C_ACT_2403 Transition Path: New Implementation SAP S/4HANA on premise

Transition Path: New Implementation SAP S/4HANA on premise Detailed Explanation

The New Implementation SAP S/4HANA On-Premise path is designed for businesses that need a self-managed deployment and require extensive customization to meet their complex business requirements. Unlike the cloud model, the on-premise deployment gives organizations full control over their systems and infrastructure.

What Is This Path?

This path is ideal for companies that:

• Operate complex business processes requiring significant customization.
• Prefer to maintain control over their IT infrastructure and data.
• Have existing IT systems they want to integrate with SAP S/4HANA.

On-premise implementations are typically chosen by large enterprises with unique needs or regulatory requirements that demand in-house data storage.

1. Characteristics of This Transition Path

a. Supports Complex Business Processes

• What It Means:
  Businesses with non-standard workflows or highly specialized operations can configure SAP S/4HANA to fit their needs.
• Example:
  A manufacturing company might implement a custom production planning process that isn’t available in standard SAP workflows.

b. Integrates with Existing IT Infrastructure

• What It Means:
  The on-premise model allows seamless integration with other internal systems such as legacy ERP software, proprietary databases, or specialized tools.
• Example:
  A financial institution can integrate SAP S/4HANA with its custom-built risk management system.

2. Key Steps in the New Implementation Path

Step 1: Prepare On-Premise Servers

• What Happens:
  The organization must ensure that their IT infrastructure meets SAP’s technical requirements.
• Key Activities:
  • Set up physical or virtual servers with sufficient processing power, memory, and storage.
  • Ensure compliance with SAP’s prerequisites, such as database compatibility (e.g., SAP HANA).
  • Install the operating system and prepare the network for connectivity.
• Example:
  An IT team installs a high-performance server cluster to support SAP S/4HANA and configures network firewalls for secure access.

Step 2: Install SAP S/4HANA Software

• What Happens:
  SAP S/4HANA is installed on the prepared infrastructure. This step involves configuring the technical environment and ensuring all components work correctly.
• Key Activities:
  • Download the SAP S/4HANA software package from the SAP Marketplace.
  • Install the SAP HANA database as the backend for S/4HANA.
  • Deploy and configure the application server.
• Tools:
  • SAP Software Provisioning Manager for installation.
  • SAP Maintenance Planner to manage the installation process.
• Example:
  The IT team uses the Software Provisioning Manager to install SAP S/4HANA, ensuring the database and application servers are properly connected.

Step 3: Customize Processes and Configure Business Functions

• What Happens:
  SAP S/4HANA is configured to support the organization’s specific business processes. Custom developments or enhancements may be added to handle unique requirements.
• Key Activities:
  • Map the organization’s workflows to SAP’s functionality (e.g., sales, procurement, finance).
  • Develop custom extensions for processes that cannot be managed by standard SAP features.
  • Configure roles and permissions for users.
  • Set up integrations with third-party or legacy systems.
• Example:
  • A retail business customizes SAP’s inventory management module to include multi-location stock tracking.
  • A financial institution configures SAP to calculate compliance metrics for local regulations.

Benefits of This Path

1. Full Control:

   • Businesses maintain complete ownership of their data and systems.

2. Highly Customizable:

   • Companies can design processes tailored to their unique needs, supporting even the most complex scenarios.

3. Long-Term Flexibility:

   • On-premise systems provide flexibility for future upgrades, integrations, or infrastructure changes.

4. Integration Capability:

   • Easily integrate with existing IT systems, enabling a smooth transition to SAP S/4HANA.

Example of a New Implementation

Let’s consider an example of a manufacturing company implementing SAP S/4HANA On-Premise:

1. Preparation:

   • The IT team prepares the infrastructure, installing high-performance servers and configuring a network to support SAP HANA.

2. Installation:

   • SAP S/4HANA software is installed, along with the required database and application servers.

3. Customization:

   • The company customizes production workflows in SAP to support their unique manufacturing process, such as tracking raw material consumption and automating quality checks.

4. Integration:

   • SAP S/4HANA is integrated with their existing logistics system to ensure seamless data exchange.

Key Takeaways

• Who Should Use This Path?
  Businesses with complex operations, strict regulatory requirements, or existing IT systems that require integration.

• Why Choose It?
  Full control over systems, the ability to customize extensively, and integration flexibility.

• How to Succeed?
  Ensure your IT infrastructure is robust, allocate resources for detailed customization, and plan for thorough testing and integration.

Transition Path: New Implementation SAP S/4HANA on premise (Additional Content)

SAP S/4HANA On-Premise is designed for organizations that require full control over their infrastructure, data, and customizations. Unlike SAP S/4HANA Cloud, Public Edition, this deployment allows greater flexibility in system configuration, ABAP development, integration, and lifecycle management.

This enhanced version integrates SAP Activate methodology, Fit-to-Standard discussions, On-Premise deployment tools, data migration strategies, and lifecycle management considerations.

1. Applying SAP Activate in On-Premise Implementation

SAP Activate provides a structured implementation framework tailored for SAP S/4HANA On-Premise deployments.

SAP Activate Phases in On-Premise Implementation

Phase	Key Activities in SAP S/4HANA On-Premise
Discover	- Assess business needs & define project scope.- Conduct SAP Readiness Check for On-Premise.- Determine hardware and infrastructure requirements.
Prepare	- Procure servers, storage, and networking resources.- Install SAP HANA database & configure system landscape.- Set up roles, authorizations, and security measures.
Explore	- Conduct Fit-to-Standard workshops to validate SAP Best Practices.- Perform Gap Analysis to determine required customizations.- Define core business processes & integration needs.
Realize	- Install SAP S/4HANA using Software Provisioning Manager (SWPM).- Configure business processes & system settings.- Develop custom ABAP enhancements & reports.
Deploy	- Execute data migration using SAP Migration Cockpit & Data Services.- Conduct final system testing & UAT (User Acceptance Testing).- Train end users and plan cutover activities.
Run	- Monitor system performance & security.- Manage patching, upgrades & long-term support.- Optimize processes and plan future enhancements.

Key SAP Activate Adjustments for On-Premise

• Infrastructure and system setup are critical in the Prepare phase.
• Extensive Fit-to-Standard discussions are needed to determine custom development scope.
• The Realize phase requires custom ABAP development and integration with existing systems.
• Long-term lifecycle management is required beyond deployment.

Key Insight:
SAP Activate for On-Premise deployments includes more technical preparation, infrastructure planning, and long-term lifecycle management compared to Cloud implementations.

2. Importance of Fit-to-Standard Discussions in On-Premise Implementation

Even though On-Premise allows full customization, Fit-to-Standard workshops remain essential in the Explore phase to avoid unnecessary modifications.

Objectives of Fit-to-Standard Discussions

• Determine where SAP Best Practices can be adopted without modification.
• Identify required custom developments (ABAP enhancements, extensions).
• Plan system configurations vs. custom-coded solutions.

Key Fit-to-Standard Discussion Scenarios

Business Process	Evaluation in Fit-to-Standard
Financial Reporting	Do SAP standard reports comply with local accounting laws?
Manufacturing & Production	Do SAP production planning tools support specific industry needs?
Procurement Workflows	Do SAP approval workflows align with internal compliance rules?

Outcome of Fit-to-Standard Discussions

1. Processes that fit SAP Best Practices → Implement as-is with minimal configuration.
2. Processes requiring modifications → Extend via custom configurations.
3. Processes that require full customization → Develop ABAP enhancements or integrations.

Key Insight:
Even in On-Premise deployments, avoiding excessive customization reduces project risk, improves system stability, and simplifies future upgrades.

3. On-Premise Deployment Tools in SAP S/4HANA Implementation

SAP provides specialized tools for installing and managing SAP S/4HANA On-Premise systems.

Key Deployment Tools

Tool	Purpose	Use Case
SAP Maintenance Planner	Ensures system compatibility before installation.	Required for planning system installations & upgrades.
SAP Software Provisioning Manager (SWPM)	Handles system installation and initial setup.	Used to install SAP S/4HANA & HANA DB.
SAP Software Update Manager (SUM)	Manages system updates, patches, and upgrades.	Used for system maintenance & version upgrades.

Installation Steps

1. Plan system landscape & hardware sizing using SAP Maintenance Planner.
2. Install SAP HANA database & SAP S/4HANA software via SWPM.
3. Apply required patches & updates using SUM.

Key Insight:
On-Premise deployments require a structured approach to installation, including hardware setup, database configuration, and software provisioning.

4. Data Migration Tools and Strategy for SAP S/4HANA On-Premise

SAP On-Premise deployments require comprehensive data migration planning, especially when transitioning from legacy SAP ECC or non-SAP systems.

SAP-Provided Data Migration Tools

Tool	Functionality	Best Use Case
SAP Migration Cockpit	Simplifies master and transactional data imports.	For standardized, structured data migration.
SAP Data Services	Supports complex ETL (Extract, Transform, Load) operations.	For large-scale data migration from heterogeneous sources.
LTMC (Legacy Transfer Migration Cockpit)	Web-based interface for structured data transfer.	For legacy system data extraction and mapping.

Data Migration Process

Step	Description
Step 1: Identify Data Scope	Determine which master data, transactions, and historical data to migrate.
Step 2: Data Cleansing & Transformation	Standardize data formats, remove duplicates, and ensure consistency.
Step 3: Data Migration Execution	Import data using SAP Migration Cockpit or Data Services.
Step 4: Validation & Reconciliation	Verify data integrity and completeness before Go-Live.

Key Insight:
On-Premise deployments require more extensive data validation and transformation compared to Cloud deployments.

5. Managing Lifecycle Updates in SAP S/4HANA On-Premise

Unlike SAP S/4HANA Cloud, Public Edition, which has quarterly mandatory updates, SAP S/4HANA On-Premise follows a manual upgrade strategy.

SAP S/4HANA On-Premise Versioning Strategy

Release Type	Frequency	Upgrade Flexibility
Major Release	Annually (e.g., S/4HANA 2023, 2024)	Customers choose when to upgrade.
Feature Packs	As needed	Optional enhancements, no forced updates.
Support Lifecycle	5 years mainstream + 3 years extended support	Customers manage long-term support & maintenance.

Best Practices for Managing On-Premise Updates

• Evaluate new SAP versions regularly to assess impact.
• Use SAP Software Update Manager (SUM) for patching and upgrades.
• Ensure ABAP customizations are compatible before applying updates.

Key Insight:
Unlike Cloud deployments, On-Premise customers have full control over upgrade timing but must actively manage system maintenance.

Conclusion: Strengthening SAP S/4HANA On-Premise Implementations

Enhancement Area	Key Takeaways
SAP Activate Phases	Ensures structured On-Premise deployment and lifecycle planning.
Fit-to-Standard Validation	Minimizes customizations to improve upgrade compatibility.
On-Premise Deployment Tools	SAP Maintenance Planner, SWPM, and SUM streamline system setup and upgrades.
Comprehensive Data Migration	Requires structured validation using SAP Migration Cockpit & Data Services.
Lifecycle Management	Organizations control updates & long-term support cycles.

By leveraging SAP Activate, structured deployment tools, and lifecycle management best practices, organizations can successfully implement and sustain SAP S/4HANA On-Premise.