Introducing SAP S/4HANA

It is clear that technology is disruptive. This is precisely why we need to engage with digital transformation. Driven by the combination of ever-growing digitization and evolving consumer demands, digital transformation is the use of new technologies to drive significant business improvements. This includes capitalizing on new opportunities and effectively transforming existing business.

If you look at the numbers in the preceding figure, it is apparent that the world around us is becoming more complex. Some of the reasons for this increasing complexity are as follows:

• Exponential growth of digital information, that is, social, mobile, and big data

• Globalization and spread of business networks

• Internet of Things (IoT)

So far, the response has involved more complex business processes, more complex organizations, and more complex software solutions. At the end of 2009, 5% of the world's population owned smart phones. Four years later, that figure had jumped to 22%. Currently, 1.7 billion people are on social networks. Over the next three years, that audience will grow to surpass 2.55 billion. By 2020, 5 million people will enter the middle class and come online, while 50 billion devices will be connected to the IoT, creating a digital network of virtually everything. Cloud computing, which was a $41 billion business in 2011, will grow to be a $241 billion business in the same time-frame.

The proliferation of mobile devices, social media, cloud technologies, and the excessive amounts of data that they generate has transformed the way that we live and work. Sixty-one per cent of companies report that most of their employees use smart devices for everything from email to project management and content creation. While all these advancements have improved lives and provided greater opportunities for innovation, they have also accelerated the rise of an entirely new problem: unprecedented and crippling complexity. The world may be getting smarter, but it has not become easier.

For more than 45 years, SAP has been on a journey with our customers, helping them create value for their organizations by applying technology to solve some of their most complex challenges. In each era of enterprise computing, we’ve evolved our strategy – and product portfolio – so our customers can run better. In the 1960s and 1970s, as mainframe computing gained popularity, SAP enabled its first customers to automate their plant floor operations with material requirements planning software. In the 1990s, as companies expanded their use of the Internet, SAP helped connect its customers’ headquarters with their subsidiaries through SAP® R/3® software for enterprise resource planning. Over the past 10 years, as cloud computing and Big Data have become ever more pervasive, SAP HANA® software, along with SAP's extensive portfolio of cloud applications, has helped SAP's customers begin their own digital transformations. Now, as technologies such as artificial intelligence, machine learning, the Internet of Things (IoT), advanced analytics and blockchain become mainstream, SAP has a new opportunity – to help turn its customers’ businesses into intelligent enterprises, with new capabilities that enable their workforces to focus on higher-value outcomes.

Advances in machine learning are enabling algorithms to become highly accurate in natural language understanding and in image and speech recognition. Businesses can use these increasingly sophisticated capabilities to drive the next level of intelligent business processes automation and eliminate repetitive manual tasks. Automation can now also be implemented far more cost-effectively, because it is embedded more and more within business processes. All of which means that the workforce will be able to focus on high-value activities like customer success, strategic planning, and innovation. Advances in ubiquitous connectivity and edge computing are creating a step change in business productivity. This connectivity, coupled with artificial intelligence and machine learning, can be used to analyze petabytes of data to affect real business outcomes. IoT can connect the entire value chain, from design to production to supply chain, and data-driven insights of customer preferences can inspire better design, lower material costs, and reduce risk. Real-time analysis of machines can predict maintenance needs, identify potential quality problems in manufacturing processes before they occur, and reduce asset downtime by as much as 50%.The integration of advanced analytics capabilities into applications allows business users to analyze data on the fly and informs better decision-making. Empowered users, benefiting from embedded analytics in business processes, can get real-time visibility into their changing environment, simulate the impact of business decisions, and achieve better customer outcomes.

The global economic growth of the last nine years has been powered largely by technology. Record corporate profits and new business models can all be tied to technology-driven innovation. On average, an S&P 500 company is now being replaced once every two weeks. This "tumble rate" is accelerating – with the difference between winners and losers tied to their ability to embrace digital technologies. The next decade will, of course, bring about even greater tectonic shifts. To address these challenges, businesses need to make sense of a growing volume of data, create a step change in productivity, and innovate with relentless clock-speed. In other words, they need to accelerate value creation. This is the heart of the Intelligent Enterprise.

This means first, an intelligent suite of seamlessly integrated applications with a unified user experience for each line of business including, Customer Experience, Supply Chain and Manufacturing, Digital Core, People Engagement, and Network & Spend Management. Next, customers can use the digital platform to tap into new sources of data within your business and across value chains to derive deep and holistic insights in real-time. SAP Cloud Platform provides the glue to securely integrate and extend solutions, and reuse common services. Last, intelligent technologies, including Artificial Intelligence, Internet of Things, and Advanced Analytics are embedded in SAP S/4HANA to enable customers to automatically detect patterns in data, recommend the best courses of action, and optimize workflows. For customers that want to innovate even further, we offer industry accelerators and open development services where you can apply design thinking methodologies to identify new business models.

• Digital assistance with business context awareness and natural language conversations for increased productivity and user satisfaction
• Context aware, real-time, predictive insights so you can make better decisions and adjustments, faster

• Artificial intelligence and robotic process automation eliminate more than half of manual tasks
• Continuous learning and adaptive processes

• Rapidly design and execute new business models and digital services, based on advanced end-to-end processes

• Context aware, real-time, predictive insights so you can make better decisions and adjustments, faster
• One Analytics Platform with real-time insights
• One User Experience across real-time planning, analysis, and execution
• Broadest Analytical Support

To help businesses become Intelligent Enterprises and achieve breakthrough outcomes, SAP provides three essential components.

These enhanced capabilities will empower SAP customers to achieve the following three critical outcomes faster, more effectively, and more completely than ever before:

• Do more with less and empower employees

• Invent new business models and revenue streams

• Deliver best-in-class customer experience

The Intelligent Enterprise is more than just automated business processes. It’s a vision – how we at SAP see the future of business for our customers, the future of work for our customers’ employees, and the future of experience for our customers’ customers. Only SAP can deliver on this vision, because of the following:

• Integration end to end across the processes that matter most to our customers, built on common master data, domain models, and platforms

• Industry expertise to help make sense of customers’ data in the specific context of their businesses, using insights about their own performance to optimize algorithms

• Intelligence embedded directly into core solutions as part of customers’ standard road map, so they don’t need to create a separate data lake or purchase additional tools

The decision of which deployment option to select largely depends on the degree of standardization versus the degree of flexibility required by a customer in their enterprise software.

All cloud deployments offer an annual, subscription-based pricing model, so customers pay for what they need and can add to it later. On-premise continues with the traditional licensing model.

SAP S/4HANA Cloud, essentials edition is a public cloud solution that is highly standardized and covers selected LoB and industry scenarios, and a comprehensive ERP scope. Services are delivered to customers over a network generated from a multi-tenant server. "Multi-tenant" means that two or more tenants (customers) are sharing the bandwidth of one server. This multi-tenant server resides in an SAP data center. Your cloud provider (SAP) is responsible for maintaining the technical backend of your system, and runs your software service in the server where your tenant resides. SAP S/4HANA Cloud, essentials edition has the fastest innovation, meaning quarterly release cycles, where new features and enhancements to existing functionality are released. SAP maintains your system with bi-weekly hotfixes, and installs the quarterly release enhancements to a customer's existing scope on the defined release upgrade schedule.

SAP S/4HANA Cloud, essentials edition, has the lowest total cost of ownership (TCO), because more standardization means SAP can provide many pre-built resources to make the implementation and running the solution as simple and easy as possible. If you have subscriptions to multiple services in addition to SAP S/4HANA Cloud (for example, SAP SuccessFactors, SAP Concur, and so on), you will have an individual tenant for each software server that may or may not reside in the same data center as your SAP S/4HANA Cloud ERP solution.

Characteristics of SAP S/4HANA Cloud, essentials edition include:

• Highly standardized business processes covering selected LoB and industry scenarios, and a comprehensive ERP scope
• In-depth coverage for professional services and component manufacturing; more industries on road map
• Configurable standardized processes and best practice
• Defined extensibility options and extensions via SAP Cloud Platform
• Quarterly release cycle
• Lowest TCO and fastest time to value
• Subscription licensing
• Runs on multi-tenant/public cloud infrastructure in SAP data centers

SAP S/4HANA Cloud, extended edition is a private cloud solution based on standardized business processes, but also includes the extensibility and geographical reach of the SAP S/4HANA on premise solution. Services are delivered to customers over a private network protected by a firewall from a single-tenant server. "Single tenant" means that only one tenant (customer) is using the storage and bandwidth of one server. This single-tenant server can reside in your own data center, or in a data center owned by a vendor. Private clouds offer the most security and control. SAP S/4HANA Cloud, extended edition has semi-annual (twice yearly) upgrades, and is hosted in SAP's private, managed cloud, SAP HANA Enterprise Cloud.

SAP S/4HANA Cloud, extended edition, is an excellent choice for customers that require specific functionality, broader extensions, and deeper configuration capabilities in a dedicated cloud environment. Additional capabilities are allowed, because the customer is the only tenant on the server. As a cloud solution, it is also easily scalable and has a low total cost of ownership (TCO).

Characteristics of SAP S/4HANA Cloud, extended edition include:

• Standardization and scalability of the cloud combined with the full functional scope, extensibility, and geographical reach of SAP S/4HANA on premise
• Semi-annual upgrades
• Configurable and customizable processes
• SAP S/4HANA Extensibility Framework and extensions via SAP Cloud Platform
• All industries supported
• Low TCO and fast time to value
• Subscription licensing
• Runs on single-tenant/private cloud managed infrastructure (SAP HANA Enterprise Cloud)
• Choice of where SAP HANA Enterprise Cloud is hosted: SAP data center or hyper-scaler (non-SAP vendor, for example, Microsoft Azure, Amazon Web Services, and so on)

The business impact of simplification includes the following:

• Move from batch processing to real-time processing

• Management of inventories at the smallest lot sizes passing through the logistic operations

• Real-time processing of inventory postings and visibility of inventory values

• Ability to run complex and data intensive processes (ATP, Backorder Processing)

• More timely and detailed inventory postings, leading to higher inventory accuracy

• Reduced safety stocks due to increased visibility of stock situations

Overall, this results in an ultra-thin data layer that cannot be further stripped down. Further reduction of tables and functionality would not lead to more simplification, but a reduction of data (data loss). Simplification is not reduction; simplification is the same feature made simple. Only primary information remains, and all secondary (redundant) information is removed.

The 42.4 gigabytes (GB) of data shown on the figure Data Footprint includes actual data and historical data. Older data is needed less often, which means that it is possible to run the application in an 8.4 GB environment. In terms of our daily life, this means that a reduction from 593 GB to 84 GB provides much more than simply storage capacity reduction.

It also offers the following benefits:

• You can run the application on a mobile device.

• You increase the flow of data through your business applications.

• Response times are shorter.

• You can see more data on a view (statistical data directly into a data entry view).

• Backup and updates are faster.

• Restore is faster.

The business impact of the reduced data footprint includes the following:

• Lower TCO as customers can reduce the number of systems and BW in their landscape

• Data compression and flexible access to the data

• Fewer interfaces between systems

• Less technology stack required

The scalable infrastructure, which has high performance and lower TCO from an optimized system landscape, and a reduced number of systems, provides customers with significantly improved performance.

Productivity is increased by building business user-relevant, role-based UIs. This enables business users to focus on real-time decision making and insight-to-action in their daily tasks. The features of these improved UIs include the following:

• Intuitive graphics for faster insights

• Exception-based rendering of information

• Pre-evaluated solution proposals, with the possibility to make manual adjustments

• Decision support by enabling the simulation of every proposal before deciding

• One-click execution of a solution

• Intuitive personalization, allowing the tailoring of apps to individual work styles

• Availability on multiple devices

SAP Fiori is a technology that offers a state-of-the-art web UI, based on HTML5 and UI5 (SAP technology), and provides capabilities to personalize the view. SAP Fiori offers the technology to provide the correct views for new end users. Its design principles make it possible to adjust the views to every front-end device, and adapt it automatically to future new design principles. This ensures that the views are always state-of-the-art.

SAP Fiori is also a development and design principle for SAP. The views are role-based, and, therefore, SAP developers know everything about the end user. This means that they can design and adapt the view to the needs of the end user of this particular role, thus putting the user into the center of the business process. With this principle, SAP ensures that the software does not target a "neutral individual" who enters all information into one view. Instead, the software reflects the business context, the tasks, and the unique user situation. The software provides all of the relevant information that the user needs to perform tasks ("The system is working for me; I am not working for the system").

This architectural principle results in a product that is lean, high-performing, and flexible. SAP Fiori is enabled for web access and it is role-based. This enables the systems of Online Transaction Processing (OLTP) and Online Analytical Processing (OLAP) to merge, allowing embedded analytics to focus on problem-solving and decision-solving tasks. This new decisive mode of the software is also embedded in the new MRP Cockpit.

You can check for further information on SAP S/4HANA Enterprise Management in the following locations:

• SAP S/4HANA Training:

  Visit our Web shop at http://training.sap.com/

• SAP S/4HANA Documentation:

  Visit our help portal at http://help.sap.com/

• Simplification List:

  Visit our help portal at https://help.sap.com/s4hana_op_2021/

• Conversion Guide:

  Visit our help portal at https://help.sap.com/s4hana_op_2021/

• SAP Fiori:

  Visit Experience SAP at https://experience.sap.com/fiori/