SAP New­bie — this is what you need to know about S/4HANA

In my dai­ly work, I con­stant­ly meet peo­ple who are not famil­iar with the world of SAP tech­nolo­gies. This means that us SAP pro­fes­sion­als who speak the lin­go must approach those new to SAP with spe­cial care.

Espe­cial­ly S/4HANA ter­mi­nol­o­gy has raised a lot of inter­est. As I have talked to count­less num­ber of peo­ple inter­est­ed in the sys­tem, I have seen that the fol­low­ing ques­tions are con­stant­ly dis­cussed. What is S/4HANA and how does it work? Is it a data­base? Is it an Enter­prise Resource Plan­ning tool? So, with­out fur­ther ado, wel­come, SAP rookies!

So, what exact­ly is S/4HANA?

SAP S/4HANA is the next gen­er­a­tion busi­ness suite designed to help orga­ni­za­tion nav­i­gate through the con­nect­ed and dig­i­tal world. It has been built upon a rev­o­lu­tion­ary in-mem­o­ry plat­form that offers users a unique user expe­ri­ence via its intu­itive user inter­face. It is a fun­da­men­tal solu­tion that cov­ers the crit­i­cal busi­ness process­es with­in com­pa­nies. SAP S/4 HANA is not only an enter­prise resource plan­ning sys­tem but an inter­est­ing com­bi­na­tion of dif­fer­ent tech­nolo­gies, prod­ucts and solutions.

For over four decades SAP’s tool, SAP ERP, was a piv­otal prod­uct for the Ger­man tech­nol­o­gy giant. There­fore, it is no won­der that SAP’s CEO, Bill McDer­mott, described the intro­duc­tion of S/4HANA as the “biggest launch in 23 years, if not in the entire his­to­ry of the company”.

It all began with HANA

So, what sep­a­rates SAP S/4HANA from pre­vi­ous gen­er­a­tions of SAP ERP? Biggest clue to the answer is in its name.

The orig­i­nal HANA data­base, first intro­duced in 2010, has been fun­da­men­tal­ly built on new archi­tec­ture. It oper­ates in-mem­o­ry and data is saved in columns which enables faster and real-time analy­ses and com­plex calculations.

Towards S/4

This brings us to SAP S/4HANA which is a next gen­er­a­tion busi­ness solu­tion. It has been built on SAP HANA and comes with the mod­ern Fiori user interface.

S/4HANA deliv­ers all ERP core func­tion­al­i­ties to a sin­gle loca­tion that hous­es a com­mon data ware­house. Fur­ther­more, it has been engi­neered to enable orga­ni­za­tions to oper­ate under dif­fer­ent cir­cum­stances. The core tech­nolo­gies of S/4HANA allow com­pa­nies to cen­tral­ize and stream­line a solu­tion for han­dling increased amounts of data com­ing from, for instance, IoT or online marketplaces.

SAP S/4HANA offers a wide range of solu­tions and inno­va­tions that sim­pli­fy dai­ly func­tions. For instance, although in the pre­vi­ous ver­sions of SAP ERP finan­cial account­ing was very effi­cient, infor­ma­tion was kept and processed in silos. Hav­ing sep­a­rate mod­ules and their indi­vid­ual tables serve as a per­fect exam­ple of this.

This way, a sin­gle orga­ni­za­tion with SAP ERP would get its data from hun­dreds of dif­fer­ent head­er and line item tables. If the orga­ni­za­tion want­ed to process or report finan­cial infor­ma­tion, data was need­ed to be com­piled from sev­er­al dif­fer­ent tables. Fur­ther­more, these tables were not nec­es­sar­i­ly under the same struc­ture but might have been in dif­fer­ent mod­ules. This meant that data acqui­si­tion and con­sol­i­da­tion was com­pli­cat­ed and had a sig­nif­i­cant effect on sys­tem performance.

SAP S/4HANA is the dig­i­tal core for enter­pris­es. It com­bines inter­nal and exter­nal ele­ments into a sin­gle liv­ing struc­ture that goes beyond a tra­di­tion­al ERP sys­tem. The most obvi­ous advan­tages are the use of new and scal­able user inter­faces, bet­ter accu­ra­cy in data col­lec­tion, greater flex­i­bil­i­ty, and high­er pen­e­tra­tion. For instance, those that work in finance can ben­e­fit from effi­cient shared ser­vices and faster finan­cial close.

These days, orga­ni­za­tions have a crit­i­cal need for real time infor­ma­tion. Com­pared to the long data analy­sis and report­ing times of SAP ERP, SAP S/4HANA stands out in a class of its own. Users can now com­pile reports and ana­lyt­ics while using the sys­tem. This is thanks to the effi­cient HANA inno­va­tions that allow orga­ni­za­tions to swift­ly col­lect and uti­lize real time information.

Exam­ples of SAP S/4HANA abilities

In prac­tice, S/4HANA can be used to exe­cute any core func­tion in a giv­en orga­ni­za­tion. More­over, a mul­ti­tude of oth­er SAP solu­tions can be inte­grat­ed for more spe­cif­ic and inno­v­a­tive approach­es per busi­ness area and need.

For instance:

• Finan­cial man­age­ment solu­tion, includ­ing finan­cial and man­age­ment account­ing, accounts payables and account receiv­ables, asset accounting
• Pro­cure­ment solu­tion, includ­ing S/4HANA com­pre­hen­sive pro­cure­ment process and demand planning
• Sales solu­tion, includ­ing sales process­es for core busi­ness func­tions and Hybris sales and mar­ket­ing tools
• Logis­tics solu­tion, includ­ing pro­duc­tion plan­ning and qual­i­ty management
• Human cap­i­tal man­age­ment solu­tion, includ­ing core HR process­es and trav­el man­age­ment. More­over, it is sim­ple to add the best in the mar­ket, cloud-based HR-solu­tion SAP Suc­cess Fac­tors to S/4HANA. It includes HR and pay­roll, time man­age­ment, train­ing and devel­op­ment, com­pen­sa­tions, recruit­ing and analytics.

S/4HANA means con­sid­er­able cost sav­ings and opti­miza­tions in orga­ni­za­tion­al management

An inter­na­tion­al met­al pro­duc­tion and engi­neer­ing com­pa­ny renewed its pro­duc­tion envi­ron­ment. With the renew­al, finan­cial man­age­ment, account­ing and human cap­i­tal man­age­ment func­tions were con­sol­i­dat­ed and dig­i­tal­ized. Fur­ther­more, the company’s pro­duc­tion process­es, ware­house man­age­ment, and report­ing were devel­oped and improved.

The com­pa­ny works in 14 dif­fer­ent coun­tries and employs 560 employ­ees. As a finan­cial man­age­ment solu­tion, it chose the agile SAP S/4HANA. After the renew­al, all nec­es­sary infor­ma­tion is now con­sol­i­dat­ed. The employ­ees can do their dai­ly tasks from wher­ev­er when­ev­er thanks to a new mobile appli­ca­tion. For exam­ple, they can do pur­chase orders with their smart phones and approve requests from human resources.

The solu­tion also includ­ed an MRP (Mate­r­i­al Require­ments Plan­ning) process autom­a­ti­za­tion. The cost sav­ings were sub­stan­tial. The new fea­tures in ware­house man­age­ment deliv­ered val­ue sav­ings of 1.75 mil­lion dol­lars. The time need­ed for a finan­cial close was cut in half: from two weeks to a week. Last­ly, where­as the com­pa­ny man­age­ment used to get its reports in a week they now get them in two hours.

How to tran­si­tion to S/4HANA?

It might not be easy to trans­fer crit­i­cal func­tions to S/4HANA not to men­tion the cloud. There­fore, it is impor­tant to have a holis­tic view on the tran­si­tion meth­ods and waypoints.

Orga­ni­za­tions can use S/4HANA on premise, in the cloud or as a hybrid solu­tion. For those orga­ni­za­tions that go with cloud, there are mul­ti­ple options: S/4HANA can be used on SAP’s pri­vate Enter­prise Cloud plat­form or in pub­lic cloud togeth­er with IaaS ser­vice providers such as AWS, Microsoft Azure or Google Cloud.

Besides choos­ing how to run the sys­tem, the orga­ni­za­tion must decide how the old sys­tem is tran­si­tioned to the new gen­er­a­tion S/4HANA. Two pop­u­lar options have been the con­ver­sion of the pre­vi­ous SAP ERP sys­tem to S/4HANA and a green field approach where S/4HANA is tak­en into use from scratch – just as if it was a new implementation.

Enter­pris­es in Fin­land have cho­sen both options depend­ing on their cir­cum­stances. There­fore, the most impor­tant thing is to first define what solu­tion is the best for your orga­ni­za­tion. To deter­mine this, an S/4HANA assess­ment is rec­om­mend­ed to map orga­ni­za­tion­al readi­ness to move towards an S/4HANA system.

Why to choose the cloud?

Cloud ser­vices offer its users the abil­i­ty to cap­i­tal­ize on the lat­est inno­va­tions and opti­mize cen­tral orga­ni­za­tion­al process­es. Auto­mat­ic sys­tem updates take place every quar­ter giv­ing orga­ni­za­tions bet­ter chances to uti­lize machine learn­ing and pre­dic­tive ana­lyt­ics. SAP S/4HANA Cloud offers inte­grat­ed process­es that are based on best practices.

The five piv­otal advan­tages for orga­ni­za­tions that have moved to SAP S/4HANA Cloud are:

• Faster exe­cu­tion times
• Sup­port cost reductions
• The pos­si­bil­i­ty to stan­dard­ize com­plex process­es and offer oversight.
• Stan­dard­iza­tion towards SAP strate­gic direction
• Flex­i­ble integration

We tell you glad­ly more about SAP S/4HANA.

Con­tact Information:
Piia Hoff­sten
Chief Oper­at­ing Officer
piia.hoffsten (a) islet​group​.fi
+358 40 5877 303

#SAP #S4HANA #islet­group #SAP­for­be­gin­ner #SAP­new­bie #busi­ness­suite #tech­so­lu­tions