Author: Priyasha Purkayastha, Global Content Manager, TJC Group | Co-author: TJC Americas team, TJC Group
Choosing the optimal S/4HANA migration strategy is one of the most critical decisions your organisation will make. With multiple pathways available, a data-driven approach can help you assess which route aligns best with your business objectives, current landscape, and transformation goals. In this blog, we discuss the different approaches that organisations can consider for their ERP migration, how to choose the approach, and more. Read on!
Table of contents
Introduction
Migrating your existing ERP system to S/4HANA is more than a normal or mandatory technical upgrade. As a matter of fact, it is transformation that has the potential to reshape how organisations operate. Moreover, the S/4HANA migration opens a path for removing your obsolete data or legacy systems, which takes up quite a budget for maintenance. However, migrating to a new ERP is never a smooth sail; statistics show that 70% of ERP change projects fail to meet their business goals. Ever wondered why? The primary reason could be selecting the right migration approach, which is more crucial than one can think.
The challenge lies not in choosing between good and bad options, but in identifying the path that best serves your specific business requirements, technical landscape, and transformation objectives. This is where a data-driven approach becomes invaluable, helping organisations move beyond assumptions to make informed decisions based on concrete analysis of their current systems and future needs.
Understanding the S/4HANA migration landscape
SAP traditionally presents three main S/4HANA migration approaches: system conversion (brownfield), new implementation (greenfield), and selective data transition. However, this simplified view doesn’t capture the full spectrum of possibilities available to organisations planning their transformation.
System conversion typically offers the quickest and most cost-effective route, essentially upgrading your existing system to S/4HANA. At the other extreme, new implementation provides maximum flexibility for transformation but requires the highest investment in time, cost, and effort.
The reality is that most organisations don’t find themselves choosing between these extremes. Instead, they’re looking for approaches that balance transformation value with practical constraints, seeking more flexibility than a simple conversion offers, but less complexity than starting from scratch.
S/4HANA migration: The three core approaches
System conversion: The foundation approach
Also known as the Brownfield approach, system conversion represents the most straightforward path to S/4HANA, typically using SAP’s SUM DMO (Software Update Manager Database Migration Option) to upgrade both the application and database. This approach maintains your existing customisations and data structures while moving to the new platform.
The primary advantage lies in its simplicity and cost-effectiveness. However, any process improvements or data optimisation must be addressed as separate projects before or after the migration, potentially increasing overall transformation costs.
New implementation: The clean slate approach
This S/4HANA migration approach is known as the greenfield implementation. It involves building your S/4HANA system from scratch, often using model company approaches or templates. Data migration typically occurs through SAP’s Migration Cockpit, moving objects individually through the application layer.
This approach offers maximum transformation potential and the ability to leverage S/4HANA’s advanced capabilities fully. However, it requires significant investment and typically involves leaving behind substantial historical data that cannot be easily migrated through standard application-layer tools.
Watch our expert webinar on selecting S/4HANA migration path for more insights:
Selective data transition: The strategic middle ground
A hybrid route to S/4HANA migration, selective data transition (SDT) combines elements of both system conversion and new implementation. This method involves creating a shell copy of your current ECC system, upgrading it to S/4HANA in your target environment and then applying targeted transformations before migrating data using table-based migration tools.
Additionally, it is important to note that selective data transition isn’t a single approach but encompasses several variants, each offering different levels of transformation capability as explained below –
Lean SDT: Minimal transformation
Lean SDT provides the simplest selective S/4HANA migration approach, allowing you to leave behind redundant companies and fiscal periods while maintaining existing processes. Using SAP Business Transformation Centre (SAP BTC), this method offers limited transformation capability but provides significant data volume reduction benefits.
Full SDT: Targeted transformation
Full selective data transition enables comprehensive targeted transformation using third-party landscape transformation software. This approach allows you to migrate full historical data while implementing specific process changes, making it ideal for organisations seeking focused improvements without wholesale system redesign.
Hybrid SDT: Best of both worlds
Hybrid SDT combines table-based migration for operational data with application-layer migration for areas requiring extensive transformation. For example, you might maintain full transactional history for logistics while implementing comprehensive financial process changes with only recent financial data.
This approach to S/4HANA migration proves particularly valuable for organisations with stable operational processes but significant financial transformation requirements, such as implementing new GL structures or parallel ledgers.
When to consider each migration path
The choice between migration approaches should align with your transformation objectives and organisational readiness:
System conversion works best when:
- Your current processes largely meet business needs
- Budget and timeline constraints are primary concerns
- Minimal business process change is desired
- You plan separate data management initiatives
New implementation suits organisations that:
- Require comprehensive business process transformation
- Can invest significant time and resources
- Accept leaving behind substantial historical data
- Want to fully leverage S/4HANA’s advanced capabilities
Selective data transition is ideal for:
- Targeted transformation requirements
- Multiple system consolidation needs
- Historical data preservation priorities
- Balanced approach to change and risk
The key lies in starting with clear business objectives rather than presuming a particular technical approach. As highlighted in our comprehensive guide on SAP data archiving, understanding your data landscape early provides crucial insights for decision-making.
Click on the banner to learn more about SAP data archiving for migrating to S/4HANA:
The importance of early data strategy
It cannot be stressed enough that data considerations should drive S/4HANA migration approach selection. Early data discovery reveals critical insights about system complexity, transformation opportunities, and potential risks.
The four lenses of data analysis
Effective data strategy examines your landscape through multiple perspectives:
- Functional lens: Which business processes are moving to S/4HANA versus other solutions?
- Historical lens: What level of integrated transactional history do you need to maintain?
- Organisational lens: Which company codes, plants, or organisational units remain active and relevant?
- Custom data lens: What customisations add value versus complexity to your future system?
Avoiding data procrastination
Many organisations delay data decisions due to perceived complexity, but early analysis provides the foundation for informed migration planning. Understanding your data landscape enables you to quantify the effort, cost, and complexity associated with different approaches.
TJC Group’s experience shows that organisations addressing data strategy early in their S/4HANA planning consistently achieve better outcomes. Our analysis of SAP data archiving importance in S/4HANA migration demonstrates how proactive data management significantly reduces project risk and cost.
Legacy system considerations
Planning for legacy system management should begin with your S/4HANA project, not after completion. Organisations that address legacy system decommissioning as part of their transformation strategy achieve cleaner outcomes and avoid project fatigue.
TJC Group’s ELSA solution enables organisations to preserve access to historical data while safely decommissioning legacy systems, supporting compliance requirements while reducing ongoing maintenance costs.
Conclusion
Selecting the right S/4HANA migration approach requires balancing transformation ambitions with practical constraints, technical capabilities, and business objectives. The key to success lies in adopting a data-driven approach that examines your current landscape through multiple lenses before committing to a migration strategy.
With over 25 years of experience in data management, TJC Group helps organisations navigate these complex decisions with confidence. Our data-driven approach ensures that your strategy aligns with your business objectives while minimising risk and maximising value from your transformation investment.
The right migration path exists for every organisation; the key is taking the time to discover it through thorough analysis and strategic planning. Contact us now to get your data prepped for S/4HANA migration.
