The Complexity Antidote
At the time it seemed like a great idea. Take a standard enterprise software package and then add some custom code to enhance functionality or adapt it to work with an existing process or system.
As McKinsey noted in a 2014 report, “Large global organizations have created so much complexity that businesses often struggle to bring good ideas to the marketplace profitably.” Instead, they end up spending much of their time on non-value-added activities including what IT departments often dub ‘keeping the lights on.
Complexity has become the number one issue for both business and IT leaders. In many cases, these are systems that have been adding in complexity over decades (sometimes as a result of mergers and acquisitions) and now they are nearly impossible to change. So for me, one of the most exciting features of SAP’s new S/4HANA suite, officially launched today, is that it offers a clear path for enterprises to simplify their IT infrastructure and remove the redundancy and complexity resulting from old customized code.
Implementing S/4HANA provides the opportunity to take out all the complexity, get rid of all the redundancies, eliminate the unused custom code, massively reduce the data footprint, and gain more throughput. The key to this is the architecture of S/4HANA. The new suite is designed to accommodate the requirements of most businesses without the need for (code) modification to the core code.
But obviously not all functionality is available as standard: some companies will need specific features that are not supported by the core ERP system. SAP is enabling this flexibility through an extension framework (HANA Extensions) within S4/HANA and via the open SAP HANA Cloud platform to introduce advanced applications – for example predicting, recommending, simulating – while protecting existing investments.
Reduce the data footprint
Rather than customizing the core code, modifications are put in a “safe” place so that innovation packages can be easily applied. The core ERP system remains ‘clean’ and can be quickly and easily updated when new features or functionality are added – in just the same way that consumer apps are updated on a regular basis.
From an IT perspective, S/4HANA creates unique opportunities to dramatically simplify the landscape and reduce total cost of ownership. Enterprises will now be able to significantly reduce their data footprint and work with larger data sets in one system (reintegrating ERP, CRM, SRM, SCM, and PLM in one system) to save hardware costs, operational costs, and time.
S/4HANA has also been designed to natively connect to people, devices, and business networks in real-time, making the Internet of Things and Big Data accessible to any business. By eliminating the need for extensive batch processing (which can take hours or even days,) the S/4HANA should enable business users to gain insight from business data in real time and make faster and more informed decisions.
For end users, S/4HANA’s simple user experience runs on any device – eliminating the complex, and often confusingly different, UIs associated with older enterprise apps – and that is something I’m sure we can all applaud.