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SAP S/4HANA: Hallmarks of the Next-Generation Business Suite

February 3, 2015 by Andreas Schmitz 0

It’s not so much the technology as the challenge of simplifying complex business processes that makes enterprises hesitant to embrace the digital transformation. SAP’s new, next-generation business suite, SAP Business Suite 4 SAP HANA (SAP S/4HANA), will help them overcome their reluctance once and for all.

It all began in finance; then came customer interaction, retail, procurement, and inventory management en masse: Now, the new generation of software is set to blaze a trail through the combination of a modern user experience and the SAP HANA platform.

Accommodating the customer’s pace of change, SAP is combining more than 40 years of industry experience with SAP Fiori and SAP HANA into a new product ― SAP S/4HANA, the next-generation business suite and the company’s biggest innovation since SAP R/3. It will be delivered in largely standardized form either from the public cloud, the managed cloud, or on premise.

The latest developments every three months from the cloud

Despite offering an array of delivery options, SAP has a clear “cloud first” priority: It will import the latest developments to the cloud platform every three months, where they will then be available for use by private cloud users after six months at the latest. Customers that do not opt for a cloud model will benefit from the latest innovations once a year ― a well-established innovation cycle in the on-premise world.

It almost goes without saying that SAP’s next-generation business suite benefits from the supplier’s oft-cited simplification tools, the advantages of the SAP HANA platform, and SAP Fiori for personalizing the user experience, now role-oriented. SAP S/4HANA, the next big step on SAP’s innovation trail, unites all of these simplifications and innovations in a single product.

What makes the new generation of software so special?
1. Smaller data footprint

A company that currently requires seven terabytes of data storage capacity in its SAP Business Suite will in the future require only one-tenth of that volume. This forecast is based on first-hand experience. Because, as so often in the past, SAP implemented the new software in its own operations before releasing it to the market — “SAP runs S/4HANA.”

SAP Simple Finance, the first element of the next-generation suite, has already demonstrated at SAP what will be reproduced in all the functional areas of the business suite. The advantage: Large systems and gargantuan data volumes will become obsolete. Reduced hardware, smaller network capacities, and lower bandwidth for data transmission will help CIOs cut their investments in the IT infrastructure.

2. Greater flexibility for new business processes

The absence of indices and aggregates in SAP S/4HANA means that system throughput is higher. As already demonstrated by SAP Simple Finance, intermediate calculations are no longer necessary. Which accelerates the task of calculating elaborate and complex processes such as financial closing and demand planning. Even forecasts in inventory planning can now be carried out on the fly.

This “real-time flexibility,” as Sven Denecken, Global Vice President of Co-Innovation for the Cloud Suite at SAP, calls it, helps provide ad-hoc answers to all kinds of “what-if” questions. This benefit comes particularly to the fore when companies run a de-cluttered IT system, that is, when they consolidate their IT landscape and ― like SAP ― deploy one ERP system worldwide.

“Customers must embrace the digital transformation. To do that, they need flexible systems that enable new processes with low effort,” explains Denecken.
3. Role-oriented experience

Depending on their role in the company, employees need access to different sources of data. And, ideally, they should be able to collect the applications they need and display them on a single user interface. Logistics personnel, for example, might need fast access to both financial and sales figures to help them make an informed decision about procuring parts or components.

“With S/4HANA, new business processes can be implemented quickly, even if they are not part of the familiar process structure. And the ad-hoc collaboration approach to solving new challenges is a source of innovation too,” explains Denecken, who is one of the managers responsible for the new software generation.

SAP Fiori, with its role-based interface design, enables individual employees to access precisely the information and applications they need across lines of business and from any device, be it an iPad, smartphone, or desktop.

“Customers must embrace the digital transformation. To do so, they need flexible systems that enable new processes with low effort,” explains Denecken. This means, among other things, that the user experience must be enjoyable and that operation must be intuitive, requiring only minimal explanation.

4. Analytics components

In logistics, finance, and demand planning, there is a growing and ever-more frequent need to review the current “state of play” and to compare certain figures with those for the same period in the previous quarter or year. These analyses provide the only sound basis for making reliable and well-informed decisions. “In future, ad-hoc analysis will be part of the normal daily routine,” says Denecken.

The latest figures show that SAP’s cloud business is continuing to gain momentum: The company generated €1.1 billion in cloud revenues in 2014, which is an increase of 45% on the previous year.

“It’s clear that our strategy of enabling a sustainable transformation to the cloud at the customer’s pace of change is the right one. We’re delivering this innovation on premise too, because the speed of innovation is more significant than the delivery model used. What counts is that I can create value in a way that suits the enterprise concerned,” says a satisfied Sven Denecken.

What is also clear is that the digital transformation will be a key factor in deciding a company’s success. Thus the smoother the transformation, the better.

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