S/4HANA, the latest SAP Business Suite based on the in-memory SAP HANA technology, is the next generation – intelligent ERP. With the support for the traditional ECC platform expected to end by December 2025 (source –sap.com) and all the Core SAP products optimized or being optimized for the SAP HANA database, the question is not whether to migrate or not to the new ERP, but when and how?
To understand S/4 HANA and why it is essential, we must understand the buzz word of “Digital Transformation”.
Digital Transformation is a revolutionary way of doing business leveraging new Technologies. This means that we make a paradigm shift from being a reactive business model to a proactive business model by building the right platform, utilizing the existing business data.
Following are the 5 main reasons we see S/4 HANA is mandatory for any organizations’ Digital Journey.
Reason 1 – S/4 HANA Better User Experience
The Simple, Role based and Responsive User Experience (UX) ensures that there is significant shift from purely functional view to a single entry point access having common design across all business processes. This removes the handling complexity and significantly improves efficiency.
For example – Consider a complex Business Process of Clearing Invoices from Incoming Payments. Following is the difference when the same process is used in Traditional SAP ERP and in SAP S/4 HANA.
Reason 2 – S/4 HANA Integration Capabilities
As a part of digital transformation, along with UX, it is critical to understand end customers’ needs so that we can provide them a customized service or product. And to achieve that, it is imperative that the ERP communicates with outside world effectively and efficiently. S/4 HANA is designed to fulfil the end-to-end digital cycle requirements. S/4 HANA is optimized for end-to-end digital processes that resides on single data source. Thus, S/4 HANA can easily communicate with SAP cloud as well as with other cloud vendors like AWS, GCP and Azure. Integration with SAP Hybris, SAP Ariba,
SAP Fieldglass, SAP Concur etc. is out of the box supported.
Reason 3 – S/4 HANA Digital Supply Chain
With the advent of Big Data and the tools to save and process that kind of voluminous data, it is a need of the hour, to digitised the existing supply chain in order to remain competent in the market. Since the ways of collecting data and reading patterns have changed, the old business processes needs to change along with them.
The current ERP serves as a classical system to store transactional data and thus falls short when the requirement is to fetch real time data. S/4 HANA allows users get away from this traditional system and allows to leverage the core capabilities of the platform, such as IoT or a business network connectivity.
Reason 4 – S/4 HANA Design Principles
To support customers’ digital journey, SAP has applied key design principles in S/4 HANA. The Simplified, Cloud First approach with a Single code-line structure, be it on-premise or on the cloud, makes the implementation and extension scenarios easier than any other setup. The Flexible deployment options, reduces complexity and brings down the Total Cost of Ownership (TCO).
Reason 5 – S/4 HANA Extensibility
All the customers who have implemented SAP ERP, have, in one way or the other, modified or enhanced the standard SAP capabilities to suit their business needs. These extensions were the result of complex calculation and in most cases, dependent on some external entities to fulfill the tasks.
S/4 HANA out of the box supports two types of extensions – In-App Extension and Side-by-Side Extension. In-App extensions are directly built inside S/4 HANA system while Side-by-Side extension leverages SAP Cloud Platform as extension platform. Thus it is evident that all the custom business processes can easily be developed, enhanced and maintained. Also, extension support to SAP Cloud Platform ensures that we can effectively communicate with the outside world.
Conclusion
This blog tries to clear the question/confusion that many existing customers, who are weighing their option of SAP S/4 HANA as an ERP, have. Keeping SAP roadmap in mind, it is justified in saying that, SAP S/4 HANA is the way ahead. Best way to go for it is to have a small Proof of Concept in place and test the results for yourself.
You can always contact us if you have specific questions on SAP S/4 HANA planning, strategy and implementation.