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The Benefits of SAP S/4HANA and Why Enterprises Should Exploit Them More

SAP S4 HANA, released on 3rd February 2015, is an ERP (Enterprise resource planning) business suite. It is optimized for the SAP HANA in-memory database. This helps large enterprises exercise transactions and real-time assessment of business information.

The HANA stands for High-Performance Analytic Appliance. The most noteworthy attribute of S/4HANA is its simplicity and ability to work on large volumes of data. Both are better as compared to their predecessors.

S/4HANA Line Of Business

SAP S/4HANA has found popular usage in the following lines of business:

    • Asset Management: This field involves usage of S/4HANA in areas like 
      • Plant Maintenance (PM) Environment
      • Health & Safety
      • Resource Scheduling
      • Management of Change
    • Finance: This sector usually deals with the incorporation of S/4HANA for simplifying monetary operations.
    • Human Resources: Here S/4HANA facilitates operations regarding 
      • personnel management
      • Payroll
      • event management
      • Training
      • reporting etc.
  • Manufacturing:
    • Quality management
    • production control and planning
    • production implementation 

are the main areas in manufacturing that employ S/4HANA solutions.

  • Sourcing and Procurement: Exactly as the name of this field suggests, S/4HANA just helps enterprises to master the same and that too more efficiently.
  • R&D / Engineering: This field involves S/4HANA assisting companies in areas like 
    • Enterprise Portfolio & Project Management
    • Product Lifecycle Management (PLM)
    • Product Safety & Stewardship
    • Product Compliance.
  • Sales: Here S/4HANA helps in handling orders and contracts as well as subscription billing and revenues.
  • Supply Chain: Areas of SAP application range from 
    • planning and maximizing movement of stock and goods
    • examining product availability in the order generation procedure to
    • the management of shipping, stockpiling, and delivery.
  • Country / Region Versions: S/4HANA has utility in this field too for businesses that require it.

Industries currently using SAP S/4HANA

Consumer Industries

In this sector, S/4HANA deals with fields like agricultural contract management, retail, and fashion. 

SAP S4 HANA helps in managing a wide range of product contracts. It is also flexible to various kinds of

  • business environments
  • pricings based on the market
  • terms or conditions specific to the agricultural sector and
  • other necessary processes.

In terms of Retail, S/4HANA provides an end-to-end solution. This assists enterprise over their total retail value chain with a range of retail operations.

Another end-to-end solution that S/4HANA offers to consumer industries is of the ‘fashion and vertical business’. It helps businesses with operations regarding manufacturing, retail, and wholesale.

Discrete Manufacturing

In discrete manufacturing, Automotives is the main field of operation for S/4HANA.

  • It helps in organizing all forms of business exercises. It does so by allowing companies to understand better what their customers need
  • improving manufacturing procedures and
  • ensuring the production and delivery of quality goods. 

All this is possible through access to real-time data making business decisions more risk-free.

Energy and Natural Resources

In the Energy and Natural Resources sector SAP S4 HANA provides solutions for Mill products, Mining, Utilities, and oil & gas.

It offers aid in meeting the complex needs of various kinds of mill items and products like

  • textiles
  • paper
  • construction materials
  • metal and more

Non-ferrous metal components can have fluctuating prices. SAP S/4HANA helps companies to make required changes in their business decisions according to the change in market rates.

The mining industry uses S/4HANA for facilitating operations like

  • processing
  • transportation
  • shipment and 
  • marketing of the mined ore to interested parties

SAP Utilities has more sales & information architecture. It follows a process-oriented approach. This helps in the efficient functioning of waste disposal and utility enterprises. 

The Oil & Gas industry requires this SAP technology for the:

  • Exploration & extraction and
  • Refining & transportation

of hydrocarbons. Sometimes the usage goes deeper into the supply chain i.e up to ‘consumption’.

Financial Services

S/4HANA has profound usage in the fields of banking and insurance.

In terms of Banking, the areas where S/4HANA solutions come into use are deposits, loans, and collaterals.

In terms of Insurance, the areas where S/4HANA solutions come into use are 

  • Policy Management
  • Claims Management
  • Collections & Disbursements (FS-CD) and 
  • Incentive & Sales Force Management

Overall S/4HANA helps insurers to exercise effective business practices. This in turn elevates customer loyalty.

Public Services

Among Public, Services S/4HANA deals with fields like 

  • Defense & Security
  • Healthcare
  • Higher Education & Research and
  • the Public Sector

The centralization of processes reduces unnecessary opacity for the optimization of 

  • military planning
  • supply chain
  • maintenance
  • operations and
  • engineering

Patient Accounting facilitates the generation of invoices. These invoices are usually for treatments or operations registered within a clinical system. It also provides a framework to permit FHIR (Fast Healthcare Interoperability Resources) incorporation with such systems. The incorporation is industry-standard-based.

S/4HANA aids institutional (colleges, universities, research agencies) operations like 

  • campus management for students
  • analytics
  • financials
  • procurement
  • campus management for academic services
  • human capital management
  • research
  • student life-cycle management
  • asset management
  • grants management

The PSM or Public Sector Management solutions help in the handling of administrative earnings and forecasted expenditures.

Other Services

This area deals with the usage of SAP S4 HANA in Engineering, Construction & Operations, and Professional Services.

S/4HANA assists enterprises to incorporate service bills into operations related to sales and distribution. Equipment management helps improve operation flows in sectors like 

  • organizing & processing and 
  • settlement & assessment of tools and materials

Areas valid for availing S/4HANA aid in Professional Services include

  • planning and assessment of expenses
  • contract management
  • billing
  • marketing and sales practices
  • service conveyance etc

Source: https://blogs.sap.com/wp-content/uploads/2018/07/S4HANA-Deployment-Options-1.png

Impact of SAP S/4HANA on businesses in the real world

The following are a few examples of improvements gained by companies through the assistance of SAP S/4HANA.

  • Fjellsport, an online sports store, claims to have reduced its inventory carrying expenses by a margin of 20%
  • ENEL, a multinational energy company, has witnessed a 50% reduction in the time invested in its billing process
  • Swiss Post Ltd. claims to have reduced its entire operation expense by a margin of 30%.

An analysis of enterprise successes

Cloud Success

  • Exide affirms an increase in consumer retention by 25%.
  • Larsen and Toubro Infotech has reported faster revenue closing by a margin of around 70%.
  • LaLiga claims to finish month-end processing faster (by 3 days) now than before.
  • Truebell now enjoys 24 times faster reporting than before.

Business Success

  • Century Cement now experiences a lowering of the time spent on executing reports by 70%.
  • Everest claims to have achieved 100% transparency on the movement of stocks.
  • Himalaya Wellness has witnessed an improvement in its overall performance by a margin of 23%.
  • Time spent on material requirements planning has decreased by 95% for the Indus Motor Company.

IT Success

  • Ace Designers claims the current data size to be only 10% of the order value.
  • Future Consumer Limited reports increased accuracy in forecasts by a margin of 60%.
  • Himachal Futuristic Communications Ltd. (HFCL) affirms a reduction in data volume by 45GB.
  • Phillips Carbon Black Limited has reported a performance improvement margin of 30%.

Final thoughts

By now the advantages of S/4HANA solutions for businesses and enterprises should be quite clear. 

The SAP technology can be incorporated into various sectors or departments based on the need of the company or organization. But wherever used, it always proves to be beneficial by an appreciable margin.

The best part of it all is that one can always apply for a free trial and get comfortable with its functioning before opting for premium plans.

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