What’s next for SAP APO
This a question in the minds of clients and more importantly for us SAP Consultants who have been working with APO for past 15 years or so. There is lot of debate offline and online in this topic including tales like here and here. Not to mention in our own SCN series of discussion forum threads Will SAP substitute APO?, APO Roadmap and demand-driven MRP, APO being sunset in 2020? sparked off. To top it SAP’s SVP Line of Business Supply Chain, Hans Thalbauer talked about roadmap and direction in 2014 and here recently on broader Supply Chain implications and SAP applications.
It is very clear things are not going to be the same. It is not just about HANA but a plethora of Supply Chain related business process and technical innovations that is pushing for a step change for an relatively old (but stable and reasonably robust) application like APO. SAP APO is no longer considered New Dimension Product and does not command much premium for quite some time now, be it in Consulting rates or SI companies hiring for the skill. HAving worked my entire professional life as SAP Consultant primarily in SAP APO, here is my take on the topic.
1. SAP APO will be under general support till 2025 (extended from 2020 earlier) part of SAP Business Suite. This is as announced now – may change in future.
2. Currently SCM 7 EhP 3 is most recent Enhancement Package for APO, there is no guidance for EhP 4 or any future enhancement packs for SCM or APO.
3. SCM 7 EhP 3 can run with HANA as underlying database along with other traditional databases notably IBM DB2, MS SQL Server, Oracle.
4. SAP IBP is pure HANA based application – current launched version is Ver 5 with S&OP, Demand , Supply, Inventory & Control Tower as its components.
5. S4/HANA is the next generation Business Suite application running on HANA as DB. Simple Logistics is expected to be launched before end 2015 and will be the first innovation series in Supply Chain area.
6. From ECC 6 EhP 7 it is possible to activate business function to run APO on ERP i.e. APO DP, SNP, PPDS and GATP components in ECC directly. There are some restrictions and note communication between APO – ECC is still via CIF with liveCache required.
7. There is planned move APO PPDS and GATP functionalities to ERP in S4/HANA (no official roadmap reference found so far – if anyone has please share found it and blogged here).
8. SAP IBP application focus S&OP capabilities along with Demand and Supply that will cover most of APO DP, SNP functionalities.
9. SmartOps suite products like Demand Sensing is introduced in IBP Demand while Enterprise Inventory Optimisation is IBP Inventory.
10. New Supply Chain process and technology innovations are expected to be launched either as part of S4/HANA or SAP IBP both of which are running on HANA as underlying database layer. There is nothing to confirm that such innovations will be available on non HANA DB systems (it is not a question about performance but more deep-seated as to where application logic resides and operates on).
Even though SAP is pushing hard on HANA and IBP, APO will be around for quite some time. For all it’s apparent fallacies, gray areas etc. APO is a robust planning tool tightly integrated with ERP. Personally I believe there is not a strong business case for APO on HANA in the current context. APO uses liveCache that itself is in-memory database, so just performance of HANA is not going to make a difference. Integrated Analytics is one strong point but then after Supply Chain Info Center (SCIC) introduction not a lot has been heard about its long-term roadmap, nor has it been pitched much later on. Guess it is ported in SAP IBP Supply Chain Control Tower KPIs. Moreover SCIC provided very specific set of dashboards primarily around DP and SNP modules and not very flexible other than addition of new KPI measures in existing dashboards.
This brings us to the big question as what’s next especially for those into APO Consulting line. As I see it customer adoption will take time along with product development timelines and maturity. Note clients will expect at a minimum all APO functionalities to be available in the next generation application – SAP IBP is clearly not there yet. S4/HANA for Supply Chain / Logistics is not launched so nothing can be assessed about it yet. Net net other than technical move of SCM system to HANA database there is nothing now. Yes SAP IBP especially Inventory brings in SmartOps EIO capability within its fold but that is not what majority of APO customers have already implemented. On other hand Enterprise Demand Sensing, a recent business process improvement has not seen widespread usage in industry / clients mainly in CPG. So while it’s difficult to predict, but realistically in next 3-5 years APO will rule and even new clients will implement (one of my recent large client is still going for new SAP APO implementation). Assuming SAP comes with full complement of APO capabilities between SAP IBP and S4/HANA in next 5 years there will still be clients running regular APO (non HANA DB) as the product support is till 2025. Considering 5 year timeline there will surely be a significant change coming in this area – whether new APO implementation projects will become zero – tough to make a call but surely going to reduce a lot, with more uptick on SAP IBP and S4/HANA or a combination. With long term future (if you want to remain in handson consulting beyond 5 years) in mind there is no harm is starting to look into and pick up new application capabilities. But to rush into it right now – I am not sure. I would not do it but awareness (by attending SAP Webinar’s, keeping tab on SCN Wiki space, openSAP courses and if possible review the feedback / session transcripts from SAP events attended by SAP product Consultants and customers will be good investment.
If you are interested on the evolution of SCM products then read this blog. Hope to blog further this year based on specific application exploration and potentially what would be in Simple Logistics in S4/HANA.
UPDATE: My POV on Simple Logistics in S/4 HANA outlines APO capabilities long-term embedded into S/4 HANA according to SAP Roadmap.
Links to SCN spaces for IBP, EIS & S4/HANA added.
Read this blog in SAP for Chemicals space about SAP APO’s lifetime clarification along with IBP pitch.
DISCLAIMER: Note all above points (especially 7, 8, 9 ) are purely my interpretation based on exploration of public domain information so far. These are NOT to be construed as official or even unofficial product roadmap or future direction.