SAP ERP modernization for long-term stability

The move from SAP ECC to S/4HANA isn’t just an upgrade—it’s an opportunity to rethink how business processes are orchestrated. Instead of keeping workflows embedded within the ERP, leading organizations are externalizing their process layer, making it more agile, scalable, and future-proof. Why Externalize the Process Layer? Historically, SAP ECC tightly integrated business logic and workflows into the core ERP, making processes: 🔹 Rigid & difficult to change (custom code deeply embedded) 🔹 Expensive to maintain (high rework during upgrades) 🔹 ERP-dependent (limited flexibility across systems) With S/4HANA and modern architectures, organizations can decouple process execution from the ERP and manage it in an external process orchestration layer. How Does This Work? 🔹 ERP as a "System of Record" – S/4HANA holds master/transactional data, while process execution is externalized. 🔹 Loosely Coupled API & Event-Driven Architecture – SAP BTP, Kafka, Event Mesh, and middleware enable seamless orchestration. 🔹 Business-Driven, Adaptable Workflows – External BPMN-based process orchestration engines replace embedded SAP workflows, improving agility. Key Benefits ✅ Cross-System Orchestration – Seamless integration across SAP and non-SAP applications. ✅ No More Hardcoded Workflows – Business-driven process adjustments instead of rigid SAP coding. ✅ Third Party AI Integration – Maximum flexibility to embrace innovative new AI technologies in your business processes. ✅ Future-Proofing & Easier Upgrades – SAP updates won’t disrupt business workflows. Challenges to Consider ⚠️ Governance & Ownership – A clear CoE for process automation is recommended. ⚠️ Latency & Performance – Well-architected API/event-based integrations are key, paired with a highly scalable orchestration engine. ⚠️ Standardized Process Modeling – Full support of the BPMN standard ensures clarity and consistency. Is This Right for Your Organization? ✅ Ideal for: Enterprises with complex, cross-system processes (manufacturing, logistics, financial services). ❌ Less critical for: Companies with highly standardized SAP-centric processes. Final Thought: The shift to S/4HANA is a chance to modernize, not just migrate. Let SAP be the system of record, while a best-of-breed process orchestration layer drives agility, innovation, and scalability. How is your organization approaching process orchestration in its S/4HANA journey?

Dear #SAPPartners, in August, SAP has released a new white paper on Clean Core extensibility for SAP S/4HANA Cloud. The white paper serves as a guide for organizations looking to implement a clean core strategy in their SAP S/4HANA Cloud environments, ensuring system integrity and readiness for future innovations. 💡 The clean core strategy addresses the challenges posed by custom code and undocumented changes in ERP landscapes. It promotes the use of standard processes and strategic extensions to enhance flexibility and reduce maintenance costs. A clean core allows organizations to overcome obstacles related to legacy systems, such as lack of standardization and poor data quality, enabling faster innovation and improved agility. 1️⃣ Extensibility Options:  The document outlines two main approaches to extensibility: • On-stack Extensibility: Extensions tightly coupled with SAP S/4HANA, primarily using the ABAP Cloud or classic ABAP. • Side-by-side Extensibility: Loosely coupled extensions running on the SAP Business Technology Platform (BTP), utilizing released APIs and modern integration methods. 2️⃣ Clean Core Level Concept:  SAP introduces a new maturity model categorizing extensions into four levels (A, B, C, D) based on their architectural integrity and upgrade stability, promoting a "BTP first" strategy for clean extensions. 3️⃣ Clean Core Framework:  The framework provides a step-by-step approach, focusing on governance, measurement through KPIs, and implementation of clean extensions. The "Stay Clean" and "Get Clean" strategies are emphasized, with "Stay Clean" focusing on new developments and "Get Clean" targeting existing technical debt. 4️⃣ Clean Core Governance and Measurement: Recommendations for establishing a governance framework and measuring adherence to clean core principles through KPIs are provided, along with tools like SAP Cloud ALM. 👉 White Paper: https://lnkd.in/e_CbSaWu 👉 SAP News Center Article: https://lnkd.in/eugFz_v4 👉 SAP Community Blog: https://lnkd.in/ey3CABjz #sappartner #cleancore #sapcleancore #sapbtp #sapclouderp #s4hana #sapcustomcode #sapextensions #clouderp #extensibility

𝐖𝐡𝐲 "𝐂𝐥𝐞𝐚𝐧 𝐂𝐨𝐫𝐞" 𝐚𝐧𝐝 "𝐅𝐢𝐭 𝐭𝐨 𝐒𝐭𝐚𝐧𝐝𝐚𝐫𝐝" 𝐬𝐡𝐨𝐮𝐥𝐝 𝐛𝐞 𝐠𝐮𝐢𝐝𝐢𝐧𝐠 𝐩𝐫𝐢𝐧𝐜𝐢𝐩𝐥𝐞𝐬 𝐨𝐟 𝐲𝐨𝐮𝐫 𝐒𝐀𝐏 𝐒/𝟒𝐇𝐀𝐍𝐀 𝐢𝐦𝐩𝐥𝐞𝐦𝐞𝐧𝐭𝐚𝐭𝐢𝐨𝐧 Two guiding principles stand out as essential pillars for achieving seamless and effective implementations in SAP S/4HANA implementations: "𝐅𝐢𝐭 𝐭𝐨 𝐒𝐭𝐚𝐧𝐝𝐚𝐫𝐝" and "𝐂𝐥𝐞𝐚𝐧 𝐂𝐨𝐫𝐞." These principles may seem straightforward, but their impact is nothing short of transformative. Why are they crucial for doing SAP ERP projects right: "𝐅𝐢𝐭 𝐭𝐨 𝐒𝐭𝐚𝐧𝐝𝐚𝐫𝐝" - 𝐀𝐥𝐢𝐠𝐧𝐢𝐧𝐠 𝐰𝐢𝐭𝐡 𝐁𝐞𝐬𝐭 𝐏𝐫𝐚𝐜𝐭𝐢𝐜𝐞𝐬: One size doesn't fit all, but striving for alignment with proven industry best practices sets the foundation for success. Embracing "Fit to Standard" means leveraging the out-of-the-box functionalities offered by modern ERP systems. This approach minimizes unnecessary customizations, streamlines processes, and accelerates implementation timelines. By optimizing existing features, your organization can harness the power of tried-and-true processes, ensuring efficiency and future scalability. "𝐂𝐥𝐞𝐚𝐧 𝐂𝐨𝐫𝐞" - 𝐓𝐡𝐞 𝐄𝐬𝐬𝐞𝐧𝐜𝐞 𝐨𝐟 𝐒𝐢𝐦𝐩𝐥𝐢𝐜𝐢𝐭𝐲: Complexity may seem impressive, but simplicity is where true power resides. A "Clean Core" philosophy advocates for a streamlined and uncluttered SAP environment. By avoiding bloated configurations and intricate customizations, you ensure smoother system maintenance, easier upgrades, and reduced risk of bottlenecks. A clean core paves the way for agility, allowing your organization to adapt swiftly to changing business needs. If you need to individualize, no problem, SAP BTP is the perfect sidecar platform for it, not need to modify your ERP. 𝐓𝐡𝐞 𝐈𝐦𝐩𝐚𝐜𝐭 𝐨𝐧 𝐑𝐎𝐈 𝐚𝐧𝐝 𝐋𝐨𝐧𝐠-𝐓𝐞𝐫𝐦 𝐒𝐮𝐜𝐜𝐞𝐬𝐬: "Fit to Standard" and "Clean Core" isn't just about immediate gains – it's an investment in the future and a more manageable and cost-effective ERP landscape, driving up your return on investment over time. They position your organization to readily adopt innovations and embrace digital transformation without the burden of cumbersome legacy structures. 💡 𝐒𝐨, 𝐇𝐨𝐰 𝐂𝐚𝐧 𝐘𝐨𝐮 𝐋𝐞𝐯𝐞𝐫𝐚𝐠𝐞 𝐓𝐡𝐞𝐬𝐞 𝐏𝐫𝐢𝐧𝐜𝐢𝐩𝐥𝐞𝐬? Begin by fostering a deep understanding of your organization's unique requirements while acknowledging that not every customization is a necessity. Engage in thorough business process analysis, mapping your processes to the standard functionalities offered by your ERP system. Embrace "Clean Core" by focusing on what truly adds value to your operations and resisting the temptation to over-engineer. 𝐖𝐢𝐭𝐡 𝐅𝐢𝐭 𝐭𝐨 𝐒𝐭𝐚𝐧𝐝𝐚𝐫𝐝" 𝐚𝐧𝐝 "𝐂𝐥𝐞𝐚𝐧 𝐂𝐨𝐫𝐞" 𝐩𝐫𝐢𝐧𝐜𝐢𝐩𝐥𝐞𝐬, 𝐲𝐨𝐮'𝐫𝐞 𝐬𝐞𝐭𝐭𝐢𝐧𝐠 𝐭𝐡𝐞 𝐬𝐭𝐚𝐠𝐞 𝐟𝐨𝐫 𝐚 𝐬𝐮𝐜𝐜𝐞𝐬𝐬𝐟𝐮𝐥 𝐄𝐑𝐏 𝐢𝐦𝐩𝐥𝐞𝐦𝐞𝐧𝐭𝐚𝐭𝐢𝐨𝐧 𝐚𝐧𝐝 𝐩𝐚𝐯𝐞 𝐭𝐡𝐞 𝐰𝐚𝐲 𝐟𝐨𝐫 𝐬𝐮𝐬𝐭𝐚𝐢𝐧𝐞𝐝 𝐠𝐫𝐨𝐰𝐭𝐡, 𝐢𝐧𝐧𝐨𝐯𝐚𝐭𝐢𝐨𝐧, 𝐚𝐧𝐝 𝐜𝐨𝐦𝐩𝐞𝐭𝐢𝐭𝐢𝐯𝐞 𝐚𝐝𝐯𝐚𝐧𝐭𝐚𝐠𝐞.

My thoughts on the most pressing questions many of my fellow CIOs are facing today (other than AI) Modernizing Legacy SAP ERP: the True Costs/ benefit Large Enterprises The push to modernize legacy SAP ERP systems is at a critical juncture. Large enterprises face a strategic dilemma: should they transition to on-premise S/4HANA or migrate to the private cloud via Azure, AWS, or GCP? While SAP and hyperscalers tout cloud as the inevitable future, does the business case truly add up? Let me share my view: The Case for On-Premise S/4HANA ✅ Data Sovereignty & Control: Mission-critical applications remain in-house, ensuring compliance with regulatory and security needs. ✅ Cost Predictability: No recurring cloud subscription fees; costs remain within IT CapEx budgets. ✅ Customization & Performance: High flexibility for industry-specific configurations without cloud provider restrictions. ❌ Infrastructure Costs: Requires substantial upfront investments in hardware, maintenance, and specialized SAP Basis teams. ❌ Scalability Challenges: Upgrading and scaling require additional CapEx and planning, making agility an issue. ❌ Talent Shortages: Finding skilled SAP Basis and ABAP developers is becoming increasingly difficult. The Private Cloud Argument (Azure, AWS, GCP) ✅ Elastic Scalability: Enterprises can scale computing power on demand, avoiding over-provisioning. ✅ Lower IT Overhead: Managed cloud services reduce dependency on in-house SAP technical teams. ✅ Security & Compliance: Hyperscalers offer best-in-class security, but at an additional cost. ✅ Future-Proofing with AI & Analytics: Easier access to cloud-native AI/ML services for real-time analytics. ❌ Lock-in Risk: Enterprises become dependent on SAP’s RISE program and cloud hyperscalers, limiting flexibility. ❌ Cost Overruns: While OpEx pricing seems attractive, long-term cloud costs often exceed on-premise investments. ❌ Performance Variability: Shared cloud environments can lead to latency and unpredictable performance. ❌ Complex Migrations: Moving from ECC to S/4HANA Cloud is not a simple lift-and-shift; extensive reimplementation is needed. Hidden Costs & the SAP-Cloud Hyperscaler Play • SAP Benefits the Most: The cloud-first push enables SAP to enforce RISE contracts, generating steady recurring revenue. • Licensing & Exit Costs: SAP’s licensing structure and vendor lock-in make moving out of RISE costly. • Unclear ROI Timelines: Cloud cost advantages materialize only after years, making the short-term financial case weak. Therefore, No Clear Winner, but a Cloud-First Hype remains • For heavily customized industries (e.g., manufacturing, defense, pharma), on-premise remains relevant. • For fast-scaling, digital-first firms, private cloud offers agility but at a price. • Hybrid cloud models with selective cloud adoption (e.g., AI, analytics, disaster recovery) may be the best compromise.

SAP S/4HANA Transformation: Greenfield, Brownfield, or Bluefield? The transition to SAP S/4HANA is a critical milestone for organizations looking to modernize their ERP landscape, drive operational efficiency, and stay competitive in an evolving digital economy. Choosing the right implementation approach—Greenfield, Brownfield, or Bluefield—can make or break the success of your transformation journey. Here’s a breakdown of these three approaches to help you make an informed decision: 1. Greenfield Implementation A Greenfield project involves starting from scratch by designing and implementing a completely new SAP S/4HANA system. Pros: Enables a fresh start with redesigned processes aligned to industry best practices. Offers flexibility to innovate and eliminate legacy complexities. Ideal for organizations with outdated or heavily customized systems. Cons: Higher cost and longer implementation timeline. Significant change management effort required. Potential disruption to business operations. 2. Brownfield Implementation A Brownfield approach involves upgrading your existing system to SAP S/4HANA, retaining much of your current processes and customizations. Pros: Lower cost and faster implementation compared to Greenfield. Minimal disruption, as it retains existing processes and configurations. Easier change management since users are familiar with the system. Cons: Limited opportunity to optimize and simplify processes. Risk of carrying over inefficiencies from the legacy system. Complexities in managing technical conversion and data migration. 3. Bluefield Implementation The Bluefield approach combines elements of Greenfield and Brownfield, selectively migrating and transforming processes and data to create a tailored system. Pros: Balances innovation and cost-efficiency. Allows selective process redesign without starting from scratch. Faster than Greenfield and more flexible than Brownfield. Cons: Requires careful planning and a skilled implementation team. Complexity in deciding what to retain, redesign, or migrate. May have a higher cost than Brownfield. Which Approach is Right for You? The choice depends on your organization’s current landscape, business goals, budget, and timeline. A Greenfield approach is ideal for organizations seeking transformation, while Brownfield suits those aiming for minimal disruption. Bluefield strikes a balance, offering flexibility for selective innovation. As you evaluate these options, ensure alignment with your strategic objectives and involve the right stakeholders for a smooth journey to SAP S/4HANA. #SAP #S4HANA #DigitalTransformation #ERP #BusinessProcessManagement