SAP S/4HANA – The Path to Simplification
This week I was following a discussion on a social media where my friends were arguing SAP positioning against a highly-customized SAP environment.
While it may be hard to say goodbye to many years of custom-developments, there is not doubt that the SAP S/4HANA is the best opportunity to re-think the way how the new ERP will support your existing processes and how this will help getting rid of the custom-codes (or at least some of them).
The networked economy is driving business while companies are challenged every day to deliver tangible customer results in a more and more integrated end-to-end ecosystem.
A SAP S/4HANA project is full of great opportunities and it has firmly established itself as the next generation business suite to support digital businesses, helping the company to drive through the storm.
SAP S/4HANA it is not a legal successor of any SAP Business Suite Product. SAP S/4HANA is a new product
What does that means?
If you have the SAP Business Suite and you are going to implement SAP S/4HANA, you can’t look to this project as an upgrade… It has to be seen as a new implementation, even if your project’s approach is going to be a system conversion or landscape transformation.
SAP S/4HANA may not give you the full SAP vanilla flavored system when your project is finished… It may be hard to get rid of 100% or the developments and customization that you have in the ECC system today, but SAP S/4HANA will enable you to think different and you should always to consider the benefits of running SAP standard, if your company’s business model allows you to do it this way.
Think about the developments you have today and try to list the ones that differentiate your business from other companies and competitors? What are the ones that increases customer service and profitability? Evaluate if they bring true benefits and cost saving or if it is just another “nice to have” feature, that in the end it keeps your support team busy maintaining it, just because the end-user wants to have one extra button here or there. Think on the many products and features that you may have missed, things that SAP released in it’s core or products that are out there that you could evaluate and if they would replace some of the developments that you have today or not.
SAP says that: Run Simple to Run LIVE… companies should be able to react in a timely manner to economic and business changes, and if your ERP system is too complex, there is a risk that you will never be able to adapt to changes fast or not react at all.
The new digital economy is disruptive and the game rules have changed.
(image source: s4hanasap.com)
You must consider the potential that SAP S/4HANA has to reduce not only custom developments but also interfaces and 3rd partner applications you may have in your system, reducing the maintenance and license cost, support and other direct/indirect cost those applications may bring to the company.
The foundation of S/4HANA innovation is the revolutionary in-memory column-store based capabilities of SAP HANA, that enables both OLAP (analytical) and OLTP (transactional) data to reside in one system, allowing to analyze, report, simulate and predict in real time, LIVE and leading to smarter and quicker business decisions. The secret of success on those analysis requires that all of your processes are carefully reviewed and adhere to the best practices as much as possible, from Procurement-to-Pay all way to Order-to-Cash and etc., at the risk of looking to data on your screen that doesn’t reflect the real numbers.
(image source: sap.com)
Researchers shown that 90% of the company’s CIO’s are considering some kind of cloud strategy to the next 5 years *…Shifting from legacy systems to cloud technology, increasing agility, scalability to support growing demands, better embedded security and reduced TCO. SAP offers S/4HANA in a SaaS mode with different flavors: HEC (HANA Enterprise Cloud), Private Cloud, Public Cloud.
Depending on the cloud strategy, the customization and developments are not possible or limited, so here is another reminder to consider running simple when you start your project, even if that is a on-premise implementation, as companies can move to Cloud at any time later.
(image source: sap.com)
SAP S/4HANA Cloud has been conceived to co-exist in a diverse system landscape with native integrations to other SAP solutions and open interfaces for further integrations and extensions via the SAP Cloud Platform to anything out there.
It may be difficult at the beginning. Try to think this way: think that the company was running another ERP for more than 20 years and now they took the decision to move to SAP (why it took so long, right?)… So imagine that everything that they had in the old ERP will go away… how would you handle the core business processes without the developments they had in the old ERP?
It is going to be scary at the beginning, but the pay-off will come latter… how many times you rejected the idea of implementing a new product SAP was offering because it would not “fit” on your current system highly-customized landscape?
Less developments, more standardization and best practices will allow you to consume those products in a more efficient way and those products could be the answer to the developments you had to do in the past. Take this opportunity to ask “why not?”, and push your company towards to simplification. It will set free your IT department to work on items that brings real value to the business and to be more innovative, instead of coming to the office and spending the whole day coding, repairing code or thinking what needs to be adapted in the program to accommodate an acquisition, a merge, a new tool that the company is considering to buy and etc.
SAP S/4HANA is a once in a lifetime career opportunity to many people… I know many people that are proud of their R/2 <–> R/3 project but the fact is that comparing R/2 to R/3 move versus moving from ECC to S/4HANA has a huge difference, it’s way bigger and the S/4HANA gives you the opportunity to not only improve what you already have but totally re-imagine what is possible to your company in the next years.
(image source: sap.com)
“If you’re not serving the customer, your job is to be serving someone who is.” Jan Carlzon
According to RightScale’s 2015 State of the Cloud report, which surveyed 930 IT professionals about their current adoption and future plans involving cloud computing, 88 percent of businesses are using public cloud technology and 63 percent are using private cloud. Eighty-two percent have a hybrid cloud strategy, up from 74 percent in 2014, a clear indication that the cloud has quickly become an essential ingredient of modern IT.