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Powering the Digital Transformation with SAP S/4HANA: A Q&A on Why SAP S/4HANA

September 30, 2015

The digital transformation is picking up speed and driving enterprises to take a look at every area of their business. Since SAP announced SAP Business Suite 4 SAP HANA (SAP S/4HANA), its next-generation  business suite, earlier this year, companies around the globe have been asking how a transformed ERP can help them innovate and drive business value.

To make the leap to SAP S/4HANA, companies need to understand how the technology will benefit their business and how to assess their landscape to determine which adoption — on-premise or cloud — is best.

During this one-hour chat, Mark Dudgeon, Brian Burke, and Craig Rich of IBM took readers’ questions on the importance of SAP S/4HANA and best practices for adoption.

View the online chat replay and check out the entire, edited transcript below.

Meet the panelists: 

Mark DudgeonMark Dudgeon is the Global SAP CTO for IBM GBS SAP Service Line, based in Edinburgh, UK (but typically only there on weekends). Having spent 20 years in architecture design and delivery for some of IBM’s largest SAP deployments, Mark’s role is now a wider remit ensuring that IBM has the right partnerships, capabilities, and offerings to support its customers in their digital transformational journey with SAP at their core.

Brian BurkeBrian Burke is the IBM SAP Global Alliance executive responsible for the relationship with SAP representing the entire IBM portfolio of hardware, software, Cloud, and services. He is also responsible for HANA on Power and HANA Cloud globally for the IBM SAP Alliance. This is his 25th consecutive year handling the Alliance with SAP and has been with IBM for 35 years. He has spent significant time at SAP in Walldorf, Germany as well as SAP Labs in Palo Alto, California. He is located at SAP Headquarters, in Newtown Sq. Pennsylvania. Brian has his MBA from Temple University.

Craig Rich

Craig Rich is IBM's SAP HANA and Analytics Leader for North America, based in Austin, Texas. He has spent the past 18 years in the business analytics space and is responsible for helping SAP clients get more value from analytics, through applying new advanced technologies and capabilities to their data to unlock new competitive advantages. Craig has significant experience transforming IBM customers' data and analytics capabilities by leveraging the capabilities of HANA, and he has responsibility for sharing the lessons learned and IBM's thought leadership across the practice.

Live Blog Powering the Digital Transformation with SAP S/4HANA
 

Transcript

Natalie Miller, Moderator: Welcome to today’s Q&A on Powering the Digital Transformation with SAP S/4HANA. I’m Natalie Miller, features editor of SAPinsider and insiderPROFILES, and I’m pleased to have Mark Dudgeon, Brian Burke, and Craig Rich from IBM here today to answer your S/4HANA questions.

Hello Mark, Brian, and Craig! Thank you for being here today!

Mark Dudgeon, IBM: Hello, everyone; Mark Dudgeon, Global SAP CTO from IBM here, and happy to answer your questions around S/4HANA and the HANA platform.

Brian Burke, IBM: Hello, from Brian Burke. Thanks for joining, and please let us know if you have any questions on HANA infrastructure deployment options — cloud or on premise or both.

Craig Rich, IBM: Hello, everyone; Craig Rich, IBM SAP Business Analytics Leader. Very excited to be a part of the panel and assist in providing clarity in how the market is utilizing S/4HANA.

Natalie Miller, Moderator: There are already many great questions coming in from readers, but to kick things off, what are you seeing in the marketplace in terms of interest in SAP S/4HANA?

Mark Dudgeon: Hi, Natalie. Previously there was limited interest from customers in adopting or migrating to Suite on HANA for their mission-critical ERP. “So what if it’s a faster database?” was the thought. But S/4HANA is a game changer, and we are seeing huge interest in the “What, Why, and How” of S/4HANA and customers now embarking on the S/4HANA journey.

Craig Rich: HANA has certainly been a very hot topic with our clients from an analytics perspective — as an analytics platform that provides new opportunities to our clients to leverage their investment in SAP and integrate their SAP data with the rest of the enterprise, and one that provides new, advanced analytical capabilities beyond just improved performance.

Brian Burke: Natalie, this is also helping clients evaluate and sometimes accelerate the movement of SAP workload to the cloud. The evaluation of on premise or cloud is still critical, as some SAP customers will want and need to keep HANA on premise. This is especially true of customers who are running ECC, non-HANA, on IBM Power Systems.

Comment from Sudheer: Is there any cutoff date for migrating from Oracle to HANA (BW on HANA and S/4HANA for Business Suite)?

Mark Dudgeon: Hi, Sudheer. SAP has committed to support other databases until 2025 (see OSS Note 1648480). While SAP will continue this support, and certainly provide new functionality (especially legal and fiscal changes), my view is that all new developments (especially innovations) will be developed on a “HANA First” — and in many cases, for new innovations, “HANA Only” — basis. So while support is maintained, access to new innovations may be restricted.

Comment from SK: What options are available to feed data into HANA? Does it help in speeding up the process? Today, some of our data loads can take hours on the AnyDB platform.

Craig Rich: There are a number of options to load data into HANA, from utilizing SLT for real-time integration to ETL tools like SAP Data Services. In our experiences, long batch load schedules have been a big driver for organizations moving to HANA. The real-time extraction and simplification of the architecture has drastically improved load times. We have seen 10- to 12-hour load windows be reduced to 2 to 4 hours, which provides a number of benefits from reallocation of resources to improved SLAs.

Comment from Angelica: Is Simple Finance available to implement in Latin American countries, including all the localizations?

Mark Dudgeon: Hi, Angelica. It’s a very good question, and the short answer is that for Latin America, the following country versions are supported in S/4HANA Finance 1503: Argentina, Brazil, Chile, Colombia, Peru, Venezuela, and Mexico.

However, with S/4HANA Finance there are a number of functionality compatibility restrictions that need to be validated — e.g., line-of-business functionality, industry solutions, and country version restrictions — as part of an S/4HANA adoption project based on “as is” functionality and future requirements. This is not only needed during the prep phase, but should be revisited during key checkpoints during the project.

As indicated, in general, S/4HANA Finance is available to implement in Latin American countries. However, functionalities may not be supported with the current S/4HANA Finance. For example, joint venture accounting, which tends to be specific to Oil & Gas, is not available yet for S/4HANA Finance 1503; Oil & Gas won’t be readily available for S/4HANA Logistics until a later date. Transfer pricing functionality and, for the likes of Brazil, country parallel depreciation functionality are not yet supported.

With new S/4HANA Finance releases 1508 and 1511 — what was previously referred to as sFin 3.0 is due in November as the next big release — a number of these release restrictions will change.

So, the main areas to validate are:

IBM is also augmenting this with our early project experiences and lessons learned, and is working closely with SAP around this “dynamic” roadmap. Let me know if you are looking for some specific details and lessons learned from early projects.

Comment from Bernd: I hear that IBM is well prepared to serve clients with certified consultants on SAP’s development platform, HCP. Can someone share more information about the IBM skills in that space?

Brian Burke: Bernd, you are correct, IBM has the largest number of skilled consultants on HANA overall, and with HCP in particular, outside of SAP.

Comment from Guest: Which industries and geographies do you see having high adoption rates for S/4HANA?

Mark Dudgeon: There are no fixed trends, from what we are seeing. There is general interest across industries — less so for Oil & Gas due to some restrictions on functionality with S/4HANA Finance, and more so for distribution and CPG companies, and Europe. It is sometimes a case of certain geographies tending to be early adopters of new innovations (e.g., Nordics and France) rather than other countries that tend to take a more “wait and see” approach (e.g., UK and Germany).

Comment from Angelica: Does Simple Finance offer the same functionality (modules) available in ERP 6.0 (for example, Treasury Management)?

Mark Dudgeon: Hi, Angelica. This is partially answered in the earlier question on country versions, but again, a good question. S/4HANA Finance covers the same modules as SAP ERP 6.0, but certain existing functionalities and/or add-ons are not available with the current S/4HANA Finance version.

With S/4HANA Finance, the standard FICO modules have been redefined (“S/4HANA-tized”) and new functionalities are introduced, such as new asset accounting and cash & liquidity management. New G/L functionalities will vary based on the migration starting point, which also needs to be reviewed prior to starting the S/4HANA journey (e.g., starting from the new G/L vs. the classic G/L).

In summary, S/4HANA Finance 1503 provides the same functionality, but with the compatibility restrictions referred to in the earlier answer.

So, initially look to the following:

  1. SAP Simple Finance, on-premise edition 1503 release scope (OSS Note 2119188)
  2. See the SAP online help for a detailed overview of SAP Simple Finance, on-premise edition

And also refer to the OSS Notes on restrictions referenced earlier:

  1. Release restrictions for SAP S/4HANA Finance, on-premise edition 1503, are listed in OSS Note 2127080 and OSS Note 2117481
  2. Localization requirements will need to be reviewed based on OSS Note 2153644

For an overview of some of the benefits and a summary of new functionality (e.g., new asset accounting, smart cash management), see this document, which is based on the CFO’s point of view of S/4HANA Finance.

Comment From Bernd: HANA on Power is relatively new on the market. Is there a robust roadmap available to give clients a clear feeling about which new models/features will be available?

Brian Burke: Yes, HANA on Power is certainly one of our great solutions for SAP HANA deployment along with the IBM Cloud. Running HANA on Power Systems is hugely beneficial for a number of reasons. Right now, BW HANA is supported for Power Systems. IBM and SAP are working together to support Suite on HANA and S/4HANA on Power Systems as well. This should occur this year. The number of SAP customers running non-HANA SAP on Power Systems is over 5,000 worldwide, so this is a huge amount of customers who now have another option.

Comment from Julius Rusnak: If we consider the migration to an “in-memory business suite” the enabler for much more accurate and faster reporting with a single point of truth, then migrating to SAP S/4HANA could cause a mild headache to at least some managers. Not all feel comfortable with reports that are fast, accurate, and well traceable. With this in mind, the question is: In your experience, where within the customers’ organization structure are the biggest obstacles to adopting this change?

Craig Rich: Julius, you have hit on a key point around change. Technology itself will never solve change management or user adoption challenges, and to your question, in some cases it will introduce new challenges. Technologies such as HANA and analytics should be viewed as enablers, not change. We believe the change in culture needs to start at the top and be driven down — moving companies to a data- and analytics-driven culture is a big change and some managers will see this as too much transparency. To drive this change, we focus on the new capabilities provided and how this real-time reporting capability can help organizations do things not only faster, but with new insights.

Comment from Bryan: The title of the session is “Powering the Digital Transformation with SAP S/4HANA.” Can the panel describe the best example of this that they have seen?

Mark Dudgeon: Bryan, from what we are seeing from SAP’s roadmap and early engagements with customers on HANA and digital transformation, I really believe that S/4HANA — although a work in progress — is the “ERP core to enable digital transformation” with embedded analytics, a mobile-enabled interface for anytime anywhere access, and business models built on the cloud. For some examples of what we are seeing and where we see the value of S/4HANA, see this IBM Institute Business Value study on digital transformations and view this study of CFO perspectives on S/4HANA and S/4HANA Finance to see how S/4HANA can be a technology enabler. Also, see this document on considerations of S/4HANA, which covers some other examples.

Comment from RP: What would be the role of ABAP in SAP S/4HANA? Will it be considerably reduced, close to non-existent?

Mark Dudgeon: RP, in terms of the role of ABAP in S/4HANA, it’s still there and depends on what HANA adoption scenario you take.

For migration, there is an ABAP “HANA-tization” activity for code that needs to be remediated to work with HANA (we use an extended version of SAP Code Inspector to determine the need, and optional third-party tools) and a “recommended” HANA modernization phase (which can be subsequent to the migration). For future developments, or when changes come up for existing developments, I would suggest looking at the option of using a cloud DevOps platform (e.g., SAP HCP) for these application extensions.

For new implementations, ABAP doesn’t go away, but with capabilities such as HANA Live and self-service reporting, HCP for DevOps developments, and SAPUI5 for Fiori extensions, I would expect custom ABAP in the future to be less.

Comment from Margarita: We are facing the selection of an EAM and the implementation of a new release of ERP. For the EAM, I have problems with users because they don’t want SAP PM due to its poor UI — instead, they prefer Maximo and IBM’s connectivity package to SAP. Can you give me any advice about this? Can S/4HANA help me to achieve the same usability as Maximo?

Mark Dudgeon: Hi, Margarita. If this is related to a UI issue, then S/4HANA goes toward addressing that specific issue. All S/4 HANA developed code is “Fiori enabled.” Other ECC code that has not been fully “S/4HANA-tized” may already have Fiori-enabled transactions or have the capability to have Fiori-enabled transactions developed (SAPUI5). That needs to be validated.

In summary, S/4HANA with a combination of Fiori and custom UI5 can address the issue, and the integration/TCO advantages would provide more benefits then going with SAP Maximo. Fiori and UI5 would enable PM to be mobile enabled.

Comment from Guest: I’m interested in cloud deployment. What’s the benefit of deploying S/4HANA in the cloud? Is there anything to watch out for?

Brian Burke: Cloud deployment for S/4HANA is a great solution option. Going to an operating expense from a capital expense is a top consideration for moving SAP workload to the cloud. Being able to “pay for what you use” is huge, especially when your workload needs to be elastic and flexible. In addition, being able to pay for what you use from a services standpoint (Basis, HANADB, OS, etc.) gives you good flexibility as well. With the IBM Cloud for SAP HANA, we also give you choices of over 40 cloud datacenters worldwide. Having the ability to do S/4HANA projects, migrations, etc., in the cloud also enables you to not have to “buy” hardware up front. You only pay for what you need/use.

However, as with any option for deployment, there are some things to consider as well. For example, the size of your production environment may not fit into a cloud model today, though most of the size maximums in the cloud are continually increasing. The other considerations are things like the number of bolt-ons, integration points, etc.

Comment from SteveKingCOKY: We are currently running ECC 6.0 EHP7 and run HCM. We heard at a recent ASUG event that SAP may be going in a vastly different direction with HCM in the future (5-10 years?). We’d like to know more about SAP’s roadmap and what this will mean for us as we have a lot invested in our existing system, not the least of which are hundreds if not thousands of customizations.

Mark Dudgeon: SteveKingCOKY, SAP HCM on premise will still be supported. SAP’s direction and investment in the HCM and talent management area is going to be around their cloud solutions, such as SuccessFactors and Fieldglass.

In addition to SAP’s collateral around HCM on SAP Service Marketplace and SCN, maybe this information would be of interest. I’m also happy to have a followup discussion with you, SAP, and one of our HCM consultants.

Comment from Guest: I hear IBM is well positioned vis-à-vis other players when it comes to innovation around S/4HANA consulting. How are clients reacting to this?

Craig Rich: IBM has invested early in HANA. We have a dedicated SAP Innovation Lab where we have the newest releases of SAP and non-SAP technology in environments that simulate our clients’ environments, including HANA. This has enabled us to learn early and share our experiences as well as develop accelerators and assets for our customers. These real experiences have been critical to our clients in helping them accelerate their HANA projects and better leverage the new technology to drive transformation.

Comment from Mr. Graf: From the SW development point of view, will there also be a skills shift from the traditional ABAP developer to something else more HANA specific? I guess SAPUI5 is necessary and also HANA database scripting. What developer skills are needed to take full advantage of the S/4HANA system?

Mark Dudgeon: Hello, Mr. Graf. Yes, SAPUI5 is the key “new” development skill required in this new S/4HANA-Fiori-HCP world. For ABAP, there is an uplift in core skills to take advantage of the HANA database (e.g., code pushdown), but that is a small delta and similar to what has been the case throughout the ages with ABAP.

A key consideration is a change of mindset in the way processes and developments are designed, and this is really thinking about the user experience (UX) and what a good UI would look like. So a bit like taking the mindset of an Apple developer when developing a nice, easy-to-use mobile app. Mobile developers have this mindset, but this is a new “softer” skillset that traditional developers and solutions architects need to pick up. For more on this, see the IBM Interactive Experience site and also SAP’s UX Design site.

Comment from Bernd: Brian, can we talk to real-life clients who have already had experiences with HoP?

Brian Burke: We do have a number of customers running SAP BW HANA on Power Systems today, and it’s growing daily. If you contact your local IBM rep or me, we can help you with that.

Comment from SK: Today, we have G/L data and policy data combined in the enterprise data warehouse environment to drive analytics. Are there customers out there who are bringing policy (or other) data into BW on S/4HANA to leverage the speed?

Craig Rich: We are definitely seeing customers leverage the in-memory processing capabilities of HANA as an advanced analytics engine, bringing external/non-SAP data together with their SAP data. Customers who have made significant investments in BW have typically migrated BW to HANA and continued to leverage that as an EDW advanced analytics engine. Enterprise HANA (native HANA) is also being used to integrate SAP and non-SAP data. Customers who have strong data modelers available like the flexibility and power in HANA Studio. In either case, the in-memory engine is being utilized to drive advanced calculations and integrations.

Comment from Bernd: Let’s assume I have an application with a lot of custom code in it and I consider moving that workload to a cloud-based solution — how can IBM and SAP make sure that I make the right decision?

Brian Burke: Bernd, a lot of custom code, bolt-ons, and integration points certainly are considerations for moving to the cloud. However, before a customer makes that decision, it’s a good idea to sit down with IBM and see how hard or easy it would be to move to the cloud. Most environments should be relatively easy from an infrastructure deployment perspective as the cloud will ensure that the SAP environment works just as it would on premise. It may be more important to ensure that all the custom code, etc. is looked at from an application perspective (e.g., S/4HANA) than from an infrastructure/cloud perspective.

Comment from Guest: We already use HANA Live. Does S/4HANA complement it?

Craig Rich: My assumption, based on your question, is that you are using HANA Live as a sidecar and/or you are on Suite on HANA and considering moving to S/4HANA. In either case, the HANA Live views are the same — there is a decision to be made as to whether you utilize the HANA Live views directly in S/4HANA or continue to utilize them in a sidecar scenario. We have seen both work effectively, and the decision is typically based on a customer’s long-term analytics strategy.

Comment from Vijay R: When ECC moves to HANA, does the existing data model (table names, table relations, etc.) change? If so, is new effort/training required for functional/technical teams?

Mark Dudgeon: Vijay, one of the benefits of S/4HANA is the simplified data model, where the direction is to eventually move to a few columnar-based tables per functional line-of-business area (i.e., ACODOCA in sFin 2.0). This requires no updates or record locking (all inserts); no aggregates (and batch jobs to maintain); and no indices (and expensive DBAs to maintain).

There will be some uplift in skills to understand the new data model, and data load routines/interfaces will need to be adapted. For reports/read-only custom developments, SAP introduced a virtualization layer that will map “old to new” to avoid a massive remediation exercise as part of the migration, but this needs to be tested. We also recommend a HANA modernization phase (can be post-migration) that will take code and either move it back to standard, or optimize it for the HANA database and new data model.

See slides 38-41 in this slide deck on this topic. This touches on S/4HANA Finance, but it’s the same story for S/4HANA Logistics — e.g., 28 tables to around four tables, including the core table MATDOC for Inventory Management.

Comment from Julius Rusnak: Could you please describe some cases of using “sentiment analysis” in SAP HANA?

Craig Rich: We have utilized customer sentiment data in a number of use cases. As mentioned earlier, consumer product companies have leveraged this data as part of building their demand signal repository. HANA has provided an opportunity to merge back-office SAP data around the supply chain with the unstructured real-time nature of customer sentiment data. This video provides more details on the potential power this can provide.

Comment from Julius Rusnak: Do some customers feel the need to integrate the “external view” into their reporting? In other words, can you provide some examples of mashing up internal data with external data?

Craig Rich: Julius, we believe the integration of external data into the enterprise reporting environment is very important to provide additional insights, whether it is benchmark data, customer sentiment data, or macro-economic data. This analysis is something that organizations have been doing for years manually. With the technology advances and big data capabilities that are available with HANA, we see an opportunity to automate these activities and help provide new capabilities for the business. If you look at your previous question on customer sentiment, think of the advantages for a CPG company if it can integrate its customer’s feedback into the supply chain. This is something that is helping CPG companies manage inventory levels.

Comment from Volker: Is Lumira going away?

Craig Rich: Providing an improved self-service and advanced visualization experience for customers is critical for any software company competing in the analytics space in today’s marketplace. Lumira has been SAP’s focus to address these requirements. While we cannot comment on SAP’s strategic direction with Lumira, we know that continuing to improve advanced visualization and storyboarding capabilities for its user base is critical to SAP. We are working with SAP at several clients on a Lumira adoption strategy and seeing great results, thus I see no reason to believe it is going anywhere anytime soon.

Comment from Guest: What do we need to know before migrating to the S/4HANA Finance solution?

Mark Dudgeon: See slide 22 in this slide deck for a high-level overview. That slide also has links to the prerequisites that need to be understood — in summary:

  1. Upgrade to ECC 6 enhancement pack 7 (typical upgrade project).
  2. Perform technical database migration to HANA database (can be combined with upgrade dependent on downtime window).
  3. Activation of s-innovations, such as sFIN and sLog, based on “best practice” guides. As per my earlier response to Angelica, it is critical that you validate “as is” scenarios and what line-of-business solutions and functionality you are using, including industry solutions and country versions, to ensure there are no compatibility issues.

Comment from Bernd: IBM no longer has Intel-based servers — what if a client has an Intel-based server strategy? How can IBM help here?

Brian Burke: Bernd, that is correct. Since IBM sold its Intel product to Lenovo, for SAP HANA, IBM gives you two options: one option is IBM Power Systems for HANA (see earlier answer); the other is cloud. Right now, our IBM Cloud is an Intel/Linux-based environment for SAP HANA. So, if you are Intel/Linux today, you may want to look at the cloud in order to keep the same “stack.” However, the IBM Cloud has Power/Linux in its roadmap for SAP HANA as well, certified and supported.

Comment from Guest: Do we need the new G/L to implement S/4HANA Finance?

Craig Rich: You will not need to be on the new G/L to move to S/4HANA Finance. There is a direct migration path to S/4HANA Finance as long as you are on the correct version/EP (ECC 6 enhancement pack 7).

Comment from Sanjay: Does S/4HANA support multiple languages?

Mark Dudgeon: Sanjay, S/4HANA does support multiple languages (38 in the current 1508 release), but see my response to Angelica for SAP release notes on what languages (and country versions) are supported today.

Comment from Alicia: We have old instances of SAP along with non-SAP systems. Would that impact migration to S/4HANA?

Mark Dudgeon: Alicia, see slides 23-24 in this slide deck for the various adoption scenarios. I would be delighted to discuss this further, as S/4HANA may be a catalyst for reimplementation (based on SAP Agile Activate methodology) versus the upgrade and migration of lots of legacy systems. The Central Finance scenario (Scenario 5) might also be an interim solution to get some immediate benefits of S/4HANA Finance.

Natalie Miller, Moderator: As we come to the end of the Q&A, I’d like to thank you all for joining us. And a big thanks to our panelists for these insightful answers! It’s been a great discussion.

Brian Burke: Thanks for joining this chat and thanks for all your questions. Please remember, should you need more information or have more questions about SAP HANA deployment options (cloud or on premise), please contact me at bburke@us.ibm.com.

Craig Rich: Thank you for the opportunity to participate in the panel. There were some great questions from the audience. I am sure there are and will be more questions as each person continues or begins their digital transformation with HANA. Please feel free to contact me with additional questions via email (craig.rich@us.ibm.com) and Twitter (@CraigMRich).

Mark Dudgeon: Thanks for your time. There were some great questions, and I am more than happy to help further on your journey to S/4HANA and make sure you embark on the right adoption roadmap to get there — including lessons learned from early deployments. Contact me on Twitter (@MarkDudgeon) or via email (mark.dudgeon@uk.ibm.com).

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COMMENTS

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eM.

9/29/2015 12:17:19 PM

Hmmmm....interesting aber ohne geht nicht keine...😉

Margarita

9/28/2015 10:29:06 AM

We are facing the selection of an EAM and the implementation of a new reléase of ERP.. For the EAM I have problems with the users because they don´t want SAP-PM because of its poor UI, instead they prefer máximo and IBM´s connectivity package to SAP. CAn you give me any advice about this?, S4 hanna can help me to achieve the same usability than máximo?


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