point. There are some things that they definitely need to consider. Are they going to be moving their infrastructure to a cloud structure? That’s a huge move that a lot of companies take advantage of when they do this type of migration. What type of data do they need to keep? How much data do they need to really bring along to keep their day-to-day business going at the end of the day? What do they really have to keep to make the users in, and what do they do with that old data? Do they have legacy requirements for audits and capabilities that they need to keep that data set in place? In a Greenfield, they may not have all that data there, so they’re only going to have a smaller set, but they’re going to have users going back to another system. What’s the system user impact? I think the biggest thing to understand in one of these changes is yes, it is a technical upgrade and it’s an upgrade for the system and that, but at the end of the day, it’s a change in management to the end user community. Having the end users buy off on the change to S/4 is what makes a successful implementation at the end of the day. We can always throw a lot of technical compute power, we can throw lots of resources at it from that perspective, but if the users aren’t adapting to the change, it’s going to be an unsuccessful migration at the end of the day. I would say from a Brownfield perspective, you need to know how long you need downtime. I mean, if you’re talking about moving to downtime and you need 120 hours or you need four more days to do the upgrade, some companies can’t stay down and keep their billings and their processing of their documents or processing of their orders and things down for four days, so you got to really figure out how you can shrink that migration as small as possible to get that updated.

Rob Jackson: Yeah, there’s a couple of other things that you want to consider, as well. Most people, through years and years of running their legacy ECC systems, have created a lot of customizations, and if you’re going to a Greenfield, now’s the time that you can look into those customizations and say, “Hey, I want to get rid of those. I want to go to a clean core,” which is a popular term right now that basically means running SAP standard and then putting anything else in not as a modification to the SAP technical objects and data fields and so forth. There’s machine learning and artificial intelligence capabilities out there, so you want to take advantage of those. There’s the web and the mobile experiences that you can bring into the mix now with Fiori and some of the cloud platform extensions that you can use. There’s a lot of different processes that you can take advantage of now, so you have to look at not only the components within your SAP system that anything that feeds or is bolted on or interfaces with your S/4 environment going forward. So you want to take a good look at those as well and utilize those new technologies. So you can’t just look at it as just the SAP system that you’re going to touch. You’re actually going to touch anything that is a spoke of that SAP system.

Keith Kirkpatrick: So who needs to be involved in this planning? Because it sounds like this is a huge undertaking. It does not seem like it’s something where it can be done in silos.

Rob Jackson: It is. I mean, obviously technical needs to be involved, your basis team, that’s a given. Now also another given is your business process folks. So you are going to be changing some of your business processes. You are going to be changing user interfaces, so you want to keep the users involved. Anybody that’s involved in change management with your organization, if you have a specific team for change management, documentation, audit, because of course you still have the audit, obviously finance and sourcing… so pretty much everybody just think of it as like a new SAP installation that you did way back when you first brought SAP on. If you have shared service organizations, you definitely want to be sure that you bring them into the mix because there’s a lot of uniqueness around shared service organizations, as well.

Keith Kirkpatrick: Perhaps one of the things that’s really interesting about all this is, we talked a little bit about Greenfield versus Brownfield migrations. Are there any specific planning or steps that differ between the two that should be really highlighted?

Rob Jackson: Well, apart from what I mentioned earlier about changing your enterprise structure and your charts of accounts and those kinds of things, you do want to consider the customizations that you have. Is it easy to get rid of the customizations? If you were to choose a Brownfield and get rid of those, again, the Brownfield is when you’re doing it basically a technical upgrade, so you’re moving your ECC system into an S/4 system. But with the Greenfield, if you want to change those, that’s your perfect opportunity to do that as well as get rid of those customizations or minimize them as much as possible. But on the flip side of that, with the Brownfield, you’ve got all that old data that you can bring over. You don’t have to bring it all over and we’ll talk about that in a little bit, but you have the same structure of the data, the same chart of accounts and so forth, that you chose to go the Brownfield route because of those. It’s a familiarity. So it’s a less change from a business perspective on that, but it does have some user interface changes, a lot of Fiori apps and Fiori interfaces there. Some people are choosing not to use the old SAP GUI, the thick client SAP GUI, and using either the business client or all Fiori, which is a big change to the business users as well, as well as the mobile enablement. So in both aspects, you’re going to be looking at those kind of topics when you go doing your cutovers and so forth.

Jason Boyer: I think it really boils down to change management too, right, Rob, at the end of the day? Because the change management for the end users, whether you want to simplify it or keep it as minimal change of the end user community, you have to evolve the business to grow with the ever-changing environments and the economies and everything else. But we also want to make sure that the impact to the end users is as transparent and as minimal as possible.

Rob Jackson: That’s true. Good point, Jason.

Keith Kirkpatrick: So once you have all of this strategy mapped out, how do you turn that into action? How do you really activate all of these plans and actually get that migration started? What are some of the things on the checklist?

Jason Boyer: Yeah, the checklist, you kind of have to build a checklist at the end of the day, right? I think there’s about five or six things that come into a checklist. One is realizing, “How much data do I need to bring and how much can I live without and where can I deal with that data at the end of the day?” What’s the structure going to be? Where is it going to be? Cloud, on-premise, in the rise environment? Is it going to be in BPT? Where are you going to put this at the end of the day? And then, are you going to get your money back at the end of the day? That’s another value add that customers have to figure out it. Are they going to get the money back from spending the money to go up to S/4? And then what other interfaces do they have to deal with? Making sure they checklist all those interfaces. That’s a common myth that most companies run into is they think they know all the interfaces and oops, they forgot one along the way, and that causes the business impact of a production down and the trucks aren’t rolling to deliver product to the stores, or they’re not able to process checks or things like that just because they missed a process piece there. And then making sure that they’re seeing their industry standard, making sure they fit that gap. They need to make sure that they’re keeping what they need in the system and making sure that they’re complying with the new regulations out there.

Keith Kirkpatrick: So one other question here is obviously it’s like when you move a house, you can’t bring everything, right? I mean, it’s too much. What kind of data should organizations think about archiving?

Jason Boyer: To be honest, for both the Green and the Brownfield approach, I would say data archiving is a necessity regardless of the approach that you go for at the end of the day. Keeping that data in the system puts yourself at risk for lots of different areas from an audit perspective as well as for a change management issue at that point. So data archiving in general is just a good housekeeping mechanism to keep your system cleaned up. At the end of the day, it’ll improve system performance, it’ll improve data retrieval back for your customers, and then of course, having it archived and non-changeable provides other added value to audit that you don’t have to worry about at the end of the day.

Rob Jackson: Exactly, and data archiving isn’t just a precursor to S/4. When you move to S/4, you’re going to still continue to data archive as you should have in ECC all along, but of course, it’s not a glitzy project so a lot of people have left it alone and they’ve accumulated 20 years worth of data. And so archiving should be a continuous task, but it’s most important, and it’s really coming to light during this S/4 push because of the impact that data archiving has on successful S/4 project implementations.

Jason Boyer: Especially in a Brownfield implementation, right? If you’re trying to migrate a 20 terabyte, 40 terabyte system to S/4, as much data as you can get out of that system to move to S/4 into data archive that you can access it outside the system, it’s a huge win. If you only have to move 10 terabytes instead of 40, that downtime and that time for the business is impacted is so much reduced at the end of the day.

Keith Kirkpatrick: Jason, do you have any examples in the real world about a company that was able to do this? Because obviously, it can be an overwhelming project.

Jason Boyer: Data archiving projects in general, as Rob said, are not the most glamorous projects out there, but we did do a great project for the Dr. Pepper/Snapple group in which they migrated from an on-premise ECC system running Oracle to Suite on HANA to S/4 in a matter of about six months, and we were able to archive almost 40% of their data out and allowed that migration to occur… what was supposed to take almost 72 hours, took 48 hours at the end of the day, so a huge savings at that point. In addition to that, they didn’t have to buy as a big of an S/4 appliance because they had removed that 40% of the data out of the infrastructure at the end of the day. So we have tool sets in place that allowed us to do data archiving in parallel, and we were able to cut that time down, like I said, from 72 hours to about 48 hours at the end of the day.

Keith Kirkpatrick: Wow. So I’m just curious, when we’re looking at this process, does the business have to wait for IT to be done with everything in terms of planning before you actually begin this move to HANA? What is the starting point, or when can businesses really get started?

Rob Jackson: Well, with the data archiving, you can get started anytime. We suggest as soon as possible. A lot of people will begin their S/4 project and then realize, “Uh-oh, we’ve got to do some data archiving,” which is something they could have done before they even considered moving to S/4 because eventually, you’re going to need to do it anyway. So the inevitable data archiving is best done upfront, and you don’t have to wait for that. You could look into attending conferences, and we’ve talked to a lot of people to gain that knowledge and so forth, and start analyzing things like the known things that you’re going to have to look at. For instance, you’re going to go to the business partner concept instead of the vendor customer number concept. So how is that going to impact us? You’re going to choose one or the other or go completely new. So those are things that are long tail decisions that you would want to bring upfront. The other thing would be the Greenfield/Brownfield, having that discussion. That’s another long tail decision that you don’t want to start analyzing and making that decision when you declare officially that this project has started and so forth. You want to look at not only your ECC system going to S/4, but again, all of those ancillary systems that are feeding it: any portals, any interfaces that you have, any additional businesses you might want to bring in. So there’s those macro decisions that you need to think about before you specifically form the project, get everybody engaged and say, “Okay, we’re going to start blueprinting.”

Keith Kirkpatrick: Right, right. So what tools are available to really handle this archiving process that companies can use?

Jason Boyer: Well, Serrala has a great set of tool sets with Neev here today that allows us to take the advantage of doing data acceleration. So we’ve been able to take advantage of SAP’s standard SAP archiving functionality that’s been in the business for 30 plus years, Rob, I think it’s at this point?

Rob Jackson: Yup.

Jason Boyer: They’ve had, started some type of archiving objects. And we’ve been able to take technology and make a patent out of it where we can do multiple paralyzation of those jobs and get that data cleaned out much faster at the end of the day. We’ve also been able to store that data in a cloud connector, so we’re taking advantage of using the cloud. We no longer have to have a server infrastructure to hold data archiving files. That’s huge at the end of the day, not having to worry about another database, another connection, another data point of failure. The cloud can replicate to multiple points already done today, so we’re able to leverage that and remove that server infrastructure going forward. We also have audit capabilities to extract data that’s been audited and put it back into a file that they can use for an auditor in a format that they like. And those three things there put together given a great foundation for things moving to that point.

Rob Jackson: I used to be a data archivist actually as a customer 25 years ago. Running data archiving runs manually at midnight on Saturday nights. Anytime that everybody else wasn’t working, I was working, and doing that manually is a daunting task. Now you’ve taking a look and say, “I’m going to remove 40% of my data from a system.” You have to have some kind of automation, otherwise you won’t be able to do it in time. So the automation key is key to the success of an archiving project, especially one that-

Jason Boyer: I think the Neev tool set does allows us to have the ability to automate the variant creation, and what that really means is basically what are we selecting the dataset we’re going to grab out there? You can easily mess up a data archiving project by double duplicating archiving, or not archiving the right things and deleting data before it’s actually stored. This tool set allows that protection for the customers at the end of the day.

Rob Jackson: And what we’ve been seeing from a lot of our customers that we are talking to and people that are moving to S/4, when they start their data archiving project or they start their test migrations to S/4, they’re finding that they’ve got… one of the most common problems in archiving is that they have open item managed GL accounts that they’ve never cleared, and now they’re too big to clear. So that’s something that you really want to determine and take note of upfront in the project and get your finance teams to determine, “Have we already settled this? Do we need to account for this? How are we going to deal with this?” Because we do have tools that can yank that out and archive that regardless, and that’s some of the other things that you won’t be able to do if you’re doing it a manual data archiving project.

Keith Kirkpatrick: Right. So gentlemen, we’ve covered a lot of ground in the last 15, 20 minutes or so, a lot of really great insights. I’m wondering if the two of you can just distill some key takeaways or words of advice that people… they’re watching this video and they’re going to say, “What are the top 3, 4, 5 things I absolutely need to do?” as they start to make this transition to HANA?

Rob Jackson: Yep. Good question and good ask. I would suggest that anybody that’s moving to S/4HANA clearly understand their business processes in your existing SAP environment, how that’s servicing the business, and so forth, because you’re going to contrast that to, “What can S/4 do either better or the same or maybe not do at all?” And figure out, “How am I going to accommodate that into the business?” You need to know what your business is doing and what your current processes are and why any customizations were put in in the first place. And that’s a key part too, is because a lot of times customizations were put in long before most people running the system we’re around and working inside that system. So some of that knowledge may be lost. So people just say, “Oh yeah, we always do it this way,” and then realize that it’s a customization and it throws them for a loop, let’s say.

Jason Boyer: I would say don’t underestimate change management. Change management is key to making this successful. Having a good change management plan, a good change manage strategy, is absolutely key. And a good data management plan as well. Having the ability to understand where your data sits, what data you need to keep, and what data should be out of the system. Most users are like anybody else, “I want to have everything forever and ever, amen. I don’t care. I want it, I want it, I want it.” But really getting them to get that change management to understand, you don’t need 20 years of this data. That doesn’t provide any value to at the end of the day. You need two years of that data, and convincing them at that point.

Rob Jackson: Exactly, yeah. Setting expectations and also looking at any bolt-on software or ancillary software that you have that runs your back office environments and processes, so things like accounts payable, accounts receivable, payments, GRC type software, all of that needs to be evaluated because now is the perfect time during an S/4 project to maybe change that and upgrade that and use some of the machine learning and AI capabilities that have been embedded into those systems in the past few years. It’s best to update the entire system, including the ancillary stuff, so that you don’t end up retesting or changing if you were to just do S/4 first and then say, “I’ll do the APAR stuff later.” Then you’re live on S/4 and then you have to do another project. So bring it all together, use all that unit testing and integration testing and so forth with the entire environment all at once. That’s what I see as the working the best.

Keith Kirkpatrick: Right. It sounds like it’s a real opportunity, though, to also integrate new technology, whether it’s AI or really improve automation across whatever processes the organization has in place.

Rob Jackson: It is.

Jason Boyer: It really is, and I think another thing that’s a benefit at that point is removing complexities, right? So anytime that you can get to a standardized functionality that’s utilized as a global standard for whether it be REST APIs into the cloud to store data or things of that nature, you have that ability to make your future upgrades that much easier down the road. As Rob said it, deciding on a Green or a Brownfield has a long time implication going down the road, right? You have opportunities that, if you keep your customizations, your upgrades are always going to be that much difficult down the road. You get to the point where you don’t need as many standard customizations, you have that ability for upgrades down the road to be that much smoother, that much quicker, less work to do for integration, less points that you have to fix with the business, less change management. So really, building that foundation strong at the beginning will pay dividends down the road.

Keith Kirkpatrick: Great.

Rob Jackson: Exactly.

Keith Kirkpatrick: All right, well I think we’re just about out of time here, but I’d like to thank Rob and Jason for speaking with me today. Your insights have been really valuable and insightful.

Rob Jackson: Great. Glad to be here.

Keith Kirkpatrick: Is there anywhere listeners should go for additional information.

Jason Boyer: Thank you again for taking the time. We’ll have a link to our website and our LinkedIn page so you can find out more about the Serrala solutions and find a way to do that.

Keith Kirkpatrick: Great. All right everybody, thanks very much for joining us today. Hit that subscribe button and join us here for all of our episodes on the Futurum Tech Webcast and our interview series with so many insightful leaders from across the technology industry. Thanks, and we’ll all see you again soon.

Rob Jackson: Great. Thank you.

Jason Boyer: Thank you.