SAP S/4HANA Selective Data Transition Explained

By Akash Kumar, Solutions Architect, HCL

SAP has suggested three transition paths (new implementation, system conversion, and selective data transition) to SAP S/4HANA. In this article, we are going to answer these questions: 

• What is the selective data transition?
• What are the scenarios and benefits to select selective data transition?
• What is the shell or mix and match technique of selective data transition?
• What tools are available with the partners to automate the selective data transition?
• What are the lessons learned during selective data transition? 

Companies have come a long way in the digital transformation by replacing mainframe with client server architectures, fostering decentralization, adopting cloud and SaaS applications, and automating both front- and back-offices processes.

Companies want to become digital to continuously meet the customer expectations and at the same time help customers achieve high-value outcomes. The meaning of digital varies with companies as some would like to increase customer satisfaction by building mobile applications or optimizing the processes by digital automation whereas others would like to improve the employee experience, deliver superior business operations, and increase business agility by moving from legacy ERP to the intelligent SAP S/4HANA.

I worked with one of the retail customers who wanted to increase the digital shopping experience of the customer, but the internal processes were complex and not optimized, which caused late deliveries or returns, eventually killing the digital transformation factor. 

Companies in the digital world face a dilemma whether to replace aging, on-premise business applications or ERPs, which are very complex, with the ever-increasing intensity of integration, data volumes, change requests, and workarounds. At the same time, the business processes designed around the technology limitations of the past keep standing in the way of implementation of new digital technology, such as Internet of Things (IoT), blockchain, and real-time reporting, and optimized business processes utilizing robotic process automation or embedded artificial intelligence (AI) in major business processes.

SAP S/4HANA Transition Paths

As we all know, ERP digital transformation is expensive, impacts the business, and has long implementation timelines, so the majority of the customers are still working on building the SAP S/4HANA business case and deciding the SAP S/4HANA transition path.  

With a new implementation, you build a fresh SAP S/4HANA system whereas with a system conversion, you turn your existing SAP ERP system into an SAP S/4HANA system. In selective data migration, you build a fresh SAP S/4HANA system from the existing SAP ERP system, but the existing SAP ECC system is still available after the migration (Figure 1). 

Figure 1: SAP S/4HANA Transition Paths (Source: SAP)

There are three different transition paths (Figure 2) to SAP S/4HANA; however, I will focus on selective data transition, which enables you to have the correct balance between process redesign, custom code, and selective historical data. 

Figure 2: SAP S/4HANA Transition Path (Source: SAP)

The selective data transition approach falls between the greenfield and brownfield approaches in terms of efforts, cost, and timelines (Figure 3). 

Figure 3: Selective Data Transition Falls between System Conversion and New Implementation (Source: SAP) 

The following scenario allows customers to choose selective data transition 

• When customer who are on SAP S/4HANA on-premise and want to move into SAP S/4HANA private cloud with reduced cost and increased efficiency 
• When there is need to provide more flexibility, reduce risk, etc., to the deployment approach (Figure 4), i.e., phased go-live approach or big-bang approach 

Figure 4: Selective Data Transition Deployment Approach (Source: SAP) 

• When there is a need to re-use and redesign some parts of the business processes, e.g., reuse logistics, redesign finance 
• When there is no need to migrate all the custom development to the new system
• When there is a split of historical data based on any of the following points (Figure 5) 
• Split by organizational units 
• Split by functions 
• Split by regions 
• Split by master data 
• Split by time slice 

Figure 5: Selective Data Transition Data Split Criteria (Source: SAP) 

• When there is a need for historical data of only a few years and not large chunk of legacy data
• When there is a consolidation or split of the SAP ERP instances (Figure 6) 

Figure 6: Source-Target System Relationship – Consolidate or Split (Source: SAP) 

A majority of the SAP ERP customers have already done huge investment in their current system and would like to leverage their investment and protect good practices while moving to SAP S/4HANA, including creating or adapting business processes, adjusting historical data, etc. They should choose selective data migration. Other factors (Figure 7) that impact the transition path include: 

• Process reengineering
• Data cleansing
• Data transformation
• Phased go-live 
• Historical data
• Public cloud (target system) 
• System split or consolidation 

Figure 7: Selective Data Transition Parameters (Source: SAP) 

Now selective data transition can be further classified into shell conversion (more reuse) or mix and match (more redesign) based on the following scenario:

• When there is a requirement to reuse customizing and further adjust or create on top of the existing customizing, then select shell conversion (Figure 8)

Figure 8: Selective Data Transition – Shell (Source: SAP) 

• When there is a requirement to redesign existing customizing and further adjust or create on top of the redesigned customizing, then select mix and match conversion (Figure 9) 

 Figure 9: Selective Data Transition – Mix and Match Approach (Source: SAP) 

The cost, efforts, and timelines are more for mix and match conversion compared to the shell conversion approach of selective data migration. 

SAP selective data transition is not supported only on the SAP S/4HANA public cloud (multi-tenant solution). 

Technical Implementation Approach 

The selective data migration project is basically a two-stage projects, i.e., first stage is a technical transition followed by a second stage to implement business transformation innovations. The following high-level steps are executed during a selective data migration project based on selected approach, i.e., either shell or mix and match transition. 

• One time creation of an empty shell hosting repository objects, cross client, and client dependent configuration
• One-time technical conversion or creation of the fresh SAP S/4HANA system
• Migration of customizing data 
• Migration of application data 
• Migration of master and transaction data
• Migration of full historical data 

The technical transition approach differs between shell and mix and match – one focuses more on reuse and the other on redesign.  

Shell Conversion (reuse) 

The shell creation process starts on an existing system and creates a new system with the same repository as the original system, including custom objects and modifications. Optionally, the customizing can be part of this process, so that the full customizing is available in the shell. Master and transactional data is left out; therefore, the shell is a rather small system. At this stage the shell has the same software stack as the source system. The shell will then be brought to the desired S/4HANA target version by system conversion and subsequent upgrades, if required. 

The shell conversion is usually a one-time activity at the start of the project to support the creation of a golden system. Figure 10 explains in detail the shell technical conversion approach. 

• SAP model company or best practices in brownfield approach – The SAP best practices content and model company deployment do not foresee a selective application of the models towards a populated environment. Therefore, this is not an option in a brownfield approach. 

• Customizing adaptation – If customizing was part of the shell conversion, it is already up to date for topics such as organizational setup. Minimum scope: adjustment with regards to mandatory changes towards S/4HANA; Optional scope: adjustments in case of further desired changes 

• Custom code adaptation – Since the custom repository was part of the shell conversion process, all custom objects are available from the beginning and remediation can start from the existing custom code base. 

• Double-maintenance – Often, the development of the target system is only created once with a shell conversion. As of then, the double-maintenance process needs to start. A tool to support this is the SAP Solution Manager retrofit. 

Figure 10: Selective Data Transition – Shell Conversion 

Mix and Match (redesign) 

In this approach, the project team creates a fresh SAP S/4HANA installation and then transports or manually transfers the ABAP repository and configurations (customizing) to the target environment. The customer can perform a fit-to-standard workshop to use SAP best practice processes as a baseline and consider existing SAP ECC process as part of delta design exercise. Figure 11 explains in detail the mix and match technical conversion approach. 

Figure 11: Selective Data Transition – Mix & Match Conversion 

Automation Tools for Selective Data Migration 

The majority of SAP partners have the tools for the following tasks of selective data migration to save cost, effort, and time on the project. The tools provide approximately a 60% reduction in time for overall migration to SAP S/4HANA. Some of the tools are mentioned below:  

• Custom code
• Automated custom code adaptation
• Customization
• Automated configuration check between SAP ECC and SAP S/4HANA
• Automated configuration adjustment and remediation between SAP ECC and SAP S/4HANA
• SAP Fiori 
• Automated activation of the standard SAP Fiori applications
• System creation and migration
• Automation of shell creation from SAP ECC
• Automation to check post- and pre-conversion steps of SAP S/4HANA migration
• Data
• Automated tools to compare and validate the migrate data between SAP ECC and SAP S/4HANA
• Migration of historical, adjusted, or selective data from SAP ECC to SAP S/4HANA
• Majority of the partners have done partnership with CBS, Datavard, SNP, or Syniti to support the migration of data from SAP ECC to SAP S/4HANA
• Automated migration from old general ledger to new general ledger 

In short, selective data transition (Figure 12) is all about combining the benefits of both approaches without their limitations: use the innovations in S/4HANA, while selectively leveraging/re-using your investment.  

Figure 12: Selective Data Migration Decision Parameters  

The major challenge faced in the selective data migration is adjustment of the customizing (forex – change in company code structure) and transfer of selective data (forex – data migration for only few company codes) to SAP S/4HANA. The below points/lessons learned should be discussed in advance with the implementation partner to mitigate any risk in the digital transformation. 

• Understand how to create or adjust the current customizing and migrate to the new SAP S/4HANA system 
• Understand how the current add-ons in the system will be migrated to the new SAP S/4HANA system 
• Understand how the selective or adjusted data will be migrated to the new SAP S/4HANA system 
• Understand if there is a requirement to set up the parallel landscape to support the in-flight projects, etc. 
• Understand how much custom code will be migrated to the new SAP S/4HANA system
• Understand the accelerators such as automated code remediation, automated configuration migration, or automated data migration available with the partners to reduce the cost, efforts, and implementation timelines
• Understand that activities can be executed in parallel in the selective data migration to expedite the project forex – new functionality implementation and custom code remediation can be done in parallel 

What Does This Mean for SAPinsiders 

SAP selective data transition is not only an IT project but also a major support for the business. As the next steps, I suggest an assessment and having a detailed discussion with SAP and partners to understand if the selective data transition approach will be beneficial to your organization. The selective data transition approach is one of the most important factors that impact digital transformation.