Outlining the Motivation for SAP S/4HANA


After completing this lesson, you will be able to Outline the motivation for SAP S/4HANA.

SAP S/4HANA Overview

If you look at the numbers in the figure, The Business Landscape is Increasingly Complex and Networked, it becomes obvious that the world around us is getting more complex, for the following reasons:

  • Exponential growth of digital information – social, mobile, big data

  • Globalization and spread of business networks

  • Internet of Things (you could also say, the Internet of everything)

The world has continued to change and so to have business challenges and opportunities. Today’s world is digital and networked.

  • The pace of data generation is accelerating – in the last two years, 90% of world data has been generated.
  • Over the next two years, there will be 40% growth in the adoption of business networks.
  • By the end of the decade, 212 billion things, from cars, to heavy equipment, to consumer appliances, will be connected to the internet.
  • Currently there are approximately 9 billion mobile users in the world.
  • Last year alone, 51% of workloads were processed in the cloud. That amount will only grow for the foreseeable future.

The response so far has been the development of more complex business processes, more complex organizations, and more complex software solutions.

The exponential proliferation of mobile devices, social media, cloud technologies, and the staggering amounts of data that they generate has transformed the way that we live and work.

In the last decade, there have been significant advances in technology that application developers can take advantage of to build smarter and more powerful applications. Examples include the following:

  • Multi-core processors enabling parallelism of tasks

    This means more throughput of data and faster processing to give us real-time responses.

  • Big memory

    This enables us to fit an entire organization’s database in memory, which means that we lose the mechanical spinning disk and the latency it brings.

Advances in the design of the on-board cache means that data can pass between memory and CPU cores rapidly. In the past, even with large memory, this created a bottleneck as the CPUs demanded more data and the journey from memory to CPU was not optimal.

We can now easily slot more servers into our landscape to add more processing power or memory in order to scale to any size.

SAP rewrote its business application software to fully exploit the new hardware. SAP worked closely with leading hardware partners, who shared the product blueprints of their new CPU architectures, so that SAP knew how to write the best modern software to extract as much power as possible.

Cloud computing technology has matured in the last few years and is now a compelling deployment option for our customers who do not want to take on the complexity and cost of the installation and maintenance of IT landscapes. Virtualizing machines means lower costs associated with running enterprise-wide applications. Public cloud services based on subscription models increase access for everyone to the latest solutions, reducing the costs and simplifying everything.

Time to Rebuild

Some key moments in the application development history of SAP are the following:

  • 1979 – SAP invents ERP. SAP builds standard business software based on mainframe technology. The name, SAP R/2 supports and integrates major business functions in real time and handles multi-country and multi-currency implementations (R means real time, and, although there was an R/1, this is not regarded as the first major release).

  • 1992 – With the rise of the personal computer, the introduction of client/server architecture means another rewrite of the applications to exploit the power of a layered, three-tier architecture approach, in which processing is split across three layers - client, application, and database. It is the end of the mono-chromatic, text-based, messy green screens and the start of a new graphical interface to improve the end user experience. This is the birth of SAP R/3.

  • 2004 – Now the Web is firmly established as the common business network and customers demand better integration between their business applications and the Web. SAP develops a new integration application platform called SAP NetWeaver in order to enable this. Now all SAP applications run on a common platform, and customers and partners can build and integrate existing applications easily using widely adopted Web standards, such as service-oriented architecture (SOA). Additionally, a little later, a new switch framework is introduced to allow customers to selectively enable only the new functions developed by SAP in order to avoid disrupting their core processes. The SAP R/3 name is now replaced by SAP ERP. ERP is part of a larger family known as SAP Business Suite, which also contains many other line of business (LOB) applications from SAP, such as SAP CRM.

  • 2015 (Current) – A new wave of advances in hardware architecture brings massive computing power at decreasing costs. Huge memory and multi-core processors arrive to offer massive computing power. The underlying design of existing SAP applications does not fully exploit the power of the new hardware. A rewrite of the complete Business Suite is required. The new business suite is called SAP S/4HANA. With the new codeline, ERP has been re-imagined. We can now include new intelligent technologies like Machine Learning (ML), Internet of Things (IoT), Artificial Intelligent (AI), and Blockchain.

SAP S/4HANA Enterprise Management

SAP S/4HANA is not a single product. Customers can start with the basics components and add to them later. SAP S/4HANA Enterprise Management is a great place to start. This is known as the simplified core. Perhaps it might help to think of SAP S/4HANA Enterprise Management as the replacement for SAP ERP. Here, we find support for all core business processes, such as order to cash, procure to pay, and so on. For many customers, this is where their SAP S/4HANA adoption begins.

SAP S/4HANA Enterprise Management component is enhanced by LOB Solutions.

In the past, we had multiple add-on applications surrounding a core (for example SAP ERP (Enterprise Resource Planning), SAP CRM (Customer Relationship Management), and SAP SRM (Supplier Relationship Management)), but with overlapping models and much redundancy. Now overlaps and redundancy have been completely removed from SAP S/4HANA. SAP S/4HANA is built natively and optimally to run only on the SAP HANA platform.

Let’s highlight the most important aspects of SAP S/4HANA and what makes it very different from what we had before. We will then drill down on individual topics in later slides.

First of all, SAP S/4HANA is built on SAP HANA, so we inherit all the capabilities of this powerful data management and application platform. This includes advanced text mining, predictive analysis, simulations, and powerful real-time decision support.

A brand new user experience is delivered to improve the productivity and satisfaction of business users and brings the interface up to a consumer-grade experience on any devices.

SAP S/4HANA can be deployed on premise or in the cloud, or a combination of both, to provide flexible options to customers.

The data model has been massively simplified. This means that we lost unnecessary tables and, of course, the data in those tables, to shrink the footprint dramatically and simplify the application design and extensibility.

Thereby solutions from SAP Ariba, SAP Concur, SAP SuccessFactors, SAP Fieldglass, and SAP Customer Experience are used.

SAP Ariba is the world’s business commerce network. SAP Ariba combines industry-leading cloud-based applications with the world's largest Internet-based trading community to help companies discover and collaborate with a global network of partners. Using the SAP Ariba Network, businesses of all sizes can connect to their trading partners anywhere, at any time from any application or device to buy, sell, and manage their cash more efficiently and effectively than ever before.

SAP Concur Travel and Expense is a web and mobile solution for travel and expense management. It includes corporate travel booking, expense report automation, reimbursement, audit, and business intelligence, and corporate card integration. It is offered in multiple editions (Small Business, Standard, Concurforce, Professional, Premium).

SAP SuccessFactors is the leader in cloud-based Human Capital Management (HCM) software for talent management, core HR, and HR analytics.

SAP Fieldglass provides a cloud-based Vendor Management System (VMS) to manage contingent workforce and services procurement programs.

SAP Customer Experience helps businesses around the globe sell more goods, services, and digital content through every touchpoint, channel, and device.

SAP Intelligent Enterprise

SAP has worked closely with customers to identify where digitized operations could provide the most value.

The result is a massive wave of simplification and innovation in the core that covers critical business processes in finance, sales, service, sourcing and procurement, manufacturing, supply chain, asset management, research and development, and human resources.

SAP Intelligent Enterprise represents the core solution, covering all mission-critical processes of an enterprise.

It represents the foundational core solution, natively built on the SAP HANA platform and designed with SAP Fiori UX, along with digitized business solutions to meet today's needs for advanced technology.

The most comprehensive, integrated, and intelligent ERP. The integrated end to end processes can be controlled by intelligent technologies and fit into almost all industries.

SAP Intelligent Enterprise Framework

The Intelligent Suite means, that companies build a new platform for core business processes and bring together business processes with analytics in real time. This enables a smarter, faster, and simpler enterprise, which includes connecting every aspect of internal operations. It also enables real-time processes.

Machine Learning and the Intelligent Suite: Machine learning technologies are critical to empowering this vision of the Intelligent Suite. By embedding algorithms directly into multiple SAP systems, we can continuously learn and adapt to new data as it comes in, without a user having to be involved.

The information is presented to knowledge workers in the transaction screens they are familiar with, but are enhanced with new information to make them more effective at their job.

And not only is SAP delivering these types of embedded self-adapting algorithms into all our core applications, we are making it possible for our customers to customize these models or deliver entirely new models of their own with SAP Predictive Analytics, application edition.

This entire value chain, including the core, is digitized and serves as the platform for innovation and business process automation.

Key Aspects of SAP S/4HANA

Bringing Online Transaction Processing (OLTP) and Online Analytical Processing (OLAP) Together

For more than 20 years, organizations have been using specialist software, usually with additional hardware, to extract, transform, and load (ETL) data from transaction systems to dedicated reporting systems. Based on the technology available, this has been the optimal way to provide a holistic view of business data with good response times (especially when you add accelerator software or hardware).

OLTP has been separated from OLAP. This is due to the database design of OLTP and OLAP. Database models have been either built for OLTP optimization or OLAP optimization, but not both.

However, this has also bought with it complexity, redundancy, and latency. It has been common for today’s business figures to be available only tomorrow for analysis, once the data has been extracted and loaded to a reporting system.

The database that supports SAP S/4HANA (SAP HANA) can handle both OLTP and OLAP processing from a single data model, so there is no need to move transaction data to a separate system. This means that transaction and analytical applications run off the same tables, and data is available in real time at every level of detail.

Data Footprint

A simplified solution architecture benefits your IT organization immediately.

The IT landscape, processes, and maintenance routines are all positively impacted by a simplified solution architecture. The numbers shown here are from real-world experience of SAP Benchmarking Services, a division of the SAP services and support organization.

The advantages offered by a simplified solution architecture include the following:

  • Simplified IT landscape:

    Cut memory and storage resources dramatically and improve reliability

  • 71% reduction in maintenance:

    Maintenance is simplified by greatly reducing ETL and re-indexing batch jobs

  • Infinite scale:

    Having an engine that allows the processing and analyzing of massive amounts of any data leads to a situation that only our imaginations limits the boundaries to use the system. All data, both inside and outside the company, structured and unstructured, can be processed and analyzed. Therefore, systems need the performance and scale to operate on a complete new level of data quality and quantity; it must be ensured that any redundant data is removed from the system, any data that does not directly contribute and benefit the business process or the quality of the information provided.

  • Business agility:

    Systems need to be able to support massively increased business agility and need to instantly react on user requests. Processes that hinder system performance and system agility must be avoided. This is the end of batch processing; batch has started with punch cards, punch cards have died, UIs, which were the interfaces of function modules have died and the batch is now dying in these days.

A reduction from 593 GB to 8.4 GB provides much more than simply storage capacity reduction as follows:

  • 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 screen (statistical data directly into a data entry screen).

  • Backup and updates are faster.

  • Restores are faster.

Simplified Applications

Traditional applications were built on a hierarchical data model. Detailed data was summarized into higher level layers of aggregates to help system performance. On top of aggregates we built more aggregates and special versions of the database tables to support special applications.

So, as well as storing the extra copies of data, we also had to build application code to maintain extra tables and keep them up to date. Database indexes improve access speed because they are based on common access paths to data. However, they must be dropped constantly and rebuilt each time the tables are updated and therefore more code is required to manage this process.

The traditional data model is complex, and a complex data model causes the application code to be complex. It has been found that up to 70% of application code is built specifically for performance of an application and adds no value to the core business function. With a complex data model and complex code, integration with other applications and enhancements are difficult. They are simply not agile.

Using the raw power of SAP HANA, we can aggregate on the fly in sub seconds from any line item table. We don't need pre-built aggregates. SAP HANA can generate any view of the data at runtime, all from the same source tables.

SAP HANA organizes data using column stores, which means indexes are usually not needed; they can still be created but usually offer minor improvement. So, in addition to losing the aggregates and indexes from the database, we can remove huge amounts of application code that deals with aggregates and indexes.

We are left with a simplified core data model and also simplified application code. Now, it is much easier to enhance the applications and integrate additional functions.

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