Companies throughout the world are modernising their IT infrastructure to be competitive, resilient, and agile due to the changing digital economy. The most ambitious example of this transformation in South Africa is taking place at the state-owned freight logistics company Transnet. Transnet is responsible for rail, ports, and pipelines in South Africa and is executing one of the largest digital transformation journeys in the world. To support this transformation, Transnet is moving from an older version of SAP (SAP ECC) to a newer version called SAP S/4HANA on a robust hybrid cloud infrastructure. This blog will investigate the reasons behind Transnet's decision to migrate from ECC to S/4HANA (the roadmap) and the expected results.

^{Why Transnet Embarked on an SAP S/4HANA Migration}

Transnet's legacy network was effective for much of its past, but as the company evolved, the organisation faced certain challenges as a result:

• An older system can't support the performance needs of a rapidly changing business proposition.
• Due to a heavily customised application environment, Transnet also finds that the cost and risk of upgrading is difficult.
• Transnet lacks access to real-time analytics needed for predictive planning, reducing operational visibility.
• The costs associated with maintaining an older system continue to rise while new releases become less frequent.

To modernise its ERP backbone, Transnet is undertaking a complete migration to the SAP S/4HANA platform, which will provide the organisation with enhanced performance, better decision-making capabilities, and the flexibility for continued growth.

^{The Road from ECC to S/4HANA}

Moving from SAP ECC to SAP S/4HANA is a major project for all big enterprises. Due to Transnet's large operational footprint, it is significantly more complicated than other moves. The migration has generally been built on four main types of principles:

^{1. Full System Analysis and Strategy Development}

Before the migration can begin, an in-depth analysis of all legacy applications will be done, including, among many other things:

• Application Landscape
• Custom Code Inventory
• Data Quality and Volume
• Integration Points

Based upon this analysis, a detailed strategy for migrating to SAP S/4HANA was developed, including risk, business priorities, and technical feasibility.

^{2. Choosing an Appropriate Migration Path — Brownfield or Greenfield?}

When it comes to large companies like Transnet, two options for migration are usually taken into consideration:

• Brownfield Migration — migrating its existing ECC environment to the new S/4HANA system
• Greenfield Implementation — building new systems from scratch with the ability to create new processes and start fresh

Transnet opted for a blended approach that would incorporate existing configurations and redesign old or inefficient business processes where necessary. This hybrid approach offered a continuity of service while modernising their business solution offering.

^{3. The Advantages of Utilising SAP's Migration Cockpit via S/4HANA Cloud}

An important factor in Transnet's successful migration was its use of SAP's Cloud S/4HANA Migration Cockpit. This software from SAP made transferring/transferring data between the legacy environment and SAP S/4HANA much easier. Specifically for Transnet:

• Allows for mapping of legacy data to consolidate into new, clean layouts in SAP S/4HANA
• Updates master and transactional data quickly and automatically without any input from users
• Provides a level of assurance that the final data transferred was correct (no data integrity and consistency issues)

Through the use of Cloud S/4HANA's Migration Cockpit, Transnet was able to reduce manual input, reduce human error during data transfer and compress the overall duration of its migration project.

^{Hybrid Cloud Strategy: Powering Digital Resilience}

Transnet adopted a strategic approach to the implementation of its SAP system, transitioning to a hybrid approach that utilises both cloud and on-premise resources. The advantages of this hybrid approach are the flexibility, cost-effectiveness and compliance to operate a balanced business.

The following is an explanation of the hybrid cloud model:

• A hybrid cloud model combines on-premise infrastructure with both private and public cloud services.
• This would enable the organisation to retain sensitive workloads on-premises and use the public cloud for scalability and to run analytic workloads, all while managing costs effectively.

By leveraging a hybrid cloud model in conjunction with SAP S/4HANA, Transnet is positioned to achieve the following goals:

• Increase availability for systems
• Improve disaster recovery
• Increase their ability to scale during periods of increased load
• Enhance their ability to adopt new technologies such as AI and IoT

Therefore, by using a hybrid cloud to integrate with SAP S/4HANA, Transnet can obtain flexibility from digital technologies and build resiliency to a rapidly changing business model.

^{Key Benefits Realised}

Transnet has achieved numerous direct benefits as a result of transitioning from SAP ECC to SAP S4HANA while also utilising a hybrid cloud strategy:

1. Real-Time Insight and Reporting

Through S4HANA's in-memory computing capabilities, Transnet can access real-time analytics for quicker and higher-quality decision-making related to logistics, maintenance, finance, and operations.

2. Simplified IT Environment

Transitioning to S4HANA has removed legacy technical debt and simplified their IT landscape, allowing for:

• Easier upgrades to the system
• Maintenance is less costly
• Improved efficiency of business processes

3. Improved Operational Efficiency

Automation and standardisation of workflows provided by SAP S4HANA have:

• Less need for manual intervention
• Faster throughput
• More efficient use of resources

4. Ability to Innovate

Utilising a hybrid cloud infrastructure gives Transnet the ability to integrate new technologies, such as:

• Predictive analytics
• Machine Learning
• IoT sensor data from their fleet and infrastructure

These advanced capabilities allow better proactive decision-making and asset management.

^{Challenges and Learnings}

Migrating on a large scale has various barriers. The following were some of the challenges that Transnet faced during its migration:

• Data cleaning and validation of large datasets for migration
• Change management across business units that were used to operating within legacy systems
• Ensuring that all external partners and systems are integrated into the new systems and processes without interruption

However, by embedding governance, training and communication as part of the migration strategy, Transnet met these challenges successfully.

^{What This Means for Other South African Enterprises}

Transnet’s SAP S4/HANA migration can serve as a reference guide for any South African company that has an out-of-date ERP system and wants to:

• Update their ERP system
• Cut down on operational risk
• Access the agility that comes with cloud technology
• Have access to live business information.

These principles can be applied in any industry and will give Transnet a solid foundation to migrate its existing data successfully through well-planned installations, hybrid implementation strategies and proven SAP Migration tools available today.

^{Conclusion: A Transformational Leap}

Transnet has made the transition from SAP ECC to SAP S/4HANA through a strategic roadmap that includes using the SAP S/4HANA migration cockpit and adopting a hybrid cloud approach. The transition to SAP S/4HANA is a transformational step towards the future and exemplifies the importance of modernising business processes, simplifying business processes, and adopting cloud technologies in building resilient, future-ready companies.

Transnet provides a tested model for how to modernise legacy systems to support digital transformation due to rapid change in business technology brought on by digital disruption. With the right strategy and execution, businesses can modernise their complex legacy systems and position themselves to compete in a digital world successfully.

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