Lessons learned from an S/4HANA public cloud migration by Spirit Airlines
- 18 May, 2019 01:00
Budget US airline Spirit is in the process of moving from SAP's legacy ECC enterprise resource planning (ERP) software to S/4HANA public cloud but it has had to overcome some challenges on the way to what it says is a very different system for its users to get to grips with.
SAP doesn't break out its public cloud vs on premise numbers for S/4, which now counts more than 10,000 customers, but only a small minority so far have publicly opted for the SaaS version of the vendor's next generation ERP system, instead of staying on-premise or in a single tenant private cloud.
This makes it all the more useful to hear the perspective of a customer that is migrating to the public cloud version of S/4, especially as the vendor continues its efforts to push customers towards the public cloud where possible.
Speaking during SAP Sapphire in Orlando last week, Spirit was up front about some of the challenges the public cloud version of S/4HANA brings with it, primarily hinging on change management and integrations to third party software, as well as the benefits of modernising processes and moving away from a customised world.
Why S/4HANA public cloud?
The airline has been an SAP customer for a long time, and has been running its original instance of ECC without a single upgrade since 2013. Recognising that ECC support is being dropped by SAP in 2025, the airline decided to modernise ahead of time.
The move to S/4HANA public cloud hinged on several motivations, including a reduced IT maintenance burden, streamlining its financial reporting cycle and moving away from highly customised business processes to more best practice.
"The more you customise, you are moving away from best practices. Just because it is good for the user, doesn't mean that its best practices," SAP BI architect at Spirit Airlines, Pani Pothur, explained during the breakout session. An example of how Spirit has already improved here is that it has already reduced the number of cost centres from 600+ to 150+, and has consolidated from 20 company codes for invoicing, to just one.
On the technical side one of the challenges Spirit faced was the lack of integrations for some third party software it was reliant on, such as OpenText for invoicing and an Excel plug-in called Z Options.
After seeing that the invoicing capabilities in S/4 probably didn't scale for the airline, it also decided to procure SAP Ariba in tandem, opting for the SaaS solution because of its natural integration with S/4.
"One of the key pieces of advice I would give is to take your time," Pothur said, "because the S/4HANA public cloud is a completely different architecture. So you will have to make sure that you do your due diligence before starting your journey because all of your third party applications, your integrations, you have to focus on them all working with the S/4HANA public cloud."
He also urged customers to get their master data in order ahead of time. "You have got to make sure you clean up the master data," he said, "you don't bring the garbage into the new system."
That being said the main challenges, as always, related to change management.
"Since it is going to be different to ECC you have to make sure your key stakeholders are involved in each and every engagement process to have a successful implementation," Pothur said. "The screens are different, the processes are going to be different, you need to make sure that your key stakeholders are involved in all the different phases, from explore to testing and documentation."
In terms of training Pothur, admits Sprit could have taken more time to get this right. "You have to spend more time," he said. "It's completely different, you cannot really employ the same process from your older system, so you have to use best practices, so ensure you have enough time to train everyone."
These lessons were hard learned for Spirit, which delayed its S/4 implementation date after the business realised it wouldn't be ready. "We started our journey last year, but because of all the things that we have learned so far we had to pause for a few months and re-strategise," Pothur admitted. The airline is now due to go live with S/4 public cloud in October of this year.
In terms of the benefits of moving to S/4HANA public cloud, Pothur identified a whole host of efficiencies he hopes to achieve later this year.
Firstly, the old ECC system required a lot of manual work to get financial reporting done. As S/4 is built on the in-memory data store HANA, data is processed in closer to real time, the finance team will have the ability to do a 'soft close' ahead of time.
Moving to S/4 public cloud also reduces the maintenance effort required from IT. "In terms of the amount of effort, the amount of maintenance activities, the upgrades and everything to do, it is like a really time consuming," Pothur said. This has total cost of ownership implications for the business also.
"Moving to the cloud will definitely reduce the time, effort, maintenance and cost for your company, because everything will be taken care of by SAP," he added.
Lastly, Pothur wanted employees to have better mobile access to the ERP system when they are on the move, with Ariba's mobile capabilities also being heralded as a major improvement for the business.