With the launch of SAP Simple Finance and, more recently, SAP S/4 HANA, SAP’s ERP direction is becoming clearer. It’s reported that there are nearly 40,000 SAP ERP customers of which, as of this month, nearly 2000 are using SAP Business Suite powered by HANA (5% of the total ERP customer base). This shows the size of the prize that could move (migrate/ upgrade to SAP S/4 HANA in the next 18 months or so).
The announcement of SAP S/4HANA has created a lot of buzz and interest from customers who are planning their future SAP ERP journey. For a comprehensive FAQ, it’s worth checking out The SAP® Business Suite 4 SAP HANA® (SAP S/4HANA) FAQ by John Appleby.
I’ve been working with a number of customers to help them understand what S/4HANA is and how they can put together a business case. Whilst this is often initiated by those who are more IT-focussed, the conversation often moves quickly onto the business users and mainly Finance since SAP Simple Finance has been the first add-on to be released. If you’re interested in understanding some of the solution benefits of SAP Simple Finance, you might want to check out SAP Simple Finance – the dawn of a new age for Finance professionals
Some of the benefits to IT are usually overlooked by the business users who, generally expect nothing more than a killer app that will pay for the move to SAP S/4 HANA. Therefore when considering SAP S/4HANA both the IT folk and the business users need to work together to realise the full potential of the new solution. Here are some examples.
Key benefits to both IT and the business
1. The simplification of table structures
IT: This provides IT the ability to reduce the size of the database. An SAP ERP system that is currently 5TB could be reduced to less than ½ TB by moving to SAP Simple Finance due to the compression of SAP HANA, and the Finance add-on which removes the index tables, structures and duplicate data records.
The business: The business also benefits from this change. Reports can be simplified, data reconciliation between Finance and Controlling can be removed and Inter-Company reconciliations can be sped up. All of these enable the Finance team to remove manual (non-value steps) and focus on more analytical tasks which add true value to the business.
2. Operational reporting moved from SAP BW into SAP S/4HANA
IT: This will reduce the volume of data that is required to be held within a SAP BW environment. It will also improve performance around data extraction from ERP into BW.
The business: Additionally, business users now have the ability to run real-time analysis of financial information from SAP S/4 HANA. Historically, assessments and cost allocations would be run within the month-end process with the data then needing to be transferred to SAP BW to see the impact. The time lag resulted in the Finance team working late into the night and being dependent upon IT to transfer data from ERP to BW. This can now be removed, thus improving the efficiency of both teams and removing some of the pressure from the month-end cycle.
IT: There are many different types of simplifications that SAP S/4HANA can achieve. One business case is to use it as a central solution to link multiple SAP ERP systems. It can be used to help reduce a customer’s SAP ERP landscape and the volume of SAP ERP systems. Moving an SAP ERP solution to the Cloud can also reduce the TCO of the environment.
Moving to SAP HANA also paves the way to move other solutions onto HANA and reduce the size of existing systems. The benefits to the IT department are numerous.
The business: Business users can benefit from new SAP delivered apps such as SAP Cash Management and new SAP Fiori screens. There are currently there are over a dozen SAP transaction codes that can be used to record a journal within SAP ERP. SAP Fiori simplifies this by providing a single common process that will be utilised by all. This will remove potential issues with data being entered incorrectly, leading to additional work at month end to correct these postings.
Whilst the IT benefits for SAP S/4HANA may be well publicised, the true business benefits are there too. I’m being contacted by both IT and business users who are interested in pulling together a business case for SAP S/4HANA.
It is clear that both departments need to work together to pull the full business case. Pulling together a roadmap to move to SAP S/4HANA is the first step, followed by a review of the solution in detail. Creating a PoC or prototype will help the business fully understand what they can achieve with SAP S/4HANA and IT understand the true tangible benefits around data compression and performance.