Essential Conversion Guide for SAP ECC to SAP S/4HANA

Most companies find it difficult to modify their business operations when their ERP system operates on an outdated platform. Organizations need to stop assuming it is better to remain on current systems because change does not guarantee success.

Businesses can only expand and stay competitive by “adapting” to change. Constant growth requires a similarly ongoing strategy for change adaptation.
Keeping the same in mind, SAP upgraded its ECC offering from the ground up to develop what we know today as the SAP S/4HANA.
S/4HANA is more than just a 360-degree ERP support today. Since its inception in 2015, severe yearly updates have brought us new and better features for improved performance and analytical abilities.

However, the migration from SAP ECC to SAP S/4HANA is still an ongoing trend. Therefore, we have covered the entire path from SAP ECC to SAP S/4HANA in this blog post to assist you.
Keep reading to discover the various features of both platforms and what your company has been missing out on.

Importance of Migration with SAP Ending ECC Support by 2027

S/4HANA migration is not merely a choice; it is a necessity for companies that depend on SAP ECC. The risks and costs associated with continuing to use the old system increase as the 2027 deadline approaches, when SAP will cease providing mainstream support for ECC. Organizations that continue to use ECC after this deadline will face security update deficiencies and compliance issues. Support and innovations will not be available to you which will create difficulties for your organization to adapt to the fast-moving digital environment. A successful transition to S/4HANA will maintain business operations while delivering modern features and establishing your organization for growth in the digital age. The migration to S/4HANA represents an investment that protects your business operations while enabling your ERP system to operate at its full potential. SAP S/4HANA represents a significant development compared to the dependable ERP system known as SAP ECC.

Key Differences Between SAP ECC and SAP S/4HANA

SAP S/4HANA is a major advancement over SAP ECC, which has long been a dependable ERP system. The main differences are listed below:

SAP ECC to SAP S/4HANA Migration Strategies

During the migration from SAP ECC to SAP S/4HANA organizations need to select their appropriate migration strategy which stands as a crucial step. There are specific advantages and factors to consider with each migration strategy. The three options listed below are for migrating SAP ECC to S4/HANA:

1. Greenfield Migration
2. Brownfield Migration
3. Hybrid Migration

Greenfield Migration

The process of establishing a new S/4HANA system combined with extracting appropriate data from your current ECC system defines a “greenfield” migration approach. The process is comparable to building a new house instead of renovating an existing property. A new system approach allows you to build an optimized foundation while re-designing your business operations and adopting standard practices. The approach suits businesses who want to transform their operations completely and simplify their procedures.

Brownfield Migration

During a brownfield migration your existing ECC system undergoes technical conversion into S/4HANA. The migration of customized code along with its procedures to S/4HANA requires more work but this migration approach remains faster and less disruptive than greenfield migration. Businesses which want to perform a swift transition with minimal disturbance to their current operations should choose this option.

Hybrid Migration

This approach is selective. A hybrid migration combines elements from both brownfield and greenfield migration processes. The method enables you to transfer particular elements from your ECC system while setting up a new S/4HANA system. The approach lets you focus on critical features while breaking down your migration plan into manageable stages. This approach suits organizations which have intricate system structures or need to maintain operational stability while making gradual changes.

Key Aspects of the Migration

The migration from SAP ECC to SAP S/4HANA brings a fundamental change to business operations through system design modifications and enhanced user experiences and altered business processes. Firms that want to migrate their systems need to focus on various essential elements for achieving a successful conversion:

System Conversion

The migration approach enables your SAP ECC system to transform into SAP S/4HANA without losing your custom developments and system configurations and business data. The approach enables businesses to transition into S/4HANA’s modern digital core by preserving key elements of their existing configuration including master records and historical transaction data along with custom additions.

Landscape Transformation

The process of landscape transformation requires moving selected business units and processes and data sets from multiple outdated SAP systems into one SAP S/4HANA system. The strategy provides businesses with operational flexibility to unify operations and standardize worldwide business procedures while allowing them to replace obsolete systems without disrupting business operations.

New Implementation

System conversion lacks the automatic transfer of custom code and old configurations and historical data unlike the other approaches. This lets companies check out their business and fix things as needed. The goal is to match things up with SAP S/4HANA, so they can get the most out of quick automation, live data analysis, and easier data setups.

Phased Approach

The process of breaking down transformation activities into smaller parts functions better than conducting an entire migration at once. Large companies with complex IT environments, multiple business divisions, or international operations will find this approach particularly successful.

Data Migration

Switching your data from SAP ECC to S/4HANA means first taking the data out of the old system. Before you move your data to the new system, you’ll need to clean it up a bit. Getting your data moved over smoothly means your business can keep running without any hiccups, and you’ll be working with info that’s correct and finished.

Custom Code Adaptation

Your custom code requires modification to work with SAP S/4HANA so you need to perform the necessary adjustments. The Custom Code Adaptation tool enables you to find out which custom code requires modification.

Testing and Validation

Before the system goes live, let’s double-check that it’s working correctly and stays stable, and that everyone’s ready to use it. Small setup errors in SAP or messed-up data could cause real problems. Because it’s a tricky system, testing things well lowers the chances of problems and makes everyone trust the new system more.

Steps for SAP ECC to S/4HANA Migration

Following are four SAP ECC to S/4HANA conversion steps:

Step 1: Familiarization with SAP S/4HANA

Following are SAP S/4HANA versions:

1. SAP S/4HANA Cloud, public edition
2. SAP S/4HANA Cloud, private edition
3. SAP S/4HANA On-Premises managed by SAP (HEC)
4. SAP S/4HANA On-Premises

SAP S/4HANA Cloud, Public Edition

A completely managed SaaS solution named SAP S/4HANA Cloud, Public Edition delivers an ideal experience for companies which need standardized innovative solutions. The solution delivers affordable access to S/4HANA essential functionalities through fast implementation and automated system maintenance. The solution is best for smaller organizations together with those using basic operations since it delivers quick and straightforward solutions.

SAP S/4HANA Cloud, Private Edition

The SAP S/4HANA Cloud Private Edition delivers a specialized cloud infrastructure which allows organizations to have enhanced command over their environment. This cloud deployment option enables businesses to obtain cloud advantages such as scalability and lowered IT expenses while enabling system extensions and customizations. The platform serves organizations that need unique requirements and those who want to transition to the cloud in stages.

SAP S/4HANA On-Premises Managed by SAP (HEC)

SAP manages the implementation of SAP S/4HANA On-Premise which provides users with both simplified infrastructure management and on-premise deployment benefits. The IT team receives relief from infrastructure management responsibilities while the system remains under your complete control. The platform provides an ideal solution to organizations who want managed services or need to meet strict data residency requirements.

SAP S/4HANA On-Premises

Businesses should make the most of SAP S/4HANA on-premises to fit their current IT setup, and tweak it to perfectly match what they need. This is certainly the best option for large enterprises with complex business requirements and internal IT staff with the expertise to deliver necessary customization on a tight schedule for implementation. It is a bit less flexible because once you have decided to go with this route, you would have to take more on your shoulders regarding system upgrades and maintenance.

Choosing the Right Deployment for the Business Needs

Different kinds of S/4HANA migration have advantages and considerations. Hence, it becomes very important to really assess the business needs and goals to make sure that the right migration path for a quick return on investment with minimal drawbacks is chosen.

Step 2: Data Analysis and Classification

The step of classifying data is quite important and is considered among the big steps of an SAP S/4HANA migration, wherein you classify the existing data according to its relevance and use. Three classes are usually used in this process:

Data classification for the ECC to S4HANA migration into hot, warm, and cold data

Hot Data: Your most important and often accessible data, known as “hot data,” is necessary for day-to-day operations and instant decision-making. Consider master data, transactional data, and any information required for urgent business operations. For best results, your new S/4HANA system must have easy access to this data.

Warm Data: Warm data is information that is less frequently accessible but is still useful for auditing, analysis, and reporting. Examples include historical financial records, transaction data, and previous client interactions. Though this data is not required for day-to-day working, it must be readily available at any instance.

Cold Data: Cold data is that which is stored primarily for compliance or archival purposes and is infrequently viewed. Legal expedient documents, long-term audit trails, or data from legacy systems might constitute this. Speedy access is not a consideration, but maintenance certainly is.

Step 3: Data Cleansing

Data cleaning is super important when you move to S/4HANA. It makes sure your info is correct and works well with the new system.

Key Processes in Data Cleansing

When you are moving data from SAP ECC to S4 HANA, here are some important data cleanup steps:

Duplicate Removal: Finding and deleting these makes sure your data is accurate and that things run smoother. Duplicates mess up reports and cause problems.

Standardization: Every dataset requires transformation into a standardized structure regardless of its origin or content. You need to maintain uniformity in your names and units and data types so the data functions seamlessly together and remains simple to review afterwards.

Validation: Data validation checks if your data is complete and correct based on set rules. It finds missing info, data that doesn’t match, and wrong entries to make sure your data is good quality.

Enrichment: Data enrichment means adding more helpful info to what you already have. This could be giving context to the data, making new data points, or bringing in data from other places. By adding things, your data is better and more detailed for analysis and decisions.

Error Correction: The idea here is to fix any mistakes you find in your data. It could be fixing typos or other wrong stuff so your data stays trustworthy.

Data Profiling: Data profiling tools look at your data to see what’s up and catch any errors. They show you the problem spots like wrong data types, missing info, and things that don’t match up. This way, you get a good idea of how much cleaning your data needs and what kind.

Automated Cleaning: Software can take care of lots of the cleaning for you.These programs find and fix common problems, like duplicates, wrong formats, and missing info—based on the rules you create. Doing this automatically makes sure things are correct and saves you time, especially when you have loads of info.

Manual Review: Even though a lot of info cleaning can happen on its own, you still need a person to check some things. Manual review is when a person looks at the info that the programs flag as potentially wrong. This ensures data quality and completeness by enabling a more sophisticated evaluation and rectification of complicated issues.

SAP Data Cleaning Tools

During your S/4HANA migration, SAP offers strong tools to optimize and expedite the data cleansing procedure. There are two obvious solutions:

SAP Data Services: An all-encompassing data integration platform that can be used for extracting data from a variety of sources, manipulating the data, and finally loading it. Having very strong data cleansing features-e.g., enrichment, validation, standardization, profiling-it allows you to ensure data accuracy and consistency before moving into S/4HANA by automating many aspects of data cleansing with SAP Data Services.

SAP Information Steward: Concentrates on data quality monitoring and assessment. It offers a single platform for data quality scorecards, rule building, and data profiling. Understanding your data environment, spotting problems with data quality, and monitoring advancements over time are all made easier with SAP Information Steward. This means your data should satisfy such prerequisites for a smooth S/4HANA migration.

Step 4: Assessment of Readiness

The preparation check is crucial for a smooth S/4HANA migration. In the assessment, the existing SAP ECC system is scrutinized in its entirety and suggestions and insights provided for the best-suited transition. It properly evaluates your existing system environment, identifies possible hurdles, and assists you to organize the migration efficiently.

The steps involved in readiness checks are as follows:

System Analysis: A high-level overview of your present SAP ECC system, including its version, components, and usage patterns, is given in this first stage. It determines whether your current system is compatible with S/4HANA and brings up any possible technical issues.

Identify What Needs to Be Simplified: Simplified data models and procedures are introduced by S/4HANA. This process determines which features of your existing system are affected by these simplifications. These areas which might require modifications or adjustments to fit the S/4HANA best practice are highlighted.

Custom Code Analysis: This phase evaluates your custom code to find any S/4HANA compatibility problems. It assists you in prioritizing repair efforts and understanding the scope of code adaptation needed.

Data Volume Management: Transferring massive amounts of data is a common part of migrating to S/4HANA. This step examines your data footprint and offers suggestions for optimizing, archiving, and cleaning your data. It ensures optimal efficiency in the new system and reduces the work required for data migration.

Analytics for Business Processes: This phase analyzes your existing business procedures and identifies areas where S/4HANA might improve efficiency. It helps you make the most of S/4HANA’s new features to boost productivity and creativity and offers insights into possible process enhancements.

Challenges of Migration

Any transition from SAP ECC to SAP S/4HANA is revolutionary yet challenging. As much as S/4HANA offers many benefits, there are still organizational, functional, and technical challenges a company must work through to attain a successful migration.

Complexity

The number one problem stands as the S/4HANA migration from SAP ECC, with its inherent complexity. This is a complete change in architecture, data models, procedures, and system behavior rather than only a technological improvement. Businesses have to operate in a complex environment where every choice they make affects several facets of the company.

Cost

Software licenses are only one aspect of the costs. Since upgrading infrastructure, paying consulting fees, training, and handling data migration are what make companies apprehensive, the costs must be estimated and managed with care; otherwise, timelines and budgets can quickly go astray.

Timeline

With regard to project timelines, there are interrelated parameters ranging from the size and complexity of the existing ECC landscape to the amount and quality of data to be moved, the number of custom developments present, and the availability of internal resources. Depending on whether the approach is greenfield, brownfield, or hybrid, this timeframe, for large enterprises, easily stands anywhere between 12 and 24 months or more.

Change Management

Resistance, late-in-the-day rejections, disruptions, and low user acceptance often come about because of bad communication and inadequate training. Employees used to working within the ECC for years may be baffled or overwhelmed by the new system. If not done very well, even the most technically implementable transition will fall flat because users will resist change, at least for a while, leading to a drop in productivity.

Benefits of Migrating to S/4HANA

Migration from SAP ECC to SAP S/4HANA is a strategic choice that enables all businesses to undergo digital transformation, while still remaining agile, data-analytical, and competitive. This is more than a mere technical upgrade as it is built around SAP HANA in-memory database-the next-gen ERP suite which solves the complexities of the IT plumbing, allows for real-time decision-making, and faster business processing.

Real-time Insights

This essentially provided the decision-makers an ability to react to intangible tracking such as financials, supply-chain, inventories, sales, or customer behaviors with the SAP Fiori intervention of role-based dashboards together with embedded analytics, which provides real time actionable data to the user requirements at all hierarchies. It, therefore, builds agility, enables decision-making in a swift manner, and allows the company to respond quickly to changes in the market or disruptions or immediate requirements from customers.

Improved User Experience

SAP Fiori has a number of advantages such as SAP’s redesigned user interface, user domain cockpits, embedded analytics, and proactive insights. Alerting and notification service keeps users informed and aids in the transition to SAP S/4HANA.

Modern Technologies

Due to the fact that ECC was not developed with intelligent technologies in mind, conversely, S/4HANA is designed to smoothly interface with cutting-edge technologies such as advanced analytics, robotic process automation (RPA), machine learning (ML), artificial intelligence (AI), and the Internet of Things (IoT).

Simplified Data Model

Usually, previous SAP ERP systems had to go through a number of aggregate and index tables to do the reporting and transactional processes. Such awkward situations have rendered the system beset with maintenance costs, with low performance, and heavy data volumes. S/4HANA alleviates the situation by taking advantage of its new architecture coupled with the in-memory database to drop unnecessary tables, reduce redundancy among data, and combine transactional with analytical processing.

Enhanced Functionality

S/4HANA is packed with features that used to be extras or add-ons, like advanced automation, built-in AI, machine learning, and analytics that work in real time. It comes with industry-specific features and integration with cloud solutions like SAP Analytics Cloud, Ariba, and SAP SuccessFactors. On top of this, we have modern modules such as Central Procurement, Group Reporting, and Predictive MRP.

Implementing the SAP S/4HANA Update

Setting up this system involves key steps: installation, moving your data, tweaking custom code, and connecting it with your other essential business systems. Depending on whether the project team chooses the Brownfield (system conversion), Greenfield (new implementation), or Landscape Transformation approach, they need to adjust it so all elements are compatible, optimized for the best performance, and most importantly, aligned with business goals.

Technical Implementation

• System Preparation: Means ensuring that the database and disk space are fit for purpose, that compatibility has been verified, and that the SAP Host Agent, SPAM/SAINT, and SAP Notes have been updated where necessary.
• Performing the Update: The update, per se, uses the Software Update Manager (SUM). It is necessary to review important SAP Notes, probably update database software, and then carry out the update procedures.
• Validation: After the upgrade, the system testing shall be carried out to check if everything is working perfectly and to fix issues if any arise.

Process-Oriented Implementation

• Define Scope and Objectives: This is to define scope and objectives. Defining precisely the objectives of the S/4HANA update and the areas it will affect.
• Evaluating Readiness: Evaluation of readiness shall be necessary for a smooth transition. Data quality, interoperability, and current system skill gaps have to be assessed.
• Change Management: To keep users ready for the update and lessening disruption, communicating well and training them is required.
• Testing and Validation: UAT has to be performed along with technical testing to ensure the updated system does meet business requirements.
• Go-Live and Support: Go live and support have to occur post-deployment and may have to continue with ongoing support after the release for long-term success.

Conversion Phases to SAP S/4HANA

Pre-Conversion and Detailed Assessments

For an upgrade to SAP S/4HANA that brings as little disruption as possible and makes the maximum impact on your business, a close inspection of the technologies running in your SAP ECC is very important. This includes ensuring Unicode compatibility, data migration capabilities, custom code reviews, and options for consolidation of your business processes from day one.

Evaluating the Current SAP ECC Environment

You have to ensure that your system is Unicode-compliant in order for it to support a variety of languages and character sets in order to accurately evaluate the state of your ECC landscape. Additionally, you must make sure that your database can support the migration from SAP ECC to SAP S/4HANA, which uses a separate in-memory database.

Many businesses discover that in order to match their code with their business operations, they must write custom code. You’ll also want to evaluate whether any of this code needs compatibility tweaks. You may also have to fix or upgrade network and hardware configurations supporting your migration from SAP ECC to SAP S/4HANA.

Fit-Gap Analysis

After the present landscape evaluation comes into play, a fit-gap analysis between your ECC and S/4HANA environments will be of utmost importance. Simply put, a fit-gap analysis identifies what your current system supports as your target and any variances or gaps.

The conversion analysis will assist in the choice of the best strategy for conversion according to your needs—whether greenfield, brownfield, or selective data transition. You can either re-engineer current procedures or use standard S/4HANA processes in this situation.

The business scope across the business domains and processes that will be included in the analysis, the identification of technical components such as integrations and custom code, and the establishment of precise goals for the analysis and the results’ handoffs are all important factors to take into account. Failure to conduct a fit-gap study may result in unforeseen problems, overspending, and poor implementation.

Software Upgrade Manager (SUM)

SAP SUM is a multifunctional solution that SAP offers to assist with some housekeeping duties to ensure a smooth transition from SAP ECC. Many SAP clients find that having a backlog of fixes to apply is a significant burden. These could be enhancement or support patches that will raise your ECC system to the level required for a successful conversion. A higher release of an ECC system can be upgraded with the help of SUM.

Data migration from a conventional legacy database to SAP HANA, the new in-memory database, can be accomplished using SUM after the ECC system is available. Along with identifying features that need to be modified during the conversion, SUM searches for things that can be made simpler during an upgrade.

SUM is a critical tool for the technical items required to do a brownfield SAP ECC to SAP S/4HANA conversion. This process streamlines software upgrades, database migrations, and any necessary fine-tuning between the old and new setups.