Integrating SAP S/4HANA – A Guide for Adopting and Migrating to S/4HANA
Worldwide, 35,000 organisations are facing a mammoth task: adopting and migrating everything to SAP S/4HANA, the new ERP system from SAP.
We have put together a guide for you on what you need to consider when integrating SAP S/4HANA into your current set-up.
Get an overview of the systems and endpoints that need integrating with SAP S/4HANA. Learn about the different integration patterns available, and how SAP S/4HANA may involve changes and modernizations to integration interfaces.
Discover the role played by connectors in integration, as well as how using content and common formats can help you manage B2B integration. We will also be looking at what you need to consider when choosing the best type of integration platform for integrating S/4HANA.
The final pages of this guide contain thoughts from integration experts and opinion leaders on integrating S/4HANA.
Let's find out more!
What is SAP S/4HANA?
SAP S/4HANA is SAP’s new strategic, future-orientated Enterprise Resource Planning (ERP) System. It replaces SAP EEC, SAP‘s decades-old ERP system. As well as covering classic business processes in various industries, SAP S/4HANA also contains a number of modern, intelligent integrated technologies. These enable companies to better automate their business processes and run real-time analytics.
The first three generations of SAP’s ERP system were known as R/1, R/2 and R/3. The ‛R’ stands for real time. At the time, the R generations were innovations. All core operative processes shared a common data model. Updates were immediately viewable and effective throughout the system.
SAP S/4HANA has done more than simplify real time analytics. Now, any details updated in a single transaction become immediately visible and effective in the system as a whole. This has previously not been possible due to the sheer volume of data which needs to be processed in real time.
A big innovative jump is that SAP S/HANA is also available as a cloud offering. SAP offers S/4HANA in the following versions:
The challenges in adopting SAP S/4HANA
The clock is ticking – it’s time to switch to S/4HANA
SAP have announced that they will no longer be supporting SAP ECC (otherwise known as the R/3 generation, see above). This means that existing customers will need to have switched to S/4HANA by 2030 (as of 2021). This situation affects around 35,000 companies worldwide.
Some SAP customers have already implemented SAP S/4HANA components, while others have already extensively or even completely migrated.
As it looks today in 2021, however, it is safe to assume that 80% of SAP’s ERP customers have not finished migrating to S/4HANA. Some have not even started. The greater majority are planning to have migrated within the next five years.
What makes migrating to SAP S/4HANA challenging?
Adopting SAP S/4HANA is not a quick job. It needs time and will run alongside your everyday business:
- What scalability and future-proofing can we gain by adopting SAP S/4HANA?
- How could we use this opportunity to optimise by consolidating and modernising our IT infrastructure and architecture?
- What would be the best way to set up a multi-cloud strategy?
- Which non-SAP solutions or legacy systems need to be included to cover all your business needs? The answer varies by company and industry.
- What is the total proportion of non-SAP systems?
- Which core tasks could – or should – we keep in house?
- What tasks would it be better to outsource?
Integrating SAP S/4HANA: time and costs
What will implementing S/4HANA mean from an integration perspective, if you're looking at an IT system which has evolved, grown and been integrated piecemeal over several years?
The somewhat simplistic diagram in figure 1 shows that the longer an ERP system has been in operation, the more endpoints it will probably have:
When you start adopting S/4HANA what will these years of new endpoints mean for your integration team?
These endpoints all need to be migrated to S/4HANA, but in a drastically shorter timeframe!
Once you get down to it, integration is actually more complex. A company doesn’t shut down during migration. It still runs at full power. You therefore need to ask questions like:
- Which interfaces need to remain connected to SAP ECC during migration?
- How can this be done in a meaningful way, so that these interfaces can be quickly re-mapped to S/4HANA?
It’s easy to see how integration is one of the biggest threats to exploding the budget, scope or schedule of your S/4HANA migration project.
What systems and endpoints need to be integrated with SAP S/4HANA?
Simply put, most of your integration needs with SAP S/4HANA can be put into four main categories:
Each of these integration areas have their own particular characteristics, which we’ll look at in turn.
You need to take the time to plan which third party applications and legacy systems need to be integrated with SAP S/4HANA. It’s not uncommon to underestimate the work needed or even to overlook a system, which would completely derail your project schedule.
Integrating 3rd party applications with SAP S/4HANA involves resolving certain technical, procedural and semantic challenges.
Cloud-based applications bring further obstacles and challenges such as security requirements and firewall configuration.
3rd party offerings which are often integrated with SAP S/4HANA include:
- Cloud-based business applications for CRM, Human Capital Management, Non-SAP ERP solutions, Procure-to-Pay,
- trading platforms and ecommerce solutions,
- industry-specific digital B2B platforms and ecosystems and
- cloud service providers.
Legacy systems and in-house developments make the project even more difficult due to the frequent lack of modern integration options. If an organisation decides to operate some elements from this category from a hyperscaler’s cloud, the increase in security requirements make it more difficult to integrate these quickly.
B2B integration, which for our purposes also covers B2G (Business-to-Government) and its various international e-invoicing procedures, is the most varied and most challenging integrating area when migrating to SAP S/4HANA. There are six main reasons for this:
- A B2B integration is directly connected to a company’s core processes and value chain.
- Of the four categories, B2B integration has the highest range of technical challenges.
- Integrated business partners and government agencies require constant updates.
- SAP S/4HANA has different interfaces options to its predecessors, and choosing and mastering the right integration pattern for each endpoint is fraught with uncertainty.
- B2B integration requires a strong understanding of business and technical needs and processes.
- In B2B integration, you need to ensure that your mappings comply with various security requirements and business legislation.
Your migration to S/4HANA is an opportunity to consolidate, standardize and modernisethe B2B integration infrastructure that has evolved over the years. This ensures that B2B integration is more manageable in the future and often enables you to significantly reduce annual costs.
S/4HANA integrating in a multi-cloud or hybrid cloud architecture
These days, a lot of organisations running hybrid IT infrastructure do so in a multi-cloud environment. This could involve using several public clouds, or a combination of public clouds and in-house or hosted private clouds. This means hybrid cloud integration. To this end, nearly every organisation using SAP S/4HANA follows a multi-cloud strategy and has to deal with the impact on integration:
- Multi-cloud integration between several public clouds/hyperscalers
- Hybrid cloud integration between private clouds and public clouds/hyperscalers
Integrating S/4HANA with data lakes in public clouds – How can an organisation get their data streams under control?
Integrating with a public cloud tends to involve using a hyper-scale environment to create a data lake and its tools for analytics, machine learning (ML), IIoT and artificial intelligence (AI).
Companies want to harness the information hidden in the mass of data produced every day. And they know a hyper-scale environment is a cost-efficient solution to store this mass of data and have the tools to extract the valuable insights it contains.
However, how does the data enter the data lake in the public cloud? And how can you manage further bidirectional data streams? The answer is a hybrid integration platform, and SAP S/4HANA is one of its interesting data sources.
You can find a number of ready-to-use solutions for integrating a public cloud or a data lake in a public cloud by going to our connectors page and taking a closer look at the categories Public Cloud Access and Technology, Databases and Data Storage.
SAP S/4HANA is only a part of SAP’s portfolio, which consists of around 300 products and a further 200 cloud services. SAP also offer an out-of-the-box integration solution for four core processes and the SAP applications these involve. This, however, still leaves a number of items for each individual organisation to integrate.
The advantage for SAP customers is that they can rely on SAP’s offerings to be open to integration, as can be seen in this impressive example with SAP BW/4HANA.
This means that all SAP’s products and services can be integrated over a suitable integration platform smoothly and easily. As in the example above.
Most SAP cloud applications actually started life as non-SAP 3rd party applications and were later acquired by SAP. These include SAP SuccessFactors, SAP Concur, SAP Fieldglass and SAP Ariba. The applications contain various interface options to integrate them into your IT infrastructure. Many companies using an SAP ERP also use alternative offerings, such as Coupa instead of SAP Ariba. However, sharing data between all applications and services, SAP or otherwise is no problem. Neither is orchestrating transactions or a business process as a whole as these offerings have been designed with an openness which enables integration.
Proportion of SAP-to-SAP integrations in an SAP IT landscape
In information events run by the German-speaking SAP user association DSAG, members learned that 70% of integrative work for SAP S/4HANA would be to connect non-SAP applications and endpoints.
When migrating to S/4HANA, your goal and challenge is to create seamless connections between all your endpoints. A mapping may therefore neither begin nor end with the new ERP.
B2B-Integration deserves a special mention here. This category tends to have the highest number of endpoints as several different transactions need mapping to several different partners. Awkwardly, it also wins the award for the lowest average volume per endpoint.
Integration patterns for SAP S/4HANA and beyond
One approach to getting an overview of what you need to integrate with SAP S/4HANA and what your integration platform needs to be capable of, is to look at integration patterns.
Why are integration patterns important?
There are many ways to identify, describe and classify the integration interfaces within IT infrastructure.
When choosing an integration
platform to use with SAP S/4HANA, you need to look for one that covers an extensive range of integration
patterns.
Unlike the other attributes you may look for, this one cannot be
addressed by a development roadmap.
However, it is this attribute which
underpins how future-proof your
investment is.
You therefore need a powerful integration platform which can map and standardise these patterns in a centrally-administered system landscape. Central management functions include development, configuration and monitoring tools, as well as user management.
At the same time, your integration platform needs to manage and resolve potential conflicts between the various integration patterns. These clashes include how to process bulk data or to run complex, processing-intensive integration tasks without negatively impacting time-critical, fine-grain or other real-time processing.
Which integration patterns do you need to focus on when migrating to S/4HANA?
To this end, it is advisable to carry out a needs analysis for SAP S/4HANA and the IT landscape as a whole, considering the following:
- Real time versus batch processing
- Fine grain versus bulk processing
- Synchronous pull (consumer driven, e.g. RESTful APIs) versus asynchronous push (sender driven) integration patterns
- Transfers either streamed or in discrete files
- Data flow can be triggered in a number of ways:
- Request
- Message
- Event
An integration platform must be able to deal with the above integration patterns to be able to standardise processes.
If it can’t support any of the above, it is questionable whether it is a long-term solution for integrating SAP S/4HANA.
White PaperWhat integration technologies are supported by SAP S/4HANA
SAP users have been using the old, familiar SAP interface technologies IDoc, ALE, RFC, BAPI and JCO to integrate their ERP systems for decades. They hope they can continue to do so. However, they also expect some innovation from the new SAP S/4HANA, including support for more modern technologies.
SAP have added three further interface technologies to make SAP S/4HANA a more innovative ERP system:
- An interface using the ODATA protocol (REST API)
- An SAP Reliable Messaging interface (SAP RM, SOAP)
- Business Events (SAP Event-Driven Architecture (EDA), also available for SAP ECC since 2020)
This is nicely illustrated by this diagram:
It can be safely assumed that SAP is unlikely to further develop its legacy interfaces. SAP organisations are therefore mostly choosing to rely on an integration platform, which
- already covers the full range of integration options offered by SAP S4/HANA.
- will allow them to easily switch to the more modern interface technologies at a later date through decoupling and employing a common format.
The new concepts offered by SAP with their SAP One Domain model and SAP Graph will also be very interesting options for various integration scenarios.
Use connectors to make migrating to SAP S/4HANA easier
A challenge in SAP S/4HANA integration is mastering its sheer range of integration technologies. An efficient integration platform will simplify this huge task with integration adapters and configuration tools.
To ensure that adopting SAP S/4HANA goes smoothly for your organisation, pre-programmed connectors are a great way to accelerate your project and make sure it stays on track.
Connectors let you integrate defined endpoints without detailed knowledge of the technology normally required.
The advantages of using connectors Migrating to SAP S/4HANA:
In some integration scenarios, it’s not even necessary to use specific connectors, as the endpoints can be connected with generic integration adapters. These include (s)ftp, REST-API, KAFKA, standard IOT protocols such as MQTT and OPC UA, AS2, AS4, e-mail, EBICS, MLLP, SOAP, JMS, MQ, Database.
Essentially, connectors can drastically speed up your migration to SAP S/4HANA, while requiring very little specialist knowledge:
- they reduce complexity
- they are configured rather than programmed
- they help integration teams scale up their output
How can a content-driven system with a canonical format make SAP S/4HANA B2B integration easier?
B2B integration with SAP S/4HANA is a particularly challenging area. The chart below summarises 6 reasons why this is so:
The image below shows how complex B2B integration can be:
It’s the sheer range of options, requirements and possible combinations which make B2B Integration with SAP S/4HANA tricky. These relate to:
- Interface technologies
- Legislation to comply with
- The use of APIs alongside classic EDI technologies
- On boarding new and existing partners during migration
Make migrating to S/4HANA easier: decoupling and the use of a common/canonical format
In order to meet the many simultaneous demands of B2B migration, you need a highly standardised concept and procedure. This concept involves decoupling Partner content & their individual B2B technologies from SAP content & selected SAP interfaces.
This decoupling is made possible by using a common/canonical format in an intermediary, standardising layer.
The canonical format converts an external partner's specific requirements into standardized, generic business processes. Only these are integrated with the backend system.
When a new partner is added, it is their content being added, not their systems. And this means that they no longer need their own integration project. Once you have added them with a partner connector, the potentially complex work on your side is reduced to content updates.
Figure 11 shows how decoupling might work for an organisation actively using SAP ECC while simultaneously rolling out S/4HANA. Not only do they have the flexibility of when to switch to S/4HANA’s more modern interfaces – the how is also easy (see ). They can still use their huge range of partner content and will only need to map a few processes.
Using a common/canonical format as an intermediate layer works irrespective of the B2B integration technology and content format used by your various business partners. It also works for APIs (see ).
Where should your SAP S/4HANA integration platform be based?
Where should your integration platform run from? Which option is best for which needs? To answer this question from an integration perspective, let’s look at an example.
The diagram below shows the IT architecture of a company which not only needs integration in all four integration areas detailed above, but also follows a multi cloud strategy.
The top row shows both public and vendor clouds to be integrated. A vendor cloud is used to access software or an application as a service (XaaS) from a specific company, including SAP. An organisation may also have applications running from a public cloud.
The central system can be located in different, even hybrid, cloud variants; a certain number of applications can and will continue to run on-premises (e.g., store floor management systems).
The diagram suggests that an integration platform should be based near the central system.
What are the implications for choosing the right type of integration platform?
A) You need a hybrid integration platform
This means, it needs to run both on-premises and in a variety of cloud scenarios, with the exception of private, vendor clouds. This allows your integrations to successfully fulfil demands on functionality and security, while also minimising risk and costs. For the organisation from the image above, the decisive factor would be the cloud operating platform their central ERP system runs from.
B) You need to be able to add other integrations to your SAP S/4HANA integration platform
Adopting S/4HANA involves re-integrating the rest of your network and beyond. Therefore, many organisations are taking the opportunity to consider the following questions:
- Which integration tasks or areas would it be better for your organisation to be responsible for itself? Would you only operate these, or also set them up?
- Which integration tasks could an integration service provider manage better, more reliably or more cost-effectively?
Adopting SAP S/4HANAis an excellent opportunity to increase efficiency – and this is something a specialised external provider can offer you. Because, an SLA for integration services is not for system availability, rather to guarantee a certain processing speed and scope, as this is what counts.
The following integration areas are particularly suited to an external service provider:
- B2B integration
- Integrating cloud-based 3rd party applications with an SAP backend
C) Your integration solution needs to be available as an iPaas
In recent years, the iPaaS model has grown in popularity. A significant reason for this is the explosion in interfaces over the last ten years. Driving factors have included:
- the growing use of cloud-based applications,
- the success of APIs as an interface technology and
- the integration needs of companies following multi-cloud strategies.
What are the advantages of using an iPaaS?
- It comes with the integration tools and technologies you need,
- it means your organisation doesn’t have to put in the effort needed to procure a licensed solution and
- you don’t expend resources operating the platform or managing applications.
- It is a low entry cost way to address your operative needs.
These days, the main advantage of using an iPaaS solution is that it is managed by the provider. However, its performance and scope can be optimized for your company’s specific needs. This does not absolve a company from their responsibility to see that the product is fit for need and productive. However, the provider does the legwork.
What do integration experts and opinion leaders say about S/4HANA integration?
Let’s summarise what we have learned so far about what an integration platform for SAP S/4HANA needs to do:
- It needs to support all the interface technologies necessary for integrating with S/4HANA:
- The platform needs to cover the four main integration fields:
- 3rd party applications and legacy,
- B2B integration,
- Public cloud and data lakes,
- SAP applikations.
- The platform needs to cover the four main integration fields:
- It’s particularly important that it can cater for the non-SAP endpoints, which make up over 70% of integrations. It is crucial that each integration process can draw on all the available interface technologies and combine them as desired. This means that each integration process can encompass any number of systems or applications.
- The platform needs to master both the SAP legacy and modern interfaces for SAP S4/HANA. Although these are SAP interfaces, they are open.
- Simultaneous, high-performance operation of integration patterns
- The platform needs to master all the relevant integration platforms.
- The platform must be able to run these integration patterns simultaneously, without having a negative effect on processing speed.
- The provider of your integration platform must be able to accelerate your migration project with pre-build connectors and standardised content
- For integration applications and systems, you need a provider with a wide range of pre-built connectors, or solutions for speedy implementations.
- For business processes, particularly for B2B integration, you’re looking for an integration partner with a comprehensive library of partner content and mappings to SAP ERP systems.
- Cloud deployment and support for hybrid multi-cloud scenarios
- The platform must be able to run from any public cloud as well as from a (hosted) private cloud or on-premises.
- It must be possible to set up a hybrid platform, split over many clouds, yet centrally administrated.
What do users need from an integration platform when migrating to S/4HANA?
The picture becomes complete when you also consider user requirements. Although integration has traditionally been a topic left to a group of specialists, these experts are in short supply and running everything through them can quickly cause a bottleneck. Therefore, users need to be able to do their own basic integration tasks through a self-service app. This is often limited to simple tasks such as setting up a secure Managed File Transfer (MFT) with external partners – in those situations where email or an FTP server have been deemed too insecure, or are simply not able to cope with large files.
These requirements are all hybrid in nature.
The key word for your integration platform is hybrid. Hybrid endpoint integration in a multi-cloud landscape, hybrid integration styles and patterns, hybrid accelerators, hybrid operating platforms and models, and support for hybrid user models to perform integration tasks themselves. This takes a job-to-be-done approach while also ensuring the technology is available to support it.
Opinion leaders and experts such as the analysts at GARTNER, therefore recommend using a hybrid integration platform, also – indeed, especially – for SAP S/4HANA. The word hybrid addresses all the above requirements in hybrid form, as presented in two current reports:
- Ensure Your Integration Strategy Supports Modern Integration Trends
Published 23rd Feb 2021 – Reference: ID G00743374 - How to Successfully Tackle API-Based SAP S/4HANA Integration
Published 1st Dec 2020 – Reference: ID G00732196
Why S/4HANA unsers need API management and API integration on one platform
The analysts stay short of some of the recommendations in the list above and go into more detail elsewhere on the reusability and management of API integrations. This is an important point, particularly for SAP S/4HANA users, as over 70% of the integration work will be for non-SAP applications. A serious integration platform can manage this.
A core function of your integration platform should be managing and integrating internal and external APIs on the same unified platform, which is also used for other integrative tasks.
The advantages of a centralised integration platform for SAP S/4HANA companies
The analysts also highlight the significant advantages of a central integration platform, in its operation, its administration and for the users, who don’t need high skills. They only need to use the tool correctly.
The advantages:
The image below shows a possible solution for companies adopting SAP S/4HANA:
The image above shows a solution which covers all your SAP S/4HANA needs. It is characterised by:
- Being end-to-end and fully hybrid, as recommended above. It provides integration services for the functions such as for B2B integration and e-invoicing regulations, connecting SAP GTS to international customs authorities, or connecting cloud-based applications.
- A centrally administered platform
- Standardisation solutions
- Integration accelerators such as connectors
- An immense library of ready-to-use integrations and pre-packaged content, which are particularly important for B2B integration
The technology is only part of integrating S/4HANA
When migrating to or adopting SAP S/4HANA, most companies take great care in selecting a technical solution, be this an integration platform or integration services. This is crucial, as highlighted by the reasons above. The following image, however, show the other elements needed to successfully manage this mammoth integration task.
What many companies tend to neglect somewhat is the importance of the element consulting and remote services. The main reason is that many underestimate the integration issues in adopting a new system.
To avoid this, you need the advice of external specialists at an early stage. You are then able to identify and tackle project risks early on to ensure that SAP S/4HANA goes live on schedule.
What are the challenges in an SAP S/4HANA migration project?
The jump start problem: Integration teams tend to be called too near the end of the project and contribute whenever they can in this short remaining time.
During a system change, integration teams are almost always involved in several concurrent sub-projects, all with highly specific requirements and in a permanent state of flux.
The individual integration projects are often highly volatile:
• Interfaces need implementing,
• you need to wait for systems and meaningful test data to become available,
• your dependency on other project teams and external partners make it nearly impossible to carry out individual tasks at the pace you would like,
• tests results merely prompt another iteration, and it starts all over again.
You can’t properly estimate the time and workload involved in advance as you don’t have the knowledge or experience.
Once the project has gone live, remote services guarantee expert support to ensure the integration processes work reliably. After all, ‛support’ which looks at log and trace files and then declares that there’s no technical issue, would be particularly frustrating where a system relies on underlying integration processes. Instead, you need a skilled, knowledgeable partner with a hands-on mentality who will look for and find a solution.
Forward-thinking project managers understand this, and purposely choose an integration services partner who will ensure the success of their project beyond its set-up.
What questions are SAP users asking about SAP’s integration products?
The term integrated application system may sound antiquated. However, it describes the key advantage to SAP’s IT solutions and its commercial success. It means that all of a company’s business processes can be managed from one system.
These days, that’s no longer the case. According to SAP’s website, they currently offer around 300 products and a further 200 cloud services. Many are not integrated with one another. It’s true that the core system SAP S/4HANA still broadly keeps to the original promise. However, many significant SAP cloud applications, for example, have been bought in. These have their own data structure and logic. The promise of an integrated application system is no longer enough to stick stringently to SAP products. Instead, providers Salesforce, Workday and Coupa will often be found in SAP customers’ systems.
SAP has worked hard to make it easier for their customers to integrate into an SAP landscape with their own offerings and the SAP One Domain data structure. The SAP community have welcomed this development.
When searching for a suitable integration platform for SAP S/4HANA, many organisations include SAP offerings on their shortlist. One reason behind this is to let SAP solve SAP-to-SAP integration issues.
After closer analysis and drawing on the experience and recommendations of third parties, organisations then start asking the following questions on whether SAP’s offerings will cover their comprehensive integration needs:
- Is it in SAP’s interest to provide the best integration solutions for third party endpoints? These endpoints account for 705 of integrations.
- It is worth noting the high proportion of outside providers offering integration solutions for 3rd party applications.
- Is SAP as reliable and sustainable with their integration solutions as for their business applications? What has been the experience of other companies?
- Is SAP's integration suite the best hybrid integration platform for solving the various SAP SAP S/4HANA integration issues? What are key issues for our organisation?
- How can I reliably work out the ultimate licence costs for the SAP Integration Suite? SAP is transparent, but you need to also look at the terms and conditions and the whole picture. Start by looking here:
https://blogs.sap.com/2021/03/24/integration-suite-usage-analytics/
When choosing an integration platform, make sure that you have designed your selection process well and considered which criteria are crucial for your organisation. It’s a task which needs to be considered very carefully from a technical, business and financial investment perspective.
It’s for these reasons that many companies are also considering alternatives to SAP’s offerings. Some organisations, for example, employ an SAP solution for SAP-to-SAP integration, but prefer to approach a specialist integration service provider for non-SAP integrations to S/4HANA.
