Devraj Bardhan is a co-author of SAP S/4HANA: An Introduction, newly available in its fifth updated and revised edition from SAP Press. ASUG members can enjoy 15% off any SAP Press titles with the discount code 15ASUG.
As SAP pivots from ECC toward cloud modularity, more companies are finding themselves rethinking transformation altogether. Shrewd ECC customers have learned through experience that rushing into complete S/4HANA adoption seldom delivers optimal returns. Organizations instead sequence their transformation journey, prioritizing high-impact initiatives while pursuing calculated, incremental adoption that minimizes business disruption.
The new modernization approach reframes expectations. S/4HANA is no longer treated as a singular destination but as part of a broader landscape of modular tools and services. Enterprises are investing in targeted, high-impact solutions, most notably SuccessFactors and Ariba, to modernize select domains while ECC remains operational.
Navigating Paths to Success
Several paths support this approach. A brownfield migration is viable for organizations with well-maintained ECC systems that have current support packs, clean customizations, and operational alignment. Greenfield implementations suit firms undergoing deep restructuring or dealing with fragmented architectures.
An increasingly popular middle path, the selective data migration or bluefield approach allows organizations to be selective about what they carry forward. Rather than carrying forward decades of accumulated records, companies can limit migration to active business entities and a leaner, three-year window of data.
The result is faster system performance, streamlined processes, and a focused transformation without sacrificing business continuity. An increasingly common path keeps ECC stable while introducing parallel cloud-native applications. This method enables faster time to value and reduces the risk of overextending internal resources.
Among the first moves, SuccessFactors often leads. It modernizes core HR processes with artificial intelligence-driven capabilities, natural language interfaces, and a clean user experience. Unlike legacy ECC HR modules, it offers agility out of the box. For companies struggling with outdated employee systems, the case for SuccessFactors is straightforward. Implementation is efficient, adoption is high, and value realization begins early. SuccessFactors enables Joule, SAP’s AI copilot, along with other modern capabilities that transform HR operations.
Procurement follows a similar rationale. Ariba consolidates indirect spend across suppliers, automates onboarding, and surfaces real-time insights. In many instances, it generates savings substantial enough to fund subsequent phases of transformation. This self-funded transformation approach means Ariba implementations can effectively pay for the broader S/4HANA journey through realized procurement savings. For decentralized or nonstandard procurement environments, Ariba does more than optimize operations; it creates a financial bridge to modernization.
Data, Data, Data
At the foundation of this work lies the issue of data integrity. Master Data Governance (MDG) binds ECC, SuccessFactors, Ariba, and future S/4HANA environments into a cohesive ecosystem. Early MDG implementation establishes authoritative reference data for customers, suppliers, and materials while enabling self-service management, shifting responsibility to data owners. Instead of processing emails about bank detail changes that could be phishing attempts, organizations can provide secure portals where vendors update their own information. Similarly, catalog vendors can maintain their product specifications and pricing directly. This approach transforms organizations from data entry processors to data validators, eliminating administrative burden while improving data quality. Clean data does not follow transformation; it enables it.
Legacy code demands an equally calculated approach. The most successful transformations modernize custom code first, making it S/4HANA-compatible before migration rather than attempting wholesale replacement. Post-migration, organizations systematically evaluate usage patterns through tools like SAP Signavio, identifying which customizations genuinely drive value and which merely exist through inertia. The delays often caused by attempting to address all legacy customizations in a single project can be avoided through phased modernization, which delivers value incrementally while laying the groundwork for a cleaner technical foundation.
Integration sequencing becomes a critical success factor. Organizations should never attempt simultaneous transformation of their ERP core and data warehousing layer. The most successful programs migrate S/4HANA first while keeping existing Process Orchestration (PO), ETL, EDI, and integration layers intact, focusing initial efforts on stabilizing core processes before modernizing external connections. Many organizations maintain their existing PO systems during the transition to minimize disruption. Once S/4HANA is stabilized, they can then begin migrating integration components to CPI and similarly transform other data platforms.
After the Go-Live
Only after S/4HANA is live and stable should organizations transform their data platforms, including SAP Data Warehouse Cloud, Datasphere, and Databricks. Once on S/4HANA, organizations can leverage Embedded Analytics, SAC, Fiori, and CDS views before modernizing their data warehousing approach. The process resembles marathon training, where initial months focus on building foundational strength and endurance before increasing intensity as the event approaches. Transformation teams must pace their modernization journey by starting with minimal necessary changes to achieve some transformative value, avoiding overly ambitious brownfield approaches. After establishing a stable platform, organizations can then accelerate their transformation efforts.
A carefully sequenced progression underpins the entire modernization path. HR and procurement functions are improved first. MDG stabilizes the data foundation. ECC continues to operate in parallel. Each investment contributes operational value and strategic readiness for what comes next.
The public versus private cloud decision isn’t actually a debate for most established enterprises. Large multinationals burdened by labyrinthine business procedures, heavy compliance obligations, and extensive technology investments find themselves with essentially one choice: the Private Cloud Edition, also known as SAP Cloud ERP Private. Nothing else delivers what these organizations require — comprehensive SPRO configuration latitude, compatibility with existing systems, and fluid connections to their on-premises technology backbone.
Leveraging BTP
Beyond these basics, private implementations grant access to the SAP Business Technology Platform (BTP), elevating it beyond mere infrastructure into strategic territory. Companies wielding BTP craft purpose-built APIs, reimagine workflows, construct sophisticated analytics environments, and harmonize specialized services around their ERP foundation. Access to event triggers and a modern integration layer turns S/4HANA into an enterprise platform rather than a system of record.
The BTP Integration Suite’s value lies primarily in its pre-built content, not just its technology. While SAP has integrated third-party products under the hood, the main value comes from the Business Accelerator Platform. It offers pre-built APIs, integrations, and event streaming activations — a buy versus build proposition that can accelerate integration by 40% compared to custom development. Organizations select SAP BTP Integration Suite primarily for this content rather than the underlying technology itself. This content-first approach transforms how companies connect their landscapes, allowing them to consume rather than code integration patterns.
The Public Cloud Edition is optimized for speed, not complexity, offering only 405 scope items that can be activated, compared to the comprehensive SPRO customization capabilities available in the Private Cloud Edition. It suits fast-turnaround scenarios like newly acquired subsidiaries, divestiture-ready business units, or legacy systems that need quick modernization.
The key advantage is implementation speed — weeks rather than months or years. Two-tier ERP strategies particularly benefit, with Public Cloud instances serving subsidiary operations while the enterprise core maintains its Private Cloud foundation. However, the Public Cloud Edition serves a different purpose than a simplified S/4HANA; for many ECC customers, it is not the right modernization path. The logic for Private Cloud is not about preference but about fit.
Some components of transformation operate independently of the core ERP decision. Spend management, for example, is modular by nature. Ariba, Fieldglass, and Concur form a suite that enables full-spectrum spend visibility without needing deep ECC integration. Ariba governs indirect procurement. Fieldglass handles contingent labor, services, and project-based engagements, complete with SoWs, timesheets, and approval workflows. Concur provides intuitive travel and expense management. These platforms are tightly connected to each other but loosely coupled to ECC, allowing enterprises to deploy and extract value quickly.
With Ariba, Fieldglass, and Concur in place, organizations can access a unified view of discretionary spend, including indirect, service, and employee-generated expenses. Finance leaders can track spend categories, optimize vendor relationships, and implement controls without waiting for back-end transformation.
System architecture decisions require equal precision. While conventional wisdom might suggest consolidation of disparate systems, diversified enterprises often benefit from deliberate segmentation. Consider an oil and gas company with downstream, upstream, midstream, refinery, petrol station, and EV charging businesses. Consolidating these diverse operations into a single S/4HANA instance offers little value, as separate SAP instances better serve these distinct business models. These businesses can operate with multiple SAP systems running harmoniously, linked not by uniformity but by shared data and integration layers.
Sometimes, deliberate segmentation aligns better with business logic than any attempt at forced consolidation. This approach provides common services for AI, integration, Fiori, Launchpad, and BTP across all businesses while allowing individual operations to function independently.
Transformation Done Right
Transformation at this scale isn’t a single decision but a precisely ordered sequence of strategic moves. The best programs start where value is obvious and urgency is high. Organizations should modernize with discipline, mitigating large-scale disruption through targeted deployment and understanding that momentum is a resource that must be earned and protected.
For some organizations, HR is the right starting point. For others, procurement or master data offers a clearer path. The entry point matters less than the ability to execute in the correct sequence.
SAP’s championing of modularity shouldn’t be mistaken for a detour. It’s transformation done right. Companies that execute with precision, break down silos, and sequence moves intelligently achieve what the rushed migrations miss. By pairing tactful strategic vision and architectural exactitude, organizations boost the effectiveness of their SAP ecosystems.
Devraj Bardhan is a distinguished global SAP leader at IBM, renowned for his exceptional track record in leading large-scale transformation projects that have significantly driven business growth through innovation and digital efficiencies.