Transformation Champion

E-3 Editor-in-Chief Peter Färbinger spoke with Thomas Failer, Group CEO of Data Migration International (DMI), about the best possible path to Hana and S/4, as well as DMI's individual assistance and management concepts for SAP legacy customers.

Hardly anyone in the SAP community doubts the necessity of an ERP generation change - even if there is a lot to be said for staying with the existing business processes. Over many years, SAP's system has matured and been perfected by existing customers.

The users have mastered the business processes and the systems run stably and with low operating costs in their own data center. But the vast majority of systems are not prepared for the upcoming digital transformation!

The generational change specified by SAP therefore appears logical and thus necessary. All experts in the SAP community agree on this. The challenge: It is a generation change and not a technical release change.

However, to avoid the resource requirements of a new ERP implementation during the transformation to S/4 Hana, the help of experts and SAP partners such as Data Migration International (DMI) is unavoidable. It would be reckless and irresponsible not to draw on the knowledge and experience of the transformation champion DMI.

"The transformation and migration to S/4 Hana and the Hana database is challenging at all levels"

says DMI CEO Thomas Failer right at the beginning of the E-3 conversation.

"The more data and business objects you transfer from legacy systems, the more expensive it becomes. The more effort you have to put in during the project and afterwards."

In this context, the new software generation offers the possibility of reducing the number of business objects from the 180 possible to perhaps 40 or 50, as Thomas Failer knows from numerous successful customer projects.

New, innovative and different

In addition, S/4 comes up with new and changed business objects. For example, the previously separate objects customer and supplier have been merged into the new business object business partner. In addition, the switch to a new software generation offers the unique opportunity to adapt and redefine processes.

"SAP Hana and S/4 not only provide the technical basis for this, but also enable and support new digital processes and business models. Against this background, it makes little sense to transfer all business objects - whether standard objects or those created in-house - from the old to the new world."

DMI CEO Failer emphasized.

What is true at the level of business objects is even more true at the level of data and documents. 90 to 95 percent of legacy information is retained for legal reasons, but certainly also for business reasons, for example in mechanical and plant engineering, where customer projects last not just days and months, but years and decades.

However, even though the business benefits are great, the vast majority of data and documents in the databases of existing SAP customers are no longer subject to change. Instead, they must be stored and maintained in an audit-proof manner for compliance reasons.

"But this legally compliant, because it is audit compliant, storage does not have to take place in legacy systems"

Thomas Failer explains.

However, this is also not possible in the Hana database, because SAP's new database generation requires completely new data structures and the data and documents would thus lose their evidential value as soon as they were transferred there. Only the data that is operationally required in the new system environment should therefore be transformed and migrated, recommends CEO Failer and explains further:

"The large remainder, on the other hand, should be kept on a separate, legally secure platform that costs much less to operate than the SAP legacy systems, but on which the legacy information always remains accessible, even via SAP S/4."

Holistic challenge

Moving to SAP S/4 is challenging at each of the levels mentioned, and many experts and SAP partners know that ERP environments are complex and multi-tiered after years of corporate restructuring and modernization, mergers, spin-offs, divestitures and other actions.

SAP's existing customers are well aware that ERP systems become more demanding with every market change, new requirements and, last but not least, every new release. This makes the transformation to S/4 and Hana an extremely complex and therefore - without an appropriate partner - a rather risky project. Especially since the move to S/4 is more than just a "simple" release change.

Against this background, companies need to consolidate their data and systems - with all areas in view! Transparency, comprehensive reporting and compliance with tax and legal regulations must be ensured.

A common side effect of organizational transformations in general, and the complex S/4 transformation in particular, is noticeable disruptions in the preservation of information for compliance. If information is lost or no longer matches current processes during audits, the organization faces major legal and perhaps even criminal liabilities, warns Thomas Failer.

According to recent studies, data and system security is one of the most important concerns of business leaders. Concerns about potential system breaches are well-founded among SAP's existing customers, as the expenses in terms of damage limitation, system downtime and follow-up costs are considerable.

Interfaces and data protection

Up-to-date and complete interface documentation is a prerequisite for interface monitoring and for planning and implementing changes in the system landscape as part of technical or business transformation projects.

Interfaces are critical for business processes because they ensure the exchange of information within the system landscape and with external communication partners, as experienced transformation experts repeatedly emphasize.

In this context, the interface analysis in the context of the S/4 transformation is also of utmost importance in view of the EU General Data Protection Regulation. Accuracy and speed play a decisive role in interface identification in the run-up to a transformation.

DMI's analyses and preparatory work are thus essential for S/4 transformation projects, because only a holistic approach and a comprehensive view of tasks can guarantee success. The DMI platform also offers the possibility to clean up and optimize the stock of legacy information even before the migration, for example by enriching it from other data sources.

"This is a huge opportunity"

knows Thomas Failer,

"because only correct and meaningful data can form the basis for Big Data scenarios. Finally, it must be taken into account that it is very costly - both financially and organizationally - to protect legacy systems against cyberattacks while at the same time meeting new compliance requirements, especially in the area of data protection."

At this point, Thomas Failer's E-3 conversation naturally also refers to the European General Data Protection Regulation (EU-DSGVO). Among other things, this regulation stipulates that it must be possible to delete information down to the level of the individual data record in a legally secure manner.

However, not all existing SAP systems have the comprehensive retention management functionalities required for this. Retrofitting would therefore be costly, to say the least, if it were technically possible at all.

"So a legacy information retention platform is much more than an archive"

DMI CEO Failer explains,

"because it must be able to manage the entire lifecycle of data and documents that are no longer operationally required, from transfer to final legally compliant deletion."

Against this backdrop, the switch to S/4 and Hana in the lifecycle of existing SAP customers offers a great opportunity for digital transformation, for new digital business processes and models. DMI CEO Failer is certain that this is best achieved in terms of technology, organization, business management and licensing law if companies seize the opportunity to reduce business objects and the volume of operational information.

Migration platform for S/4

"In the case of our Information Management Platform JiVS IMP, the associated benefits are quite concrete: 80 fewer operational costs compared to continuing to operate the legacy systems, halving the financial and time migration effort, 100 percent information access, the basis for 100 percent legal certainty, and an estimated 25 percent savings in the total cost of ownership (TCO) of the new software generation from Walldorf.

This is because, as part of the target landscape, data and documents that are no longer required operationally can be continuously transferred to JiVS IMP and managed there. SAP S/4 and Hana thus remain lean in the long term, which not only increases agility but also saves on licensing, hardware and operating costs," Thomas Failer knows from many successful customer projects.

However, users and experts in the SAP community are aware that, due to numerous modifications and add-ons, hardly any operational SAP ERP/ECC is the same as another: Are there generally applicable approaches and procedures for the S/4 transformation? Thomas Failer:

"Hana and S/4 create the basis for digitization at SAP's existing customers. The main goal that companies are pursuing with this is to become more agile, just as agile as the large and well-known providers of digital services on the Internet. IT has to become much faster at implementing and delivering such digital services, often in addition to the existing range of products and services."

Indeed, users in the SAP community - whether in business departments or in management - expect the kind of agility they are used to from the public cloud and from their smartphones. But more agility also means realizing business strategies and activities faster than before, Failer emphasizes.

The digital transformation is leading to restructuring and reorganization within the company, to the spin-off of business units and parts of the company, and also to strategic acquisitions and mergers. Until now, IT has struggled to map and support these measures quickly and flexibly at the system and application level.

Agility and digitalization

"Agile business scenarios, new digital processes and business models first and foremost need support at the level of applications and business objects. These are subject to and must also be subject to continuous change, much more so than before. At the level of data, however, the opposite is true, especially for legal reasons. Stability is required here," says Thomas Failer, explaining the approaches to the challenges of digitization.

So regardless of the question of how many business objects will be transferred to the new world, how many self-developed objects there are and will be in the old and new application landscape, how frequently business objects will be adapted and further developed in the future, the question of standardized solution paths can clearly be answered positively.

"Yes, there is a basic universal approach: the greatest possible separation of the application level from the data level. With JiVS IMP, our customers achieve this separation for the data and documents that are no longer needed in operational business."

is how Thomas Failer describes the S/4 transformation. The existing SAP customer always focuses on the core areas of data and business objects.

"That is indeed so"

is how DMI CEO Failer describes the current situation.

"From a business perspective, the music plays in the business objects. This is where business agility is reflected. The data, on the other hand, is dependent on stability. Until now, many companies have tried to resolve this conflict of goals in the conventional way - and inevitably fail.

They try to archive as much data and documents as possible using the ADK interface. In the process, they discover that the result usually falls far short of expectations. Anyone who has ever tried to delete material masters using this method knows what I'm talking about."

Thomas Failer reports from numerous discussions with existing SAP customers, who then have only two options: Either they invest a lot of time and money in an extensive consulting project in order to reduce the information stock after all. Or they transfer all the data and documents that have accumulated over the years to the new solution. In either case, however, they will have to continue operating their legacy systems in parallel with S/4 for many years.

Classic approaches such as archiving or transferring the data stock during migrations cannot solve the fundamental conflict of goals. Thomas Failer knows that a different approach is needed:

"The strict separation of the layer with the historical information from the layer of the applications. With its architecture, in which the individual layers - data, apps, interfaces - are separated from each other as clearly as never before, S/4 offers the advantage, so to speak. However, this approach is not only optimal for the migration itself, but also for its preparation and the time afterwards."

With this approach, customers can save 80 percent or more in operating costs compared to continuing to operate legacy systems, which they can completely shut down and dispose of. The migration effort can be halved and the volume of data to be transferred reduced to a minimum - the keyword is zero migration.

The total cost of ownership (TCO) of the new SAP environment is reduced by an estimated 25 percent because operational data and documents can be regularly transferred to the separate level of legacy information. At the same time, SAP legacy customers have 100 percent access to legacy data and documents including business context - the basis for 100 percent legal certainty.

Acquisitions, mergers and disposals

In addition, in the case of acquisitions and mergers, information no longer has to be transferred from the systems taken over by the seller. Instead, it can simply be displayed in the operational systems. When selling parts of a company or business units, the information to be transferred is selected at the level of historical data and documents and then handed over in a neutral format. And rightsizing SAP landscapes no longer requires complex individual projects, but is built into the target landscape, so to speak.

"The link to the business object level consists firstly of transferring the complete information inventory from the legacy systems to our JiVS IMP information management platform and then separating the data that is no longer required operationally from that which is to be transferred to the new systems"

DMI CEO Failer explains the procedure. JiVS IMP transfers the rules for the selective transfer of data and documents from the legacy system to third-party solutions in the form of whitelists. "We call this method 'First separate, then migrate'. In between lies the transformation.

This is one of the core competencies of our software according to the business objects that the respective existing SAP customer needs to support its processes in the new application and system landscape," defines Thomas Failer.

The success of large-scale IT projects, of which the change to S/4 is undoubtedly one, is determined by the right analysis, planning and implementation procedures, as well as experienced experts at the customer's side. This is generally true, even in the case of S/4 transformation, and it is especially important in the case of highly heterogeneous systems that have evolved over years, been modified, and thus not infrequently grown into pure colossi.

And indeed, the switch to S/4 then also involves risks, and examples from the recent past with losses in the millions have shown how momentous poorly executed IT and business transformations can actually be.

The key to success is an analysis and transformation approach based on modern and highly automated software solutions. The resulting risk reduction and efficiency cannot be achieved with any other approach. In addition, the full conversion of historical data adds another dimension of security by ensuring tax compliance and regulatory compliance with minimal disruption to business operations.

The strong automation, high migration speed and minimal downtime simplify the transformation. Project duration and costs are reduced by up to 50 percent. With the analytical and strategic functions, the standardized DMI software provides accurate planning of business scenarios and detailed estimation of project costs.

Legacy data transformation

But how should and can the legacy data be technically transformed?

"The decisive factor here is the preparatory work, which for us is called housekeeping"

Thomas Failer defines the roadmap.

"In order to prepare the transformation properly and efficiently, all legacy data should be transferred to a system-independent platform for information management. Please allow me to explain this using our own platform JiVS IMP, simply to be able to answer your question as concretely as possible. Especially for the decommissioning of SAP systems, JiVS IMP enables automatic data transfer practically at the push of a button.

For mapping the business logic of SAP data, the platform has more than 1200 predefined business objects for the relevant SAP modules, such as FI document, sales order, invoice, HR master record, etc.. All data is transferred completely and unchanged, including customer-specific tables and fields. Data access is configured via integrated JiVS-IMP functionalities."

However, the most important aspect of this basic preparatory work is that the historicized information always remains accessible. Only then can companies migrate only that part of the data to S/4 that they actually still need in their day-to-day business, for example, open orders.

For this purpose, JiVS IMP offers an analysis tool with a wide range of parameterization options. For example, the information stored in the legacy system can be selected according to orders that are older than six months and have therefore already been completed, or according to company codes and plants that no longer exist.

Master and transaction data

Further selection criteria for a data reduction potential analysis (DRPA) would be, for example, org units, various master and transaction data types, modules that are no longer required such as MM/PP and Basis, or certain business objects. The result of this DRPA are reports for the management in the form of white or black lists, which indicate which tables and fields are transferred to tables or are no longer required.

"Even in this phase, which we call Identify, JiVS IMP therefore provides a very good basis for deciding whether and to what extent the switch to S/4 is worthwhile. Due to the large number of successfully completed SAP projects, JiVS IMP is familiar with the data structures of a wide range of SAP releases, from R/3 version 3.0 right up to SAP ECC 6.0. The selection criteria therefore no longer need to be developed, but only configured."

Thomas Failer explains the operational procedure.

Once it has been clarified what is operational and what is historical information, the detailed planning of data selection and migration follows in the design phase, the third after housekeeping and identify. This also takes place on JiVS IMP. The selection criteria from the Identify phase are then refined and tested once again, so that the cut in the dataset can be automated via software and real-time access to the dataset in SAP.

The design phase also offers other advantages: It allows decisions to be made about whether the number of business objects in S/4 can be massively reduced, for example, through process changes or a return to the SAP standard - from the 180 maximum possible to perhaps 40 or 50.

"At the completion of the design phase, JiVS IMP provides accurate and tested filtering rules as whitelists and blacklists"

CEO Failer describes the workflow.

"This gives customers the choice of using SAP's conversion tool or third-party solutions to transform and migrate the information. Alternatively, JiVS IMP can hand over the complete data package to SAP's Migration Cockpit and to third-party extraction, transformation and loading (ETL) tools. We call this handover the Transform phase."

Green or Brownfield

In the past, the willingness to migrate to S/4 was reduced by the restriction to the two migration options brownfield or greenfield. Yet time is pressing: As of today, between 30,000 and 50,000 companies worldwide still need to transform their system.

This results in a (growing) required changeover rate of 100 companies per week until the announced end of support and maintenance of the current ERP systems in December 2025.

However, numerous companies are already facing a major shortage of qualified S/4 Hana consultants, as is well known in the SAP community. This is an area of tension in which solutions need to be developed to support companies in migrating in a time- and cost-saving manner.

In the meantime, there are SAP concepts for this, such as the "Move" program and corresponding transformation software that can be used to create system copies. In close cooperation with SAP, Data Migration and experts from the IT community, the necessary preparations and changes are made to fill the new S/4 systems of SAP's existing customers with a complete or selective set of new data.

The ability to decouple systems from data makes it possible to develop an intelligent and low-risk path for the transition to S/4. As a result of this migration strategy, existing SAP customers are able to perform both business and technology transformations and flexibly take advantage of greenfield and brownfield - all while cutting consulting efforts and project duration in half. In addition, companies can integrate and continue to use previous solutions as well as data in the new S/4 system.

The planning premises for SAP S/4 implementations have changed: While the greenfield approach was still favored in surveys a year ago, a more differentiated picture is now emerging. Manageable, "digestible" projects, no complete redefinition of templates, use of proven solutions, most of which are not removable from S/4, bundling of project packages in order to shorten the number of projects and thus also the roadmap duration.

"SAP legacy customers naturally insist on a transfer of historical data. These requirements can only be reconciled with a flexible transformation approach."

Thomas Failer knows from many successful projects.

Data selection and housekeeping are important work to prepare for a successful S/4 transformation. But are they a one-time process or will this process be repeated with "new" legacy data in a future S/4 system? Thomas Failer:

"This is the fifth phase in our model. We call it Operate. As a platform that claims to manage the entire lifecycle of historical data and documents, JiVS IMP is built to function as an integral part of the target landscape with Hana and S/4 as its core components."

Because with JiVS IMP, many challenges typical of existing SAP environments can be avoided in the S/4 world right from the start. These include, for example, the continuously increasing demand for resources. For example, data and documents that are no longer needed in day-to-day business after a certain point in time can be regularly historized using JiVS IMP.

"S/4 remains permanently lean as a result, which reduces operating costs accordingly over time"

DMI CEO Failer emphasizes.

In addition, however, the information in JiVS IMP remains of great value not only for legal reasons, but also for business reasons. The longer the terms of orders and projects in an industry, the more regularly business users need to access information from further back in time.

In addition, they only get an all-round view of a customer or process if they know what information exists about it in total. For this purpose, however, they do not want to switch back and forth between different environments; after all, media breaks are taboo in the cloud age.

For this reason, Data Migration International is increasingly working on integrations between JiVS IMP and the target systems. Regardless of the interface, whether SAP Fiori, S/4 or C/4, SAP users are to be shown the information stock belonging to a business case. They should also be able to navigate directly to and open this content from the respective SAP interface.

Deadline 2025

Final question for Thomas Failer: How much time is left to achieve a successful S/4 transformation? The earlier companies get to grips with the implementation, the better, is the acknowledged motto in the SAP community.

The changeover requires extensive planning and analysis phases and, in addition to the actual migration, corporate cultural aspects must also be taken into account and employees must be involved in order to be sure of acceptance after the implementation and to be able to fully utilize the potential of S/4 throughout the company.

So there are many other construction sites around the actual migration project. If companies do not yet dare to tackle the project for reasons of time, resources or other reasons, they can still be brought safely to the finish line later. Thomas Failer specifies:

"Companies should definitely complete their plans for migration to the new software generation from Walldorf this year. From 2021 at the latest, the corresponding projects must begin in the case of large SAP landscapes. Not all project steps have to be completed at once.

In many cases, a good start could be a consolidation and harmonization of the existing SAP landscape. Legacy systems and archives could be decommissioned and disposed of. At the same time, this would create the necessary time and technical prerequisites for analyzing the data reduction potential.

Based on the results of the analysis and depending on the design of the new process landscape as well as the necessary adjustments to the business objects, the correct dimensioning of the new system landscape for S/4 is then determined. This means that nothing more stands in the way of implementation."

And DMI CEO Thomas Failer emphasizes once again that even with large and very large SAP landscapes, the race against time can still be won with the JiVS-IMP approach.

"However, it's already too late for a leisurely stroll."