Navigating the Storm with SAP S/4HANA Cloud: Introducing Release 2005

I closed out my last quarterly update on SAP S/4HANA Cloud in February with the statement “2020: Shaping Up as a Year to Remember.” It is unbelievable how quickly those words have taken on an entirely different meaning.

Today, a mere three months later, we find ourselves in the midst of a global pandemic, a crisis quite unlike any we have ever known. While the circumstances have changed dramatically, the sentiment on which I closed last time remains true: SAP continues to roll out innovations that help our customers change people’s lives for the better.

The focus has shifted, but with quicker and easier implementations that lead to faster time to value, SAP S/4HANA Cloud customers are well positioned to weather this storm.

During recent weeks, watching industries’ rapid responses to the wide-scale disruptions to supply chain, finance, and manufacturing has been inspiring. The innovative responses – companies large and small around the world pivoting from their traditional business to provide a product or service to address an immediate need – demonstrate that necessity truly is the mother of invention. What becomes clear is that having smooth, worry-free processes at the heart of your operations helps ensure the ability to turn things around swiftly.

Keeping operations running worry-free is our job, supporting our customers in focusing on new challenges and opportunities. We continually strive to improve how we do that, and the May 2020 SAP S/4HANA Cloud 2005 release is a case in point. Building on the previous 2002 and 1911 releases, release 2005 continues to advance intelligent enterprise resource planning (ERP) as the cornerstone of the Intelligent Enterprise, doubling down on integration and efficiency, and providing significant functional enhancements in key lines of business.

Integration and Efficiency Drive Agility and Flexibility

Integration has long been a strong suit for SAP and in turn, a significant strategic advantage for our customers, and the ensuing efficiency is key to adaptability. This release continues to build out our integration advantage, most notably in the areas of compliance management, finance, and human resources (HR) connectivity.

SAP Global Trade Services (SAP GTS) compliance management is now fully integrated with SAP S/4HANA Cloud. With only minimal new configuration, customers can utilize existing investments in SAP GTS 11 for a best-of-breed deployment of an international trade solution to help ensure compliance with international trade regulations.

Similarly, customers with existing SAP SuccessFactors software investments will benefit from an evolution of the integration between SAP S/4HANA Cloud and SAP SuccessFactors Employee Central. Customers can achieve faster onboarding of new employees or contingent workers thanks to automated user and role provisioning. Simplified integration setup and minimized replication errors further smooth HR processes.

Customers employing SAP S/4HANA Cloud for finance will appreciate the enhanced integration with SAP Analytics Cloud, which enables integrated financial planning and budgeting. Processes such as profit and loss planning and balance sheet planning can now leverage the full analytical capabilities of SAP Analytics Cloud, and important key figures can be seen at a glance.

Companies using SAP S/4HANA for enterprise portfolio and project management have been eagerly anticipating the integration of enterprise projects with sales orders. This update provides customers with a direct flow of revenues to projects, simplifying margin analysis. Actual costs and revenues can be captured in the project, allowing real-time project profitability analysis.

In the line of business sourcing and procurement, we have tightened the integration of SAP S/4HANA Cloud and SAP Ariba software, resulting in more efficient procurement processes. Enhancements include the automatic transfer of attachments between systems, and the ability to integrate SAP Ariba Contracts with central procurement using a single back end.

Key Line-of-Business Highlights

The list of new features in the 2005 release is extensive and exceeds the scope of this article, so I’m highlighting a handful that are real game changers in their respective lines of business.

  • SAP S/4HANA Cloud for supply chain: Managing inventory in the supply chain is the eternal balancing act, and rarely has that been more apparent in day-to-day life than in the early weeks of the COVID-19 pandemic. This release introduces situation handling – physical inventory monitoring to increase the accuracy of monitoring physical warehouse stocks.
  • SAP S/4HANA Cloud for manufacturing: The SAP Fiori kanban board app can help customers constantly monitor control cycles and their circulating kanban containers. Visual alerts identify and help eliminate errors quickly while reducing manual effort. Tailored perspectives are supported for different roles in lean manufacturing.
  • SAP S/4HANA Cloud for sales: The new order-to-cash dashboard for sales and service, a one-stop shop for sales and after-sales reporting, provides insights into sales volume, profit margin, and incoming sales and service orders across different dimensions.
  • SAP S/4HANA Cloud for service: New service order enhancements help customers achieve higher revenue potential. Combining service bundles with fixed-price order items and time and material items in the same service order greatly increases the flexibility of handling service orders and the coverage of service processes.
  • SAP S/4HANA Cloud for finance: This release introduces advanced payment management for approving and monitoring payments from SAP or non-SAP systems. Advanced payment management is seamlessly integrated with cash management and bank account management, giving a single source of truth for payments and related cash position. Notably, advanced payment management brings increased visibility of all cash flows, as well as improved cash forecast accuracy. In turbulent economic times, more than ever, understanding cash flow is at the fore of any chief financial officer’s mind. We could not possibly have known what state the world would be in as we release advanced payment management to customers, but its launch is timely.

Only a few months into 2020, we have already delivered two of our quarterly releases for SAP S/4HANA Cloud. Innovation is happening fast and steadily as we continue to advance the vision of intelligent ERP as the efficient engine of a company, running smoothly no matter what the terrain.

In these extraordinary times, just as in previous periods of economic downturn, companies that continue to focus on efficiency and innovation will be better positioned to come out of this crisis stronger. SAP remains committed to delivering intelligent and flexible innovations that keep businesses running and equip them to thrive as we come out the other side of this global crisis.

For more details on the release, see SAP S/4HANA Cloud Release 2005 Highlights.


Oliver Betz is senior vice president and head of Product Management for SAP S/4HANA at SAP SE.