Accord­ing to the ASUG Pulse of the SAP Cus­tomer 2020 sur­vey, 16% of respon­dents are cur­rent­ly live on SAP S/4HANA, while 21% are in the process of start­ing their jour­ney. Mean­while, SAP recent­ly announced that it will extend main­te­nance to its Busi­ness Suite 7 through the end of 2027. It also announced a main­te­nance com­mit­ment for those on SAP S/4HANA through the end of 2040. 

For those who are live on SAP S/4HANA or are get­ting ready to go live, it’s crit­i­cal that they under­stand how to plan, what to look for, and how to gain the full ROI from their projects. 

ASUG sat down with Johnsonville’s VP and CIO Ron Gilson and Senior Direc­tor of MIS Lori Plate to dis­cuss the company’s move to SAP S/4HANA, the hur­dles their team had to over­come, and how they made the tran­si­tion a success. 

Jim: Let’s start with some­thing every­one talks about. How did John­sonville devel­op its busi­ness case for SAP S/4HANA, and how did you get buy-in?

Ron: Our project was an SAP ERP upgrade project. There was no finan­cial or busi­ness trans­for­ma­tion jus­ti­fi­ca­tion. We had a sig­nif­i­cant road map of func­tion­al­i­ty we were look­ing to deploy over a three-year peri­od. That was back in 2015. 

We paused and thought about how we want­ed to imple­ment that tech­nol­o­gy. Do we want to imple­ment it on the SAP ECC lega­cy plat­form know­ing that we would have to migrate that envi­ron­ment? Or do we want to upgrade to SAP S/4HANA — which is the lat­est ver­sion of the SAP ERP plat­form — and start build­ing on top of that? We knew that the more we piled on top of SAP ECC 6.0, the big­ger the project would be in the future. We also knew SAP ECC 6.0 was, essen­tial­ly, a dead envi­ron­ment and there was no addi­tion­al invest­ment going on there. We based our busi­ness case on that and were able to get buy-in because it made the most sense. 

Jim: John­sonville used a brown­field approach to imple­ment SAP S/4HANA. What were the fac­tors that led to that decision?

Lori: Our exist­ing envi­ron­ment with­in SAP ECC 6.0 had very few cus­tomiza­tions. We were already uni­code com­pli­ant with the new Gen­er­al Ledger active as well. Our envi­ron­ment was set up to move eas­i­ly. Our John­sonville busi­ness users were hap­py with their exist­ing busi­ness process­es. John­sonville was­n’t look­ing for a busi­ness process transformation. 

Jim: How much test­ing did John­sonville per­form dur­ing the SAP S/4HANA project overall? 

Lori: We did mul­ti­ple rounds of test­ing, includ­ing a sand­box con­ver­sion, fol­lowed by full unit tests in our devel­op­ment envi­ron­ment, and a full inte­gra­tion test in our QA envi­ron­ment. Our users were then brought in, includ­ing more than 50 sub­ject mat­ter experts, to com­plete the full user accep­tance test­ing. We went through every process John­sonville runs on SAP. Final­ly, we con­duct­ed three mock cycles and test­ed the con­ver­sion process in every mock cycle before doing a pro­duc­tion conversion. 

[ad]

Jim: What types of road­blocks did you face dur­ing the project and how did you address them?

Lori: We had an issue with third-par­ty cer­ti­fi­ca­tion and mak­ing sure all our ven­dors were cer­ti­fied for the ver­sion of SAP S/4HANA we were mov­ing to. Cer­tain com­po­nents had dif­fer­ent license use for SAP S/4HANA. We worked with SAP and our ven­dors pro­vid­ing the third-par­ty solu­tions to push through the cer­ti­fi­ca­tion process for SAP S/4HANA 1610. Some of those ven­dors chose not to do the cer­ti­fi­ca­tion, and in those cas­es, we were forced to find dif­fer­ent solu­tions for that functionality.

The next issue involved our con­di­tion con­tracts replac­ing their rebate func­tion­al­i­ty. The rebates were dep­re­cat­ed in SAP S/4HANA. The con­di­tion con­tracts, at least in SAP S/4HANA 1610, did not ful­ly replace the rebate func­tion­al­i­ty. We nev­er ful­ly imple­ment­ed it in 1610. We start­ed to dur­ing our upgrade project but real­ized the full func­tion­al­i­ty to replace rebates was­n’t there and stopped the imple­men­ta­tion at that time. It was­n’t until after our ini­tial go-live with SAP S/4HANA 1610 that we picked up the con­di­tion con­tract work again and start­ed to work with SAP to get the issues resolved. That has since been fixed, but it didn’t work when we first imple­ment­ed it. 

There were com­plex­i­ties with­in the U.S. retail-based rebate process that were han­dled by the rebate func­tion­al­i­ty and weren’t avail­able with­in the ini­tial con­di­tion con­tract con­fig­u­ra­tion with­in SAP S/4HANA 1610. We real­ized you could­n’t do set­tle­ment at the mate­r­i­al and prod­uct hier­ar­chy lev­el, lump sum accru­als worked dif­fer­ent­ly, and you could­n’t copy con­di­tion contracts. 

The customer/​vendor inte­gra­tion (CVI) con­ver­sion was anoth­er prob­lem we had to tack­le. It took us mul­ti­ple tries to get that right. It was dif­fi­cult con­vert­ing every­thing to the busi­ness part­ner. The cus­tomer was a major inte­gra­tion point between some of the oth­er exter­nal SAP sys­tems. So, we had to redo all of those integrations. 

There are deci­sions to be made dur­ing this con­ver­sion process — it isn’t a process that is done only one way. You need to deter­mine if you are going to keep your cus­tomer and ven­dor num­bers or cre­ate all new busi­ness part­ner num­bers. Depend­ing on what you decide, that has impli­ca­tions on your busi­ness process­es and inte­gra­tions down­stream. It took us mul­ti­ple tries because we test­ed mul­ti­ple dif­fer­ent ways before we fig­ured out which way was going to be best for our busi­ness and cause the least amount of disruption. 

Jim: Know­ing what you both know now, what are some of the things that you would go about differently?

Ron: The one piece of advice I give to cus­tomers is if you’re doing a brown­field migra­tion, there’s work you can do ahead of time to reduce the scope and risk of your project when you get to the migra­tion. You can tack­le small­er projects on ECC pri­or to migrat­ing to SAP S/4HANA — things like migrat­ing to busi­ness part­ners and mov­ing from rebate agree­ments to con­di­tion contracts. 

There are oth­er things like cus­tom code and reme­di­a­tion that can be done ear­ly. With third-par­ty cer­ti­fied apps, you must under­stand which part­ners will be cer­ti­fied for the new­er releas­es and whether you need to find oth­er solu­tions. Do as much as you can ear­ly to reduce the cost, scope, and effort when you do implement. 

Lori: I also think hav­ing an auto­mat­ed test­ing tool is help­ful. We did­n’t have one. Addi­tion­al­ly, we planned mock cycles and added addi­tion­al ones just to increase our lev­el of com­fort. I like to tell peo­ple that you can’t plan for enough mock cycles. 

Before you ever even engage with your SAP account exec­u­tive and go through your full bill of mate­ri­als, make sure that you have all the rel­e­vant SKUs in your license. We had to put our project on hold for a lit­tle bit to work through that issue. 

Ron: The licens­ing ram­i­fi­ca­tions can be sig­nif­i­cant. The con­ver­sion of SKUs from ECC to SAP S/4HANA ver­sions can be a very expen­sive proposition. 

Jim: Did John­sonville com­plete its tran­si­tion on a sched­uled time­line? If so, what helped keep you on track? 

Lori: Yes, we did. We also met our orig­i­nal set schedule.

The biggest thing was nego­ti­at­ing for a sig­nif­i­cant ser­vice down­time win­dow. We did­n’t have a whole lot of flex­i­bil­i­ty to move it. Either we were going to hit our sched­ule, or we weren’t. Not hit­ting that sched­ule would cause a sig­nif­i­cant delay until we could nego­ti­ate anoth­er down­time win­dow of that size. We start­ed to nego­ti­ate that in Jan­u­ary for our Octo­ber go-live. The sched­ule was­n’t very flu­id. Hav­ing access to the SAP val­ue man­age­ment team was sig­nif­i­cant­ly help­ful to keep us on pace and target.

Jim: Can you talk about any mea­sur­able improve­ments in per­for­mance and ana­lyt­ics since imple­ment­ing SAP S/4HANA?

Ron: Just to set some con­text here, John­sonville has a rel­a­tive­ly small envi­ron­ment. Our data­base is under one ter­abyte. We have approx­i­mate­ly 1,000 active users. We imple­ment­ed SAP S/4HANA using the SAP GUI as the pri­ma­ry user inter­face — as such we have not used SAP Fiori and the embed­ded ana­lyt­ics. Gen­er­al­ly, most of the trans­ac­tions are work­ing about the same from a per­for­mance perspective.

Lori: We’ve seen a cou­ple of func­tion­al­i­ties that have got­ten slow­er. Pri­mar­i­ly these have been back­ground jobs we are run­ning or process­es and jobs — like top-down allo­ca­tions — that we run dur­ing the close process.

Ron: Giv­en that our ECC envi­ron­ment was run­ning on a com­pressed Microsoft SQL serv­er data­base in flash mem­o­ry, we weren’t bank­ing on any sig­nif­i­cant improve­ments in per­for­mance. Most of our ana­lyt­ics are done with­in our SAP Busi­ness Ware­house environment. 

Jim: Do you plan on deploy­ing more SAP Fiori apps in the future?

Lori: Yes. The biggest rea­son we haven’t deployed SAP Fiori is because it has some prob­lems when run­ning on SAP S/4HANA 1610. We just recent­ly com­plet­ed our upgrade to SAP S/4HANA 1809 and now we’re active­ly work­ing toward deploy­ing por­tions of SAP Fiori. We’re doing it on a case-by-case basis as we imple­ment new functionality. 

Jim: How has SAP S/4HANA affect­ed your over­all busi­ness processes? 

Lori: Ulti­mate­ly it has­n’t. But that was our goal. We meant for this to be a non-event for our end users. 

Ron: Fun­da­men­tal­ly, the tech­nol­o­gy works. There’s a lot of con­cern as to whether SAP S/4HANA is going to be as sta­ble and reli­able as SAP ECC 6.0 was. We haven’t seen any sig­nif­i­cant increase in inci­dents or downtime.

Jim: How long did it take you to get to a steady state of oper­a­tions post-implementation?

Lori: We had one autho­riza­tion issue when we went live. But that was resolved with­in a cou­ple of hours. Beyond that, we real­ly did­n’t have any sig­nif­i­cant issues. 

Jim: Do you have any more advice for com­pa­nies get­ting ready to make their own move to SAP S/4HANA?

Ron: Get start­ed ear­ly. Begin going through the sim­pli­fi­ca­tion list, which is the list of prod­ucts that you have dep­re­cat­ed or are remov­ing from the code line. Begin think­ing about issues like busi­ness part­ner imple­men­ta­tion and cus­tom code reme­di­a­tion. There’s so much you can do before even get­ting engaged in an SAP S/4HANA brown­field envi­ron­ment, so take advan­tage of the oppor­tu­ni­ty to do it.

Make sure you find a con­sult­ing orga­ni­za­tion that has actu­al­ly done a brown­field migra­tion. It’s a very dif­fer­ent project than a green­field imple­men­ta­tion, so make sure you’re vet­ting your consultants.

Reg­is­ter for the ASUG Express: Achiev­ing Suc­cess with SAP S/4HANA Vir­tu­al Boot Camp series, begin­ning on Oct. 27, 2020, to learn about strat­e­gy and vision, build­ing a busi­ness case, project plan­ning and prepa­ra­tion, suc­cess­ful­ly exe­cut­ing, change man­age­ment, and how to exe­cute a 100% remote project.