S/4 HANA is not actually a new ‘Business Suite’ at all…

Anyone familiar with any of my previous blogs will be aware that I am nothing if not ambitious and today’s blog is no exception – as today I will in a few lines attempt to convince you that the name S/4 HANA and indeed every single piece of SAP marketing material surrounding this product is (at the moment at least) wrong.

As people reading this may well be aware the full name for S/4 HANA is SAP® Business Suite 4 SAP HANA® with the S representing Suite (and not Simple as some people believe) and again most readers will be familiar with the tag line “Next-generation Business Suite’.

So before we go any further I want to clarify what the the term ‘Business Suite’ currently means in the context of SAP’s functional offerings. To this end the diagram below shows the contents of the business suite and highlights that it is made up of 5 distinct components these being ERP, CRM, SRM,SCM and PLM.

However if you look at my (very much simplified) adaption of the S/4 roadmap below you will see that actually the only things that have been released (or plan to be released in the near future) sit squarely within the remit of SAP ERP and that very little is mentioned in regards to CRM, SRM,SCM and PLM.

It may sound as though I am being churlish in pointing this out but I am firmly of the opinion that this causes confusion for many SAP customers who cannot quickly and easily delineate between the S/4 ERP proposition (as I shall call it) and the wider- somewhat less tangible promise of an entirely new ‘simplified’ business suite.

The reason why this is important is that for most SAP customers ERP is considered differently from the rest of the business suite, and for good reason…

To try and illustrate why let us turn to an example involving a lady called Daisy ,an optician called Dave and two pairs of glasses!

If we consider Daisy to be a metaphor for the ERP system of a large, complex and cohesive SAP Customer we can consider Finance and Controlling (FI/CO) to be her cardiovascular system, Sales and Distribution to be her Nervous system Production Planning as her Muscular system on so on. Indeed let’s consider ERP in this context as all functions performed within Daisy’s skin.

Conversely let’s also consider the other members of the Business Suite (CRM, SRM etc) as her clothes, make-up, shoes, glasses and perfume. Specifically let’s say that one of the new SaaS vendors, let’s say Salesforce is a pair of glasses (stick with me!) The Salesforce glasses look attractive, and upon closer inspection prove to be functional, comfortable and affordable. Let’s also consider a second pair of NHS prescription SAP CRM glasses which are brown, have thick lenses and which held together with an old sicking plaster. In terms of which one Daisy will pick she has a fairly free choice as neither the SAP CRM glasses nor indeed the Salesforce glasses will work without some degree of customisation and integration (which in this context would be performed by a friendly optician Dave) but essentially Dave can customise either to work correctly with the ocular needs of Daisy without a large degree of disruption.

Crucially however whichever glasses are chosen neither replace the need for her nervous system (Sales and Distribution) which collects and processes the information from her eyes nor the various other core systems of her body that perform the myriad of other integrated tasks required to keep her alive.

Businesses considering S/4 should consider ERP within S/4 in this light and as a separate proposition from whatever additional non ERP functionality becomes available in the future. Simply put the need for core ERP is not diminished in any way by any desire an organisation may have to use none SAP SaaS  in the context of their wider business suite. Crucially also it should be understood that while these next generation SaaS solutions have rightly impinged on the market share of non ERP members of the SAP business suite they are not (for the vast majority of SAP customers) viable alternatives to core SAP ERP.

It is for this reason therefore I would suggest that whatever the future plans SAP have in regard to the evolution of S/4 HANA at the moment SAP ERP customers should focus on planning for the migration of their key ERP system to S/4 ERP and should consider this as a standalone proposition.

I will be covering how and when companies should be considering moving their ERP system to HANA in a future blog.