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If you are reading this blog, you are likely one of our SAP customers still using SAP ERP 6.0. This robust, flexible, and reliable solution was first released by SAP to customers in October 2005. With SAP ERP 6.0 now approaching its 20th year in the market, SAP has announced the end of maintenance for enhancement packages 6, 7, and 8, effective December 31, 2027. After this, there is an optional extended maintenance phase available until December 31, 2030. You can read more about SAP ERP 6.0's maintenance strategy here: https://community.sap.com/t5/enterprise-resource-planning-blogs-by-sap/maintenance-timelines-for-sap...
In the past 20 years, SAP has undergone numerous technological advancements, including, but not limited to, the introduction of Service-Oriented Architecture, in-memory database (such as SAP HANA), blockchain, the Internet of Things, cloud deployments, cloud computing, machine learning, intelligent robotic automation, embedded analytics, situation handling, SAP Fiori, mobility applications, and the SAP Business Technology Platform. We are also witnessing significant promise in the areas of artificial intelligence and embedded AI within application areas.
Recently, I've been discussing with current SAP customers, SAP partners, and SAP colleagues the accelerated transformation that SAP S/4HANA Cloud Public Edition will bring to businesses currently running SAP ERP 6.0. The benefits are numerous, including standardization, a clean core by definition, rapid innovation, technical readiness to adopt new functionalities, upgrades managed by SAP, operations and maintenance driven by SAP, embedded AI, digital assistant capabilities, integrated and external communications (via Microsoft Teams integration & SAP Collaboration Manager), a state-of-the-art user experience, and new SAP Best Practices. All these benefits aim to increase business outcomes by leveraging technological advancements to enhance business value.
However, if you truly want to achieve accelerated business transformation and are considering moving to SAP S/4HANA Cloud Public Edition, I would like to provide you with some key points (though not an exhaustive list) to help you embark on this journey successfully. Remember, SAP S/4HANA Cloud Public Edition is not SAP ERP 6.0, so you cannot treat the implementation or operation of this solution in the same way. Attempting to do so would be comparable to expecting a solution to perform as it did 20 years ago, which is neither feasible nor advisable. Accelerated transformation requires adopting a different approach to running your business and managing your solutions.
Understanding the goal of the solution: SAP S/4HANA Cloud Public Edition is designed to promote standardization through a fit-to-standard process approach, offering rapid innovation cycles at a competitive total cost of ownership. Going live with the solution is not the end of the journey; rather, it's just the beginning. You will need to continually adopt new innovations to deliver business value amid rapid changes in the market, legal frameworks, and industry landscapes. This solution is always up to date and ready to integrate any new functionality SAP delivers, making embracing new innovations to enhance business value a primary objective. In contrast, think about how you managed SAP ERP 6.0: When did you plan your latest enhancement package implementation, and how did you plan to adopt new SAP innovations? Were you always technically ready to embrace SAP innovation?
Cloud Mindset: Since the solution was natively developed in the cloud, adopting a cloud mindset is essential for successful implementation and operation. You cannot apply a traditional implementation approach typical of on-premise solutions, which includes a “fit-gap analysis” or a blueprinting exercise. While these approaches were successful for on-premise solutions in the past, they are not suitable for solutions developed natively in the cloud. The cloud mindset is one of the most critical success factors when implementing and operating SAP S/4HANA Cloud Public Edition. In practical terms, my view of the cloud mindset includes:
The Cloud Mindset is one of the most critical success factors when implementing and operating SAP S/4HANA Cloud Public Edition. In practical terms, the Cloud Mindset in my view includes:
- Adhering to the Fit-to-Standard and Agile deployment, as detailed in SAP Activate.
- Use of SAP Best Practices
- Use of modern, cloud-like integration technologies, enabled by the SAP Business Technology Platform (BTP) and cloud APIs included in the SAP Business Accelerator Hub.
- Drive business differentiation using cloud configuration capabilities and cloud extensibility (in-app extensibility, developer extensibility and side-by-side extensibility using BTP).
Transform your team's skill sets to implement and operate a natively developed public cloud solution: Experience in business processes is crucial for understanding business value, without a doubt. However, applying principles from a solution designed 20 years ago won't suffice for a natively developed public cloud solution. For example, the solution is accessed via a web browser, eliminating the need for an SAP GUI. Instead of using the Implementation Guide (IMG) to configure the solution, you use the SAP Central Business Configuration, among other tools. Therefore, it is essential to upskill your team and choose the right system integrator to assist with this transformation. I have written on this topic already, and I invite you to read my blog, which provides detailed recommendations for building the right team for this Accelerated Business Transformation https://community.sap.com/t5/enterprise-resource-planning-blogs-by-sap/transitioning-from-an-sap-erp...
New Governance and Operations: SAP S/4HANA Cloud Public Edition is primarily managed by SAP, covering aspects such as security, performance, maintenance, upgrades, and more. SAP is responsible for driving the solution for you, adhering to the contractually agreed SLAs of 99.9%. This necessitates a different governance approach, where customers focus on maximizing business value and adopting new business processes, as SAP handles the heavy-lifting aspects of maintaining and operating the solution. While customers will have options to monitor technical aspects, the overall operation and safeguarding of the solution are securely managed by SAP—from upgrades and continuous feature delivery to implementing hotfixes and self-healing the system. Our operations team manages thousands of systems, ensuring the maintenance, operation, and safety for our customers. This approach enables customer teams to leverage the tools and technology as enablers of business value creation. Consider all the tasks you handled in SAP ERP 6.0, and imagine how you can now focus that capacity on maximizing business value instead of simply keeping the lights on and safeguarding system operations.
SAP Code and SAP Best Practices: SAP S/4HANA Cloud Public Edition combines state-of-the-art programming with the use of SAP Best Practices. This solution relies on the synergy of both elements. Whenever SAP delivers new innovations during an upgrade, these include new programming alongside new best practices, ensuring that “Best Practices” are always integral to the solution. In contrast, with SAP ERP 6.0, some pre-configurations and best practices were initially used as turnkey solutions for rapid implementations. However, after the initial go-live, these best practices were often forgotten; no further best practices were utilized, and businesses implemented changes as needed without benchmarking against the collective wisdom of SAP Best Practices.
Greenfield Deployment: To drive Accelerated Business Transformation, SAP S/4HANA Cloud Public Edition is deployed exclusively using a greenfield approach, as outlined in the SAP Activate Methodology. The greenfield approach offers significant benefits, providing an opportunity to start fresh and to utilize a fit-to-standard strategy with SAP Best Practices to transform your business. I have written a blog that covers successful implementations of SAP S/4HANA Cloud Public Edition, which I invite you to read to gain more insights into this journey. https://community.sap.com/t5/enterprise-resource-planning-blogs-by-sap/successful-sap-s-4hana-cloud-...
If you are serious about Accelerated Business Transformation, I invite you to consider a greenfield deployment. This approach allows you to liberate yourself from some of the burdens of the past. It’s an excellent opportunity to abandon custom code by retrofitting to fit standard processes or, as I will discuss later, by using cloud extensibility. Limit the data you bring over, as the greenfield approach only allows open items and historical financial balances. This means it’s a good time to move historical transactional data to a business warehouse since it’s mainly for reference, not for the transactional system. Leave outdated practices behind and be open to adopting new best practices that incorporate state-of-the-art user interfaces and embedded AI. While we offer the option to bring some data objects using the SAP Migration Cockpit, this is also an opportune moment to clean up objects to facilitate more accelerated transformation.
Competitive Differentiation: You might be wondering, how can standard processes differentiate my business? Well, let’s face it—SAP provides Best Practices that allow you to configure your system with different settings, known in the public cloud as “SSCUI – Self-Service Configurations User Interfaces,” included in the new configuration tool called “Central Business Configuration.” These best practices are collections of years of customer feedback on end-to-end processes that SAP has packaged and offered as part of the solution. If the configuration doesn’t provide the differentiation you seek, SAP S/4HANA Cloud Public Edition offers a powerful extensibility framework known as “Cloud Extensibility.” This means you can create differentiation by building unique processes on top of SAP Best Practices using extensibility. Most importantly, this extensibility is “lifecycle compliant,” meaning it’s designed to support frequent innovation cycles (upgrades) without requiring remediations or adaptations—everything you extend will work after an upgrade. Consider this: How many modifications and enhancements did you implement in SAP ERP 6.0? How often did you upgrade the system, and how much did you spend on remediating and adapting custom code? This process is a thing of the past, as SAP S/4HANA Cloud Public Edition is designed as a clean core that cannot be tampered with. For more insights on competitive differentiation, check out this blog I wrote: https://community.sap.com/t5/enterprise-resource-planning-blogs-by-sap/drive-competitive-advantage-t...
Innovation Strategy: SAP S/4HANA Cloud Public Edition is designed to undergo two major rapid innovation cycles (upgrades) annually, along with minor functional updates (monthly) called Continuous Feature Deliveries. Here, I will focus on the major upgrades. These two mandatory upgrades are governed by SAP, but customers must perform regression testing to ensure everything functions correctly post-upgrade. Due to the rapid pace of these innovation cycles, customers rely on test automation to quickly identify issues. The upgrades introduce new innovations for customers, ensuring the solution remains up-to-date with the latest advancements in functionality, best practices, and technology. While SAP handles the technical upgrades, customers need to adopt new best practices or enable new functions. As such, it’s crucial for customers to develop a routine of continuously leveraging the latest innovations as market, industry, and legal dynamics evolve. These upgrades occur twice a year over four weeks—yes, just four weeks! How is this possible? Through standardization, clean core design, the cloud extensibility framework, customer - SAP test automation and excellence in automated operations.
Back in 2007, when I led the Upgrade Competency Center for SAP in the Americas, the average SAP customer upgraded their systems every 3 to 5+ years. The opportunity cost of not adopting the latest SAP innovations was significant, as customers often weren’t technically prepared to integrate them. This led to widespread system modifications to meet business requirements rather than driving innovation with standard code. Customers typically delayed upgrades due to concerns about risk, cost, business disruptions, and code remediation costs, as upgrades for SAP ERP 6.0 were complex and approached more from a technical perspective than a business-driven one. Consider this: How many upgrades did you perform in SAP ERP 6.0 to reach the latest enhancement package? Even though enhancement packages were cumulative, what functionality could you have benefited from earlier? In SAP S/4HANA Cloud Public Edition, there’s no need to worry, as upgrades are part of the solution, and we have extensive experience managing them for thousands of systems.
Consider the public cloud landscape for truly accelerated transformation: If you are currently using SAP ERP 6.0 along with other SAP solutions such as SAP Business Warehouse, SAP NetWeaver, SAP HCM, SAP CRM, or SAP SCM, take the opportunity to drive accelerated transformation by exploring their public cloud counterparts in your business transformation plan. For example, if you are using SAP Business Warehouse, consider deploying SAP Datasphere. If you use SAP HCM, why not explore SAP SuccessFactors? For SAP SCM, consider SAP IBP, and for SAP CRM, think about SAP Cloud for Sales.
I understand that customer landscapes often include both SAP solutions and third-party applications. However, the more you transition towards public cloud solutions, the better you can avoid complexities and drive accelerated transformation by harmonizing experiences, operations, and governance across your organization. While this transformation won’t occur overnight, include these changes in your plans and execute them with that goal in mind.
Two-Tier ERP Deployment: If you are part of a large corporation already running SAP S/4HANA Cloud Private Edition or SAP S/4HANA on-premise, and your SAP ERP 6.0 systems are businesses that need integration into the corporate system, consider whether these businesses could achieve accelerated business transformation using SAP S/4HANA Cloud Public Edition in a two-tier deployment instead of implementing them within the corporate systems. SAP offers a full Cloud ERP strategy through two-tier ERP deployment, enabling integration between SAP S/4HANA on-premise and SAP S/4HANA Cloud Public Edition or between SAP S/4HANA Cloud Private Edition and SAP S/4HANA Cloud Public Edition. Understand that this strategy is supported by SAP, and many customers utilize it to accelerate business value, particularly when incorporating diverse businesses into a corporate central setting is complex.
A two-tier strategy can provide business units or subsidiaries the independence to operate while maintaining common data structures with the corporate level. However, be aware that the innovation speed in this setup can vary, and you will need to factor this into your system governance approach. I invite you to read more about two-tier ERP here: https://www.sap.com/products/erp/what-is-erp/two-tier-erp.html
Foundational Elements for SAP Business AI: In SAP S/4HANA Cloud Public Edition, we have incorporated embedded AI and Business AI throughout the solution. However, generative AI alone won't unlock the full transformational potential in your current business operations if it isn't combined with other intelligent technologies already available in SAP S/4HANA Cloud Public Edition and the SAP Business Technology Platform (SAP BTP) as a business enabler. True transformational value is achieved by integrating all these elements, leveraging the latest advances in generative AI alongside the robust foundational elements of SAP S/4HANA Cloud Public Edition. I invite you to read this blog for a deeper dive into this topic: https://community.sap.com/t5/enterprise-resource-planning-blogs-by-sap/foundational-elements-for-har... In contrast, none of these elements were available in SAP ERP 6.0. So, why stay behind and not take advantage of these new technologies to increase your business's productivity?
I hope this content helps you understand accelerated business transformation as you prepare for this journey. Your insights and opinions are valuable, so please don't hesitate to contribute by adding comments to this blog.
More Information on SAP S/4HANA Cloud Public Edition:
- SAP S/4HANA Cloud Public Edition, release info here
- Product videos on our SAP S/4HANA Cloud Public Edition and SAP S/4HANA YouTube playlist
- SAP S/4HANA PSCC Digital Enablement Wheel here
- Early Release Webinar Series here
- Inside SAP S/4HANA Cloud Podcast here
- openSAP Microlearnings for SAP S/4HANA here
- Best practices for SAP S/4HANA Cloud Public Edition, here
- SAP S/4HANA Cloud Public Edition, Community: here
- Feature Scope Description here
- What’s New here
- Help Portal Product Page here
Follow us via @SAP and #S4HANA or follow @Marco_Valencia
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