SAP S/4HANA offers an array of benefits to retail CxOs looking to effectively manage their sales, procurement, and finance and accounts functions. But many retailers are still stuck trying to get the most out of their legacy ECC systems. This makes it difficult for them to effectively connect customer processes, manage customer journeys, enable accurate forecasting, and carry out accurate record keeping. It also becomes hard for them to increase efficiency across the value chain in such a way that it creates a positive impact on customers while delivering great business outcomes.
Given the pace of market changes, technology innovations, supply chain disruptions, and market fluctuations, there is a pressing need to run the business with platforms that simplify complex processes, deliver powerful insights, and enable high-quality financial planning and analysis at pace. This is only possible when organizations move away from their rigid and inflexible ECC systems and embrace a modern solution like the SAP S/4 HANA Central Finance.
Why move from ECC to S/4?
Traditional enterprise systems like ECC bring a host of challenges for modern retailers that have unique business attributes and are spread across multiple geographies. Here’s why retailers should plan to move from ECC to SAP S/4 HANA:
- To transform into an intelligent enterprise: With digital transformation happening at lightning-fast speed, retailers need to embrace new technologies offered by solutions like S/4 Central Finance. This will help them overcome issues across unavailability of enterprise-wide information, manual reconciliations, and fragmented compliance processes. Offering a single platform for reporting and transactions, the solution allows for financial data to be centralized, improving transparency, agility, and data management.
- To unify the business: With most features optimized just for transaction processing, it becomes extremely difficult for retailers to effectively manage their finance function, especially with data stored across many different tables. Moving from ECC to SAP S/4 HANA allows retailers to unify systems, departments, and processes across the enterprise, and get deeper, real-time visibility into operations, paving the way for better decision-making as well as financial risk assessment.
- To meet evolving needs: Data ambiguity due to the presence of multiple ledgers is a major challenge for retailers looking to work with a “single version of the truth” when it comes to financial data. This is essential if they wish to keep up with evolving industry trends and regulations. SAP S/4 HANA helps establish this single source of truth, allowing organizations to always have an updated and accurate audit trail of all their finance-related activities and transactions. Such a trail makes it easy to understand where organizations stand and what steps they need to take to meet current and future needs.
- To receive support from SAP: With SAP planning to stop supporting older ERP versions from December 31, 2027, it has become imperative for retailers to migrate their ECC Systems to the latest version of SAP S/4 HANA and continue receiving the latest updates, patches, and support for the SAP system.
The challenges associated
Moving to SAP S/4 HANA, although critical, isn’t an easy endeavor. The migration requires thorough planning, a committed budget, and a competent team, to enable speed, better insights, and greater value. Here are 3 challenges retailers need to be aware of when they plan their migration from their legacy ECC system to SAP S/4 Central Finance:
- Migrating complex legacy features: Disk-based databases, complex data models, and traditional processes constrained by the legacy database are some of the roadblocks organizations might face while moving to SAP S/4 HANA Central Finance. At the same time, modernizing the legacy UI and moving on-premises servers to a cloud or hybrid model with consistent code lines, data models, and interfaces doesn’t come easy.
- Dealing with customization: For ECC systems that have undergone years and years of modifications, dealing with customizations is also often a Herculean task. Not only does the migration team have to assess each customization; many times, but a lot of the features are also so propriety, that today’s young experts have little or no knowledge of them.
- Managing unclean master data: While the conversion of the ECC system to SAP S/4 Central Finance is indispensable, managing unclean master data that has been accumulated over time is no mean feat. Migration teams need to be extremely selective when comes to migrating data and must have sufficient knowledge of rules to extract exact master and transactional data sets.
The options at hand
To overcome common hurdles in the migration process, retail CFOs have three options at hand:
- Brownfield data migration: The brownfield approach to S/4 migration allows retailers to convert their existing ECC environment – without reimplementing or disrupting existing business processes. This approach is ideal for those that have robust business processes and data management policies in place and want to quickly move to SAP S/4 HANA via simple database migration and application conversion.
- Greenfield data migration: The greenfield approach requires retailers to perform a completely new implementation of the SAP S/4 HANA platform – from scratch. This approach makes sense for those companies that have carried out excessive customization of their ECC systems, as it allows them to discard or redesign aspects of the business based on the latest innovations in S/4.
- Selective data migration: The selective data migration approach relies on pre-configured transformation rules to extract specific data sets. Based on legal entities or other organizational elements, this approach allows retailers to define new configurations and improve business processes while also letting them keep, convert, or transform any historical data they want to fit the new S/4HANA configuration.
Building intelligent business models and embracing the latest digital technologies that enable modern work has become extremely critical in today’s volatile business landscape. For retailers that continue to rely on legacy systems like SAP ECC, it is time to bid adieu to their rigid, risky, and innovation-averse systems and transform them into an intelligent enterprise that reduces risks and enables quick and successful transformation.
With support for systems like ECC ending in 2027, now is the right time to carve a low-risk, high-value path forward and leverage intelligent technologies to be competitive and successful. Choose the right migration approach to S/4HANA Central Finance and successfully centralize your services, bridge rigid data silos, and drive greater financial results.
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