Two-Tier ERP increases complexity, so how reduce it?
Planning S/4HANA with a Two -Tier ERP strategy
Many organisations don’t want the ‘big bang’ approach for a new ERP and instead plan a staged roll out, one function at a time.
Moving to S/4HANA should be considered more of an ERP re-implementation, rather than a migration.?This is the advice given from those that made the move (taking an average of 20 months) in the UKISUG survey conducted last year and organisations are quite rightly weary of the costs, time and risks moving.
Two-Tier ERP usually means two things: firstly, it refers to functionality tiers with full feature ERP at the HQ and lighter versions at subsidiary levels, and secondly adopting a phased roll out of the new ERP a function at a time.
However, this roll-out plan, although minimising the risks and disruption, can add further complexity to the project.
Two-Tier increases complexity and diverse technology and skills needs
By implementing S/4HANA in stages, there also needs to be consideration to both the short and long-term landscape needs.?The new system will require integration to other systems present now and also those available in the future.?How systems are deployed and managed in the short term may be different to what is required for the final landscape.
3 out of 4 organisations adopting two-tier ERP choose finance as their first function to implement.?When the entire organisation is on S/4HANA, applications can share a common homogeneous database.?However, until the whole business has moved over, Finance on S/4 will need to inter-operate with other non-S/4 systems.?Connectors will need to be designed, built and tested to ensure the applications pull in data from all the required sources across the business.
At a later stage when other functions are rolled out, the finance system will also then need to go through a modification to accommodate information and formats available.
SAP applications in the new and old systems will have inter-application dependencies that require management and often utilise resources for NetWeaver and BASIS layers. ?These middleware services may need to be covered if not included as part of the application management services.
A phased roll-out can reduce the risks and costs of a big ERP change, however dealing with multiple systems all add complexity. ?This can put further pressure on IT teams to manage multiple apps and technologies with two ERP systems that each demand different skills and knowledge.
Long term versus short-term plans
Project needs will be different during the implementation phases to those for ongoing operations.??Each stage will require different capabilities and support from partners, dependent on the function and phase of roll-out.?Users should choose their partners based on criteria appropriate to that stage. For example, an organisation’s ultimate goal may be to outsource the entire SAP landscape to a single partner, chosen that offers the best value for money, scale and efficiency for the business.?However that may be a very different set of criteria to that required during the design or commissioning phase.
During a Two-Tier phased roll out, there will also be overlapping new and old systems, each needing different skills that could also span over multiple types of deployment (eg. separate old and new systems hosted on-prem and in the cloud). These may be interim steps towards an eventual final unified landscape could be on one or the other or hybrid to suit equipment refresh cycles or internal resource development.
Consider an SAP ECC company rolling out S/4HANA with a Two-Tier ERP plan that wants to adopt Finance in year 1 and Manufacturing in year 2. These two elements alone could easily require four sets of needs at the different stages.
领英推荐
Users in this situation should look closely at how ‘SAP production platforms’ and specialist partners can assist them for each stage of their roll- out.?Initially S/4HANA technology will be new to the organisation, which could present technology/hosting challenges that require experienced solution architects.?Once systems are fully commissioned the experience and support needs will be more around optimisation and effective management.
The knowledge and experience required at the early stages will also go beyond the technology. SAP Finance specialists will not only have technical know-how of the relevant S/4 applications eg Central Finance or Group Reporting, but also have access to in-house accountants that understand finance processes and bring expertise during the planning stage.?
Some specialist SAP MSPs can deliver all elements associated with that function in their turn-key solution. This way the new phase being deployed will not adversely impact the existing the support arrangements or require any skills that are not present currently. Organisations might consider moving to an application orientated support model. This expertise can be vital for roll-out phase success and overall project risk.
S/4HANA is available in multiple variants
S/4HANA is available in several variants and specialist MSPs can often accommodate all of them that are associated with that function. These include SAP subscription services and product options [SAP Public Edition / Private Edition subscription services or AnyPrem, perpetual license versions]. Clients can also still enjoy a completely managed software service [SaaS] either from SAP or their Partner Managed Cloud [PMC] provider offering a completely managed software service (with licenses) or on a BYO license basis [PaaS].
Once functions like finance have been completely integrated in the business, the ongoing management can be handed over to a partner more suited to a mature landscape.
Conclusion
S/4HANA Two-Tier needs experienced partners that have the experience delivery these projects as well as the specialisation relevant for each stage.
HANA specific experience may not be so proficient in pre-HANA SAP partners.? Specialist partners reduce complexity & risks of Two-Tier ERP. Partner selection must go through extensive due diligence. ?A mix of SAP MSP/CSP/VARs could be considered and verified to have successfully delivered the type of ERP system clients are looking for.
SAP Programme Director & Trouble shooter | Future SAP & AI Advisory | Separation M&A TOM Architect | Finance Domain Business Transformation Expert | Data Alchemist | TOGAF Ent Arch - CTO | SAP Investor Analyst | XTed
3 年Two tier extends the life of your ECC core to post 2030, its nothing new and we will see more of it as RISE will enable any form of plug and play going fwd.