Clean core

Successful SAP ERP has always been a mixture of standard software and customization. The adaptation of a standard business program to the requirements and wishes of the user was carried out either by SAP's own industry solutions or by add-ons and modifications from existing customers and SAP partners.

The numerous Z modifications, Abap programs and ERP add-ons are as colorful as life itself. This means that existing SAP customers need a lot of experience and proven partners when it comes to individualizing, simplifying and orchestrating their own ERP system in order to keep it up-to-date and ready for future releases. There have always been and will always be modifications. Selected SAP partners already have the knowledge of ERP-compatible enhancements in line with the clean core concept. Victor Lozinski, founder of the successful SAP partner LeverX, explains in the E3 interview: "The SAP clean core concept offers companies considerable advantages by creating a lean, efficient and updatable ERP environment. By reducing customer-specific changes in the SAP core system and using external services, companies can introduce new SAP innovations faster and more cost-effectively."

Business Technology Platform

This approach ensures smoother upgrades, minimizes system disruption and supports business agility. "LeverX's expertise in implementing BTP-based enhancements and leveraging SAP's cloud computing ensures that our customers benefit from a clean core while maintaining their unique business processes," adds Victor Lozinski.

There are many rules, programs and procedures for an S/4 conversion. What is special about Clean Core for the SAP community? Clean Core is special in the context of S/4 Hana because it focuses on reducing customizations in the ERP core and focuses on leveraging BTP for side-by-side enhancements. "This approach ensures that the system remains stable and optimized for future upgrades by leveraging SAP's continuous enhancements without the need for extensive rework," explains Victor Lozinski. "The LeverX team supports this conversion with comprehensive clean-core methods and tools that simplify and streamline the conversion process."

Customizations were very important for SAP customers with R/3 and ECC 6.0 in order to differentiate their ERP from the competition. The clean core approach does not mean the elimination of all customizations or the abandonment of competitive advantages. Rather, it reflects a change in the way customization and differentiation are achieved. It is important to understand that S/4 Cloud provides a foundation for customers to apply and benefit from technological innovations such as artificial intelligence, machine learning, the Internet of Things (IoT), robotic process automation (RPA), etc.

SAP offers quarterly updates in the cloud with the latest features, performance improvements and compliance changes. Victor Lozinski adds: "By following SAP's standard upgrade path with a clean core, companies benefit directly from these innovations and updates without the need for extensive customization."

E3 magazine interviewed a very successful and long-standing SAP customer about its Abap and clean core strategy. "Following the successful go-live on S/4 Hana, Festo is now focusing intensively on the topic of clean core in the context of our IT strategy," explains Jörn Weigle, Head of Global Information at Festo. "Our goal is to define the optimal way for Festo to future-proof the architecture around our ERP. At the same time, we have already launched a large-scale training initiative to equip our Abap developers with the necessary expertise in the new extension technologies."

For the SAP community, it is an important triad: Clean Core, BTP and Abap. Some members of the SAP community see the Clean Core as a frozen core and therefore the end of further ERP development. Does this mean the end of innovation? "No," says Victor Lozinski, "a clean core does not mean the end of innovation. Rather, it changes the way in which innovations are implemented. By decoupling custom development from the ERP core, companies can more easily leverage emerging technologies such as AI, ML, IoT and RPA via SAP BTP."

SAP Executive Board member Thomas Saueressig said at the DSAG Annual Congress 2024 in Leipzig that we cannot be satisfied with the digital transformation: "Waiting is not the answer." In addition to S/4 Hana, SAP's answer is the aforementioned triad of Clean Core, BTP and Abap modifications. This opens up a framework and a roadmap that can lead far beyond 2040. The BTP framework is an approach for a composable enterprise that can be future-proofed thanks to Clean Core. Thomas Saueressig said in the E3 discussion that SAP's clean core approach is an important part of the corporate strategy for the long-term optimization of IT systems. The aim is to make SAP S/4 Hana installations efficient through standardization and minimal adjustments.

Clean Core and S/4 conversion

When does a clean-core project begin? Before, during or after the S/4 conversion, E3 Magazine asked the LeverX founder. "Ideally, a clean-core project begins before the S/4 conversion in the Prepare phase, as described in the SAP Activate methodology," defines Victor Lozinski. "At LeverX, we support this early analysis and planning and help customers identify customizations that can be made with SAP BTP or within SAP S/4 Hana. Starting a clean-core project early avoids or minimizes rework, simplifies future upgrades and allows companies to adopt new SAP innovations faster and ensure that the new system remains efficient and easy to manage."

For Victor Lozinski, as well as for existing SAP customer Festo, conscientious preparation for the S/4 conversion and cloud transformation is particularly crucial. Lozinski: "Yes, organizational preparation is crucial. A clean core project not only has an impact on the IT department, but also on business processes and user practices. Change management, process adaptation and employee training are crucial."

The management of a clean core/BTP project by both IT and the business units is essential. The responsibility usually lies with ERP architects, CIOs and governance teams, as Victor Lozinski knows from his professional practice. "At LeverX, we can help companies set up governance frameworks and provide strategic guidance to ensure a consistent approach to clean core management," adds the LeverX founder. From an economic perspective, this should reduce the total cost of ownership by simplifying maintenance and updates, says SAP manager Jan Gilg.

"The use of standard functions and cloud-based extensions via the SAP Business Technology Platform (BTP) or on-stack is intended to reduce system complexity. This can lead to faster innovation cycles, lower maintenance costs and improved system performance," says Jan Gilg, President & Chief Product Officer for Cloud ERP, describing the clean-core potential and he specifies in the E3 interview: "The clean-core approach is intended to give companies more flexibility. Fewer adjustments to the core system allow a faster response to new business requirements or technological developments. This is particularly relevant for the transition to cloud-based solutions."

SAP offers extensive resources, including the SAP Business Technology Platform, best practices, methodologies and partner support programs. The LeverX team leverages these resources and adds its own best practices and tools to ensure smooth project implementation. Flexibility, sustainability and innovation are key to success. The clean-core approach is designed to support an organization's ability to adapt to new requirements while remaining manageable.

Victor Lozinski adds: "Our team prioritizes these values and integrates them into our clean-core solutions for the long-term success of our customers. LeverX has deep technical knowledge, industry expertise, delivery methodologies and a people-centered approach to innovation. We also utilize various practices to ensure complete alignment of projects with our clients' current and potential future goals, whether through SAP AppHaus, which ensures alignment with innovation, or through the application of comprehensive change management practices, or both."

Jan Gilg from SAP also emphasized the lasting benefits of a consistent and orchestrated approach to modifications in the E3 discussion: "From a technical perspective, Clean Core aims to create a standardized ERP basis that takes full advantage of SAP S/4 Hana. This can improve performance, security and scalability and facilitate integration with other SAP solutions. SAP sees the clean-core approach as an important factor for the future viability of companies. For both on-premise and cloud installations, it should create the basis for long-term competitiveness and adaptability."

Markus Albrecht, SAP General Manager ASC BTP Solution Area, emphasized in his keynote speech at a LeverX event in Miami, Florida, in autumn 2024 that the speed of development in IT currently requires new frameworks and roadmaps. With GenAI and cloud computing based on SAP BTP, these requirements can be managed and controlled. Change management will therefore be a constant companion of the S/4 and BTP conversion. Is a clean core project a change management project? Victor Lozinski says: "Yes, a clean core project requires significant change management, which has an impact on development practices, user acceptance and leadership alignment."

Change Management

Firstly, the application of Clean Core principles reduces disruption during system updates, allowing management to focus more on strategic goals than system maintenance. The standardization of processes ensures better coordination between departments, leading to better collaboration and efficiency as teams work on a unified system. Technologically, a clean core simplifies the system architecture, which reduces the risk of integration issues and improves system performance. In addition, the latest functions and innovations from SAP can be introduced more quickly and without major adjustments. For Victor Lozinski, it is important that a clean core reduces the costs of maintenance, system downtime and complex upgrades. The ROI results from the faster introduction of innovations, improved system stability and lower operating costs.

In order to reduce operating costs in an SAP environment, the existing customer also needs an appropriate form of organization. So will the CCoE (Customer Center of Expertise) be the control center for a clean core for SAP customers in the future? Victor Lozinski has a clear opinion on this: "Yes, the CCoE will play a central role in the management of clean core projects. LeverX helps to set up these centers and provides governance methods and tools to support customers in achieving and maintaining a clean core." The CCoE is responsible for enablement, governance and communication. These centers ensure compliance with the Clean Core principles, provide technical guidance and coordinate with partners such as LeverX for ongoing updates. "From our side, we work with the CCoEs to ensure strategic alignment and project success," Lozinski emphasizes again in the E3 interview.

However, a lack of personnel and resources does not always make it easy to deploy a CCoE for existing SAP customers. Can the clean core tasks of the CCoE also be outsourced to LeverX, E3 Magazine asked the LeverX founder: "Yes, LeverX offers comprehensive services to support or fully manage the clean core initiatives, from creating a governance framework to providing expertise for implementation."

A clean core is a strategic approach that will continue to be important beyond 2030. Even if migration projects decline, the principles of a clean core will form the basis for future SAP developments and customer-specific enhancements, "which is why we at LeverX will continue to support our customers in this development," says Victor Lozinski, explaining the current and future situation of the SAP community. LeverX offers a range of initiatives, including roadshows, events and workshops, to provide insights into its Clean Core concept. "We also use tools that simplify clean-core projects and the development of strategies with client companies," concludes LeverX founder Victor Lozinski.

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