5 Best Practices for Using Generative AI to Modernize Enterprise Resource Planning Systems

Learn How GenAI Can Accelerate Mainframe Modernization here.

As enterprises seek to modernize their IT infrastructures, one key ingredient is the ERP system. Generative AI (GenAI) offers transformative capabilities that can streamline and enhance this migration process, reducing costs, minimizing risks and accelerating timelines.

But transitioning to SAP S/4HANA or RISE is a huge undertaking – and one not to be taken lightly. Some enterprises are finding GenAI can facilitate these complex migrations, with a special emphasis on the component that covers reports, interfaces, conversions, enhancements, forms and workflows (RICEFW).

Key Benefits of Using GenAI for SAP Conversions

Source: ISG Research May 2024

Challenges of Transitioning to SAP S/4HANA or RISE

Transitioning to SAP S/4HANA or RISE presents several significant challenges:

1. Complexity of legacy systems: Legacy systems often consist of highly customized and intertwined components, making it difficult to disentangle and migrate them to a new environment.
2. Data migration: Ensuring data accuracy, integrity and completeness during migration is critical. This process involves data extraction, transformation, cleansing and loading, which can be labor intensive and prone to errors.
3. Custom-code remediation: Custom code developed for legacy systems must be analyzed, adapted or rewritten to be compatible with the new SAP environment.
4. Process optimization: Migrating to SAP S/4HANA or RISE is not just a technical upgrade but an opportunity to optimize business processes, which requires comprehensive analysis and redesign.
5. Training and change management: End-users and IT staff need to be trained on the new system, and effective change management strategies must be implemented to ensure a smooth transition.
6. Integration with existing systems: Ensuring seamless integration with other enterprise systems and maintaining interoperability during and after the transition is crucial.
7. Risk management: Mitigating risks associated with downtime, data loss and operational disruptions is essential for a successful migration.

Role of GenAI in Facilitating SAP S/4HANA or RISE Transitions

GenAI addresses these challenges by automating and optimizing various aspects of the migration process, leading to substantial productivity improvements:

1. Automated data migration and cleansing: GenAI automates data extraction, transformation and loading processes, ensuring data accuracy and integrity while significantly reducing manual efforts and migration time by up to 50%.
2. Custom-code remediation: GenAI analyzes and remediates custom code to ensure compatibility with SAP S/4HANA or RISE. This reduces the time required for code adaptation by 30-40%.
3. Process optimization and recommendation: GenAI analyzes existing business processes and recommends optimizations to leverage the capabilities of SAP S/4HANA. This results in a 20-30% improvement in process efficiency post-implementation.
4. Training and change management: GenAI develops tailored training programs based on user behavior and learning preferences, enhancing user adoption and reducing training time by 25-35%.
5. Predictive analytics for impact assessment: GenAI uses predictive analytics to forecast the financial and operational impacts of new system implementations, improving planning and risk management by 15-25%.
6. Integration and interoperability: GenAI facilitates the seamless integration of SAP S/4HANA with other systems, reducing integration time and effort by up to 50%.
7. Continuous learning and system optimization: GenAI continuously monitors system performance and user interactions, providing ongoing improvements and ensuring the system adapts to changing business needs with incremental gains of 10-20% annually.

RICEWF Components: Acceleration and Migration

The RICEWF components are critical elements of any SAP system, and their transition to SAP S/4HANA or RISE is essential for leveraging the new platform's full potential. GenAI significantly accelerates and optimizes this migration by automating key processes. According to ISG Research, it reduces report migration time by 40% through automated conversion, enhances data integration efficiency by 35% by automating interface analysis and conversion, and ensures data accuracy while reducing conversion time by 50% through automated ETL processes. Additionally, GenAI optimizes custom enhancements, reducing manual effort by 30-40%, automates form migration, cutting time by 35%, and improves workflow migration efficiency by 30% by automating workflow analysis and migration. 

Expected Productivity Improvements in RICEWF Development with GenAI

Source ISG Research May 2024

Best Practices for Leveraging GenAI in SAP S/4HANA or RISE Transitions

To maximize the benefits of GenAI in SAP S/4HANA or RISE transitions, organizations should follow these best practices:

1. Assessment and planning: Conduct a thorough assessment of your existing ERP environment and develop a detailed migration plan outlining scope, timeline and resources.
2. Pilot projects: Start with pilot projects to test GenAI capabilities and refine the migration process, scaling insights across the organization.
3. Training and development: Invest in training programs to equip IT staff and end users with the skills needed to work with GenAI tools and the new SAP environment.
4. Continuous monitoring: Implement continuous monitoring to identify and address issues promptly, using GenAI’s real-time insights for data-driven decisions.
5. Collaboration with vendors: Partner with GenAI and SAP vendors experienced in ERP migrations to leverage their expertise and best practices.

Generative AI provides a powerful solution to the complexities of transitioning to SAP S/4HANA or RISE. By automating data migration, optimizing custom code, enhancing process efficiency and facilitating training and change management, GenAI enables organizations to modernize their ERP systems effectively and efficiently. As enterprises continue to pursue digital transformation, the role of GenAI in streamlining SAP migrations will become increasingly vital, driving improved performance, reduced costs and enhanced user satisfaction.

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About the author

Steve Hall

What he does at ISG

As the leader of ISG’s business in EMEA and an Executive Board Member, Steve provides strategic insight and advice to help ISG’s clients solve their most critical business challenges, helping them adopt and optimize the technology and operating models they need to compete successfully. In particular, he uses his long experience and broad expertise to challenge and inspire them to think about their risks and opportunities in new and unexpected ways.

Past achievements for clients

Steve leads his team’s engagement with clients with an industry-recognized and highly valued perspective on the most important trends in business and technology. He asks and answers the big questions: Why do you need to transform? What’s your best way forward? What do you need to accelerate? And where should you invest your technology dollars to make it all happen?

Among his many client success stories, his ability to take in the big picture, define the problem and connect the dots to the right solutions helped one legacy postal and shipping giant transform itself into a modern logistics powerhouse. He also guided a global energy industry leader through a complex operating model and IT provider transition, helping them see past the obvious cost cutting measures to identify the root causes of their challenges—and delivering savings far beyond what they had imagined.

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