October 31st, 2016 marks the general availability for SAP S/4HANA release 1610. Expectations have been building up after a year of development upon what was the first version of SAP’s next-generation ERP. Will this new release be ready for adoption beyond just early adopters? Let’s open the box and see what’s inside.
Adoption of release 1511
As announced by SAP CEO Bill McDermott during the quarterly financial update, the revenue generated by S/4HANA is on the rise, with more than 4,100 customers having purchased or subscribed to the digital platform . Officially, more than 300 of these projects are already live and about 1,500 are under way in all 25 industries and across 74 countries.
While meeting potential customers at numerous conferences and one-on-one workshops, our team has identified the following criteria as roadblocks to the conversion to S/4HANA:
- Lack of support for industry features
- Unclear roadmap for several key applications
- Incomplete coverage for Lines of Business outside Finance.
Will 1610 answer these valid concerns?
Industry to Core
In the past, industry solutions were delivered as add-on solutions on top of the Enterprise Central Component (ECC). Most companies were adopting best practices from one or more industry solutions. However, in many cases, customers have implemented bits and pieces of features and functions from various industry solutions to build the right solution.
In addition, several capabilities were shared across multiple industry solutions that had different release schedules, making the maintenance complex at times and potentially creating incompatibilities.
With S/4HANA, SAP is rethinking its industry strategy. By focusing on the digital core and combining it with satellite best-of-breed applications, it becomes clear as to what is shared / universal and what is satellite / dedicated. In release 1610, the key features of the main industries are integrated back into the core. Let’s go over the integration of key applications.
SAP HANA support the Digital Core. Source: SAP
Integration of key applications
Moving forward with the Digital Core concept, the development team has redefined and integrated some of the key applications for which a future path was unclear, namely:
- Embedded Extended Warehouse Management (EWM) can also run as satellite
- Support of Embedded Software in Product Development (PLM)
- Simplification of Product & Portfolio Management (PPM)
- Embedded Master Data Governance (MDG)
- New UX for International Trade Compliance (GTS)
Here is an example of what Product Portfolio Management would look like in S/4HANA:
SAP S/4HANA 1610 Capabilities Highlights for Portfolio and Project Management. Source: SAP
Updates for all lines of business
In the fall of 2015, SAP’s design concept for Fiori 2.0 was praised by the design community and received the Red Dot Award out of 17,000 applications . With 1610, the concept has now been realised bringing more consistency and improving user experience (UX) benefiting all lines of business.
In addition, the following features have been improved, from Finance to Procurement to Manufacturing:
- Redesign for advanced Availability to Promise (ATP)
- Integrated Quality Management (QM)
- Simplification of Billing and Revenue Innovation Management (BRIM)
- New features for Manufacturing Planning: Production Planning and Detailed Scheduling (PPDS)
- Merging of Central Finance capabilities within S/4HANA core.
Here is an example of the new UX for Availability to Promise (ATP) in S/4HANA:
SAP S/4HANA 1610 Capabilities Highlights for Availability to Promise. Source: SAP
In short, 1610 looks to be the first release of S/4HANA that ‘mainstream’ customers can adopt. In particular, the coverage of most industry capabilities, the new innovations delivered for all lines of business, and the updated UX are contributing to a compelling value proposition.
However, some areas still need further evaluation. For instance, there hasn’t been enough information related to the coverage of the Public Sector Industry Solution, which probably won’t be able to integrate back into the core and may not be treated as a satellite. In addition, several partners and customers have noted that features announced as part of the future core might require an extra license. The pricing models and availability of these licenses have not been communicated yet. Stay tuned!