Carefully consider Non-Greenfield

Choosing the right migration strategy for SAP S/4HANA - that was the topic at the IT Online Conference at the end of January 2022 with Thomas Pasquale, managing partner and founder of GAMBIT.

What are the consequences of deciding for or against a particular migration path for SAP S/4HANA? What criteria should companies take into account - besides the often asked question of costs - when making a decision? And what speaks in favour of the greenfield approach in many cases after all?

In a conversation with Helge Sanden (Editor-in-Chief of IT-Onlinemagazin), Thomas Pasquale shared his thoughts and experiences with the audience at the conference. The topic of his contribution: "Why a non-greenfield migration should be well considered". More than 300 registrations for the contribution proved the high interest of companies in this issue.

As Thomas Pasquale explained, the choice of the appropriate transformation strategy in cooperation with GAMBIT is not fixed in any case, but always depends on the individual requirements, prerequisites and goals of a company. At the same time, however, it is a central strategic decision for the future viability and full utilisation of the potential of SAP S/4HANA - and thus also decisive for the future success of companies.

A catalogue full of criteria

"We always start by going into a decision-making process in a very neutral way," said the founder of GAMBIT. "At the beginning, however, we always ask those responsible what they actually want to achieve with such a project. If companies then start not always looking at money alone, but include strategic objectives, then in many cases new perspectives suddenly open up."

According to Thomas Pasquale, a whole series of criteria play an important role in the decision-making process, which many companies do not always consider directly, but should. At the IT Online Conference, he cited the criteria of strategic goal achievement, SAP strategy and demographic development as examples.

The crucial question about the goals

When it comes to achieving strategic goals, the first thing to do is to record the goals of the top management, evaluate them, condense them and then assess them. Often, a clear tendency emerges from this thorough analysis and alignment of the paths against the operational and strategic goals of the company, because most goals can only be achieved in their entirety with Greenfield.

If, on the other hand, the companies are satisfied with the status quo or if they already have a well-made, newer and already highly integrated ECC system, then brownfield would also be conceivable.

Another very important criterion is SAP's strategy. "Companies have to ask themselves whether their migration scenario is diametrically opposed to SAP's product portfolio and strategy, or not" said Thomas Pasquale. SAP's strong focus on the cloud, best practices and extensions via apps requires a "plug-and-play architecture", which can only be achieved with Greenfield.

Experts leave the company due to age

Demographics and the associated risks of losing employees familiar with SAP ECC should also be taken into account by companies when deciding for or against a certain migration path.

If, for example, the changeover is carried out according to the brownfield approach, then the risks are disproportionately higher than with greenfield. The reason is that the system conversion is only a technical migration and the architecture remains largely identical after the changeover - but the internal experts for these systems are no longer permanently available because they will leave the company in the near future for reasons of age.

In addition, companies would have to ask themselves how they could be permanently attractive for new employees - according to Thomas Pasquale, this is also an often underestimated criterion. It is doubtful whether a company that relies on a traditional and sooner or later outdated ERP system will succeed in attracting new employees - and yet this is exactly the environment in which the company finds itself after a technical migration.

Last but not least, costs also play a central role. However, it makes sense to look not only at the amount of the investment, but also at the benefit of the respective architecture and the amortisation period, says Thomas Pasquale.

"The investments are usually significantly higher with a greenfield approach than with a brownfield approach," said Thomas Pasquale. The payback period, however, is on average less than three years for a greenfield implementation, whereas there is no real return on investment at all for brownfield.

Check thoroughly, decide better

"My recommendation is therefore to first bring all arguments for or against an approach to the table. Companies should look at what is actually relevant for the company. I also advise them to compare their own requirements and processes with SAP's developments and products - especially in view of SAP's strategy with the SAP S/4HANA core," says Thomas Pasquale.

"Ultimately, companies must then ask themselves whether they are already on the right track or whether they still want to carry out a thorough investigation in the run-up to the changeover in order to then be able to make a fact-based and profound decision with the results."