Greenfield vs. Brownfield – how to choose the right approach for your project
The introduction of SAP S/4HANA, the latest ERP system from SAP, not only affects the IT environment, but almost all areas of a company. Therefore, the migration to S/4HANA is an important step for every company. To ensure a successful migration, a detailed analysis and preparation is required. It is crucial to choose the right migration approach – Greenfield, Brownfield or a mixture of both.
What is the Greenfield approach?
The greenfield approach refers to a procedure in which an IT environment or an ERP system is developed from scratch. All processes and systems are installed and configured from scratch. This approach is comparable to construct a new building on a green field – there are no restrictions or prior burdens from existing systems or infrastructures.
Advantages and disadvantages of greenfield projects
Greenfield offers several benefits: Complete re-engineering in the greenfield approach offers the chance to redesign your system as a whole and adapt it precisely to your needs, as well as redefine and improve your processes. There is also the option of cleansing the data. You get a customized SAP ERP system that is perfectly suited to your company’s requirements. In addition, you can implement current SAP best practices and benefit from the latest technologies and innovations.
Another advantage of the greenfield approach is the option to create a clean and efficient IT environment. You can ensure that:
- your system is well structured and documented,
- maintenance is simplified and
- you can react easier and faster to future changes and enhancements.
However, the greenfield method also has some downsides. The biggest disadvantage is that it takes more time to implement a greenfield project than a brownfield project. As you are starting from scratch, you inevitably must go through all the necessary steps again, including planning and developing the new processes and training those who will in charge later on. As a result, intensive change management is often required. This can be time-consuming but is an important basis for the success of the project. You should take these aspects into account when deciding on a greenfield project.
In addition, the complete re-implementation can result in higher costs, as it is more time-consuming to test new processes rather than existing ones.
What is the brownfield approach?
The brownfield approach is primarily an upgrade of your existing SAP ECC system to SAP S/4HANA. In contrast to the greenfield approach, it is based on an existing structure or existing processes. Customizations and data are transferred completely. The first step is the technical migration, followed by adapting the processes and in-house solutions to the new requirements.
Advantages and disadvantages of brownfield projects
The benefits: A brownfield project is usually significantly simpler than a greenfield project. It can usually be implemented faster and at a lower cost, as existing processes and data are generally retained. This makes calculating the costs easier. The costs and effort for training and change management also remain manageable and you can use your investments in existing systems more effectively.
The main disadvantage of the brownfield approach is that the existing operational processes and structures are retained. This means you miss out on the opportunity to improve processes and fully exploit the potential of SAP S/4HANA by switching to a new system. The approach offers less scope for innovation and optimization.
Greenfield versus brownfield – what are the differences?
The main difference between greenfield and brownfield methods lies in the way an IT project is approached and the associated costs and risks:
|IT environment is implemented from scratch
|An upgrade to the existing system
|Time and costs
|Higher, due to the new conception
|Lower, as customizing and processes are retained
|Delays and uncertainties due to new development
|Missing out on innovations
Which of the two methods is most suitable depends on the individual requirements and needs of the company. The advantages and disadvantages of the approaches should therefore be evaluated critically.
Is it possible to combine the two approaches?
Yes, it is possible to combine the two approaches. In some cases, a hybrid strategy can make sense, in which both greenfield and brownfield elements are used in one concept.
This method is also known as a shell conversion or mix & match approach. The system is only partially redesigned, while other existing processes are optimized. This allows some processes to be redesigned and other valuable processes and data to be retained. Taking this approach makes it possible to exploit the potential of SAP S/4HANA without completely abandoning the existing system.
Factors to consider when deciding on greenfield versus brownfield
When deciding whether to take a greenfield, brownfield or mixed approach, you should take the following basic factors into consideration:
Strategic requirements and objectives
First, you should clearly define your specific requirements and goals for the project. If you are looking for a customized solution, want to redesign your system from scratch and change your business processes, the greenfield approach may be a better choice. However, if you already have an existing close-to-standard system, proven processes and want to make the most of your investment, it may make sense to take the brownfield approach.
Time and cost planning
A greenfield approach usually requires more time, budget and know-how than a brownfield one. If time and budget are crucial for you, the brownfield approach may be the right one. However, if you are planning for a long-term solution and want to unlock the full potential of SAP S4/HANA in terms of digitalization your business, the greenfield approach may be the right one.
Conclusion: Choose the right approach for your project
Every company has specific requirements and needs an individual assessment. The greenfield approach offers the opportunity to deliver tailored solutions and fully exploit the potential of S/4HANA, while the brownfield approach retains existing customizing, which saves time and money.
It is important that you conduct a thorough analysis and consider all relevant factors before deciding. Consider your resources and objectives, your existing processes, and procedures as well as your time and cost budget. If you are not sure or need further support, contact us. We will be happy to help you make the best choice for your project.