SAP Runs SAP S/4HANA: Interview with Helen Arnold, CIO
Helen Arnold, CIO and CPO, Member of the Global Managing Board of SAP SE, spent some time with us and provided some insights on the SAP S/4HANA project from SAP. We’d like to share them with you and shed some light on “SAP runs SAP”.
Helen, can you mention a few milestones and benefits of the SAP S/4HANA project?
Helen Arnold: SAP IT plays a strategic role as an early adopter of SAP innovation. We have a clear innovation roadmap, with SAP HANA as the firm foundation. Our HANA journey began in 2013 and we are now live, as of May 2015, on SAP S/4HANA with 74,000 business users.
Let me explain more about how we got there. Our first milestone was the implementation of SAP Suite on HANA in 2013. With this, our finance department was able to achieve 420 fewer hours processing time at quarter end close, a 70% reduction in time to process reconciliation issues and a 99% reduction in processing time to perform charge-back.
Next, we went live on SAP Simple Finance. With the simplified data model that Simple Finance offers, we eliminated all aggregates and indices to make our finance system much more agile. Organizational changes are reflected within one day instead of one week and Fiori apps in the areas of Account Receivables, Account Payable and General Ledger make our finance applications more efficient and more enjoyable for our end-users.
Our latest milestone is of course that the whole of SAP went live with its mission-critical ERP system on SAP S/4HANA with 74,000 business users in early May 2015. With this version, we put all financial information in the unified journal entry, which means we can overcome all barriers, break down siloes and increase collaboration across the finance function. Finance becomes more efficient, because the reconciliation efforts between finance applications are gone and many processes and procedures have been streamlined. We now report without barriers across all FI dimensions.
The benefits that we have achieved include more simplicity in our processes, the ability to consume innovation faster and more agility. Customers will be able to enjoy these too as they transition to SAP S/4HANA.
What has been your initial business case, your expected benefits and savings?
From a business point of view, SAP S/4HANA means we now have built-in efficiency and speed, as well as better collaboration on real-time data. SAP S/4HANA offers us one view of the truth, with increased business agility and reporting flexibility. It means that we are always future-ready – we have established a platform that ensures we are poised to consume all new innovation as it becomes available.
Technically, we simplified the data model so that there are aggregates, no indices, no redundancies or discrepancies between systems. CIOs using SAP S/4HANA will be able to reduce their companies’ data footprints further and drive performance through broader data model simplification, allowing best collaboration and an innovation path that is fast and efficient. By separating current and historical data, having a single system for data entry, focusing on parallelism and removing locking, we improve throughput. These are so much more than technical highlights – they reduce TCO, which means that companies get much more for less.
Can you please describe the system landscape before the move to S/4HANA?
Well, it used to be a complex hybrid landscape with multiple satellite systems. Now, with SAP S/4HANA, we have integrated SRM back to ERP and picked the best-fitting solutions in our hybrid landscape, for example, with integrated Master Data Management. Over 40% of SAP’s IT load came from exchange between the ERP and BW systems – and now we eliminate a major part of this by moving operational reporting back to ERP. We have also retired our isolated analytics systems and created one unified Enterprise Analytics platform across the whole organization.
Can you give us a few project fact and figures on the deployment on S/4HANA: team, effort, timing, and the landscape now with ISP to S/4HANA?
Helen: We started the project in January this year, and went live at the beginning of May. We are the first to implement at such a scale and our goal was always to ensure as little disruption as possible to our business users. We used the same team to implement SAP S/4HANA as we did during the previous SAP HANA implementations, so they already had comprehensive experience in the HANA technology and how business processes interact with it. Our internal focus was on the early validation of S/4HANA and the related cut-over procedure. By using the near zero downtime approach, customers will be able to implement a complete system switch in a timeframe of one working shift (~ 12h).
Since we are the early adopters, we ran more than 3,000 test cases, half of which were fully automated. This is part of our quality assurance effort.
Now that we are live, we are following with a very clear milestone plan towards the SAP S/4HANA Cloud Edition. SAP is performing the same clean-up activities that customers also have to do. We will de-modify and reengineer our business processes, and move the remaining custom code to the SAP HANA Cloud Platform or the extensibility framework so that we are agile and ready to consume new innovation immediately.
What is the next milestone on your SAP HANA roadmap?
SAP HANA is the great simplifier and unifier across all our business systems. Now with CRM effectively on ERP, we have one database that feeds everything and we achieve an end-to-end process view across multiple systems. We have achieved part of our roadmap by bringing Enterprise Analytics onto a single platform, and by putting the SAP Store live on hybris as a core part of our digital transformation.
Our next major milestone is to implement the Boardroom Redefined at SAP. This received a huge amount of interest at SAPPHIRE NOW. Based on S/4HANA, this scenario shows how analytical insights go far beyond the ordinary; real-time analytical explorations enable us to identify trends and correlations down to the lowest level of granularity, turning data into practical value. There is no longer any gap between business transactions, data preparation, analysis and insight to action as all is connected and harmonized. High value prediction is available at any time.
What are the new IT opportunities for SAP that SAP S/4HANA brings?
This increasing digitalization and connectivity is completely changing the IT function. In the past, IT was a technical partner to the business, ensuring that systems were maintained and that users had access to the tools they needed to do their jobs. We now talk about a bi-modal – or two-step – IT, where the IT function, led by the CIO, is responsible both for rock-solid operations but also for leading innovation.
To this end, we drive a radical digitalization agenda at SAP. As the innovation partner for all business units, we are not only delivering business innovation but also enabling it. SAP S/4HANA enables entirely new business models that are simple, real-time and networked. The SAP HANA platform provides incredible flexibility and agility for SAP and its customers, partners and start-up ecosystem so that we are all agile and future-ready.
What are the new business opportunities for SAP as a software and services vendor?
We will be seeing new channels, new digital offerings, new innovation and, with SAP S/4HANA as the foundation, we will be able to take advantage of these quickly and efficiently. Agility is crucial in the new digital age.
How did you design the “ideal application on HANA” for SAP?
An ideal application on HANA must fully leverage the platform’s business capabilities of speed, big data, productivity and real-time analysis. An example of the ideal application on HANA is in fact the Boardroom Redefined. It will revolutionize the way we steer, make decisions and operate in board meetings, with insights beyond the ordinary and simulation like never before.
Finally, what would you recommend to SAP customers?
To be ready for the innovation path, customers need to be aware of the digital trends and make sure they stay ahead of them. CIOs need to ensure that they remain relevant by embracing the challenges and opportunities that digital transformation brings.
With SAP S/4HANA, CIOs will reduce their system landscapes and build an agile foundation for transformation. This is a huge opportunity for them to get their houses in order – get rid of unused custom code and unnecessary modifications. They make the decision whether they want to operate their systems themselves or hand them to SAP to run on the SAP HANA Enterprise Cloud. With complexity eliminated and innovation easily adoptable, companies can become faster and better at what they do. They will be able to create differentiated capabilities for their businesses and engage with their customers in new and more meaningful ways.
Helen, thanks a lot for your time and for the insights your have shared with us on the SAP S/4HANA project!
Have you already tested SAP S/4HANA by yourself? Check the trial versions now: SAP S/4HANA Trial Landing Page