Keep the Core Clean: Intelligent Automation

Regardless of the statistic chosen, the percentage of existing SAP customers who have not yet converted to Hana and S/4 remains enormous. A study by the German-speaking SAP User Group (DSAG) in collaboration with its American counterpart ASUG found that at the end of 2020, just 20 percent of customers were productive with S/4, 30 percent were actively working on the transformation, another 30 percent were in preparation, and 20 percent had not even started. This was confirmed by SAP's announcement that 18,800 companies were now listed as S/4 customers at the end of 2021.

However, it is unclear at what point in the transformation they are. Based on a baseline of 41,500 SAP customers and assuming that most companies also run significantly more than one SAP environment, the transformation backlog is enormous in any case, and the planned end of life for SAP ERP/ECC 6.0 in 2027 is drawing ever closer.

Skills shortage

The shortage of skilled workers and resources is the biggest risk for S/4 transformations. Many companies are now worried about the availability of internal and external expertise to handle the outstanding transformations in a timely manner. Appropriately, the German Handelsblatt ran a headline in this context shortly before the turn of the year: "The shortage of consultants is becoming a problem for SAP". The article describes the tense situation on the SAP consulting market and predicts that this will become even worse in the future. Also in a recent study published by ASUG, 26 percent of the participating companies named the biggest challenge in connection with S/4 Hana technology as: resources to support, develop and update SAP systems.

This shortage of resources has a similar effect everywhere, both on existing SAP customers and on system integrators and consulting firms that want to support their customers in the transformation: Suitable and available consultants are scarce, thus labor costs for qualified employees are rising significantly. Even in so-called low-wage countries, the daily rates for external consultants with S/4 experience are rising steeply, and system integrators are fighting tooth and nail to find the appropriate resources. The effects of the war in Ukraine on the availability of nearshore resources from this region are not even foreseeable yet.

The strategies of the past no longer work. The problems of the S/4 skills shortage and resource scarcity are clearly evident. But what are the strategies to deal with this situation? And without risking the future business added value of an S/4 implementation or else project deadlines and cost overruns. 

After all, S/4 projects are usually complex, time-consuming and long-running. They also require parallel operation at times, as the existing SAP systems must also be maintained and ongoing business requirements must be met. The resulting double burden of operational business on the one hand and project requirements of the S/4 transformation on the other must be managed, and this also against the backdrop of the S/4 skills shortage.

Compromises in the scope and quality of the transformation are definitely not an alternative. These have a negative impact on the lasting benefits of SAP S/4 Hana and acceptance within the organization. Under no circumstances should companies repeat the mistakes of past SAP upgrades, where many technical legacy issues were accumulated. It was precisely these that ultimately led to the ubiquitous slow release cycles and often unstable, insecure, and difficult-to-maintain systems that we see again and again in operational practice today.

Extending the changeover periods is not a real alternative either: the time until the new systems actually go live and add value, the duplicate maintenance until then, the impact on the ongoing business, the double burden on internal teams - all this keeps increasing. 

In addition, the time spent by internal teams on non-strategic, one-off transformation tasks in particular is virtually wasted. These highly qualified experts should use their in-depth knowledge of the company's own business processes primarily to fully exploit the potential of the new digital core of S/4.

Automation

So what alternatives remain when compromises in scope and quality are unacceptable, budgets and timelines are finite, and internal teams are expected to focus on value-added work? A real measure in the context of an S/4 transformation is the use of intelligent automation platforms for the most extensive work areas of the conversion possible: modernization of strategic in-house developments with automation. 

One example of this type of intelligent automation: handling custom processes and in-house developments within S/4 transformation programs. According to the latest SmartShift benchmark, the average SAP ECC system contains more than 25,000 custom developments and over 3.5 million lines of custom code. On average, 60 percent of these are actually still in use. As part of the S/4 transformation, the focus should be on modernizing strategic applications, while unused or redundant legacy code can be removed. The ideal case even goes a step further to the "SAP Clean Core" - a standard SAP S/4 system on which strategic customer-specific extensions run decoupled on the Business Technology Platform (BTP) or even completely outside SAP. With this architecture, SAP customers are once again able to deploy updates and upgrades from SAP more frequently and more quickly.

Avoid manual efforts

The adaptation of all in-house developments to S/4 Hana or even the decoupling of applications from the "SAP Core" often turns out to be small-scale and laborious. In a first step, you define strategic applications and a risk-free approach to decommissioning unused code. For the remaining user-defined processes, you identify all technical components and implement compliance and, at best, optimization measures for the new S/4 core and the new data model. From experience, this transformation requires dealing with thousands of customizations in the in-house developments, which in turn entails hundreds of days of purely manual work.

This does not include further reasonable adjustments in the legacy code base with regard to security, performance, stability and maintainability, which once again run into the thousands. Simply leaving strategic applications behind and re-implementing everything may be seen as an alternative, but only with unlimited budget and time. Just documenting the as-is processes and requirement is a major project in itself.

ATC Quick Fixes

A completely manual or even semi-automated approach with developer-
Tools like SAP ATC Quick Fixes (ATC, Abap Test Cockpit) has a good chance of leading to the mediocre transformation results described above: Compromises in scope and quality, budget and time overruns, blocked internal resources. Not to mention that due to the lack of resources and skilled workers, these projects cannot even be staffed with truly suitable professionals.

Therefore, many well-known companies now use best-in-breed automation, ideally as turnkey solutions with SLA-assured results. This enables: massive runtime reduction in transformation projects; outstanding transformation quality with thus significantly reduced testing and regression efforts; and reduction of technical and business transformation risk with SLA-assured results.

Relieving internal resources of mundane but time-consuming manual tasks. Ability to reuse existing processes - while paying off accumulated technical debt and modernizing applications.

For over 20 years, Smart-Shift has been helping SAP user companies modernize SAP systems through automation. The approach enables lean, modern and secure custom extensions to SAP's "Digital Core". The solutions are based on an intelligent Automation Platform and support scenarios such as Hana and S/4 transformations, system consolidations and carve-outs, as well as complex modernization and security projects. SmartShift delivers a consistent and secure approach to custom code modernization, reduces transformation times and test cycles, enables technical and business agility, and saves its customers unnecessary, resource-consuming manual work.

A brownfield S/4 transformation with 69,000 user-defined objects was successfully completed at existing SAP customer Evonik Industries. 350,000 code customizations for Hana, S/4, performance, security, cloud readiness and standardization were automated. The transformation took less than five weeks and was completed to the highest quality with less than a handful of tickets in testing. In addition, automated dual maintenance kept the business running smoothly throughout the project. Evonik eliminated much of its technical legacy, which had previously accumulated over the past few years, as part of the project.

And BMW also uses SmartShift Intelligent Automation: in the past three years in 80 projects, for 39 SAP landscapes. The result: more than 44,000 in-house developments with over eight million lines of code have been decommissioned, several million coding problems fixed, and thousands of days of manual work saved.