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JUNE 2017
HANDBOOK
SAP S/4HANA
ERP platform
options expand
but raise
deployment
questions
FOTOLIA
ENTERPRISE APPLICATIONS
HANDBOOK
JIM O’DONNELL
AP makes choosing
S
S/4HANA modules easier,
but path unclear for some Questions have swirled around SAP S/4HANA from the moment the next-
generation ERP platform was released in 2015. Although it appears that most
/4HANA Cloud adoption
S
SAP ERP users are keenly aware of S/4HANA, the vast majority of them have
starts to flourish in fast-
growing companies not yet made concrete efforts to move to the new platform.
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There are a few fundamental factors you need to consider in any SAP
In this handbook: S/4HANA implementation. You must fully understand your current
Editor’s Letter
environment and know what critical functions you want in S/4HANA. You
need to know when to make the move based on a number of criteria, including
AP makes choosing
S the time it will take and how much an SAP S/4HANA implementation will
S/4HANA modules easier,
but path unclear for some disrupt current business processes. You must decide whether to deploy the
on-premises, cloud or hybrid option. And if you decide to deploy in the cloud,
/4HANA Cloud adoption
S
you need to choose among public cloud, private cloud or a combination.
starts to flourish in fast-
growing companies
This handbook provides a valuable starting point on your road to an SAP
illarys Blinds speeds SAP
H S/4HANA implementation, with detailed information about the S/4HANA
S/4HANA upgrade with
roadmap, a discussion of various cloud deployment options and a real-world
Panaya tool
example of how some tools can make a huge impact on the speed and cost of
an upgrade.
3 SAP S/4HANA ERP PLATFORM OPTIONS EXPAND BUT RAISE DEPLOYMENT QUESTIONS
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DAVID ESSEX
AP makes choosing
S
S/4HANA modules easier,
but path unclear for some SAP continues to build out S/4HANA -- its next-generation ERP system --
by adding modules for common business processes such as procurement,
/4HANA Cloud adoption
S
inventory management and logistics. In doing so, the way forward from
starts to flourish in fast-
growing companies on-premises ERP is becoming clearer for some users. But ongoing questions
about the completeness of some S/4HANA modules -- along with apparent
illarys Blinds speeds SAP
H
S/4HANA upgrade with
differences in the on-premises and cloud versions -- are causing most SAP
Panaya tool users to hesitate.
4 SAP S/4HANA ERP PLATFORM OPTIONS EXPAND BUT RAISE DEPLOYMENT QUESTIONS
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5 SAP S/4HANA ERP PLATFORM OPTIONS EXPAND BUT RAISE DEPLOYMENT QUESTIONS
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have spent a huge amount in the past [on maintenance] when we have not kept
In this handbook: it current.”
Editor’s Letter
SAP CLAIMS BUSINESS SUITE REWRITE MOSTLY COMPLETE
AP makes choosing
S
S/4HANA modules easier,
In his keynote at the 2017 Sapphire Now conference, Hasso Plattner, SAP SE
but path unclear for some
co-founder and chairman of the supervisory board, said most of the porting of
/4HANA Cloud adoption
S Business Suite functions to S/4HANA modules has been completed, and the
starts to flourish in fast-
growing companies vendor is now turning to new features. “Our impression is that we have covered
[all the Business Suite functions]. It could be there are gaps because we retired
illarys Blinds speeds SAP
H
software,” Plattner said. “Don’t panic. We can look at it, we can talk about it.”
S/4HANA upgrade with
Panaya tool
Yet Plattner also made clear that the software as a service (SaaS) version of
S/4HANA, which runs on the SAP Cloud Platform, will be where most future
applications are developed, partly because it eases integration with other
vendors’ data and SaaS offerings. “The whole race in our industry is to go as
quickly as possible with as many users as possible to the cloud,” he said.
While S/4HANA modules have been released at a steady pace since the
product debuted in February 2015, there’s still some debate about whether
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S/4HANA is functional enough for most users, though SAP is quick to dispel
In this handbook: any doubt.
Editor’s Letter
“It is full-fledged ERP,” said Sven Denecken, an SAP SE senior vice president
AP makes choosing
S and head of product innovation and co-innovation for S/4HANA. Denecken
S/4HANA modules easier, said the roadmap will next lead to S/4HANA modules for vertical industries,
but path unclear for some
often co-developed with SAP customers in those industries. By early
/4HANA Cloud adoption
S 2018, SAP plans to add blockchain capabilities to the S/4HANA treasury
starts to flourish in fast- management module.
growing companies
As for the deployment decision, Denecken said there are three choices:
on-premises, single-tenant SaaS (private cloud) or multi-tenant SaaS.
7 SAP S/4HANA ERP PLATFORM OPTIONS EXPAND BUT RAISE DEPLOYMENT QUESTIONS
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SAP officials say customers shouldn’t expect the old modules to be completely
replicated in S/4HANA modules, especially the SaaS versions, since two major
benefits of the cloud are simplification and standardization of best practices.
“That’s never the intention,” SAP’s Denecken said. “Your future is a simplified
way on HANA.”
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But Mueller said such distinctions are the crux of the S/4HANA migration
In this handbook: decision for users and the reason companies with more complex needs have
Editor’s Letter
been the slowest to consider moving. He’s also not sure how well the SaaS
version of S/4HANA meets the needs of manufacturers, which tend to have
AP makes choosing
S complex on-premises production systems that must integrate closely with
S/4HANA modules easier,
but path unclear for some ERP. In contrast, customer relationship management and human capital
management (HCM) have long since proved themselves to be well suited to
/4HANA Cloud adoption
S
SaaS delivery.
starts to flourish in fast-
growing companies
9 SAP S/4HANA ERP PLATFORM OPTIONS EXPAND BUT RAISE DEPLOYMENT QUESTIONS
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“That’s a big dilemma,” Greenbaum said, adding that SAP HCM users
are struggling with the S/4HANA roadmap, deciding whether to migrate
to SuccessFactors and the importance of integration with S/4HANA.
Organizations that aren’t interested in bringing innovation to their human
resources functions should stick with what they have, but if they want
advanced talent management, for example, and are moving to S/4HANA
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CHRISTINE PARIZO
AP makes choosing
S
S/4HANA modules easier,
but path unclear for some SAP S/4HANA adoption seems to still be a predominantly on-premises
phenomenon, but if new S/4HANA Cloud implementations are any indication,
/4HANA Cloud adoption
S
organizations may want to take another look at both public and private cloud
starts to flourish in fast-
growing companies options.
For Vivint Inc., outgrowing its existing infrastructure spurred the Provo, Utah-
based security systems provider to examine other options. Vivint has been in
business since the mid-1990s and has more than 1 million customers. Its CEO
set a growth target of 10 million customers in the next three years, according to
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“We wanted to have just one name, one chokeable throat,” Druce said.
13 SAP S/4HANA ERP PLATFORM OPTIONS EXPAND BUT RAISE DEPLOYMENT QUESTIONS
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14 SAP S/4HANA ERP PLATFORM OPTIONS EXPAND BUT RAISE DEPLOYMENT QUESTIONS
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“We’re using the same solution as the best companies in the world,”
15 SAP S/4HANA ERP PLATFORM OPTIONS EXPAND BUT RAISE DEPLOYMENT QUESTIONS
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Govindarajan said.
In this handbook:
Like the other companies on the panel, Adita wanted a system it could grow
Editor’s Letter
with, as well as software that would be around for the long haul.
AP makes choosing
S
“A lot of these cloud solutions won’t be with us,” Govindarajan said.
S/4HANA modules easier,
but path unclear for some
“When [the software] goes to the end user, and they feel that [transactions]
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JIM O’DONNELL
AP makes choosing
S
S/4HANA modules easier,
but path unclear for some Upgrades are never a walk in the park. They usually come with costs,
uncertainties and enough business disruption for most organizations to avoid
/4HANA Cloud adoption
S
the pain if they can.
starts to flourish in fast-
growing companies
An upgrade to SAP S/4HANA appears to be a painful exercise for many SAP
illarys Blinds speeds SAP
H shops, as they fear the complexity of the job and are skeptical of the return on
S/4HANA upgrade with
investment. This may be a reason why only small minorities of customers have
Panaya tool
taken the plunge.
This is not the case with every company, however, as evidenced by the
experience of Hillarys Blinds, which completed an upgrade to S/4HANA in
record time. A longtime SAP shop with several upgrades under its belt, Hillarys
used the Panaya CloudQuality Suite, a cloud-based testing and validation tool,
to test, scope and execute the on-premises SAP S/4HANA upgrade in just six
months, rather than the three years that was projected.
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“The challenge of managing all that is part of what brought us to SAP in the first
place,” Bond said. “We implemented SAP in 1999, and even then it was one of
the few standard, off-the-shelf products that could cope with the complexity
that every product [we] make each week is unique. It could help us cope with
20 SAP S/4HANA ERP PLATFORM OPTIONS EXPAND BUT RAISE DEPLOYMENT QUESTIONS
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fairly short turnarounds on blinds that are made to order for every customer
In this handbook: order we receive.”
Editor’s Letter
Hillarys implemented SAP R/3 in 1999 and steadily upgraded or added new
AP makes choosing
S applications over time. They implemented SAP CRM in 2004, upgraded
S/4HANA modules easier, to ERP Central Component (ECC) 5 in 2006, implemented SAP Business
but path unclear for some
Warehouse and reimplemented CRM with CRM 7.0 in 2010, and added SAP’s
/4HANA Cloud adoption
S mobile platform in 2014, Bond said. So they were no stranger to upgrades and
starts to flourish in fast- adding new technology, but they were not chomping at the bit to move to SAP
growing companies
S/4HANA (Business Suite for HANA).
illarys Blinds speeds SAP
H
S/4HANA upgrade with “Like most SAP businesses, we don’t relish and jump at doing an upgrade any
Panaya tool quicker than [we] have to, but for us, the noose was closing around our neck in
terms of ECC 5,” Bond said. “We’d come to the end of enterprise support and
were starting to get locked out of some of the newer SAP tool sets that were
coming through, like Fiori or all of the new technologies you just can’t do with
ECC 5.”
Hillarys knew the upgrade was inevitable, but the company was wary of the
overall project cost and the amount of business disruption that it would entail.
21 SAP S/4HANA ERP PLATFORM OPTIONS EXPAND BUT RAISE DEPLOYMENT QUESTIONS
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Added to this was the fact that, as a retailer, Hillarys had a very limited window
In this handbook: of opportunity to complete an upgrade during its slowest time period, between
Editor’s Letter
Christmas and New Year’s.
AP makes choosing
S
S/4HANA modules easier, PRIORITIZING FUNCTIONS SHORTENS UPGRADE TIME
but path unclear for some
This is where the Panaya CloudQuality Suite came in to help Hillarys get the
/4HANA Cloud adoption
S job done in a vastly shortened time frame that would not have been possible
starts to flourish in fast-
growing companies without it.
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on upgrading the most important functions and setting aside those that are
In this handbook: used the least. For Hillarys, this was vital because they had developed a large
Editor’s Letter
amount of complex custom code over the years.
AP makes choosing
S “It gives you a very objective view of ... what state you’re in with your bespoke
S/4HANA modules easier, code [custom code],” Bond explained. “Our bespoke code had grown up from
but path unclear for some
1999 all the way through to 2016, and it’s very difficult to benchmark that -- to
/4HANA Cloud adoption
S say this is where you are compared to other people, these are the areas where
starts to flourish in fast- you are complex, these are the areas in which you are very simple -- so that
growing companies
was very good.”
illarys Blinds speeds SAP
H
S/4HANA upgrade with This allowed Hillarys to identify and rank functions in terms of priority for
Panaya tool testing, which it did by taking the transactions done on the system in a given
period and determining which ones were used the most and what impact they
had on the business processes. Something that was done once a day had a
high impact and needed to be tested accordingly, while something that was
done once a year might not need testing. Fewer tests meant a faster upgrade,
but Bond maintained one of the real values was that it saved a great deal of
resources and caused less business disruption.
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“If you extrapolate and say that this is how much testing was needed, you could
In this handbook: say it would have taken years because, if everybody had done six times as
Editor’s Letter
many tests, it would have taken years to do,” he said. “But the truth is we would
just have had to put far more resources [into the upgrade] to have done it in that
AP makes choosing
S window that we did because it would have [caused] us much more interruption,
S/4HANA modules easier,
but path unclear for some it would have cost us much more hard cash, so I’m not sure if this is a case
where it saved us elapsed time. It certainly saved us cost, risk and disruption.”
/4HANA Cloud adoption
S
starts to flourish in fast- As it was, the upgrade project began in September 2015, and SAP S/4HANA
growing companies
went live in February 2016, which was actually two months longer than
illarys Blinds speeds SAP
H anticipated due to a few technical glitches in the SAP code.
S/4HANA upgrade with
Panaya tool
SAP S/4HANA SPEED ASTONISHES
The upgrade to S/4HANA also paid off in terms of speed, with significant
impact on business process improvements, particularly with CRM, Bond said.
“The SAP CRM system is not known for being a swift beast, and there’s
only so much you can do no matter how much hardware you throw at it, but,
clearly, putting it onto the HANA database platform has made a phenomenal
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difference,” he said. “In the old days, you could almost have finished the call
In this handbook: with a customer by the time you’d managed to bring their details up on the
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screen. It was that bad at times. There aren’t too many times when you’ve done
an upgrade and your internal customers are wowed by that, but this would
AP makes choosing
S have been one of those occasions. They were just astonished with the speed
S/4HANA modules easier,
but path unclear for some difference of the upgrade.”
Finance functions in ECC have also benefited from the boost in speed. “A
monthly tax report went from taking 20 to 30 minutes to literally within a
minute,” Bond said. “Some of the longer running jobs that we used to run
overnight, we can now do multiple jobs in a day, whereas before we had last
night’s snapshot and had to live with that until we got another snapshot tonight.
Now we’ve got a chance to make business decisions throughout the day
because we can afford to run them far more frequently.”
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