Successful SAP HCM carve-out for Daesang Group with Kolon Benit and EPI-USE Labs

Daesang’s challenge: Licence expiry and Payroll system continuity

Daesang Group had been operating an integrated SAP S/4HANA environment covering Finance, Manufacturing, Logistics, and Human Resources (HR).

However, the HR module was running under a Compatibility Pack within the S/4HANA environment, which was confirmed in early 2025 to be valid only until December 2025.

This was not just an upgrade problem; it was a structural risk, as Payroll processing and year-end tax settlement for early 2026 could fall outside of SAP’s maintenance support scope. As a result, Daesang needed to identify and execute a realistic solution within a limited timeframe.

Challenges

Licence expiry risk

• Expiration of the HR module Compatibility Pack in December 2025
• Potential legal and operational risks to Payroll continuity
• Immediate response required, independent of long-term HR strategy.

Ensuring system continuity

• Over 20 years of accumulated Payroll data
• Complex customisations, including time management, benefits, and labour union-related rules
• Requirement to maintain continuity of existing retroactive accounting functionality
• Long-term HR transformation or full re-implementation not feasible within the timeframe
• Redesigning or rebuilding Payroll data posed significant operational risk.

Because the existing Payroll operations were stable, it was difficult to justify investment in a new large-scale IT project.

Project timeline constraints

• Mandatory go-live by the end of December 2025
• Consideration of year-end tax processing and peak holiday periods in January to February 2026
• Delay in SAP PCE infrastructure readiness due to internal approval process (mid-August 2025)
• Effective execution period of approximately four months.

Under these constraints, the most realistic approach was a Lift & Shift-based carve-out model, preserving the existing system structure while relocating it to a new environment.

From a delivery perspective, projects of this complexity would typically follow a longer implementation cycle. However, with project kick-off in late July and the SAP PCE environment becoming available in mid-August, the team operated within a clearly defined execution window.

Seasonal factors, including summer vacations and the Chuseok holiday period, required careful co-ordination to ensure steady progress and timely delivery.

PRISM for Payroll migration using Selective Data Transition

The project was delivered through close collaboration with our local partner, Kolon Benit.

As the original S/4HANA implementation partner, Kolon Benit leveraged its deep understanding of the existing system landscape to lead the execution planning. The scope included project management, post-migration validation, and interface redesign and verification.

EPI-USE Labs applied its PRISM for Payroll migration service, using specialised data extraction and migration software together with Selective Data Transition (SDT) methodology tailored to the specific requirements of the Korean environment.

In addition, global data specialists from EPI-USE Labs worked alongside local HR/Payroll experts to ensure both technical excellence and strong domain expertise.

Prior to project execution, EPI-USE Labs conducted a comprehensive PRISM assessment to analyse:

• HR and Payroll data structures
• Customisation of the landscape
• Scope of data to be migrated and excluded
• Technical impact.

This enabled the project team to define a clear strategy on what to retain and what to separate before execution began.

System carve-out separating HR/Payroll from ERP core

Daesang selected a structural separation (system carve-out) approach, separating the HR/Payroll system from the ERP core while preserving existing Payroll processes and data. Unlike full re-implementation or full HR cloud transformation, this strategy aimed to achieve the following:

• Preservation of existing data and configurations
• Continuity of retroactive accounting functionality
• Operational independence from ERP upgrade timelines
• Increased technical flexibility through a dedicated cloud infrastructure.

To ensure a controlled and low-risk transition, the project followed a structured and methodical approach to migration and validation, safeguarding cut-over stability and ensuring operational readiness. The project included:

• Three-cycle iterative migration (Development/Quality/Production)
• Validation of data consistency at each stage
• Full Dress Rehearsal prior to cut-over.

This approach minimised cut-over risk and ensured operational readiness.

Transition without system downtime

Because the ERP system was integrated with other real-time operational systems, especially for sales or productions at the year-end, a full system shutdown was not feasible. The following measures were implemented to enable a seamless transition without disrupting business operations:

• Soft-freeze strategy
• Minimisation of HR data changes
• Strengthened interface control
• Preservation of business continuity.

The outcome and benefits for Daesang

The cut-over was successfully executed over the weekend of 19 to 21 December 2025: its new landscape productively and was able to complete the transition of its SAP landscape earlier than scheduled.

• Data extraction and migration were completed in approximately two hours
• System environment checks and data validation were completed over the weekend
• The system reopened as planned on the following Monday, 22 December 2025.

Benefits

• Migration stability achieved: No critical data issues occurred during the migration.
• Rapid issue resolution: Minor screen-level issues were promptly resolved and were primarily related to authorisation settings or synchronisation with connected systems.
• Environment optimisation opportunity: The process also provided an opportunity to further optimise the overall system environment.
• Successful first Payroll execution: Following stabilisation activities, Payroll was successfully processed in the new system on 2 January 2026 without any errors, achieving the core objective of the project.
• Elimination of licence risk: Structural mitigation completed before the December 2025 Compatibility Pack expiration.
• Preservation of Payroll continuity: Existing Payroll processes, including retroactive accounting functionality, were maintained.
• Technical optimisation: System performance improved through precise and selective data migration.
• Cloud-based operational environment: Migration to a dedicated SAP PCE environment enhanced security and infrastructure standardisation.
• Increased strategic flexibility: Separation from the ERP core enables greater flexibility in defining mid- to long-term HR strategies.

About Daesang

Daesang Group is one of Korea’s leading comprehensive food companies. With core businesses in food manufacturing and distribution, the Group operates across diverse business areas and maintains a stable presence in both domestic and international markets.

From an IT perspective, Daesang has been proactive in driving digital transformation, adopting SAP S/4HANA at an early stage. In 2018, the company implemented SAP S/4HANA 1709 through a new installation approach and successfully completed go-live in 2019. This was one of the first S/4HANA implementations in the Korean food industry.