What will SAP Business Suite powered by SAP HANA mean to CEOs?

15 January 2013

Mark Chalfen

Mark Chalfen

Former SAP S/4HANA Global Lead

January 10, 2013 will be seen as a significant day in the future success of SAP due to the launch of the SAP Business Suite powered by SAP HANA. IT professionals and industry analysts attended the press conference with large volumes watching online. I am unclear as to the volume of actual CEO's of Large Enterprises who were aware of the event or who have watched a replay.

The language and content were rather technical for a CEO audience. I would be surprised if many CEO's know the difference between OLAP and OLTP, apart from the clear difference in spelling. However CEO's will be expected to sign of significant cheques to pay for new projects, hardware and licences to make this a reality.

Who is going to sponsor SAP HANA?

Due to the varying benefits SAP HANA can provide customers, it is hard to identify the correct business sponsor. Having a joint sponsor or many sponsors of a large investment can be tricky as the inevitable question of how the costs are split becomes a blocker for change. To me, a single sponsor with a single vision is the best route to take. However when there are cost saving reductions around licences, hardware and future development costs the CIO's name is normally in the frame.

With SAP Business Suite powered by SAP HANA, the benefits are not constrained to just IT costs, significant tangible business benefits can be achieved as well. I personally believe that these will be greater and more significant than the IT cost savings and will be the basis of migrations and implementations.

A simple example of this could be increasing the breadth of the CO-PA assessment cycles to provide a more detailed overview of profitability by product, region or customer. As this is a Finance task the Finance Director could be dragged into the equation, however he is not the main benefactor. Depending on the output it could be the Sales Director who gained previously unachievable analysis on the profitability of a product. The Sales Director could then choose to discount the product to grow demand leading to an increase in revenue. However that same piece of information could be consumed by the Operational Director to identify that a plant was not at full capacity and either reduce the workforce to become more profitable, or increase capacity to improve the net margin on the products they produce. Someone within the Organisation needs to be able to identify these potential benefits and build a business case that covers all impacted areas, not just the ones they are responsible for.

Will a CEO care about SAP Business Suite powered by SAP HANA?

At the moment, I doubt many have even heard of it, or understand what it can do. The question I pose is forward thinking. The product is exceptionally new and will stay in ramp up for some time. Early adopters will need to focus on identifying the relevant benefits and this will require close integration between different divisions, sectors and teams within an Organisation with invariably different opinions and priorities. If you look to narrow the scope the costs will still be there, but the benefits won't be maximised; however getting too many people to provide an opinion and direction will slow the process and lead to excessive costs of implementation, especially around the analysis phase.

Most organisations will have strategic objectives and medium term goals. Can SAP Business Suite powered by SAP HANA assist to achieve those goals and objectives? If the answer is yes then any project will become more attractive to the CEO.

Why should a CEO care about SAP Business Suite powered by SAP HANA?

The standard business suite from SAP is seen as the system of record. So it is not that sexy and does not really add too much value, its benefits lie more around risk mitigation of recording data rather than increasing profitability and reducing cost. By running SAP Business Suite powered by SAP HANAthe real time analytics will ensure better decisions are made, which in turn will provide the ability to increase profitability and reduce costs. The system alone cannot provide these benefits; the internal workforce will need to amend the way they look at data. Challenge needs to be encouraged internally to use real time data to spot trends and react accordingly.

When is the right time to invest?

Timing for investments is always critical. Invest early and you have the ability to make use of the business benefits as quickly as possible and have an advantage over your competitors. Wait and the system may become more stable, robust and complete. Leaders and innovators will tend to adopt new functionality and technology earlier compared to more conservative organisations that follow as they are more risk adverse. Preparation is key to success, and I would recommend promoting challenge internally just before looking at implementing SAP Business Suite powered by SAP HANA. Getting key business users to identify data or analysis that was previously not achievable will provide not only some of the scope of the new solution but a direction for the planned business benefits that could be achieved.

To conclude

I don't envisage a CEO pushing a migration to SAP Business Suite powered by SAP HANA. This will invariably come from the CIO with the support of a divisional head. To make the migration attractive to the CEO the business benefits need to be compelling and provide real tangible cost reductions and or revenue growth. The ability to find these discrete process and system changes will influence the timing of the implementation as well as successful funding. All of this is based on the business's ability to understand the benefit of real time analysis and to start to request information which was previously unachievable. Having external eyes to look within your system and processes should start some of these conversations as I believe partners will play a significant part in the internal behaviour change required to make this successful.

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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.

Bluefin and SAP S/4HANA - welcome to the one horse race

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