Identifying Characteristics of SAP S/4HANA Cloud Public Edition


After completing this lesson, you will be able to:

  • Provide an overview of SAP S/4HANA Cloud Public Edition characteristics
  • Explain how the lines of business interact with one another in the overall scope

SAP S/4HANA Cloud Public Edition Overview

SAP S/4HANA Cloud Public Edition

SAP S/4HANA Cloud Public Edition, is a ready-to-run cloud ERP that delivers the latest industry best practice business processes and continuous enhancements to help customers stay competitive and enable them to work toward their future business goals.

This solution tends to be the best fit for small to mid-size customers with minimal customization requirements and an openness to adopting the predelivered SAP Best Practice business processes that are already available in the system. These processes are regularly improved with enhancements between releases, and in the major release upgrades that occur in August and February each year. Enhancements and upgrades are automatically installed by SAP on a defined release schedule.

SAP tries to make it as easy as possible for customers to manage and maintain their SAP S/4HANA Cloud systems during and after release upgrades by providing tools that enable them to get an understanding of the impact on their actual system (Release Assessment and Scope Dependency tool), and to re-test their upgraded processes after a release with automated scripts (Test Automation Tool).

SAP S/4HANA Cloud Public Edition is also a good fit for larger customers when deployed in combination with SAP S/4HANA on premise or SAP S/4HANA Cloud Private Edition in a two-tier ERP structure.

Sustainability and artificial intelligence capabilities are built into many of the standard business processes to enable customers to get a clear understanding of their organization's environmental impact and run deep analyses on their business data.

The SAP Fiori Launchpad makes it easy for non-developers to make small customizations through the built-in low/no-code extensibility applications, and helps end users learn how to use the new software through embedded in-context support information and tutorials.

Solution Scope and Business Process Story

Finance-led Administrative ERP

Every business needs to buy and sell things, and keep track of how much money is going out and coming in. These core tasks are covered in a set of business processes from the Finance, Sales, and Sourcing and Procurement LoBs referred to as Administrative ERP.

Procure to pay

In the Finance LoB, a business forecasts what they estimate they'll need to purchase for the upcoming quarters to determine how much budget to set aside. In the Sourcing and Procurement LoB, the business identifies what they need from suppliers, purchases the items (for example, laptops for new hire employees), pays the supplier, and receives the goods.

Order to cash

In the Sales LoB, we receive orders from our customers, confirm the orders, and deliver goods to customers. The payments received post in the Finance LoB to accounts receivable and our revenue adjusts accordingly. Back in the Sales LoB, if there's a customer return, we handle the return by inspecting the returned good, and hopefully can put it back in stock to sell to a future customer. If a customer submits a claim based on a product's warranty, we may need additional business processes in the Service LoB to create a service order and deliver the service described in the warranty.

Record to report

In the Finance LoB, we perform period end-closing at the end of each month. This is the last day of the period when the accounts are set back to a zero balance. Additional financial accounting tasks are completed to record transactions, reconcile bank statements, manage tax payments, and ensure the accuracy of all financial statements. Moving forward, we continue to plan for the future, maintain the budget, and forecast potential financial requirements based on different scenarios for the business.

Service-Centric Industries

In addition to the core processes covered in Administrative ERP, do we sell services to our customers? If we sell services, what type of services are being sold? Selling consulting services and delivering on those services is covered with the business processes in the Professional Services LoB. If we sell technical services, for example when a technician from your internet provider comes to our location to fix or replace a faulty modem, these are covered by business processes in the Service LoB. The example below is based on selling consulting services to a customer.

Sell and plan

Before a service is sold, there's likely some work being done in the Sales LoB to generate leads who will potentially buy our services.

Setup and staff

Once a consulting service is sold, we can set up the project with processes in the Professional Services LoB, search for people within our organization that have the right skills for the project tasks, and staff the project.

Deliver and recognize

To support the project, do we need to procure any services or materials from a third-party provider? If so, we move into the Sourcing and Procurement LoB to identify what we need, purchase it from a supplier, and pay the supplier. In the Professional Services LoB, we deliver each task of the project, and the staffed resources submit their time and expense reports for work-related travel. The project manager keeps track of the project margin (how much the customer is being charged less the cost of expenses and consultant time working on the project) to ensure it stays profitable as the customer pays installments of the total cost.

Bill and manage

After the project completes, the customer pays the final installment and the revenue is recognized through processes in the Finance LoB. The project manager uses the analytical applications to evaluate different aspects of the project.

Product-Centric Industries

In addition to the core processes covered in Administrative ERP, do we sell products to our customers? If we sell products, how much of the design, production, and delivery of the products are handled in-house? This brings in several other LoBs to handle the operational tasks necessary when a business produces products to sell.

We could produce pharmaceuticals or pre-made baking mixes through process manufacturing, or we could produce cars or mobile devices through discrete manufacturing. Process manufacturing is where ingredients are combined in a mixture, and once combined, cannot be separated back to the original parts. Discrete manufacturing is where materials are assembled into semi-finished or finished goods, and once assembled, can be separated back to the original parts. The example below is based on discrete manufacturing.

Idea to market

When developing a new product, a business starts with processes in the R&D Engineering LoB to forecast the demand for a potential product, and design the product itself. This creates the materials list needed to begin production, which is handed over to the Manufacturing LoB. We run material requirements planning to identify what we have or can make in-house, and what we have to order (procure) from third-party suppliers.

Procure to pay

In the Sourcing and Procurement LoB, we source materials from third-party suppliers, order and pay for the materials, and receive them into our warehouse.

Plan to fulfill

Now we can move forward in the Manufacturing LoB with scheduling and running the production process. We need to pick the materials from our warehouse necessary to make different parts of the final product (sub-assemblies), then run the final assembly to put all the pieces together into the finished good. We're likely using some expensive machinery to assemble our product, and those machines need to be maintained - maintaining our assets is covered by processes in the Asset Management LoB. The finished goods should go through a quality check, then be stored in our warehouse. The logistics of moving materials between our warehouses, locations, and plants is covered with warehouse management processes, which are under the umbrella of the Supply Chain LoB.

Order to cash

In the Sales LoB, we receive sales orders, whether we're selling direct to the consumer, through a third-party platform or both. We then move into the Supply Chain LoB to get the final product delivered to the customer by planning the transport of the outbound delivery from our warehouse to the final destination. The transportation of goods between warehouses or orchestrating deliveries to customers is called transportation management, which is under the Supply Chain umbrella. We receive payment from the customer and handle any follow-up sales-related tasks, such as the customer returning the purchased good, completing a quality inspection, and ideally returning the good to stock in our warehouse so we can sell the product to a future customer. If the product is defective, we need to identify the cause - was it a faulty component we made in-house, or was it a component purchased from one of our suppliers? This initiates follow-up actions to handle the defect and then salvage as much as we can from the product before disposing of the remaining components in a responsible way. If the product has a warranty, we move into the Service LoB to respond to claims and deliver the service guaranteed in the warranty.

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