Exploring the Clean Core Approach

Objectives

After completing this lesson, you will be able to:

  • Explain how maintaining a clean core enables businesses to focus resources on areas of differentiation and innovation

Business Case for a Clean Core

Clean core strategy is the enabler to future-proofing business, supporting our customers to stay competitive and relevant.

Clean core is a transformation journey that helps ensure organizations use the latest release, minimize modifications, and run with cloud-compliant extensions and customizations.

Clean core gives ERP the flexibility to adapt to changing business requirements with modular innovation, which we define as the ability to build innovative extensions and functionality decoupled from the core and cloud-ready.

Leveraging the clean core strategy, SAP is setting a new standard in enterprise resource planning.

Clean means up-to-date, transparent, unmodified, consistent, efficient and cloud compliant. The core describes the main aspects of an ERP system such as extensibility, processes, data, integration and operation. Capabilities of the core depend on the implemented software-stack.

The Value of a Clean Core

Why is a clean core important?

The business case for adopting a clean core approach with SAP cloud ERP revolves around the following key points:

Standardization of Processes

With the transition to SAP S/4HANA, SAP has undertaken a significant effort to simplify and standardize its ERP software. By removing redundant functionalities and simplifying data models, SAP aims to create a cleaner, more efficient core system. A clean core ensures that standard processes are maintained without heavy customizations. This standardization can lead to reduced complexity in business operations, which in turn can lower costs, decrease risk, and improve efficiency. For instance, in previous versions of SAP ERP, there were often multiple ways to perform the same task, leading to complexity and confusion for users. With SAP cloud ERP, SAP has consolidated and standardized these processes, reducing complexity, and improving usability.

Seamless Integration and Extensibility

A clean core supports seamless integration with other cloud solutions, such as those offered by the SAP ecosystem, enabling a more connected enterprise without the compatibility issues that can arise with heavy customizations.

Flexibility

A clean core allows businesses to be more agile. With fewer customizations, the system is easier to update and upgrade. This agility means businesses can quickly adapt to market changes, regulatory requirements, or technological advancements.

Scalability

Businesses can scale more effectively with a standardized system. A clean core can handle increasing volumes of transactions without the need for significant additional custom development or infrastructure.

High Performance

The clean core approach takes full advantage of SAP S/4HANA's in-memory database, which can dramatically improve the performance of business processes and analytics. In addition, SAP has focused on eliminating legacy code and outdated functionality that is no longer relevant or necessary for modern business processes. This approach not only reduces the size and complexity of the software, but also improves performance and scalability.

Innovation Ability and Adoption

SAP cloud ERP with a clean core approach, facilitates faster innovation. SAP continuously delivers new functionalities and improvements, including artificial intelligence, embedded analytics, and automated processes. These can be deployed rapidly due to the reduced complexity of the core system.

With a clean core, businesses can shift their focus from maintaining customizations to innovating and improving business processes. This means resources can be allocated to activities that add more value to the business.

Security, Compliance and Privacy Controls

With standard processes, compliance with industry standards and regulations is easier to achieve and maintain, as the core system is designed to be compliant with current standards, reducing the compliance burden on the organization.

Standard processes are well-tested and supported, which reduces the risk of business disruption and ensures that critical business functions are always available and reliable

Lower Total Cost of Ownership (TCO)

By minimizing customization, companies can reduce the cost of maintaining their ERP systems. This includes lower costs for upgrades, testing, and support, resulting in a lower total cost of ownership over the life of the system.

The SAP Clean Core Strategy

A clean core is a system that is as close to standard as possible, while running cloud-compliant extensions and customizations. 

It allows companies to adapt their system to changing business needs and adopt new capabilities.

The core of ERP software consists of six fundamental dimensions: software stack, extensibility, integrations, processes, data, and operations.

Keep the coding clean. Within the software stack, keep the data clean, keep the modifications controlled, keep the landscape reliable, keep the processes clear, keep the operations effective and efficient.

With a clean core, the performance of each ERP dimension improves.

Dimensions of the ERP Core

DimensionDefinitionBenefit with Clean CoreCriteria for Clean Core

Software stack

The standardized SAP software

Software stack can run closely with capabilities from the latest release and partner solutions that are clean core compliant.

  • Software version close to the latest release
  • Software version close to he latest Feature Pack Stack (FPS) and Support Pack Stack (SPS)
  • Partner solution clean cloud compliant

Extensibility

Added functionality beyond standard ERP software

Extensions are upgrade-stable, well-documented, and adhere to best practices on a single instance of each SAP standard functionality.

  • Upgrade-stable extensions following prescribed extensibility model
  • Only actively-used and well-documented extensions
  • Adherence to general code quality standards and best practices
  • No duplication of SAP standard functionality

Integrations

Communications between solutions

Integrations have upgrade-stable interfaces, proper monitoring, and error resolution capabilities.

  • Upgrade-stable interfaces
  • Proper monitoring and error resolution capabilities
  • Only actively-used and well-documented integration

Processes

Actions presented in an end-to-end sequence

Process consistency and efficiency increases when staying close to the SAP standard business process.

  • No inconsistent or inefficient processes
  • Leveraging SAP recommended Best Practices
  • Only actively-used and well-documented integration

Data

Configuration, master, and transactional data

Data is more complete, accurate, widely used, and relevant.

  • Complete
  • Correct
  • Used and relevant

Operations

Ongoing governance and monitoring

Day-to-day operations are planned and executed regularly and system can easily be upgraded.

  • Day-to-day operations planned and executed regularly to maintain alignment with the above guidelines (e.g., security authorizations, integrations, data, etc.)
  • Opt-in on lifecycle events such as periodic upgrades
  • Compliance with pre-approved maintenance windows

Overall, SAP's clean core strategy in SAP S/4HANA exemplifies its commitment to simplification and innovation.

Implementing a clean core enables rapid innovation, better execution, and efficient operations. This means a company can access the latest innovations without their ERP customizations limiting implementation. Meanwhile trust and compliance are strengthened due to software being up to date with increased data quality and availability. Extensibility is enabled without risk to core processes allowing the flexibility to meet business-specific needs.

The Essence of Business Differentiation: Embracing the Clean Core

In today's competitive landscape, companies must identify what truly sets them apart. What drives customer choice isn't the basic "system of record" capabilities such as accounts payable or tax and treasury functions; these are universal and essential, but not distinctive. Most organizations, regardless of size, location or industry, operate with about 75% similarity in these basic operations.

These operations constitute what we call the "clean core," the essential, non-differentiating functions that every business must execute. In the past, excessive customization in these areas led to rigidity and inertia. But in an era of agile business practices, maintaining a clean core - standardized and streamlined - becomes critical.

In essence, the clean core approach is about ensuring that standard processes operate at peak efficiency, freeing up resources to invest in what truly differentiates a business and enables it to innovate, adapt and excel.

How Does a Clean Core Differentiate From Traditional on-Premise Systems?

Challenges of on-premises software include old versions limiting access to new innovations, lack of data standardization, and complex and costly upgrades due to customizations. A clean core unlocks rapid and continuous innovation, better execution, and efficient operations.
Note

Want to learn more? Access the Learning Journey Managing Clean Core for SAP S/4HANA Cloud.

Log in to track your progress & complete quizzes