What are the benefits for HCM when your Suite runs on HANA?
In 2010, SAP embarked on a journey to redefine the industry with in-memory computing. SAP’s bold vision and big promise was to combine the analytical and transactional worlds, completely redefining the “real-time enterprise” without disruption to our customers’ businesses.
Meanwhile our internal SAP systems all moved to SAP HANA. For us as SAP employees this means that any employee who travels, makes a purchase or records time now experiences the power of SAP HANA. In addition, our complete infrastructure is operated in the SAP HANA Enterprise Cloud.
Recently, I have talked to many customers about Suite on HANA and what the expected benefit can be for HCM. In this post I will share information that might be helpful when considering Suite on HANA.
Suite on HANA
First things first: In the past I have written about the benefits of BW on HANA because that was the most valuable business scenario on SAP HANA only a while ago. Meanwhile we have seen a huge change: SAP launched the full Business Suite Applications running on the next-generation SAP HANA platform. This means that you can run your entire business in-memory. This brings together all your transactions and analytics into one platform. Obviously, for HCM as a part of ECC this has a big impact as well.
So what does this mean for your business? Ultimately this will mean that you can drive your entire business in real time to create new business value with smarter business innovations, faster business processes, and simpler business interactions.
What is the benefit for HCM?
In the past months I have received quite a few questions about why HCM will benefit. Mission critical systems that directly impact revenue streams are usually the first ones that come to mind when thinking about Suite on HANA. HCM quite often runs on a separate instance so why consider HCM?
Actually I have talked to quite a few customers that want to start with their HCM system, just because it is a separate system. The reasoning for these customers is that the lessons learned from this move to Suite on HANA for HCM will be beneficial for future initiatives to put other ECC systems to HANA.
From a landscape perspective Suite on HANA brings cost savings and simplification for IT. But what about the business benefits? Why would the HR department consider moving to Suite on HANA?
Smarter Business Innovations
After talking to many customers I came to realize that for quite some customers SAP HANA equals speed. So the expectation is to do the same things, but then much faster. This is not what SAP HANA or the Suite on HANA is about. What Suite on HANA allows us to do is rethink processes we have taken for granted for years.
For example: “Leverage HR data and analyze and report across the business cannot happen in real-time. It’s too complex and the data volume that needs to be analyzed is too high.” For the business this meant that measuring what the revenue per FTE is after a sales campaign, figuring out what soft-skills profile delivers the best-selling sales rep, or what will be the most rewarding team to staff your store with on a Saturday was not possible. Just because it requires data coming from multiple modules like Finance, CRM, and HR. Having that data real-time was considered as too complex.
With Virtual Data Models in SAP HANA we are now able to create a data model that combine data from multiple modules in the Business Suite, and to have answers to those business questions in real-time. SAP HANA Live provides predefined data models that customers can use out-of-the box or as examples to get going quickly. In addition, for HR the latest HR Renewal FP4 provided a new user experience to bring SAP HANA based metrics to the manager easily.
Another assumption for us seemed to have been: “our payroll is not lightning fast and it is so complex that changing it requires a complete ‘recoding’ of the existing.” This is not true anymore! By analyzing what takes most time in the payroll process you can find out that this is not the payroll program. Because data volume is high and is stored in clusters, the end-to-end process usually requires a lot of batch-jobs to create reports that provide insight into payroll results. Analyzing results and making corrections are very time consuming, and the control record puts a lock on the whole administration during the process. Simply speeding up the payroll program does not solve these pain points.
By rethinking the payroll process we will be able to provide payroll results in a smarter way, and allow business users to analyze these results quicker. By pushing areas of concern and potential issues to business users earlier in the process, this would provide more time to analyze and correct. Ultimately this will result in quicker end-to-end payroll processing. And if we brainstorm a bit further on this new insight: “Why would we still need a control record in the future that during a payroll cycle is hindering a lot of administrative efforts?” Maybe we can rethink this as well and ultimately move towards an approach that employees will get paid whenever they want to get paid. How frequent that may be.
These kinds of smarter business processes combined with the new look offered by HR Renewal, our amazing SAP Fiori, and complemented by our SuccessFactors Talent suite this will define the new hybrid approach and the way HR will operate.
HANA Enterprise Cloud
So what about the cloud? Everywhere around us we hear and see that the software market is moving from the on-premise model towards the cloud. This might be a public cloud like we offer with SuccessFactors or a private/managed cloud.
The three main reasons for a move to the cloud are rapid globalization (scalability), quicker ways to adopt innovating technology and a different cost model. With that in mind we found that many of our customers need business agility, and that IT could be a bottleneck to keep up with desired or required speed. We received feedback from customers that do frequent acquisitions, that it takes too long to get hardware and systems up and running fast enough to support new businesses. As an answer to these market requirements one of our biggest recent announcements is the HANA Enterprise Cloud.
HANA Enterprise Cloud offers a way for all our customers to have their own SAP systems (ECC, BW or any other SAP system) being put in the cloud. customers can also get completely new landscapes up and running quick to support new business or even projects. HANA Enterprise Cloud is a private cloud. This means a dedicated landscape per customer, but then offered and maintained by SAP in the cloud. SAP will care for upgrades, patches, and all other activities that are needed to keep your environment up and running and on the latest release. In addition it means that you can keep leveraging our latest technology without having lengthy internal projects and discussions about upgrades and release windows.
Ordering and installing hardware can take months. HANA Enterprise Cloud offers fully operational Suite on HANA landscapes in hours or days, provided via data centers in Europe, APJ and the US. Just imagine how quickly you can get for example a sandbox environment up and running to test new innovations, instead of first planning and upgrading your own on-premise sandbox environment.
This link provides customer stories about journeys and benefits of Suite on HANA, BW on HANA, and the HANA Enterprise Cloud. It includes customer references for speed and smarter solutions.
If you want to check which of the HR Business Innovations on Suite on HANA are relevant to your business you can check the Business Scenario Recommendations
I hope that I have provided you with some food for thought. I will keep sharing new HANA based innovations over the coming period. In the meantime, if you have questions please contact me.
Great blog and good use of scenarios for HCM on HANA. There is a lot of potential and it's about customers thinking of what they can achieve now that speed and time are no longer issues. It really is exciting knowing that the possibilities are endless.
Next step is for SuccessFactors to get on HANA and then we move into a new world completely.
thanks for your reply!
Moving SuccessFactors to HANA is planned to happen shortly. From a data
integration and simplification point of view that is the next big step from
which all our customers will benefit.
Frans, very nice reminder of things to come. It is important to see HANA not as a goal, but as a tool, for the benefits it can provide in the medium and long term.
Inspiring MSS screenshot!
Awesome blog, Frans! Way to go!
For the readers interested in Analytics, for SAP HANA Live we recommend leveraging SAP BusinessObjects Dashboards, SAP BusinessObjects Explorer, SAP BusinessObjects Analysis, edition for Microsoft Office and SAP Crystal Reports Enterprise. Latest addition to that list is SAP Lumira. For sophisticated and Advanced Analytics please read the blog about how to start leveraging SAP Predictive Analysis. With slides and speed demo you can excite your customers and showcase the SAP Corporate HR pilot around Talent Analytics.
that's a very good blog, I especially like the ideas about the potential payroll improvements.
I am not yet seeing how HANA can help us here ? Is this a realistic perspective or does this require to rewrite the whole HCM payroll functionality (that would be a really big task for SAP) ?
We do not intend to re-write the whole payroll. That would indeed be too big of a task. And if you look at the whole end-to-end process, the payroll driver is not the most time consuming. Most time is spend on analyzing (and waiting on reports to finish) and correcting issues. With the new functionality that does not store payroll results into clusters, but in transparent tables we can already process data much faster on a SAP HANA database. What we are now working on is smarter ways to bring e.g. reconciliation results to the end user. In the end that is where most time is spend, and therefore also the biggest win if we can improve this.
Hope this helps
How does SAP Handle Multiple Clients of ERP system in Business suite in HANA, Especially HCM ?
If the Suite runs on SAP HANA that means that the whole ERP system (including all clients) runs on SAP HANA. How did this question come up?