Part 1: Cutting the Tension Between IoT and ERP | First, a Look Back
In the last two years, 90% of the world’s data has been generated. More data has been produced in the last three hours than produced previously from the beginning of time to the year 2013. Even with this acceleration and plethora of data, less than one percent of today’s data is being turned into business benefits. You may have seen or heard similar, appalling soundbites in the recent past. These facts are not only incredible to fathom, but they provide significant business challenges that have the potential to significantly disrupt business models, business processes & work. Never before have there been so many promising breakthrough technologies available – and so many businesses ready to capitalize on them. From Machine Learning, to Blockchain, from Cloud to the Internet of Things (IoT), Smart Devices, Analytics and more, companies are eager to run smarter and take advantage of the new business possibilities they offer. Although there is eagerness and excitement, a recent ZDNET article points out the continuous tension between innovation and transactional systems leading to a lack of value realization. Information processing and management are at an inflection point.
How about a quick history lesson? Many ERP transactional systems that companies use today to run their business were built on legacy client server technology from the 90s. For example, transactions (POs, production orders, GL transactions) were stored in relational databases in row and columns (OLTP). If you needed to understand what was happening in the business or what was going to happen (OLAP), companies picked up the data (ETL) and replicated it to put in a format they can easily report on. Along with this, EDWs and perhaps multiple ones were created at a department level to do divisional reporting. Now add in unstructured data (i.e. social, sentiment, etc), the picture becomes even more scandalous. All of this spews manual effort, latency & complexity, as the visual below depicts.
Because of this, companies are stuck trying to solve today’s challenges with yesterday’s technologies. Real-time business scenarios are needed to compete in today’s digital environment. In the past, it wasn’t possible to have OLTP and OLAP together because of the drain it would put on the systems. That was then, but SAP HANA is now.
These reasons above are the foundational elements that led to SAP HANA’s creation. OLTP, OLAP and unstructured data plus a single copy of data in one repository and all in-memory incorporating the latest technologies in software and hardware – this is SAP HANA. With these capabilities, you now get super computing power at commodity prices. That is the difference. It also unifies end-to-end data processing with search, text, geospatial and predictive analytics on top of the in-memory columnar foundation, further extending the benefit of redundancy and latency elimination to all data processing workloads. These things on the right (see below visual) allow you to re-write applications and truly transform from art of the possible to real, value add applications.
Let’s take the real-life example of Gillette, the popular shaving product. Historically, they had low order volume/high quantity orders (Gillette to distributor to Wal-Mart for example – in bulk). In comes Dollar Shave Club. To respond to the digital disruptor, Gillette developed a subscription razor offering. Now that entails high order volume/low quantity orders. This requires complex, advanced available-to-promise capabilities to ensure they can fulfill and get clear, real time visibility into inventory, capacity & fulfillment. In comes S/4HANA.
S/4HANA is SAP’s next generation digital core for companies competing in the digital economy. S/4HANA has been re-engineered to take advantage of the massive simplifications the HANA DB provides. S/4HANA is built with a completely new data model, embedded analytics and new UI. It’s your central nervous system integrating and coordinating information it receives from all parts of your company.
Like nerves in your body that send and receive information from your brain, SAP Leonardo services interact with your Digital Core to enhance, accelerate or automate your business processes. They get inputs from the central system and other sources to perform the tasks they are designed for, and send back the results to automate or enhance the central core processes. Many companies are now realizing the benefits of this powerful combination, which was simply not possible just a short time ago.
In Part 2 of this blog series, we will double click into the power of “And” and why S/4HANA and SAP Leonardo is not just the present, but also the future in delivering new, differentiating capabilities and outcomes to customers.