The "S" in SAP S/4HANA, the software suite for business management with real-time ERP based on the SAP S/4HANA in-memory platform, stands for "simple". This refers to the technology's simplified data model on the one hand and the improved usability of the applications on the other. "Simple" does not refer to the implementation. But this introduction is imminent.
SAP S/4HANA replaces SAP ERP
At the end of 2027, SAP will discontinue further development and mainstream maintenance for its current ERP system. SAP will provide optional extended maintenance until the end of 2030.
There is therefore no question that the switch to S/4HANA must take place. There are differing views on when and how. But one thing can be taken for granted: the changeover will not be "easy", and it will take quite some time. SAP S/4HANA is much more than just an upgrade or a database migration. It involves the entire IT system landscape.
Whether greenfield or brownfield, the data quality of the master data is important for success
It is nothing new that there are different paths to SAP S/4HANA. These are known as the greenfield and brownfield approaches (there is also the path of transforming the IT landscape). With the greenfield approach, a system is planned from scratch ("on a greenfield site"), all company processes are redefined in SAP S/4HANA and only the data is transferred. The brownfield approach involves converting an existing ERP system to the new SAP S/4HANA. Processes and data are transferred to S/4HANA and adapted and improved on an evolutionary basis. Whether greenfield or brownfield: "A high quality of the master data used (is) important. Ideally, the standardization and harmonization of master data objects should begin at the same time as the process design," writes Computerwoche. There is no ideal way to convert to S/4HANA, as confirmed by a survey conducted by IT-Onlinemagazin in summer 2018. According to the survey, the two methods are neck and neck. 42 percent of respondents prefer the brownfield approach, 38 percent the greenfield approach and 20 percent are still undecided. Converting an existing ERP system makes it possible to set up the new S/4HANA environment more quickly, as the existing processes are largely adopted. At the same time, brownfield migration "requires a high level of master data quality and presents various pitfalls, for example with regard to customer-vendor integration or the analysis of in-house developments," as Alexander Haas, SAP Logistics Consultant at GISA, emphasizes. Indeed, the integration of customer and vendor master data is an important point.
Customer and supplier master data in S/4HANA
In the previous ERP system, customers and suppliers were created as "customer" and "vendor" - i.e. twice. In SAP S/4HANA, it is mandatory to map both as "business partners". In SAP S/4HANA, the "business partner" is the leading object and the central entry point for maintaining the master data of business partners, customers and vendors. This serves to simplify the maintenance of the above-mentioned master data and to achieve harmonization between them. Basic data is maintained at business partner level. Depending on the assigned role, the business partner can be used as a customer and/or a supplier. Compared to classic ERP transactions, the maintenance of customer and vendor master data via "business partners" offers several advantages (source: SAP Simplification List):
- "Business partner" allows you to maintain several addresses with corresponding address usages (e.g. company address, private address, billing address, delivery address).
- In classic transactions, a customer can only be assigned to one account group. In "Business partner", however, several roles can be assigned to the same business partner.
- Maximum data exchange and reuse of data, which facilitates data consolidation.
- General data is available for all different business partner roles; specific data is also stored for each role.
- Maintaining multiple relationships with the same business partner.
- Maintaining time dependency for properties such as roles, addresses, relationships, bank data, etc.
The data model has to be changed for the new SAP "Business Partner". It is therefore not just a question of migrating the data, but also of changing the type of data management. The issue is easy to understand if, for example, company X has both a customer and a supplier relationship with company Y. Company Y is therefore managed twice in the previous ERP system. Company Y is therefore created twice in the previous ERP system. All changes have to be made twice. In the new S/4HANA, company Y is created as a "business partner", but with two roles, the "customer" role and the "supplier" role. This means that a company can be used in different roles, but the common master data only needs to be maintained once. In SAP S/4HANA, central data (name, address, bank details, relationships) is only maintained in the master data of the business partner and transferred from there to the vendor and customer master data records.
Software for synchronizing master data facilitates the changeover
From a technical point of view, the changeover from SAP old (customer, vendor) to SAP new (business partner) means that the data created twice in the old system must be merged. This is an effort that should not be underestimated. This can be significantly reduced with the help of a software solution (such as zetVisions SPoT) that connects the old and new worlds. The advantage: the new data model can already be used with the solution, but it can also map the old one at the same time. Companies with which business relationships exist can be created as "business partners" (with the respective roles), while "customer" and "vendor" data can still be transferred to the old ERP system. Companies can therefore create data in the new way and continue to operate their familiar ERP world. They also benefit from centralized master data maintenance. This means that the necessary adjustment step can be brought forward before the actual S/4HANA migration, during which the operational posting data is also converted. On the one hand, companies have already improved their master data processes (data governance) and data quality, and on the other, the transition to S/4HANA is much easier, faster and more cost-effective.
The investment in master data management software always pays off
The early use of the new data model also delivers immediate added value, as it significantly reduces the burden on central master data maintenance. So no matter when you decide to use S/4HANA - the benefits are immediate. Very important: the data governance benefits are not only effective before and during the migration, but also afterwards. The advantage of redesigning processes (lean processes) is also fully retained in the S4 world. When it comes to master data management, there will be another aspect in the future: processes are becoming increasingly automated - keyword Robotic Process Automation (RPA) - and fewer and fewer people are needed. This is where artificial intelligence comes into play. However, data governance will also be an issue in a fully automated world. The software investment therefore pays off before, during and after the migration to S4/HANA.
