Whilst SAP R/3 has been around for about 23 years, and will be with us for another 15 at least, last week’s big announcement was that it is being superseded by what I’m calling R/4, and what SAP is calling S/4 HANA (already being shortened by many to S/4).
For anyone following the evolution of SAP HANA and Simple Finance (originally Smart Financials) this has been very clearly coming. Oh and if you’re wondering what the “S” stands for, its “simple”….and relatively, it is. The evolution of S/4 will be a journey, but let me paint a picture of where we’ll get to.
In a single system you’ll be able to record all of your transactions and report, and plan, in real-time with a single set of numbers. Not only is the interface user-centric, it’s also beautiful. And because it’s blisteringly fast, even for the world’s largest company, period-end can be closed at record speed with unprecedented accuracy and confidence.
Because it is part of a larger ERP suite, most finance postings are created automatically by the associated business transaction. Furthermore there’s a single application, not just for ERP, but for CRM, SRM, SCM, and PLM. And because the data is stored once, not only is there is a massive reduction in complexity, you also have the ability to report across all of your systems simply, and, if you want to, in real-time.
The reason this is possible is quite technical. And if you’d like some more of the technical detail, it’s worth reading The SAP® Business Suite 4 SAP HANA® (SAP S4/HANA) FAQ. In short, it’s related to the SAP HANA platform which is a new paradigm in technology that allows you to massively simplify underlying database structures. In the case of finance for example, you can reduce the number of transactional tables from about twelve to two. In logistics, it’s even more.
This has a double impact: hugely reduced data volumes and hugely improved simplicity. This makes everything smaller, faster, easier and more agile. And because you can execute code in the platform rather than in the application server, it can run much faster. For example, the claim is that things like variance for production orders run thirty times faster.
So the benefits include…
- Real-time reporting, planning and analytics with no need for separate data loads being entered into a reporting and planning system
- Significantly improved agility around change processes and ad-hoc reporting
- Fewer batch jobs means more of the business can operate in real-time. This is great news for enabling digital transformation
- Improved user experience and engagement (the front-end is Fiori, so you get apps that drastically cut the need for training and change management, and simplify the on-boarding of new staff)
- And of course, everything is faster, smaller and simpler.
What do you do now?
In the week since its launch, I’ve discussed S/4 HANA with three different clients. Despite being at different stages of a new global template of ECC, they all had the same question; “What do we do now?” They don’t want to implement ‘dying’ technology (as I put it to them, be the person who implemented R/2 on the mainframe in 1994), but at the same time they are conscious that S/4 isn’t ready yet for a full rollout.
S/4 HANA Finance will be released this coming March and the rest of the Suite will follow. Whilst I suspect that S/4 HANA ERP will be relatively soon, the more specialist applications will likely still be some time away. If you are embarking on, or in the process of, an ERP implementation, then you need to think about how you embrace S/4, what your roadmap is, and what, for example, your reporting and analytics strategy is. You need to build for the future, not for yesterday.
S/4 HANA will be transformational for our clients, and I for one am very excited to be part of their journeys.