Greater agility and efficiencies with SAP S/4HANA Cloud Editions

6 July 2016

Mark Chalfen

Mark Chalfen

Former SAP S/4HANA Global Lead

For the past few years, SAP has clearly stated its goals to become a cloud-first company. In a drive to realise these ambitions, SAP has acquired a number of cloud-based software companies. This has not only helped establish SAP in the Software as a Service market, but it has also seen it become a market leader in a number of product areas. But what about Enterprise Resource Planning (ERP)? Something that has been a mainstay of SAP’s offerings to clients.

Mark-chalfen-Greater-agility-and-efficiencies-with-SAP-S4HANA-Cloud-Editions-content.jpgWithin the product suite of SAP S/4HANA, the next generation of ERP solutions from SAP, there are a number of cloud-based solutions. To date, however, the current adoption of cloud solutions within this area have not been that large. The winds of change do appear to be blowing though, as sentiment in the UKISUG is now showing that SAP’s traditional customer base is ready to embrace the cloud*. There has been dramatic change in opinion around cloud and their planned adoption of the SAP Cloud product suite. Let’s take a look at what moving to SAP S/4HANA Cloud can offer them.

Greater agility

Moving to S/4HANA has a perception of being expensive and a time-consuming process. Whilst it can provide significant benefits, as detailed here, the costs in time and money can be prohibitive for some clients. One of the central themes of digital transformation is speed, with the focus on becoming agile, thus enabling quick responses to commercial change, rather than system performance.

Making alterations in a highly customised ERP environment will take much longer than in a less customised one. Sometimes business critical changes within a company will demand a much quicker turn around than that which is currently achieved where a substantially modified system is in use. Moving to a simplified cloud-based tool will resolve this issue.

Changing the mindset from fit gaps to fit2standard

For those with a strong on-premise background, a key phase to an ERP deployment is the Blueprint phase which will include “fit gap” workshops. Traditionally, this is the time when the customer looks at the standard ERP offering and provides a list of “gaps” that need to be added. This could be something like new transaction codes, additional fields and modifications to the logic used within standard transactions.

Within S/4HANA Cloud, the “fit gap” is replaced with the “fit2standard” process. Rather than focusing on how the standard ERP tool can be customised to meet the customer’s requirements, the “fit2standard” looks at how the customer’s processes can work with the standard best practice design.

Become more efficient by losing flexibility and control

A bizarre statement I know, but bear with me. Historically, on-premise projects actively encourage clients to customise their ERP systems to provide them with additional flexibility and control. This leads to a more complex environment which is more difficult to support and integrate with other tools and processes. By removing some of the flexibility, the options available to the client are reduced, and as a result they will become more efficient in terms of the project effort and duration. This in turn will lead to a simpler solution which will require less effort to support in the long term.

Time is money

Most customers would welcome an approach to reduce the deployment effort, time and cost. The end to end duration of an S/4HANA Cloud deployment will be roughly 40% less than a comparative on-premise deployment. Therefore, the cost to deploy will be significantly less for a cloud deployment compared to an on-premise one. This will enable clients to drive their digital journey forward and obtain the benefits much earlier. Moreover, the simplified cloud system will enable you to respond quicker to change - accelerating your competitive advantage.

Summary

SAP S/4HANA Cloud is clearly a new product that is ready to make its mark. SAP has typically played in the on-premise market for ERP tools, however it is clear it's now able to cross over both markets. The cloud might not be suitable for all clients, however it could be a strong fit for your organisation.

 

Further reading:

Which SAP S/4HANA version are you thinking about?

 

 

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About the author

Mark Chalfen

Former SAP S/4HANA Global Lead

Mark tells it straight - as an ex-boxer, what else would you expect?  Both his knowledge and experience of SAP products allow him to cut to the chase dispelling myths and hearsay.

As a result of working closely with various SAP Finance Product Management teams on product development, Mark understands these products inside out. This depth of understanding has led to him become a ‘thought leader’ in his field; after all, it is not often SAP consultants have helped shape and develop the very product they are selling.

Having such a strong relationship with SAP alongside being an SAP Mentor and Moderator means that Mark has an extensive network within SAP. For clients, this relationship proves to be a huge advantage and leads to configuration issues being resolved rapidly.

Mark has worked on short proof of concepts through to year-long multi-million pound global roll-outs. However, no matter how large or small the project, the true value Mark brings to his work is in the guidance he provides to senior stakeholders. In essence, he assists them to implement more effective processes and drive better behaviours within their finance teams.

Helping organisations transform their business with SAP S/4HANA is Mark’s current focus. The benefits of S/4HANA are numerous, including the simplification of tasks, embedded analytics and improved user engagement. Whilst the eventual move from SAP Business Suite into S/4HANA is inevitable, the journey to it is not always clear. Mark’s ability to understand an organisation’s needs coupled with his deep understanding of S/4HANA provides clarity and eases their transition.