A killer app for SAP HANA?
It is almost 18 months since SAP released business suite on HANA. They now claim a little over 1000 customers have jumped aboard – although the number that are running in production is significantly less. This is hardly a ripple on the surface – in fact if we take SAP numbers at face value there are more startups using HANA than Business Suite customers.
HANA is brilliant, HANA is great, yada yada yada, but the adoption rate is pretty underwhelming. And that makes sense because HANA is a platform and no one needs a platform until you have something to run on it. To achieve mass adoption a killer app or, even better, several killer apps are needed.
When the personal computer first appeared last century most people, and especially enterprises, responded with a “meh”. The killer app that drove mass adoption of the personal computer was the spreadsheet. Once the CFO saw that he fell in love and away we went.
I was invited to take part in the SAP Influencer Program at SAPPHIRE NOW and ASUG Annual Conference last week. While there I think I might have seen a potential killer app for HANA. And guess what – it is SAP Financials!
Of course SAP don’t call it that, and they have muddled it up inside messaging about HANA Enterprise Cloud and a cloud-only offering called SAP Simple Finance. New SAP CIO Ingrid-Helen Arnold demonstrated it during Hasso Plattner’s keynote (replay here) – and it rocked! The business types in the audience I spoke to were very impressed. With a little sharpening of the messaging SAP could have CFO types all over the customer base falling in love again.
When Arnold drilled down on Operating Margin from the above dashboard screen to the screen below there was no perceptible delay and she claimed the application had analysed 380 million records in the process.
The current name of this thing is, I kid you not, “Financials Add-on for SAP Business Suite Powered by SAP HANA“. I’ll call it SAP Financials because it is in essence just the latest update to that application which will be available to all existing customers. But of course the cool new ‘simplified for HANA’ stuff by definition requires HANA. If you are not running on HANA then bad luck. And all this ‘simplification’ has just begun. SAP Finance is just the first piece of the SAP Business Suite to be ‘simplified’.
Note – it’s not a bad non-disruption story either. SAP themselves upgraded their in-house ERP systems a bit over a month ago and none of their Business Suite users noticed – with the obvious exception of those that use SAP Financials.
So here is the kicker. HANA needs widespread adoption to be successful. Good technology alone will not succeed if it doesn’t achieve mass adoption. Anyone else, like me, buy a Betamax format video player? SAP Financials could be the killer app that drives adoption of Business Suite on HANA, and therefore HANA itself, within the existing SAP customer base.
I would like SAP to recognise that adoption of Business Suite on HANA is the most important thing to them – more important than anything else. That means doing everything possible to remove any “friction” that will impede adoption. The first big issue here is pricing. Let me be very clear – this is an update to existing SAP Financials. Sure it takes advantage of the unique capabilities of HANA but that does not make it a new product. Customers who have bought SAP Financials have been filling SAP coffers with maintenance euros and dollars for years – their expectation is that this type of innovation is exactly what they have been paying for.
Of course some SAP people disagree with me. SAP is currently planning to charge a “small license fee” for this update. When challenged they cite “revenue recognition” as one of the reasons for this. Whatever “revenue recognition” is – it seems to me it is a SAP problem not one that should be passed onto their customers. The pricing issue is friction, and friction will slow adoption. So if adoption is the most important thing there could be a short meeting at SAP between the strategy people and the execution people that clears away this issue. (There are other issues of friction I might cover in another post.)
If SAP can get the new SAP Financials to GA status quickly, if they can remove all possible friction, if the CFO’s fall in love – some amazing things could happen.
For a start at every opportunity a smitten CFO would stand up and talk about how happy they are with the latest SAP Financials. People do that when they are in love.
Other dissatisfied CFO’s would seek to get the same feeling. And suddenly instead of 1000 SAP Business Suite on HANA customers there might be 10000, or 20000. And that would mean HANA, Business Suite on HANA, and probably even HANA Enterprise Cloud will have crossed the chasm.
It makes pretty good sense to me – but what would I know right?
Another great post Robbo, very succinct, you could almost say "simple" 😉
I know I sound like a broken record, but I don't care. I just wanted to take the opportunity again to point out the SAP UI5 team members knocked it out of the park, yet again. I was priviledged to know how some of this was put together, and as you can imagine from the results, it was the conclusion of a lot of very hard work by some very smart people. And it could be that the outcome of that hard work could come to be, as you say, SAP's killer app for HANA.
Regarding, " I was priviledged to know how some of this was put together" 🙂
I would like to understand your view from a skills perspective as well. How does it affects the learning curve of the developers?
For example, My day job today is to create well encapsulated ABAP classes, wrap them in RFCs/Functions, wrap them up in Gateway services and support our UX team to build custom UI5 applications. I also extend the Fiori apps backend APIs and Gateway services via enhancement options supported.
With simple Finance and simplification of business suite, how ABAP development jobs are affected? Whats the learning curve? How will I extend backend and UI of this application?
I am guessing the architecture remains the same. Some part of this will definitely need HANA Platform technologies (HANA Live/XS JS OData services) and some of these are Gateway Services? Don't kill me for this sentence 😉
PS: I am still attempting to solve mysteries behind those Analytical and Factsheet Fiori Apps.
It's a bit of a large and woolly subject, and a hard question to answer without saying "it depends". But it totally depends. On your circumstances, on your job requirements, on your abilities, but more importantly than anything, on your motivation.
I agree that its an individual choice coupled with job requirements. May be I should ask you a specific question 🙂
We know that user interfaces for simple finance are UI5 screens but how is it put together from a backend+services point of view?
For example in the latest installment of Fiori (I haven't explored the details), Transaction apps are Gateway services while Analytical apps consume OData feeds directly from the HANA Platform (XS OData services). We need both connections to run all the apps. I do not know if both of connections are utilized from any one app. Hows simple business suite structured?
Is it that APIs consume views based SQL Script and then its all wrapped via Gateway?
Sorry if it did not make much sense or I have misunderstood anything.
Fiori apps consume OData. Specifically, a single OData service. It's an artificial constraint self-imposed for various reasons. Whether that OData service comes from the ABAP stack or the HANA stack is irrelevant as far as the application is concerned; and as far as the 'by what means', you've already highlighted the two mechanisms, Gateway and XSOData.
How the specific simple finance apps are structured beyond this, I don't know, I haven't had chance to study them in that much detail yet.
I had a very quick coffee catch up with Owen. Looks like its bit of both. Some apps come from platform directly and some from ABAP stack.
To me, its interesting how they are structured from backend side and how those analytics are being delivered. Soon we will know. Thanks a ton for your reply DJ!
c'est ci bon, and revenue recognition is what makes a business live or die aka top line or simply sales. to me, it's the BSEG that once put into memory pivots any way you want perpetually.
Great blog Graham! Thanks for sharing.
I think you hit the nail on the head around SAP Business Suite on HANA adoption.
Forget the naming and looking just at the final product it is compelling.
The issue as I see it is when is the time to jump to Suite on HANA?
Now (next 12 months) when SFIN is released, or should they wait until all of the Fiori apps are relased? Or should they wait until the rest of the Business Suite becomes "simple"
No-one wants to be the customer on the wrong version, when to get to Business Suite on HANA a migration exercise is required for the data base, and an upgrade for the business users.
BRilliant blog, Graham - as you say, we have got to cross that chasm - soonest.
Is that SAP Business Suite
on SAP Hana Cloud Platform ?
SAP Hana as the on-premise db ?
this is one of the biggest parts of the problem, there is a a perfect storm of
confusion between product definitions from the customer base
conflicting messages coming out of SAP
I agree with you,
and to achieve that, SAP need to come a little closer to one voice and one message,
with a well communicated road map which fits all customers.
Owen Pettiford wrote an excellent article here, where he has given very good strategic advice for customers to build a road map towards Hana Enterprise Cloud, by basically getting their existing landscape in the best condition to give flexibility for moving to HEC when the time is right.
In the past, I wrote a couple of articles with thoughts on the road map to the cloud, and this is really the challenge, SAP need to stop banging on about the how good the thing is, and start banging on about how to get there.
And so, this reminds me of something. At some point we have all experienced disjointed municipal transport systems, and at some point we have all experienced integrated transport systems, where one ticket works for all modes of transport, the time tables between trains and buses and trams work harmoniously etc.
We need a 5 or 10 year On-Premise and Cloud Integrated Plan from SAP, showing how all of the products in different states can work together, can be a pathway together with the ultimate destination being Hana.
Let's wrap this up, I totally agree with you that,
and I would like to inherit that and extend it by adding,
that SAP need to show customers the route to Hana, the road map to Hana.
(Hana is deliberately left ambiguous as Hana here, this could be on-premise Business Suite on Hana and/or Hana Enterprise Cloud or the two harmoniously).
"SAP need to stop banging on about the how good the thing is, and start banging on about how to get there."
Fair point, Andy. I sometimes wonder if we do that too often. I suppose we're all just a bit excited about it.
maybe that was a little harsh, life is about compromises, so let's compromise and word it like this,
I am happy for SAP to bang on about how good Hana is
as long as
at the same time
SAP will kindly bang on about how to get to Hana
How's that 🙂
Actually, I don't think you were being too harsh - I think this is a mistake we sometimes make "inside the SAP bubble" - we get excited about the new technology, but we don't give enough details to customers and partners about how to bridge the gap between what they have, and what we are about to release.
But thank you anyway, for taking the trouble ;-).
All the best ,Julie.
Great post Graham Robinson.
Innovation should be out of charge for the customer, they made a step forward at SAPphire with Fiori and Persona, but I think that also HANA should have a lower barrier in terms of licence cost.
If SAP can provide this innovative technology to a great range of customer for free (or very reasonable cost), they can leverage on the adoption to boost, propose and sell a new set of applications/add-ons/products. S-FIN could move on this way, but it still requires a great investment in technology.
Even more SAP has to be closer to the customer, in many cases I see just sales and max attention people on the customer side that are just interested in making money with new licences and not in understanding customer needs proposing solutions.
I'm sure that S-FIN was born by an internal need of SAP to understand better their business. This was possible because they already had the technology to support such kind of solution. SAP cannot require customers to pay (a lot) for technology first and then promise some applications later (paying again).
Good post, Graham, and couldn't agree more that improving adoption of Business Suite on HANA is crucial for long term. It might, however, take more than just one "killer app".
The whole point of having SAP ERP is that we can do most of business in it and not to maintain tons of other apps/systems with interfaces and all the headache/expense that comes with it inevitably. So having some BWesque parallel universe of SAP Financials outside of main ERP system (I don't know it it's actually true but that's the impression it leaves from a brief look) might not look very appealing to CIO. And additonal costs easily moves this into the "fuhgeddaboutit" zone.
But I hope that STSB (c) is listening to you and actually being influenced, not just crossing off "meet those pesky influencers" from their to-do list. 🙂
if it were just "BWesque" no one would be interested, IMHO, but if it indeed eliminates the need for the month-end financial close batch processing then it actually might be worth a look not just from CIO, but also from both CFO and CEO who need to sign off on the 'accounts'.
Andy raised an excellent point above - there is not enough about "how to get there". Julie posted a great blog just recently that explains in simple terms different UI options. There should be the same kind of information for all the SAP products. E.g. if our other, non-FI processes will still run in ECC with Oracle DB, how exactly will it work together with this new FI thingy? Customers always want to know "where does the poop go". 🙂 And not in form of a 40-page "white paper".
...and shareholders want to know where the poop came from.
ad rem: account determination of all pre-finance processes ensures that all the transactions are made finance relevant and ready for 'harvesting' by HANA or any other downstream data warehouse ("BWesque") process. it's really very simple and no white papers are required: DR = CR or as has been previously explained here: http://ek-lit.narod.ru/lukasod.htm (in more than 40 pages, but still).
btw, thx for the movie recommendation
Hi Jelena, Andy, hi everyone,
"...there is not enough about 'how to get there' ". I 'm no Cloud expert, but I raised these concerns with an experienced Cloud PM colleague. He agreed that this is something we don't always do brilliantly, and will raise it at his next team meeting. So I can't make any promises, but I'm hopeful that they can come up with something.
All the best, Julie.
(PS Just to derail the thread totally: The UI Clients blog that Jelena mentioned is here 🙂 :
When to Use NWBC - and When You _Really_ Shouldn't
As a matter of interest, I published two articles on the subject of routes to the cloud.
They're here and here.
Thankfully they had some effect, because, at least through the comments to the second article it transpired that there is a service from SAP offering something in the direction of guided passage to the cloud.
That still doesn't compensate for the fact that there is an imbalance between the amount of articles trumpeting the benefits of Hana/Cloud/etc compared to the number of blogs trumpeting how to get there.
Reading the articles I published you'll see an attempt was made to explain, that certainly for large enterprises with mature SAP landscapes there is never going to be a, "let's run to the cloud" scenario. There needs to be a strategy and road map with valid justification and risk mitigation for completing what is essentially a migration.
I believe we have come to the age where the technology that continues to come out is actually leaving a lot people behind, most are looking at how to do old processes in the same way. With HANA, you got to think out of the box and say. Right, now I have this data what can I do with it. To me HANA is a no brainer, you want to slice and dice and know things that would have taken you weeks to perform can now be done in mins or secs. That gives you a serious advantage over your competitors. I also will push a new saying 'Know thy data'. If you dont know what you have, it becomes useless to you. And if you are not sure how to implement do a POC, go on the cloud on a subscription basis. You see what I mean about old processes and the old ways things were done. Products dont become great because they are, they become great when imagination takes over and you really know your data.
Great blog Graham! Thanks for sharing.
Great point of view. Thank you.
Great article as usual.
Interesting that Jeffery Word in a blog about 2 years ago talked about HANA having "Crossed the Chasm". From memory that was published back when SoH was first announced. And was more about HANA as a technology rather than anything else.
Agree with you that the beginning of mass adoption is the real test of this happening, and it takes meeting a Business need or producing a true competitive advantage rather than just adopting a new technology to drive this.
Cheers, Phil G.
Thanks for your comments Phil. I am looking forward to drilling down on this S/4HANA thing at Sapphire next month.
Great blog Graham,
As someone who wrote this blog 2 years ago, how would you rate the success of S/4 HANA Finance.
SAP claims that there are 1300 implementation which are in progress world wide.
Here at the beginning of 2016 I find it hard to rate the success of S/4 HANA - or the FI piece itself.
SAP have done a pretty good job of making their customers aware that S/4 HANA is on the roadmap and that they need to consider it will be in their future. But there is still much uncertainty about how to get there - and quantifying the benefits.
The simplification message resonates but that is offset by the difficulty and complexity of moving from R/3 to S/4 HANA. The "friction" I referred to in my blog still exists and still inhibits adoption.
I hope that SAP will be able to rapidly "simplify" all of the old R/3 applications and we can start talking about "What's new?" instead of "What's next?".
And I hope they can move towards consolidating and unifying the ERP/CRM/SRM/... data models. That would potentially mean a major rationalisation of customers' system landscapes and possible a more compelling case to move to S/4 HANA.
Fingers crossed. 😏
It's rather sad but it seems that 1.5 years later Graham's blog still holds true. I can't comment on the FI piece separately either, but so far I'm having hard time seeing what new functionality S/4HANA really brings.
I might be missing something (if such information is not reaching even daily SCN visitors like myself it's obviously not the "user problem"), but every time an article or a blog comes out on how S/4HANA is awesome, it features the same functionality that already exists in R/3 (exhibit A).
Most likely everyone already gets the point about the speed and platform (certainly I'm getting sick and tired of hearing about it over and over), but, as Graham pointed out, platform is nothing without the new and exciting functionality (=killer apps) to run on it. I'm afraid "look, ma, I can do month close a bit earlier" doesn't really cut it in 2015, much less 2016.
i can see s/4HANA doing new stuff or old stuff in a more intuitive way like TB or transactions on moblie devices. it is also a lot more faster than "just a bit earlier", some processes like writing (intermediate totals) records will never be faster and that's by design. to accomplish those goals is not an easy feat, imho.
what kind of killer app are you looking for?
If I had the exact specification I probably wouldn't be posting here but diving into my own pool of cash Scrooge McDuck style. 🙂
Since S/4HANA is not just a new ECC version, wouldn't it be reasonable for the customers to expect to be surprised and delighted with the new features they didn't even know they needed?
Although personally I'd be quite happy to see simpler 3rd party ordering processes and better reports between SD, MM and PP. Or completely rewritten PS module (pretty please!).
it's hard to disagree with you as I also think that PS needs 'fixing' and better integration with SD (POC) and FI (deferred revenue recognition). as far as cash is concerned you are right 'on the money'.