One of the most discussed issues related to SAP S/4HANA migrations is the brownfield vs. greenfield issue -- or a third option known as a hybrid migration. CIOs, CTOs and any other members of the C-suite involved with their company’s S/4HANA migration should determine which is best for their specific organization.
Most SAP customers moving from SAP ERP Central Component (ECC) to S/4HANA actually need to do two migrations: They'll need to migrate to a new database, and they'll need to migrate their applications to S/4HANA. Let's look at the differences between brownfield and greenfield approaches, and which one best enables that transition.
What is a greenfield approach?
The greenfield approach is a brand-new implementation of S/4HANA, starting from scratch. The greenfield approach involves installing and configuring a brand-new ERP landscape. It's disruptive and can be costly, but it gives you a clean slate and complete freedom.
The greenfield approach is similar to migrating from a different ERP product altogether. In both instances, you'd plan for a new instance of S/4HANA by understanding your current business processes, then revamping them to align them with the software's capabilities. You'd then deploy the software, migrate your data from the old system and train your staff to use the new system.
If CIOs, CTOs and any other members of the C-suite involved with the choice are eager to take advantage of S/4HANA's new capabilities, and if substantial benefits may come from reengineering the company's processes, then a greenfield approach might be the right choice.
Pros and cons of an SAP greenfield implementation
The primary benefit of the greenfield implementation is its relative simplicity. Because you're starting with a clean slate, you won't necessarily be limited by the constraints imposed by your existing SAP system. For many organizations, this also represents an opportunity to make a fresh start. Over time, businesses change, and their systems need to adapt. That can eventually result in cumbersome processes as older systems are retrofitted to meet new requirements. The greenfield approach affords you the opportunity to start anew, taking stock of your current business processes and designing the systems that serve you well today.
There are a few downsides to the greenfield approach as well. It typically costs a bit more because it involves a complete review and redesign of business processes. In addition, it's likely that you'll lose access to some of your historical SAP data in the new system.
What is a brownfield approach?
A brownfield implementation involves upgrading an existing SAP landscape and continuing to use some legacy components. It's similar to a traditional upgrade because it involves a software update, some data transformation and some tweaking of business processes. It's still disruptive, but much less so than a greenfield implementation.
If CIOs, CTOs and any other members of the C-suite involved with the choice are risk-averse, prefer to take a gradual approach to using S/4HANA's capabilities or are worried about the costs of a greenfield approach to S/4HANA, then this approach could be best.
Pros and cons of an SAP brownfield migration
The brownfield approach makes more sense for companies that intend to keep their existing business processes more or less as they were before. Some aspects of the migration process are more automated than with a greenfield implementation; for example, master data will move to the new system without requiring any heavy lifting.
That sense of continuity requires a tradeoff, though. Customers who opt for a brownfield migration will have considerably less flexibility when it comes to overhauling the way they use their SAP software. Also, brownfield migrations require a "big bang" approach: The actual migration procedures must all be performed at more or less the same time. This requires some system downtime, which may be unacceptable for some businesses.
What is a hybrid approach?
The hybrid approach combines some elements of both brownfield and greenfield migrations. It starts with a duplicate copy of the company's SAP system, including configuration settings and customizations. Master data and transactional data are removed, though. You upgrade the resulting system to S/4HANA, preserving many aspects of the source SAP system, but also making it easier to modify. After that, you can migrate the old data to the new system.
Pros and cons of an SAP hybrid migration
Many customers like the hybrid approach because it does away with the big-bang cutover, resulting in less downtime. This method also affords companies greater freedom to reengineer any business processes that no longer work very well. The primary disadvantage of the hybrid approach is that it requires all data (including master records) to be extracted from the old system and loaded into S/4HANA manually.
S/4HANA data migration
As noted, there are some important differences among these three approaches when it comes to data migration. Regardless of whether you go with greenfield, brownfield or hybrid, you'll need to move your data at some point. Most companies will need to perform some kind of data transformation as part of that process. With a greenfield or hybrid project, you'll need to do a full-scale data migration. Anyone who has ever done a system rollout knows just how much work that implies -- especially if the business processes and data models underlying those processes have changed significantly.
In a greenfield project, you should expect that some data will simply be too expensive to migrate. Historical data, including detailed records of receivables and payables, for example, will likely not get transferred.
Choosing between an SAP greenfield vs. brownfield vs. hybrid migration
Which migration approach is best? It really depends on the specific company and its existing SAP implementation.
CIOs, CTOs and any other decision-makers should ask themselves the following questions before making the big decision:
As a general rule, does the organization prefer rapid innovation with some associated risk, or a safer, gradual approach? If you're on the cutting edge, go with greenfield. If you prefer the more conservative route, choose from the brownfield or hybrid approaches.
Is the company using business processes that no longer suit the organization? If your organization has changed significantly since the initial system implementation, then it might be time for a fresh start with a greenfield approach or a hybrid migration.
Will the company still need its customizations when it gets to S/4HANA? The new product provides a lot of updated features. Be prepared to evaluate your existing customizations to determine whether S/4HANA could address some of that functionality out of the box.
How important is it that the company retains its historical data? If you're doing a greenfield implementation, it's unlikely that you'll bring all your historical data over to the new system. Are you willing to forfeit having that detail in your live system?