16. February 2023 By Stephan Thies
Why brownfield projects should not be demonised from the outset
A greenfield project usually makes sense when a company wants to set up a completely new SAP landscape or explicitly wants to part with old processes that have grown over time. It offers it the option of redesigning its SAP landscape from scratch, adapting all its processes and applications to market standard processes and pushing ahead with restandardisation. In contrast, the point of a brownfield project is to integrate the existing system into the S/4HANA world as quickly as possible. Mandatory process changes are only made at individual points.
In this blog post, I would like to present the advantages and disadvantages of brownfield projects – because contrary to some opinions, the brownfield approach should not be demonised. There is currently a mood in the market that no one should miss the unique opportunity offered by the S/4 transformation. That is because it is the only way for a company to get the opportunity to really deal with all of its core processes again. I would also like to take this opportunity to demonstrate why a brownfield approach can be the right choice in many cases, and in some cases, it should even be the right choice.
Carrying out a brownfield project offers a number of advantages:
- Lower conversion costs: introducing a completely new system from scratch can be expensive, while updating an existing system may involve significantly lower costs.
- Shorter time to conversion: with a brownfield approach, the team can build on the existing infrastructure and code base, reducing the time it takes to get the new system up and running.
- Lower change effort: both the technical and the functional project members already know the current processes, and no new processes need to be introduced in the organisation, apart from some mandatory changes.
However, brownfield projects naturally also have their disadvantages, including:
- Technical debt: In the first step, I am not in a worse position than I was before the conversion. However, I have missed the opportunity to wipe out the technical debt in one big step. This is because the garbage-in-garbage-out principle applies to brownfield conversions and you only benefit from a few system-side improvements in the first step.
- Gap to the current state of development: Since new S/4HANA functions are constantly being published, it is difficult to close the gap to the standard. It is possible that functions have been developed in the past that are now available in the standard and you either need to actively convert again or continue to wait for them.
The advantages and disadvantages of a brownfield approach are the exact opposite to those of a greenfield approach. Why and when should an IT manager or CEO of a company actively consider a brownfield approach?
Even in small companies, a greenfield implementation leads to the teams having to deal intensively with their own processes. This inevitably leads to day-to-day business tasks or business development falling by the wayside.
Let us now put ourselves in the position of a manufacturing company with well-filled order books or a plant manufacturer that is planning for 200 per cent capacity utilisation for the next few years. They are not in a position to deal with a system conversion to this deep of an extent.
Similarly, companies may be affected by supply chain problems and view the economic development in their industry as uncertain. Here, too, companies have to ask themselves whether they should invest in IT when perhaps investing in research and development or diversification to ensure the future of the company would be the better option.
These are all reasons that go far beyond the technical project approach and should be taken into account. With the right approach, a brownfield project can be a cost-effective and reliable solution that allows a company to meet the requirement for investment security in SAP systems and thus build on the core of its corporate IT beyond 2027. A brownfield changeover also does not rule out a company benefitting from new S/4HANA functions. For example, companies can continue to use SAP’s Business Technology Platform to get extensions and gradually move towards the standard and realise the true potential of S/4HANA through a continuous optimisation process.
With that in mind, I would like to once again make the case that the path to conversion should not be fixed from the outset. This is because there are still various hybrid variants other than greenfield and brownfield that also differ from one another in terms of effort. Rather, the path should be determined depending on the state of the system and, above all, on the company’s current strategic fields of action.
Are you looking to convert your systems to S/4HANA but do not know how or where to start? It could not be simpler – our experts would be happy to advise you and support you on your way to a successful transformation. Feel free to contact me or my colleagues – either via my LinkedIn page or via our adesso Orange homepage. We look forward to hearing from you!
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