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The Background
IBM, a $60 billion technology giant with a workforce of 280,000, offers a comprehensive portfolio of cloud, AI, cybersecurity, data analytics, and hybrid IT solutions. With a global footprint and a history of innovation, the company has continually adapted to meet evolving market demands. IBM Consulting is SAP’s largest implementation partner, and their partnership spans 50 years.
However, IBM’s own IT infrastructure had become increasingly complex due to years of reinvention, acquisitions and divestitures. This legacy estate hindered operational efficiency, restricted real-time insights, and drove up costs. And as the company aimed to enhance its “as a service” offerings, the need to modernize its IT infrastructure, streamline operations, and boost agility became critical. The upcoming end of SAP ECC support in 2027 added urgency to this modernization effort.
To overcome these challenges and promote future growth, IBM embarked on an initiative to upgrade its technology stack and streamline operations. The company employed its own SAP consulting practice, leveraging its proprietary Rapid Discovery and Rapid Move methodologies to create a more agile, efficient, and scalable IT environment. Ultimately, migrating to the SAP Business Suite of solutions (SAP S/4HANA, SAP Ariba, SAP SuccessFactors, SAP CX, SAP Fieldglass, and SAP Signavio) on IBM Cloud was a key milestone in IBM’s transformation journey. It laid the groundwork for delivering innovative solutions and addressing the diverse needs of the company’s global operations.
The Situation
IBM’s former SAP ECC environment was highly complex—a result of decades of acquisitions and portfolio expansions. This led to a high total cost of ownership and hindered the ability to gain actionable business insights. The complexity of the ecosystem also posed significant operational challenges. Technological modernization was necessary to ensure everything worked together seamlessly.
The goal was to migrate IBM’s global infrastructure from SAP ECC to SAP S/4HANA, a more advanced and integrated ERP system, in 18 months. In doing so, IBM would streamline operations, enhance data accessibility, and integrate key business processes into a cohesive, efficient system. The project was ambitious from the outset as this rapid transformation had to encompass critical areas such as Quote to Cash (Q2C) and finance and ensure operations could continue without disruption.
- The migration also had to take into account wider stakeholder expectations, such as:
- Real-time financial insights for better decision-making
- An integrated system that provides a personalized customer experience
- Secure environment with robust production capabilities to protect against cyber threats
- An optimized and standardized core ERP solution that reduces complexity, improves performance, and supports future growth and innovation
- A firm 18-month timeline and global big-bang deployment to minimize business disruption
The Initiative
IBM opted for a methodical approach to its migration, beginning with a “rapid discovery” phase. This involved conducting a thorough analysis of its existing infrastructure, dataset, and processes to ensure the business continued to benefit from existing investments. IBM also dove deep into the functionality and data that needed to be migrated to S/4HANA to support future growth. The company also analyzed all new functionality in S/4HANA to understand how these would fit with their goals and existing infrastructure.
In order to balance the importance of transformation with the need for speed to value, IBM chose a hybrid migration approach that allowed IBM to retain past investments where it made sense and transform where the ROI was present. The company identified up front further innovation and improvement to be delivered in a future phase. Next, using the “rapid move” methodology, IBM worked on redesigning its processes, merging functionalities, and consolidating its data to make the transition as seamless as possible.
The SAP Solution
IBM’s hybrid migration involved creating an empty shell in S/4HANA, building new functionalities, and finally transferring essential data to the final target system. The migration approach included:
- Selective Data Migration: Instead of moving everything wholesale, IBM used a solution for selective data transfer to identify and migrate only critical data and to transform data from legacy ECC processes to new and improved S/4HANA processes and data models. This minimized the technical burden and streamlined the overall process.
- New Capabilities: IBM incorporated advanced features such as Fiori-first user interfaces, revenue and accounting reporting, and intercompany matching and reconciliation during the migration.
- Strategic Partnerships: The company partnered with industry leaders like smartShift and SNP to leverage their expertise and tools. This collaboration accelerated the migration process and minimized potential risks.
- Automation and AI: IBM infused AI and automation into workflows, enhancing productivity and enabling intelligent, data-driven decision-making.
“We ourselves went through this rapid move, so it was critical for us to understand the real value and challenges our clients would face.”
Results
IBM successfully achieved its transformation within the planned 18-month timeline, covering 150,000 users across more than 150 countries in a single go-live. The transformation resulted in:
Operational Efficiencies: The successful adoption of the SAP Business Suite of solutions (SAP S/4HANA, SAP Ariba, SAP SuccessFactors, SAP CX, SAP Fieldglass, and SAP Signavio) greatly improved user experience and day-to-day operations by streamlining workflows, minimizing manual tasks, and speeding up transaction times.
Revenue Growth: Enhanced capabilities in areas like Q2C and finance meant sharper financial management and reporting. With more accurate and timely financial data, IBM could make smarter strategic decisions, ultimately driving growth.
IT Simplification: Remediating 30,000 custom code objects and modernizing 320,000 lines of code helped IBM significantly simplify its IT environment. This standardization and reduction in complexity has enhanced system performance and lowered maintenance costs, catapulting IBM forward on the Clean Core journey.
Enhanced User Experience: IBM revamped the user experience with over 250 new, user-friendly Fiori apps. These apps, along with integrated AI assistants and streamlined workflows, make daily tasks a breeze. Plus, these apps reduced the data footprint by a massive 1TB, optimizing storage and retrieval processes for everyone. This combination improved user satisfaction and productivity across the board.
“Rapid move is a way to introduce the à la carte menu of your existing system, taking what’s absolutely business-critical and leaving behind legacy technical debts.”
Tools and Methods
IBM utilized a variety of advanced tools and methodologies to ensure a smooth migration to S/4HANA.
- SNP Crystal Bridge: A tool that enables understanding complex SAP systems quickly and facilitates selective data migration.
- SmartShift: Specializes in automating and simplifying the migration process to SAP S/4HANA, offering tools and services that enhance data transfer, optimize system performance, and ensure a seamless transition for organizations.
- HANA Impact Assessment: Evaluates the impact of moving to S/4HANA and identifies opportunities for improvement.
- Automation Tools: Tools like IGNITE testing methodology, automated code remediation, and Fiori advisor support a seamless transition from ECC to S/4HANA.
Learn more about IBM and SAP's New Value Generation partnership.
Impact and Benefits
IBM’s transformation to S/4HANA brought substantial benefits, demonstrating material improvements in financial and operational KPIs. These outcomes highlighted the effectiveness of the company’s methodologies and tools.
- Accelerated Time to Value: IBM’s methodologies and tools reduced the time required to realize the benefits of S/4HANA by 50%, offering quicker access to improved functionalities and efficiencies.
- Data Footprint Reduction: Achieved up to 90% reduction in data footprint through effective data management and migration strategies, which optimized storage and retrieval processes.
- Custom Code Simplification: Streamlined up to 60% of custom code to meet S/4HANA standards and best practices, which reduced maintenance complexity and improved overall system performance.
- Operational Resilience: The migration process was supported by strong risk management practices and thorough testing, which ensured the system remained stable and fully operational before, during, and after the transition.
- Increased Scalability: Improved scalability of the IT infrastructure, allowing IBM to efficiently handle increased workloads and support future expansion.
- Enhanced Compliance and Security: Bolstered compliance with industry regulations and enhanced security measures to safeguard sensitive data and uphold business integrity.
- Future Roadmap: IBM plans to continue integrating new capabilities and optimizing processes post-go-live. The future roadmap includes implementing SAP BRIM (Billing and Revenue Innovation Management) for subscription order management, convergent invoicing, and further enhancements in enterprise performance management.
Lessons Learned
IBM’s shift to SAP S/4HANA serves as a blueprint for a successful migration. The company ensured a smooth 18-month journey by meticulously defining the project’s scope from the outset. IBM adopted a hybrid approach, selectively transferring valuable data from existing systems while integrating brand-new functionalities from S/4HANA. This maximized the value of IBM’s SAP investment while bringing in new, cutting-edge features.
IBM’s Consulting practice leveraged strategic partners for essential tools and automation, streamlining the migration and reducing data complexity. The focus on rapid value realization meant IBM quickly accrued benefits like improved efficiency, a more user-friendly experience, and enhanced data management. IBM’s experience underlines the importance of thorough planning, flexible strategies, and strong partnerships for a successful S/4HANA migration.
About IBM
IBM is a leading global hybrid cloud and AI, and business services provider, helping clients in more than 175 countries capitalize on insights from their data, streamline business processes, reduce costs and gain the competitive edge in their industries. Nearly 4,000 government and corporate entities in critical infrastructure areas such as financial services, telecommunications and healthcare rely on IBM’s hybrid cloud platform and Red Hat OpenShift to affect their digital transformations quickly, efficiently and securely. IBM’s breakthrough innovations in AI, quantum computing, industry-specific cloud solutions and business services deliver open and flexible options to our clients. All of this is backed by IBM’s commitment to trust, transparency, responsibility, inclusivity and service. For more information, visit www.ibm.com.
For more information, reach out to Nancy Carey-Richardson, Americas Strategic Partnership Leader - SAP Practice at IBM Consulting, at ntcareyr@us.ibm.com and Brad Klesius, Business Development at IBM Consulting, at brad.klesius@ibm.com.
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