SAPPHIRE NOW-2016: A lot more HANA? No, think Business Transformation!
I’m on my annual ritual to Orlando, no not Disney – would choose Hong Kong for that….It’s not my first Sapphire conference either but I am excited than never before. Less than a year ago, we decided to go for HANA, signed up in September, started the project in Nov / Dec 2015, went ‘Live’ with Suite on HANA in March 2016. Upgrade went so smooth that it felt too good to be true. I will tell you that migrating / upgrading an SAP system that we were running since 1999 (through all the various upgrades) is a totally different ball game compared to net new SAP implementation. But we have mastered the art of Upgrades, Mergers, System Divestitures, and Acquisitions – apologies if I sound a bit overconfident!
So why HANA? Here goes the Story….It’s a long one but so was the Journey 😉
It’s funny but the truth is that even my good friends at SAP sometimes ask me this question. Positioning HANA for Speed, Performance and nothing else is probably not going to take you too far in any conversations with the C-Level executives. Neither can you impress them with Slides from any Value Engineering study that predict a 35% increase in Net Revenue and 30% improvement in Margins. The over enthusiastic technical experts will give you a 360 degrees, multi-dimensional analysis on the In-Memory Computing skills of HANA – all good but will not get anyone signed up for just that alone. I have heard the same experts give us Demos and presentations on Hardware Accelerators (Remember BIA – A hardware solution to a software problem?).
I might be generalizing this but most companies have made a decision to go for ERPs around 1995 – early 2000s. It could be that the impeding threat of Y2K forced many to adopt SAP or any of their competitors. In the next few years, Companies started to focus on Supply chain and the advent of APO, SNP and many other such products shifted the focus towards value enabling the Enterprise by adopting some serious Supply Chain software. Many processes moved from core ERP to SCM. BW came in somewhere in between as the panacea for reporting. This was around the time when a Sales order backlog report could take 10 min to run. BW took data from SAP (Push / Pull) every 3 hours and made the same report available in 3 minutes (remember BW in its initial stages was not fast, and neither was it an easy thing to configure and set up). Constant bickering of data not being available fast enough, real time and even when it is available, it is too slow to run. Soon after, Sarbanes Oxley came in and there was a need to run a system that could control access, roles, User provisioning, and much more. The GRC era has begun! And now even core SAP roles / User set up etc. was moved to GRC. Along the same time, there was much scrutiny on Logistics – what is being shipped, and where, embargos etc…of course, we need a GTS System J By the way, we need Single Sign on through one common SAP ID, nice web look, with ability to collaborate on Documents and act as a single gateway to all the SAP systems. Welcome SAP Portal! BTW, enabling Enterprise Portal does not mean all your SAP transactions are web enabled….That’s still not the case. ITS is still the only option to do that I think…BTW, B2b is key and how do we take data out of these systems and send to our Customers and Suppliers? XI (not sure of the current name – Process Orchestration?) and there you have the pitch in for Netweaver – add Visual composer, Guided Procedures, KM, Collaboration rooms Dual stack ABAP, JAVA on one system – get the best of both worlds and the classic refrigerator diagram that made its way to each and every slide at Sapphire and TechEd. So over time, you end up with SAP ERP, SCM, GTS, GRC, BW, Portals and not to mention, some of the acquisitions that SAP has done – BobJ and a few others. Solution Manager too, as that’s the system that provides the lifecycle management of the Apps. When you have these many systems with huge data volume, then Data Management and Archiving becomes a consideration too, and various complementary software for Archiving, Reporting, Monitoring, Dash boarding, Eye candy versus seeing a boring SAP List or ALV report.
Between 2002 to 2009, I think the Users have done a tremendous job in managing their daily chores logging in to multiple systems, reconciling, waiting for IT often on when they could access reports, giving up on anything real time, Batch mode was not necessarily a bad thing….all this continued till a series of Hardware innovations happened and all of a sudden, a TB of Disk looked small enough and enough RAM is readily available for any high performance computing applications. Smart phones and Social Media apps became much more prevalent. Users all of a sudden were looking for a much more engaging User Experience. However, not much changed on the SAP UI. We tried putting screens on top of screens to make things look user friendly but most of that is really photo shopping SAP. We tried various web technologies – ITS, BSPs, WebDynpro. Frequent browser issues impacted end user propagation. Most common IT tickets were about browser support with familiar texts such as ‘This browser does not support WebDynpro’.
Cloud Applications– 2009 onwards
I got to say that nobody probably used SAP Cloud as much as we did – Crossgate, a Cloud B2b Service provider – worked really well. I think it’s no longer part of the SAP Portfolio. Many Companies started looking out for more SAAS, Cloud based solutions. There were a few companies (Solution providers) that did not know the difference between Managed Services and Cloud based SAAS Applications. Sales CRM and HR were probably the first enterprise apps that were successfully migrated away from On-premise applications. By this time, many of the Cloud platforms had hundreds of thousands of Customers. Mash up applications became much more common. Integration became easier and one really did not need a whole lot of effort to sign up for a VM with specific apps installed on it. Companies started adopting a ‘Cloud First’ philosophy. I am not going to talk about Licenses Vs Subscriptions, Capex Vs Opex etc…but all of that did matter.
Real time data and are we ever going to get it?
It was around the time when my good friend, Mark Finnern hosted a private webinar every Monday – ‘Mentor Mondays’. This particular incident happened in 2010 I think. System capabilities (limitations?) caused us to wait for a full 3 hours before we could run our reports. On the Mentor call, I asked if we could ever do any Real time data pulls, reporting, integration and the response from SAP’s senior executive was that there was a similar requirement from others but nothing concrete and personally, I started running out of excuses on why data is not available upon request.
And then HANA happened
We started hearing about a new database being built by SAP – did not pay much attention as this was not the first time that SAP built a Database. However, things appeared different. Some of the concepts like in-Memory computing, columnar databases etc. have been around for a while but not many have built their product portfolio around these. Of course, I knew at least one more company that could say that they were the first. Around 2011, and I really don’t know what happened around this time that led to many Businesses reinventing their Sales & Operations Planning, but we started to reengineer our largely Excel driven Spreadsheet S&OP. SAP had just launched S&OP on HANA. For anyone who has worked on an S&OP application or any Planning application for that matter, the requirements were fairly simple. It’s a set of Characteristics or Dimensions lining up against a set of Key Figures or Measures, across a Time horizon that could be in Days, Weeks or Months, but mostly Months unless it is Short term planning. However, it’s not as simple as the data needs are fairly complex – the ability to Drill down to the Detail or Roll up to Summary level, Simulate scenarios, Waterfall reporting and help drive Users to enter data at a predefined interval with Workflow capabilities that could facilitate a process that is repeatable and easy to use. The need of the hour was an incredibly fast computing process. A decade back, we tried SSIS to do something similar that did not last too long. After a few intense demos and discussions with SAP and our business users, we decided to go with SAP S&OP on HANA (now called IBP I think). The product and so was the database, was still in its infancy. However, it ramped up very well. We met our Business requirements and I probably did many Customer references, testimonials and videos that can still be found online. This experience made us realize that to redesign and reengineer a Business process, you need to have not only a perfect solution but a perfect moment to do so. The timing has to be right – the business had a pain point and SAP had a solution that was probably in a Design stage and SAP needed a Customer to walk through the journey with them and that’s exactly what we did. By beginning of 2013, we were sure and confident of HANA’s capabilities. A few SAP customers started using it for BW. I doubt if anyone ventured into running an ECC system on HANA in 2013. ERP is the backbone of a Company’s Systems and cannot be easily moved; migrated or upgraded to something that’s still being tried and not yet tested. The reasons for just changing the Database were still not too many and the justification is not as satisfactory. However, our experience with S&OP on HANA made us realize that we can transform our Business processes to a much more dynamic, real time, flexible and configurable platform with a User Experience like never before.
So why HANA and why now?
Let’s put all the facts together again…
- While we were running ECC6.0, it’s a system that has its processes built on SAP R/3 3.0F, back from the 90s.
- SAP has introduced many changes in between 1999 to 2016, and while we have adopted some of them, we had also developed many custom Z Solutions
- Business requirements for a more flexible Financial system have always been there – the need for a Parallel Ledger, with flexibility of Currency, ability to meet local GAAP, individual Site/country reporting
- Faster Consolidation
- Real-time Planning not just S&OP but AOP, Financial planning
- Various requirements on COPA, Material Ledger, Asset Accounting
- Document Splitting, if you are familiar with Allocations, which is largely an Excel driven process
- By now, you may realize that we are using the Classic Ledger and not the New GL (and the New GL has been around for some time)
- Self Service reporting is a big requirement for Finance – if not, an entire IT team could be consumed just for that.
Many of the above requirements are enabled as part of S/4 Finance. As I mentioned earlier, upgrading or migrating for the sake of migrating is not really a justifiable option. However, the idea of taking an opportunity to transform our Business processes was really appealing. The Opportunity to redo our original SAP implementation, not that those processes were outdated but that the Business has changed and times have changed too. We needed something to trigger a change and that was the time when S/4 HANA Applications came around.
Where do you start?
Do your due diligence and all the technical conversations that you would like to. But involve the C-Level executives as soon as possible. As much as Technical folks and HANA enthusiasts would like to position this as the next greatest innovation, this project has to be looked into as a Business Transformation Project or maybe even an IT Transformation Project. Chances of justifying this as a new in-memory database with great computing power etc…can take one to the CEO / CFO’s office but that’s pretty much it, anything beyond that has to be justified in Business terms. Our effort started right with our CFO, who also heads our Operations and IT. He was the Chief Catalyst to bring in HANA. At one point, I was skeptical or rather unsure of the reasons for going to HANA but as we met all the other Customers who went in for S/4 HANA and learnt from their experience that this would be our way to a true Business Transformation Project. We plan to revisit all our Finance processes and realign to Standard SAP as much as possible. However, there are many questions in my mind and that’s one of the main reasons I am back at Sapphire this year and would like to learn as much as possible about S/4 Finance.
Some interesting sessions around S/4 HANA Finance:
|A4771||S320B||Building a Business Blueprint and Project Plan for SAP S/4HANA Finance|
|A5239||S320 Roundtable Corridor – Roundtable #4||Roundtable: SAP S/4HANA: Finance Capability and Frequently Asked Questions|
|A5808||S210D||Road Map: SAP S/4HANA Finance|
|DE33713||Digital Enterprise Platform <br>DE422||Plan, Budget, and Forecast in Real Time with an Integrated Finance Platform|
|ES35204||Theater Area <br>Theater 2||Villara Builds Real-Time Project and Operational Reporting with SAP S/4HANA|
|ES37104||SME Solutions and Partner Innovation <br>PS601||SAP S/4HANA Finance, Reporting Options, and Successful Migrations|