The ambition of SAP S/4HANA is nothing less than being the de facto business standard solution for the Digital economy. This Monday, October 31st, we made another big step towards this goal with the SAP S/4HANA 1610 release, by building new and enhanced innovations on top of SAP S/4HANA 1511.
SAP S/4HANA 1610 release
everything you need to know in one place: www.sap.com/s4-onpremiserelease
In this blog you will read about the specific benefits created by bringing industry functionalities into our digital core, into SAP S/4HANA. In this latest release, 1610, Retail is one of the industries that is covered by the digital core and therefore will help reimagine business processes to master the growing needs in the market.
One of the most widely used industry solutions
Retail as an industry solution is not only one of the most widely used, but also adopted across industries. This is an obvious consequence of the “Unit of One” or “Segment of One”. In the Digital Economy, Brands become Retailers and Retailers become Brands. The total distribution of retail usage reaches from consumer goods products and wholesale over automotive and high tech to Oil and Gas. This is why SAP S/4HANA provides leading processes for cross industry customers.
Retail businesses are becoming more effective at leveraging their retail store infrastructure and local inventory presence. While e-commerce will continue to grow as a percentage of overall consumer spend, the integration of multiple customer order channels, thus the term omni-channel, is a necessity for today’s retailers when they want to challenge their pure e-commerce competition.
One of the biggest challenges in the changing market structure are the growing costs, from the explosive increase in omni-channel order fulfillment, which continuously increases shipping and transaction costs. It will be interesting to see how businesses will account for these fully-loaded burdened costs in their pricing and merchandising strategies. Based on the quality cost analysis, the increase in prices for small parcel shipments continues to drive increased transaction costs. Another factor that needs to be considered are the large numbers of returned goods, an estimated 20% of all orders from online shopping. This is a challenge to the profitability of most companies.
With these changing needs and demands from the end-consumers, it is key for retailers to gain a deeper understanding of consumer needs and manage complex buying process. Not only is Retail one of the most widely used industry solutions within SAP, it is also heavily used by cross industry customers, which is why SAP´s strategy is supporting these end-to-end processes via SAP S/4HANA.
With traditional systems, there often is a lack of end-to-end insight and visibility with disparate systems and processes and analysis are based on past performance instead of pro-actively based on customer Insights and Merchandise and Assortment Planning. This and topics like no real-time simulation or predictive capability will pose a real challenge for customers who want to take advantage of the growing opportunities in the retail industry.
A system should be so flexible that an end-consumer can personalize their product in a website or mobile device and instantaneously receive a confirmation and also a delivery date. Simultaneously it means that the business applications must verify in real-time material availability, plant capacity, performance and availability, machine parameters, distribution channels, distribution capacity, product specifications, and more, so at the end a confirmation with an accurate delivery time can be given to the end-consumer.
Among other values, SAP S/4HANA reinvents the retail business processes to make them more integrated, faster and more flexible, in order to increased competitiveness. With SAP Fiori and the role-based dashboards for all users, working has not only been tremendously simplifies, but also made more enjoyable than before. The digital core enables, for example, the throughput in inventory management and valuation, as well as MRP on HANA, which helps business to run in real-time and fundamentally better their performance. Maximizing revenue generation with real-time customer insights and predictive analysis, enabling flexible and reliable omni-channel deliveries, delivering compelling, seamless, and reliable shopping experiences, and allowing for visibility into the state of your business at any time, are only a few thing that can easily be achieved with SAP S/4HANA.
Stay tuned for even more insight into the SAP S/4HANA 1610 release. Next up I will be sharing 1610 innovations around aATP and Procurement use cases.
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