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Digital Transformation: The SAP HANA, SAP S/4HANA and “Business Networks” Strategy

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Part five of a six-part weekly collaborative series between Americas’ SAP Users’ Group (ASUG) and the German SAP Users’ Group, Deutschsprachige SAP-Anwendergruppe (DSAG)

Over the past four weeks of this blog series, we have defined Digital Transformation and discussed the broad opportunities it brings to your organization and how to think through new business models. Odds are that you are reading this because you have some connection to the SAP ecosystem. Therefore, we would be remiss if we didn’t discuss how SAP’s latest solutions and acquisitions help you to execute your Digital Transformation strategies. We want to be as objective as possible about the choice of SAP S/4HANA and SAP HANA, recognizing that there has already been considerable discussion across both ASUG and DSAG about how and when these products fit into our members’ business and technology landscapes.

Recall that our basic premise is that a “digitally capable” enterprise must have a strong technology core, and that core is the ERP system. In order to constitute a strong core, the ERP has to be open (i.e., easy to get information in and out of), fast, responsive and adaptable. Think about the requirements for the human central nervous system. These same requirements are needed for the ERP.

With this in mind, we see three basic reasons to consider the next generation of ERP:

  • Data volumes are increasing exponentially (McKinsey’s Global Institute stated that data volume was growing at 40 percent per year) due to the digitization of everything around us. This means a modern enterprise software environment is required to process exponentially increasing data volumes. A lightning-fast platform is required in order to keep up. Ultimately, the challenge is not in collecting the data but rather in converting it as quickly as possible to meaningful business information that drives decisions and action. For example, collecting data from the equipment that customer’s purchase from you is good, but what would be even better is using that data to create service calls when that equipment begins to operate outside of normal parameters.
  • Your business needs to connect more and more dots in order to understand how it fits into the broader ecosystem. Connecting these dots requires a robust and standardized enterprise back office and front office that can be the central clearinghouse for increasing data volumes as well as insight. We think these new SAP platforms hold great promise in this regard.
  • As the digital natives enter the workforce, they will require, if not demand, an enterprise software environment that is friendly to use on all fronts—on the data input side, the analytical side and the operational side. The user experience for SAP S/4/HANA and SAP HANA are built on the new SAP Fiori user experience, which we have been advocating is a critical technology that every member organization should be implementing.

Recent developments and use cases for both SAP HANA and SAP S/4HANA are beginning to illuminate the road ahead. Many of our user community members have undertaken substantial projects with these solutions and are reporting positive experiences. No doubt there is still much work to do, and that is why our established influence programs with SAP are so critical in incorporating the needs of our membership into future product releases.

ASUG and DSAG have surveyed the membership during the past two years on SAP HANA adoption. In sum, the results have shown that despite perennial concerns on licensing, cost savings and migration roadmaps, the question for ASUG and DSAG members is when they’re going to adopt—not if.

Building that business case for the SAP HANA platform—and now SAP S/4HANA—has been and will continue to be paramount, our respondents have told us. And that’s unlikely to change any time soon, though the rise of Digital Transformation on senior leadership’s agendas should encourage more discussion on the topic and where SAP’s platform fits into future plans.

Interestingly, the 2015 ASUG SAP HANA Adoption survey revealed SAP S/4HANA’s short-term rise to prominence among membership (since it was unveiled earlier in the year): Respondents were excited by SAP S/4HANA’s promise of real-time analytics, a simplified IT structure and reduced footprint, greater speed and new UX, SAP Fiori®. Where more work needs to be done by ASUG, DSAG and SAP is around the roadmap on “how” member organizations implement these new technologies and capitalize on the communal best practices and lessons learned.

Members who recognize the reality of Digital Transformation should think about investing in the latest SAP innovations. This means earnestly evaluating SAP HANA and SAP S/4HANA in a careful and measured fashion, as well as SAP SuccessFactors, SAP Ariba, Concur, SAP Fieldglass, SAP Hybris and SAP Cloud for Customer. As always, forward-thinking businesses must also recognize SAP HANA and SAP S/4HANA are works in progress and do not represent a panacea for solving the full complement of Digital Transformation issues. Nonetheless, the opportunities afforded by starting early far outweigh the risk of starting too late.

In sum, if you haven’t yet begun to formulate a strategy and execution plan for moving to the next generation of enterprise business systems, now would be a great time to get started. If you find yourself a little behind and in need of a sprint to catch up, both ASUG and DSAG have capabilities in place that can help you accelerate your journey.

We encourage you to share your thoughts and perspective on this important subject. As a technology community we are at our best when we collaborate and share insights that move us forward.

What is your perspective on Digital Transformation? We would like to hear your voice by participating in our Digital Transformation survey. We promise that it’s quick, relevant and digitally painless.

To learn more, visit the ASUG Digital Transformation Home Page. From there you can download webcasts and other important information. You can also watch our seminal webcast, Ready or Not, Digital Is Your Business – What SAP Customers Need to Know, which was recorded on April 20, 2016.

We release the final part of this six-part series right before SAPPHIRE® NOW and ASUG Annual Conference in Orlando – “Conclusion: Your Next Steps.”

Geoff Scott is the CEO of Americas’ SAP Users’ Group (ASUG).

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