SAP S/4HANA: 10 Questions Answered

As they consider switching to the new SAP S/4HANA business suite, many customers are wondering how to make their move and when the right time will arrive.

SAP S/4HANA expert Michael Sokollek provides the answers.

1. Why choose SAP HANA?

The main purpose of SAP HANA lies in executing all kinds of complex queries in the blink of an eye without aggregating (and thus sacrificing) data in advance. The in-memory technology at its core makes it possible to analyze even the largest data volumes in a matter of seconds. To facilitate real-time processing like this, SAP HANA takes advantage of the memory capacity and various caches provided by modern hardware. In fact, the technology has also influenced the development of new generations of CPUs.

This is how SAP HANA tackles virtually every challenge users can throw at it in terms of data availability, consistency, and integrity while meeting all the requirements of Acid3 testing (which determines how well applications conform to the standards of the World Wide Web Consortium, or W3C).

2. What are the advantages of an in-memory platform?

In-memory databases make it possible to process even the largest masses of data in short order. This alone is a significant advantage over previous technologies. Meanwhile, in-memory technology also opens the door to further options in developing innovative applications that offer practical business utility, including:

• Integration of text, images, video, and various other data formats through virtual access (without having to import the data into SAP HANA), real-time transfer, time-dependent integration, or data imports from Hadoop clusters
• Application development directly on the platform without a separate application server
• Functions that provide a foundation for further data processing, displaying data on maps based on SAP HANA geospatial engine, for instance.

This enables customers to assemble application scenarios without additional hardware and software while avoiding data redundancy.

3. What is SAP S/4HANA?

SAP S/4HANA is a real-time ERP suite for digital business. It is based entirely on the in-memory SAP HANA platform, which facilitates a much simpler data model. Thanks to SAP Fiori, users enjoy the kind of personalized, role-based interface they’ve grown used to as consumers and increasingly expect in the business world, as well. Here, SAP S/4HANA avoids integration gaps in order to provide end-to-end process support. This means you no longer have to switch to a business warehouse to generate a report, for example, or complete steps manually outside of your SAP landscape.

While SAP S/4HANA has been built from the ground up, it essentially provides the same functional scope as SAP ERP and is based on that application’s data model, although in radically simplified form. As such, SAP S/4HANA is compatible with conventional SAP ERP systems and doesn’t require a full-scale (greenfield) reimplementation.

With SAP S/4HANA Finance, customers have already been simplifying their financial and accounting activities since 2014. SAP S/4HANA has been available as a standalone product since November 2015, and its latest version (1610) was released in late October 2016. SAP has also plotted out a three-year road map to solidify its plans regarding the suite’s ongoing development (see question 7).

4. Why move to SAP S/4HANA?

As the successor to SAP Business Suite, SAP S/4HANA makes in-memory technology accessible to previous users of SAP ERP. To take advantage of the technical possibilities afforded by the SAP HANA in-memory platform, SAP had to simplify the underlying data model and provide for new interfaces in order to streamline processes and ensure an intuitive user experience. Making adjustments of that scale to an already established application like SAP ERP would be simply impossible.

Meanwhile, SAP S/4HANA leverages not only simple interfaces based on streamlined data structures, but the capabilities of its underlying platform, as well – including full text search. This provides companies with a technical foundation for improving their current processes and defining new ones as a basis for new products, services, and brand-new business models.

SAP S/4HANA makes in-memory technology accessible to SAP ERP users.

Technical advancements like these can both radically simplify and enhance existing processes, as the following example illustrates. Whether as a hobby or a profession, anyone who wanted to share their own photos in the 1980s and -90s will likely still recall the complicated process of inserting film, snapping shots, developing them, post-processing negatives, and sending out the printed photos by mail. It was an intricate and time-consuming affair to say the least, and the only way to find out whether the results matched your expectations was to see it all the way through.

Along with the Internet, modern smartphones and their built-in high-resolution cameras have changed all this not only by making the process faster, but also by reducing the entire underlying “infrastructure.” Furthermore, this example shows that speed alone isn’t enough: Unless the foundational architecture is simplified, the corresponding processes will also remain complex and unable to provide an environment in which creative solutions can be developed for the problems at hand.

Put another way, existing ERP solutions – including SAP ERP powered by SAP HANA – represent nothing more than the conventional way to share photos by mail. SAP S/4HANA, on the other hand, offers the chance to do more than just accelerate such functions; based on a new architecture, it provides for sweeping simplification and support for processes that were previously unavailable.

 

5. How does SAP S/4HANA simplify the previous SAP Business Suite?

SAP S/4HANA simplifies various areas of SAP Business Suite in its existing form.

User interface: Moving from the transactional SAP GUI to the role-based SAP Fiori has reduced the number of screens in the application, the need to switch between them, and the fields essential to each role and process.

To see some examples, check out the following video series:

 

Eliminating the separation between OLTP and OLAP functions has made complex ERP analyses possible again. These analyses can serve as starting points for transactions, including in material planning: If a given stock KPI falls below a certain threshold, for example, the system will report a shortage, enabling users to act immediately in response.

 

SAP Fiori supports virtually any device (including computers, tablets, and smartphones) in order to offer end users the same user-friendly interface and functions regardless of their preferred platform. Those familiar with the processes they need can essentially jump right into the software without any training.

Function: SAP follows the “principle of one,” which means that SAP S/4HANA’s ERP system (or an entire SAP system landscape) offers a single solution for a given business requirement. In the past, SAP ERP contained multiple transactions for one particular business process. A number of solutions previously found within SAP ERP, including in e-commerce, have also been replaced by SAP Hybris.

Data model: With SAP S/4HANA, aggregating data in established formats for every posting – that is, compiling information in a summarized form in order to produce more compact data packages – is no longer required. In the past, developers predefined aggregates to achieve more efficient data processing. The drawback in doing so, however, is that such aggregates generally pertain to a specific type of query. As a result, most new queries require a new type of aggregate. Foregoing data aggregation in favor of selecting individual items based on arbitrary criteria gives users a great deal of flexibility in generating analyses. It also enables SAP S/4HANA to attain higher throughput rates (read: more postings), as fewer tables need to be updated and no time is wasted waiting due to database locks.

 

Landscape: In its ongoing mission to simplify your system landscape, the latest release of SAP S/4HANA (1610) now includes SAP Extended Warehouse Management as an embedded EWM component. Release 1610 also incorporates the production planning (PP) and detailed scheduling (DS) components previously exclusive to SAP Advanced Planning and Optimization. This eliminates the need for the Core Interface (CIF) and reduces data redundancy, which in turn lowers operational and infrastructure costs.

6. What functions are available?

In release 1610, customers who already use SAP S/4HANA can access functions in the same manner and scope as in SAP ERP. SAP S/4HANA also offers an array of new user interfaces and capabilities that enable companies to significantly simplify their processes in various ways. Customers using the classic interfaces to access SAP S/4HANA transactions can use SAP Screen Personas to simplify their screens. Corresponding use cases for releases 1511 and 1610 describe examples of how to do so from both a technical and area-specific perspective.

The differences between SAP S/4HANA and SAP ERP have been documented in this Simplification List. Customer experiences have shown that only around 10 percent of these simplifications will be relevant to a given individual system. Meanwhile, functions that have not yet been overhauled are available in compatibility packs.

New customers can implement SAP S/4HANA based on SAP’s own best practices, which involves additional support through SAP Activate.

7. What future plans are in place for SAP S/4HANA?

New releases of SAP S/4HANA are scheduled to appear every year, with updates arriving on a quarterly basis. Each release will receive maintenance support for five years (until December 31, 2021 in the case of release 1610, for example).

Road maps covering a three-year period are also available for SAP S/4HANA. The current road map for the Q4 2016 edition can be found here (and all other road maps here).

8. What added value does SAP S/4HANA offer, and where can I see proof? Are there any use cases?

In essence, SAP S/4HANA features three main characteristics:

• A new design that focuses on users and their role-specific needs, can be accessed in-browser on any device, and supports communication among all process participants in a given system
• A modern architecture based on a simplified data model that makes it possible to map all of your processes in a single system – including those that were previously in place in separate installations
• An intelligent business approach that actively notifies users when certain parameters exceed or fall short of critical KPIs and offers forecasts based on predictive algorithms

At CeBIT 2016, Wieland Schreiner, executive vice president at SAP, explained how SAP S/4HANA is blazing a trail into the digital future. In a simple product demo (video in German), he illustrates how SAP S/4HANA makes it easier to render better decisions in inventory management.  As a result, you’ll be able to minimize your security stocks and reduce capital tie-up. This is just one of many examples of the innovative potential companies like yours can take advantage of in SAP S/4HANA.

The following whitepapers explain how SAP S/4HANA addresses common pain points specific areas have faced in the conventional SAP Business Suite:

Manufacturing whitepaper
Supply chain whitepaper
Sales whitepaper
Research and development whitepaper
Sourcing and procurement whitepaper
Finance whitepaper
Asset management whitepaper

9. How can I switch to SAP S/4HANA?

There are three ways to move to SAP S/4HANA:

• Fresh installation (greenfield approach): Implementation of a new system in line with processes based on SAP’s best practices, data migration from a previous system (SAP ERP or other), inclusion of select enhancements
• System conversion (brownfield approach): Transition to SAP S/4HANA in a manner similar to an upgrade or a migration; your configuration, data, and enhancements will remain as they are.
• Landscape transformation: Consolidation of an existing SAP ERP landscape, installation of a new SAP S/4HANA system, or conversion of an existing system

There are no differences between these approaches in terms of the options that used to be available in switching to previous versions of SAP Business Suite. SAP S/4HANA simplifies the established data model and features SAP Fiori, which provides users with a new, standardized interface on a wide variety of devices. At the same time, SAP also gives its customers the option to move to SAP S/4HANA by means of a system conversion. The data models of SAP ERP ECC and SAP S/4HANA are compatible, and SAP GUI will continue to be supported. The adjustments necessary before and during the transition to SAP S/4HANA are also documented in the Simplification List.

Even after completing a technical feasibility analysis, many customers find themselves wondering what their actual goals are in switching to SAP S/4HANA and whether they can achieve them in a system conversion. Answering these questions requires more than just an estimate of what a conversion would initially cost. It’s also important to assess whether it makes more sense to achieve the objectives at hand – making increased use of standard SAP offerings or improving data quality, for example – in a greenfield approach, or by carrying out a technical system conversion and implementing optimizations either simultaneously or after the fact. This is why the ultimate decision for or against a conversion always has to be made by each individual customer.

The fact that moving to SAP S/4HANA is different from a single self-contained project (like an upgrade or a database migration) is another key factor. An endeavor like this will involve your entire IT system landscape, and not because you’ll be upgrading other systems to newer releases or to a SAP HANA database at the same time. The reason is rather that the transition to SAP S/4HANA will simplify and clean up your IT landscape and all of the processes mapped within it, which requires a holistic perspective.