Last month, Anglepoint was proud to take part in the annual German SAP user group summit – a three-day event full of exciting discussions and news about SAP’s current and future developments.
But the real focus of the event was on the process of transforming current ECC-Systems to S4/HANA or cloud-based options like S/4HANA Cloud or RISE with SAP. This comes on the back of SAP’s announcement to migrate all current Business Suite / ECC customers to S/4HANA or S/4HANA Cloud and end mainstream maintenance for Business Suite 7 / ECC in 2027.
That means all ECC customers must migrate to either S/4HANA or Cloud by 2027, and all customers must migrate to the cloud by 2040.
Either way, cloud is coming. The question is, which route is best for you? In this article we’ll dig into some of the key questions to consider:
- When should I migrate to S/4HANA or move to the Cloud?
- Which migration option should I choose?
- What will happen to implemented licensing models?
How do I know which SAP migration solution is best?
Let’s start with the basics. There is no golden rule. The best SAP data migration solution for you depends on your current set up and particular future requirements.
While SAP offers support in finding the right approach to fit customer needs, it’s crucial that you understand your own license entitlement and future demand for a successful migration.
We recommend carefully analyzing legacy contracts and previously negotiated scenarios. New licensing models are being introduced with each new SAP business solution so an in-depth analysis ahead of your migration will help you avoid overspending on licenses within S/4HANA or a cloud based solution like S/4HANA Cloud or RISE with SAP.
S/4HANA Migration: The Greenfield versus Brownfield Approach
When moving to S/4HANA, SAP offers you two approaches – the Greenfield Approach and the Brownfield Approach.
The Greenfield Approach is a contract conversion. With this approach, S/4HANA is implemented completely fresh and doesn’t take over any previously customized developments. This has its perks as SAP is also currently offering incentives for customers choosing to move to S/4HANA entirely. With this migration a new streamlined licensing model will apply which has been introduced by SAP to simplify their extensive licensing options. But, as with any other negotiation, it is very important to understand what you currently own and what your future demand might be. This information will help you negotiate your license demand and use previously purchased but unused products as leverage.
The Brownfield Approach is a product conversion. This approach will enable you to gradually migrate to S/4HANA leveraging existing elements of your current ECC environment. In this approach, you can decide which SAP products migrate to S/4HANA.
Cloud-based Migration Solutions
SAP also offers cloud based solutions to their customers: S/4HANA Cloud (the SaaS version of S/4HANA) or RISE with SAP.
The advantage of SAP’s cloud-based solutions is they offer most of the S/4HANA functionalities without the need of hardware, databases or IT employees like an on-premise version. Like any SaaS product, with S/4HANA Cloud you are subject to a subscription-based license rather than the traditional perpetual licensing model.
For these models, you can choose to use either Public or Private Cloud. Public Cloud is SAP’s most streamlined offering with the highest level of standardization. However, Private Cloud is the preferred option if you need more flexibility and functionality. Both are covered within the migration to RISE with SAP.
RISE with SAP is a new business solution designed to simplify the switch to S/4HANA Cloud. Included in RISE with SAP are: S/4HANA Cloud, industry next practices and extensibility, migration tools, Business Technology Platform (BTP), SAP Business Network Starter Pack, Business Process Intelligence (including Signavio and Process Insights). The new cloud-based licensing model consists of full-use equivalent user licenses (FUE) and is significantly different to any previous SAP named-user type models.
To migrate current ERP Central Component (ECC) licenses or S/4HANA license types to the new cloud licensing model full-use equivalent, SAP provides a new STAR (S/4HANA Trusted Authorization Review) service, which can support you in analyzing the demand within the new FUE licensing model based on current license counts.
Whichever option you choose, remember that successful migration requires knowing what you already have and what you might need. This means understanding and optimization of current licensing models, current deployments and future demands before you start the negotiation process.
Not sure what to do next? If you need help evaluating your options, Anglepoint can support and provide insights on the optimal licensing solution for you – whether it’s S/4HANA, S/4HANA Cloud or RISE with SAP. Start a conversation with us.