S4HANA – What it means to consultants
Introduction and purpose
Although a many good articles have been written by a number of experts about S/4HANA, there still seem to be a lot of confusing terminology floating around. SAP customers and consultants are struggling to figure out answers to their open questions around the numerous SAP products which seem to offer similar functionality. I have provided my point-of-view on the direction SAP is headed in an effort to help relatively junior SAP consultants and aspiring future SAP consultants.
A bit of background
The biggest ERP in the market ‘SAP’ has evolved over the past four decades and has been the single most integrated business solution implemented in the market. While companies across the globe in numerous industries their businesses and IT systems utilizing SAP solutions, it offered a career opportunities in the form of a large number of highly paid consultants.
The integrated nature of the SAP package required a combined effort from many professionals who come with deep business knowledge and expertise in different business areas (functional consultants) such as procurement, manufacturing, sales & distribution, finance, quality, maintenance, warehouse, service, etc. In addition to the process areas, consultants with deep technical expertise (technical consultants) are needed to fill the gaps in standard SAP solution and to customize the solution. Also, there is a need for system administrators and people who administer security (basis and security consultants).
Traditionally, companies hired consulting firms (also called as system integrators) to understand their business processes and bring in their consultants with specific skill sets who can understand their business processes, design and configure the future SAP system and also train their personnel.
A quick look at how SAP product(s) evolved
The mainframe based SAP R2 was released in 1979 with a two tier architecture. The widely popular R3 system was released in 1992 which comprised of 3 tier architecture (database, application server and the presentation server being the 3 tiers). SAP kept enhancing the product in the form of releases. SAP stabilized its product with the name ECC6 released in 2006. SAP kept adding enhancement packs until 2013, the last one being EHP7 released in 2013.
In the last decade, SAP released numerous products that worked in conjunction with core ECC6 (also called as ERP6) to meet specific business needs, a few examples being mySAP CRM, SRM, APO, PLM, EWM, BW/BI, MII, SCM, MRS among many others.
In addition, numerous industry specific versions of SAP ECC6 (ERP) are made available, which catered to specific industry segments such as retail, utilities, public sector, oil & gas, healthcare, banking to name a few.
Demand for SAP Consultants
The number of SAP consultants increased steadily as the number of SAP implementation increased from late 80s until now. Depending on the demand for a certain skills, consulting companies and independent consultants charged their clients high hourly rates. However demand for the skill sets varied based on the industry trends, the number of ongoing implementations, support requirements, all in the mix of newer products and functionality being released by SAP. Seasoned SAP consultants would very well know that they need to constantly upgrade their skills with newer product releases and acquire newer skills that are in demand constantly so that they can stay in high demand.
Over the past two decades, a number of SAP skills became commoditized. For example, skills in certain SAP modules such as SAP MM, SD, FI, PP or even ABAP programming as the number of implementations diminished and the number of consultants increased. Long gone are the days when consultants charged top hourly rates for these skills.
Advent of new generation SAP products – S/4HANA, Cloud
SAP came up with strategies to stay as a leader in ERP market with sustaining growth over years to come. SAPs new mantra to achieve this is by bringing the new S/4 HANA into the market.
What is HANA?
SAP traditionally operated on databases that they did not own. All of the SAP installations done prior to HANA were utilized competitor’s databases. HANA is SAP’s own ‘state-of-the-art’ database which is column oriented and stores data ‘in-memory’. It offers ‘real-time’ analytics.
SAP introduced HANA database to the market in 2011. SAP so far did a few HANA releases since then with different names and functionality. ‘BW on HANA’ was released in 2012 which gained a lot of momentum in the world of analytics. Soon in 2013, SAP released ‘Suite-on-HANA (SOH)’ which is nothing but the entire existing SAP products running on HANA database. Since the introduction of HANA, SAP is working towards enhancing and optimizing all of the existing products to take advantage of the capabilities of HANA database and eliminate restrictions that the existing relational databases imposed.
SAP continued to expand their product portfolio by acquiring a number of companies and merging the products with their new generation products. A few such examples are SuccessFactors, Ariba, Hybris, Syclo, etc.
SAP released Simple Finance in 2014, which is an S/4 product and runs on HANA. Simple Finance saw a big change in terms of how financial data is stored in the SAP system. Numerous tables that traditionally stored SAP Finance and Costing (FI/CO) data have been condensed into a handful of HANA tables which reduces complexity in data storage and increases reporting speed.
Moving ahead in the same path, SAP intends to HANAize all of the traditional modules in the ERP. SAP release 1511 S/4HANA covers the latest suite of SAP products including S/4HANA Enterprise Management.
What is Fiori?
SAP also addressed the age old complaint that the SAP screens are not user friendly and non-intuitive, by releasing what is called ‘Fiori’ user interface (Ux). Fiori is based on UI5 technology and contains a set of front end templates called ’tiles’ that users can pick and choose for the applications thy intend to run on SAP. One other key feature of Fiori is mobility integration. All the new generation SAP products are web enabled, persona based and configurable.
It appears like the future SAP implementations would typically comprise of S/4HANA Enterprise Management application running on Fiori front end and mobility enabled. Since the table structures would have been simplified, there would probably be a limited need for the RICEF(custom developments). Reports would be generated using the in-memory (cloud) capabilities. Just a guess but simple queries might be able to generate complex reports given that the table structures are simple. We may have to wait and watch to see if the new generation digital analytics might possibly eliminate the need for traditional BW reporting..!
What it means to SAP Consultants
While SAP is driving big changes and on their way to creating new markets for the new generation products, customers are still confused with the fast pace of changes and the array of products available currently with overlapping functionality. They have hard time making the right choices.
This offers a huge challenge as well as a huge opportunity for SAP consultants to catch up with SAP’s pace and understand the latest products and provide customers with right information and guide them making the right choices. Good news is that the core business processes are actually driven by the industry and more of less would remain the same irrespective of the technology advancements. So the need of the hour for SAP consultants is to invest time in upgrading their skills, after all consultants are the ones to take the brunt of understanding the new products, features and functionality..!
Certainly there will be a many customers in the future who would wan to implement S/4HANA and Fiori. Consultants could look forward to upgrade projects as well as new implementations the ‘this’ is the right time for them to gear up and get ready for the ‘next big thing’..!