How to master a successful on-premise H4S4 Migration: SAP ERP6 HCM to SAP HCM for S/4HANA (H4S4)

[norman_glenk13]

1         Introduction

The current on-premise solution, SAP ERP Human Capital Management (HCM), will only be available until the end of 2027 (with extended maintenance until 2030). The so-called compatibility mode of SAP HCM, which applies to integrated installations on an S/4HANA system, will expire on December 31, 2025 (see SAP Notes 3443536 and 269324). Consequently, the corresponding usage rights will end on January 1, 2026. Since the SAP S/4HANA 2022 release, Human Capital Management for S/4HANA (H4S4) has been an integral part of S/4HANA.

2         Motivation

Based on our discussions with various companies and stakeholders at DSAG Leipzig 2024, it became clear that transitioning to the successor solution, SAP HCM for S/4HANA (H4S4), presents a significant challenge for many SAP customers. Having successfully completed our own migration to H4S4 in November 2024, we want to share our insights and demonstrate how you can also master this transition effectively and achieve success.

3         The phases of our migration project

Our migration project was structured into the following phases, which will be discussed in detail below:

1. Definition of the IT and HR Roadmap
2. Checking the prerequisites for Human Capital Management for S/4HANA
3. Analyzing the legacy SAP ERP HCM system
4. Preparing and getting the SAP ERP HCM system S/4HANA ready
5. Performing the first “dirty migration” to S/4HANA
6. Testing and analyzing the migrated system
7. Fixing functional gaps, custom code etc.
8. Performing the migration of the development system
9. Doing further adaptions
10. Performing the QAS system migration
11. Performing the main tests with HR business team
12. Performing the productive System migration
13. Hypercare & follow-up

The phases were aligned with the SAP Activate Methodology, which provided a structured framework for the migration process. In retrospect, this phased approach was essential for managing the complexities of the migration and ensuring a smooth transition to SAP HCM for S/4HANA. We will now describe each phase in detail to highlight the key activities and challenges involved.

3.1        Definition of the IT and HR-Roadmap

The first step in your migration journey is to define a clear IT and HR roadmap. This includes determining your target system landscape and setting realistic timelines. Without a well-thought-out roadmap, achieving success will be significantly more challenging.

In our case, we were operating a standalone SAP ERP 6.0 system with EHP8 and the latest service pack level. Given the end of maintenance for SAP ERP and an upcoming HR transformation project, we decided to move to S/4HANA with H4S4 to adopt the latest SAP HCM solution.

Migrating completely to SAP SuccessFactors was not a viable option for us due to our complex billing and time models, which are not fully supported by SuccessFactors. Additionally, we were satisfied with our on-premises environment, which ensured data sovereignty and met our compliance requirements. As a result, migrating to a cloud-based solution was not considered a suitable alternative.

It is worth noting that there are often rumors suggesting that only cloud-based solutions represent a future-proof investment, as on-premises solutions are sometimes perceived as outdated. However, SAP has repeatedly affirmed its commitment to supporting S/4HANA on-premises systems until at least 2040, as emphasized by Thomas Saueressig at DSAG Leipzig 2024. SAP has also confirmed that there will be ongoing innovations for on-premises solutions, even though certain technologies will remain exclusive to the cloud.

Summary:

With these considerations in mind, we finalized our IT and HR roadmap, firmly deciding on H4S4 as our on-premises solution. This clarity allowed us to confidently embark on our migration journey.

3.2        Checking the prerequisites for Human Capital Management for S/4HANA

SAP Note 3091160 (SAP HCM for SAP S/4HANA – General Approach and Strategy) serves as the central reference and entry point for the migration to H4S4. This was our starting point for the journey, and we strongly recommend considering it as part of your preparation.

H4S4 is built on the foundation of SAP ERP HCM, offering a comparable functional scope and supporting similar business processes. It runs natively on SAP HANA, which delivers significant performance benefits. However, H4S4 introduces only minimal changes; it essentially uses the same code base. Details about updates and differences can be found in SAP Notes such as 3091160. Below are a few examples:

Personnel Time Management (PT):

• Note 3138281 - Functions no longer available in time evaluation
  • Certain infotypes are now obsolete.
  • Some operations have been modified.
  • A number of reports have been updated.
  • ...
• Note 3164668 - New Functions in the Time Management Environment
  • Time evaluation (RPTIME00): Enhanced error analysis and the ability to skip "incorrect" personnel numbers in the evaluation log.
  • Collision check of time infotypes: Simplified and more flexible customization options, with the restriction to a maximum of 50 entries removed.
  • ...
• Note 3139908 - Functions no longer available in time data recording
  • Note 3429460: Adjustments to the menu bar and application toolbar in transaction PA61.
  • Note 3346202: Updates to the Time Management Pool (transaction PT40).

General Updates:

• Introduction of new MSS/ESS apps.
• Licensing for H4S4 is required (Note 3200799 - Business Function for SAP Human Capital Management for SAP S/4HANA).
• Obsolete development objects need to be checked and, if still in use, replaced.
• ...and several other minor adjustments.

Summary:

We found the changes in H4S4 to be minimal, which enabled us to carry out the migration independently with our internal IT team.

3.3        Analyzing the legacy SAP ERP HCM system

Before starting any concrete migration steps, it is essential to analyze your system thoroughly. This step helps you understand what lies ahead and what specific challenges the migration may entail.

System analysis can be divided into two key parts:

1. Analyzing the overall system:

• Assessing the general technical and infrastructural readiness for S/4HANA.
• Reviewing database compatibility, hardware requirements, and SAP Notes for system upgrades.

1. Analyzing the HCM components in use:

• Identifying all active modules, custom developments, and integrations in SAP ERP HCM.
• Evaluating dependencies and critical processes that must be preserved in the new environment.

The most critical aspect of the entire migration process is ensuring your SAP ERP system is S/4HANA-ready. Without achieving this general readiness, the HCM migration to H4S4 is destined to fail. Thorough preparation at this stage will lay the foundation for a successful transition.

3.3.1        Analyzing the general system

To prepare our system for S/4HANA, we conducted the Simplification Item Check (report /SDF/RC_START_CHECK) and the Readiness Check (report RC_COLLECT_ANALYSIS_DATA). Both checks are mandatory steps to identify the tasks required to ensure S/4HANA readiness, as previously mentioned.

In addition, we analyzed modifications and changes to standard objects using SE95, with the goal of adopting a clean core approach. This step was critical to minimize custom code dependencies and simplify future updates.

We reviewed SPAU and SPDD to address any unresolved adjustments from prior migrations or upgrades. For our custom code, we used the ABAP Test Cockpit (ATC), leveraging the S4HANA_READINESS_2023 check variant alongside our custom-specific checks to ensure compatibility with S/4HANA.

Finally, we assessed the compatibility of implemented SAP and third-party add-ons using the Readiness Check to identify any necessary updates or replacements.

3.3.2        Analyzing the HCM component

We also utilized the Readiness Check and Simplification Item Check to identify HCM components and items requiring special attention during the migration. These tools provided a structured overview of critical areas, such as obsolete functionality, required adjustments, and technical dependencies.

Additionally, as part of our preparation, we meticulously reviewed all related SAP Notes referenced in the general note 3091160. This included a detailed manual review to identify obsolete infotypes, objects, reports, and other components that might impact our processes. This step was particularly important to ensure nothing critical was overlooked, especially in areas not automatically flagged by the tools.

Key Takeaways from System Analysis:

1. Awareness of Project Scope:
   Analyzing the system provided us with a comprehensive understanding of the project's scope and highlighted potential complexities.
2. Effort Estimation:
   This step served as the foundation for estimating the effort required for the migration. If your management requests an estimate early in the project, this phase is the ideal opportunity to gather the necessary data.
3. Planning Next Steps:
   The insights gained allowed us to outline the subsequent tasks and prioritize areas that required immediate attention, such as addressing obsolete objects or verifying third-party add-ons.

Effort Estimation Guidance:

With the information collected during this phase, we conducted a detailed S/4HANA H4S4 effort estimation. This process was informed by the methodology described in the SAP Community blog: A method to estimate the effort of a transformation project (SAP S/4HANA) especially the Custom Code...

Using this approach, we were able to calculate the necessary resources for both technical and functional areas, providing clear input for project planning and decision-making.

3.4        Preparing and getting the SAP ERP HCM system S/4HANA ready

Analyzing the system served as our entry point to ensure it was ready for S/4HANA. With all the necessary information gathered, we began the adaptation phase.

General System Tasks:

We addressed the following tasks:

• Inconsistencies from the Simplification Item Check:
  • We identified various inconsistencies, most of which could be easily resolved.
• Simplification Items that needed Attention (e.g., Business Partners):
  • Since we did not use customers, vendors, or employees as business partners in the standalone system, we decided to archive (i.e., delete) them and not to migrate to CVI / BP.
• Unnecessary Modifications:
  • We removed obsolete modifications and for example moved any remaining necessary ones to implicit enhancements.
• SPAU / SPDD Leftovers:
  • We cleared any leftovers from previous migrations or upgrades in SPAU and SPDD.
• Findings in the ATC Check:
  • We addressed the issues identified during the ABAP Test Cockpit (ATC) check, including custom code and compatibility adjustments.

HCM Component Tasks:

For the HCM components, we focused on:

• Adapting Schemes and Rules
  • We updated and customized the relevant time evaluation schemes and rules to be compatible with H4S4.
• Migrating IT Infotypes
  • We migrated obsolete infotypes to the actual ones.

Summary:

The inconsistencies reported by the Simplification Item Check must be resolved in every system to ensure a smooth migration to S/4HANA. Addressing these items early in the process is crucial for a successful transition.

3.5        Performing the first “dirty migration” to S/4HANA

Once the general system tasks were completed, we set up a separate system to perform the first - we called it - "dirty S/4HANA migration". The goal was to test whether our previous adjustments were sufficient to successfully migrate the system.

We successfully carried out the first SPAU / SPDD check on the S/4HANA shadow system, which allowed us to draw valuable conclusions from the comparison. Some objects still required further adaptation, but overall, the migration process was on track.

Long story short, we were able to successfully migrate the system.

Summary:

Performing a "dirty migration" to S/4HANA helps validate the previous adaptations and actions, ensuring the migration process is feasible and identifying any remaining issues early on

3.6        Testing and analyzing the migrated system

After the migration, we carried out the standard post-upgrade steps (e.g., RZ10, SACF, SU25, activating Fiori) to identify any additional issues that needed to be addressed. We repeated the checks outlined in section 3.3 to ensure everything was in order.

Following this, the Human Resources department was involved in two key areas: first, to familiarize themselves with the S/4HANA system, and second, to perform Payroll (PY) and Personnel Time (PT) billing. They also reviewed the t-codes and reports in use.

During this process, we identified a few minor adjustments that were still needed for the schemes and cycles. Additionally, we found that the bank data (table T012) needed to be migrated manually.

3.7        Fixing functional gaps, custom code etc.

In this phase, we carried out the next adaptation cycle based on the findings from the previous phase.

3.8        Performing the migration of the development system

During further adjustments and fixes, we realized that the development system now needed to be migrated to S/4HANA, as certain adaptations could only be made within an S/4HANA environment. These requirements were primarily identified during the "dirty migration" of the S/4HANA system.

Before migrating the development system, we conducted another dirty migration to validate our findings and familiarize ourselves with the SUM/SL-Toolset steps.

As expected, the migration of the development system was completed successfully, without encountering any major issues.

Summary:

During the adaptation process, we identified the need to migrate the development system to S/4HANA. To ensure a smooth migration, we performed another "dirty migration" to validate the changes and familiarize ourselves with the tools. The migration of the development system was ultimately successful, with no significant problems.

3.9        Doing further adaptions

As mentioned earlier, we were now able to perform the S/4HANA-specific steps, such as SPAU/SPDD, in the development system. Additionally, we imposed a soft system freeze on the QAS and production systems. You might wonder why it was only a soft system freeze. The reason is that there were no major issues with transporting objects like schemes, cycles, customizing (if the relevant tables already existed), and custom code to the systems still running SAP ERP. Yes, you may encounter warning symbols (because of different nametabs / columns) in STMS during the transport, but it still works.

To clarify, we re-imported all objects and transport requests that generated warnings during the import, after the production system was migrated to ensure everything was functioning correctly.

In essence, our soft system freeze involved a restriction on transporting SAP standard objects and implemented SAP Notes. Furthermore, every transport to QAS and production had to be reviewed and approved by the STMS owner, but we did not generally block any transport.

3.10    Performing the QAS system migration

After completing all the known adaptations, we migrated the QAS system to S/4HANA. As expected, the migration proceeded smoothly without any major issues. In the meantime, S/4HANA 2023 FPS02 was released with a new SUM version. We encountered a few minor issues due to bugs introduced in FPS02 and newest SUM version, but we were able to resolve them internally.

3.11    Performing the main tests with HR business team

In this step, the Human Resources (HR) department was re-engaged to test the core HR processes. As described in section 3.6, it was now easier for the HR team to perform these tests, as they were already familiar with the question, "What should we test?" The testing phase was more efficient due to their hands-on experience with the system and the previously identified areas of focus.

The tests covered a wide range of processes, including payroll (PY), personnel time (PT), and employee data management. Overall, there were minimal issues reported, and most of the processes worked as expected. Any minor issues that did arise were quickly addressed by the project team.

With the successful completion of these tests, we were confident that the system was ready for the final productive migration.

3.12    Performing the productive System migration

In coordination with the Human Resources department, we set the migration date. As anticipated, the migration was successful and proceeded without any major issues.

3.13    Hypercare & follow-up

Afterward, we performed the necessary steps, including implementing transport requests (SU25, SACF, Fiori activation). We also updated the system parameters to the recommended values as outlined in the SAP Security Guide. Additionally, we reviewed our processes to ensure functionality.

Due to the activation of SACF scenarios, we encountered some new authorization checks, which led to minor authorization issues. These were resolved quickly and efficiently.

4         Issues and Lessons learned

• We encountered some minor issues with inconsistent documents (e.g. FI) while archiving customers and vendors. As a result, we had to resolve and remove these inconsistent documents.
• As previously mentioned, S/4HANA FPS02 caused issues initially. We began the migration on QAS the day after FPS02 was released, along with the newest version of SUM. During the process, we faced inconsistencies with SAP standard objects that were not delivered successfully, and SUM also had some minor issues.
• After the productive migration, we noticed that the wage type texts had reverted to their standard values. We manually corrected them, but in hindsight, we should have backed them up using standard reports (RPU12W0S / RPU12W0C).
• Additionally, the system settings in table T77S0 (part of SAP) were altered during the upgrade, and we needed to restore them according to our specific requirements. It’s crucial to back up this table beforehand.
• If SAP Connector for Microsoft .NET (NCo) is used, it needs to be updated to the latest version.
• If Travel Management in SAP HCM system is used, be aware about note 2906550 - New Interface between SAP Travel Management and FI: activity based costing and earmarked f... Implement the notes on ERP side, otherwise you aren't able to post the travel expenses to ERP. 

5         Key Success Factors

•   Early Definition of the IT and HR Roadmap
  An early and clear definition of the IT and HR roadmap was crucial for the project’s success. The roadmap ensured that all relevant milestones, dependencies, and timelines were outlined, allowing the project to progress along a clear and structured path from the very beginning.
•   System Analysis as a Basis for Informed Decisions
  Comprehensive analysis of the existing system made us aware of necessary adjustments and potential challenges early on. This helped us realistically estimate the effort, derive concrete measures, and prioritize tasks effectively.
•   Phase-Based Migration Approach
  Dividing the migration into clearly defined phases proved to be ideal. This step-by-step approach minimized risks, identified problems early, and ensured a systematic migration process.
•   Strong S/4HANA Migration Expertise in the IT Team
  The IT team’s extensive knowledge and experience with S/4HANA migration were key success factors. Their expertise enabled quick resolution of technical challenges and ensured an efficient migration process.
•   Close Collaboration Between IT and HR Teams
  Close and continuous collaboration between the IT and HR teams was essential. Regular exchange, thorough testing, and the active involvement of the HR department ensured that all requirements were met and processes were migrated seamlessly.
•   Thorough Testing and Validation
  Conducting extensive testing ensured that all critical processes—especially in Payroll (PY) and Time Management (PT)—worked as expected. Issues were identified and resolved in time, enabling a stable go-live.
•   Clear Communication with All Stakeholders
  Transparent and continuous communication with all stakeholders created a shared understanding of the project goals and progress. This helped build trust, avoid misunderstandings, and ensure broad acceptance of the project.

6         Summary

We successfully migrated to Human Capital Management on SAP S/4HANA 2023 FPS02.
For a successful system migration, performing the Simplification Item Check and the Readiness Check is mandatory. However, these checks alone are not sufficient. Carefully removing modifications and meticulously processing SPAU and SPDD are critical factors that can make or break the migration.

Additionally, leveraging other S/4HANA migration tools such as ATC (ABAP Test Cockpit), SCMON, SCOV, and others is equally important. These tools should not be overlooked, as they provide valuable informations and guidance for ensuring a smooth migration.

For the successful migration of SAP ERP HCM to H4S4, a key success factor was systematically working through the relevant SAP Notes. By addressing and implementing these notes proactively, we were able to resolve tasks and adjust the system before the first migration.

Note: If you have any questions, feel free to ask in the comments. For further discussion, don’t hesitate to reach out to me via my LinkedIn profile.