System Conversion to S/4 HANA
After 3 years of launch of S/4 HANA, it would be interesting to know how the adoption has been. Craig Powers of ASUG, mentions in one of his blogs that there are around 1500 companies with S/4 HANA implemented but this makes up to only around 19% of companies who have already purchased the software. You can read his blog with the link below.
So, this brings up important questions as to if some of those customers have enough information to get on-boarded onto S/4 HANA or they will need some direction. There is a lot of content available from SAP and other consultants to know more about S/4 HANA. This blog series is to help customers who are already on SAP ERP to understand delta to S/4 HANA in the Sales, Logistics and Supply Chain areas.
I would recommend for companies to start off by getting their ‘Business Scenario Recommendation’ from SAP. The blog by Victoria Menshchikova in the below link explains in detail how to get your BSR.
To start with, although the business processes have not changed much with S/4 HANA, moving from SAP ERP will not just be a technical upgrade but can bring in changes to the ways of working. This is derived by leveraging on the ‘Digital Core’ of S/4 HANA. This Digital Core of which ‘Enterprise Management’ is part of is similar to SAP ERP Logistics.
One of the key features of S/4 HANA is the simplified data model. With SAP ERP and additional systems like CRM, SRM, etc. many masters had to be replicated in both the systems with different data models. Customers and Vendors had to be replicated as Business Partners in these systems. SAP has simplified the data model to eliminate such redundancies with S/4 HANA as you only create Business Partners in S/4 HANA. Also, there are many tables eliminated to reduce the data footprint and for better application execution. Another key feature on simplification is that, there are many aggregate tables used along with data base indexes in SAP ERP. With S/4 HANA, these have been removed for better performance and more accurate/real time data.
Due to technology restrictions, Companies had to maintain separate systems for transactions and reporting as Online Transaction Processing (OLTP) had to be separate from Online Analytical Processing (OLAP). With S/4 HANA built on SAP HANA database, OLTP and OLAP can be managed in one system which means the same set of data can be used for both. This can potentially eliminate the time needed for the extraction, transformation and loading (ETL) activities which usually is done overnight in many companies resulting in data being available only up to the previous night only for reporting. One other benefit of OLTP and OLAP in one system is the availability of a key feature called ‘Embedded Analytics’.
One of the great examples of the simplified data model can be seen in the Finance and Controlling area. In SAP ERP, as an example, when an invoice is created, system posts to accounting as well as controlling tables. But, much of the data would be common across both. With the Universal Journal table, ACDOCA, you have one document recorded during the transaction processing resulting in better performance with additional documents rendered with views in real time. You can read more on the architecture of ACDOCA using the below link:
In today’s world, with many companies having global supply chains and multiple shipping schedules, it becomes even more important to have MRP as close to real time as possible. However, it is well known that MRP is a high intensive activity and lot of companies have this run overnight. Because of the simplified data model and with the power of SAP HANA, it is possible to run MRP as many times as needed with real time data. This is now called as MRP Live. This enables companies to replan even if one new customer order is received. In reality though, there could be lot of dependencies like impact on subsequent business processes or downstream systems.
With S/4 HANA, user experience is redesigned with a new design approach called ‘Fiori’. The intent is to have seamless experience on any devices – PCs, Mobiles, Tablets with focus on role based approach and with minimal user interactions. While Fiori is an option, companies can still opt for the traditional SAP GUI as well.
We will talk about specific business applications where benefits can be realized in the subsequent blog posts which will be published every week. Meanwhile, if you have any questions, please send them to me.