24. January 2024 By Moritz Eifler
IS-H and S/4HANA – an overview of transformation strategies – greenfield or selective data transition
Regardless of what solution you opt for, it is essential that you shift your core system over to S/4HANA, be that IS-H or whatever solution comes after it.
It came as a surprise to many SAP customers in the healthcare sector when SAP announced that it would not be integrating the IS-H solution into S/4HANA, as it presented them with a number of problems. It left them asking: what approach should I take to transform my SAP landscape into a strategic S/4HANA platform, without knowing what solution will replace the IS-H solution that is in widespread use today and become established on the market?
As a result, many clinics and healthcare facilities have put the S/4HANA projects they had planned on hold because it is not yet known – and, more importantly, it is impossible to know – what all-in-one solution will replace it in the future. Instead, they want to wait and see how things play out.
What we know now
- There is no upgrade path in sight to transform the integrated system with Core and IS-H into a new all-in-one solution under a brownfield strategy (one-step process). Which leaves us with two approaches: greenfield and selective data transition.
- In addition to a successor solution for IS-H and its SAP-based functions, a non-SAP solution is also conceivable, one that will have to be rolled out separately. Or it could be a solution that is already in use in other areas in which additional functions (patient billing being one example) now have to be ‘activated’.
- It is possible to continue to use IS-H in its current form at first under a side-car approach and to connect it via a standard interface. There is an extension for this interface available on the market, for example, to reduce the amount of resources required for migration and increase the level of automation.
An overview of transformation strategies – greenfield or selective data transition
Two transformation strategies are available for the final transformation, each of which meets different needs.
But let us start with the good news. Under the selective data transition approach, there is also a version that can be technically operationalised so that you do not have to devote a lot of resources to replicating the existing system if the current processes can continue to be used or there is limited capacity available to redesign them.
An overview of the two variants is provided below, with a focus on the relatively unknown selective data transition approach.
Option 1: greenfield
As the name suggests, this approach starts with a new system ‘on a greenfield site’. The advantages are clear to see. For one, it opens up the opportunity to build a new, lean and standardised system that is fit for the future and allows you to move on completely from the legacy system.
The primary aim under the greenfield approach is to deploy SAP best practices to completely redesign the processes according to the SAP standard. The E2E processes can be redesigned from the ground up so that the required changes (simplification items) are implemented using S/4HANA and the pain points that currently exist are eliminated.
All of which makes the greenfield approach a great choice, since, in addition to the goal of IS-H unswitch, far-reaching changes will also be made to the processes to go along with adjustments to the organisational structure. This includes changes to the accounting structure, the client logic, and the CO structures.
Option 2: selective data transition
Not every organisation is in a position where it can contemplate making changes to its internal processes if this would be disruptive to their day-to-day operations. Nor do they necessarily want to. It was possible to strike the right balance in many adesso projects, where
- some of the processes needed to be redesigned, while others worked perfectly well and were not affected by the changes that needed to be made – or only to be very limited extent.
- Some in-house developments would no longer be needed, while others would, since no functionality is provided in the standard version of S/4HANA to replace this.
There are many more examples I could give here. The core message is, however, that an S/4HANA transformation project often contains a bit of both, namely the redesign of some processes while retaining others that are already known to work well. How many can be kept and how many will need to be redesigned varies from customer to customer.
The selective data transition strategy combines these two approaches, which allows it to offer all the advantages of both a greenfield approach and a technical approach (such as the brownfield strategy, which would not be possible with an integrated IS-H solution).
In addition to the standard greenfield and brownfield formats (the latter of which is not possible with IS-H), adesso is also well versed in the SDT approach. This allows us to address customers
- whose current ERP solution meets some or all of their business requirements.
- who lack the necessary personnel or have pain points that make a greenfield approach the preferred option.
- who do not want to make fundamental changes in an S/4HANA project and instead want to focus on targeted adjustments to processes, structures or systems (custom code).
- who want to carry out a quick, streamlined migration to S/4HANA in order to reduce uncertainty and costs.
- who are willing to carry out the ERP transformation separate from the rollout of a new IS-H accounting solution with no risk involved.
The approach recommended by adesso
- Decoupling the ERP transformation project from the rollout of the IS-H successor solution will massively reduce the complexity and risks involved in the project, which will also be reflected on the cost front. This will place a strain on the company’s departments for much longer while at the same time reducing demand on key resources.
- The transformation path needed to convert the ERP components over to S/4HANA is the same today as it will be in the future, meaning that the only thing that really matters is when the switch is made.
- If you transition to S/4HANA ERP sooner rather than later, there will be less urgency to act fast as maintenance for the old ECC environment comes to an end. SAP will only be making the upgrades from a technological, functional and regulatory perspective available in its new S/4HANA environment, which are ready for use immediately in the business processes.
- You can continue to run the previous version of IS-H as a side-car solution without a problem until the new products are available or a non-SAP solution has been rolled out or adapted to replace the required functions.
Two things are certain: the transformation path for the ERP components has already been clearly mapped out today and the process will need to be implemented on a technically and functional level using a greenfield or SDT approach. For the reasons outlined above, adesso recommends that you address the issue sooner rather than later.
The best way to do this is not to decide whether to opt for a greenfield or SDT approach – it is to explain the rationale behind this decision. Every transformation project is unique, even if the general framework would appear similar at first glance.
The solution is the common thread running through the transformation. With its active transformation project framework and process model, adesso is there to guide you safely and efficiently to your goal.
You can find out more about our SAP solutions for the healthcare sector on our website.
You can find more exciting topics from the world of adesso in our previous blog posts.