The digital economy has certainly accelerated business opportunity, but conversely, has created complexity within IT systems that is preventing organizations across industries and verticals from growing their businesses, is decreasing employee satisfaction, and is increasing costs. SAP S/4HANA experts Lance Holbert and Carl Dubler recently answered readers' questions on how exactly SAP Business Suite 4 SAP HANA (SAP S/4HANA) can benefit business, how to draft an effective roadmap to innovation, and how SAP Service and Support can facilitate your planning and transition to SAP S/4HANA when the time is right for your company.
You can access the chat replay below to read the questions and answers from the discussion, or read the full, edited transcript.
Meet the panelists:
Lance Holbert, Business Transformation Principle, SAP
Lance joined SAP eight years ago with an original focus on global leadership for Enterprise Performance Management and Analytics Services. Lance then transitioned to a role in 2014 to create a global approach and framework around the introduction of Simple Finance and S/4HANA solutions to the market. Today, Lance works directly with many of SAP’s strategic customers on their S/4HANA and digital transformation roadmaps.
Carl Dubler, Director of Product Marketing, SAP S/4HANA
With an IT career stretching back to the late 1980s, Carl has done nearly every role in the business. In his eight years at SAP, he also managed SAP’s first commercially-available cloud product and first cloud product on HANA.
Natalie Miller, SAPinsider: Hello everyone, and welcome to today’s Q&A on how to best facilitate your planning and transition to SAP Business Suite 4 SAP HANA (SAP S/4HANA) and realize its business benefits. I’m Natalie Miller, Features Editor of SAPinsider and insiderPROFILES, and I’m happy to introduce today’s panelists, Lance Holbert and Carl Dubler.
Lance Holbert, Business Transformation Principle with SAP, works directly with SAP customers on their S/4HANA and digital transformation roadmaps. With a career in IT stretching back to the late 80s, Carl Dubler is now the Director of Product Marketing for SAP S/4HANA.
Thank you both for being here today to answer readers’ questions on S/4HANA! As readers get their questions in, Lance, can you explain your role and how you work with SAP finance customers on their journey to S/4HANA?
Lance Holbert, SAP: Hello everyone, Lance Holbert here. I’m very glad to be here and can hopefully address some of your questions! We are in an exciting time with S/4HANA. I have been working directly with the product teams since the early days of the introduction of Simple Finance and S/4HANA, which was originally called “Model S.” I have been involved directly with dozens of customers in the last 18 months to help them with their journey to S/4 Finance and S/4HANA, and I have helped them reshape their business processes to find value in their S/4HANA transformation programs.
Comment from Glenn: What is HANA exactly and will it replace or complement SAP BW?
Lance Holbert: Hi, Glenn. HANA is a new database and platform on which all of SAP technology innovations will be based. It is an “in-memory” database, meaning it has rapid query response times and dramatic performance improvements from traditional relational databases. It will complement BW in that BW can now be utilized for more strategic modeling, planning, and complicated analytics needs, rather than transactional reporting.
Comment from Ritan: What is a best case scenario to turn a customer’s head toward SAP HANA?
Lance Holbert: Hi, Ritan. Finance is definitely a compelling use case in that we can address longstanding challenges in the finance and accounting space with the new solution areas. This has been our most common request from many of our customers. SAP HANA is also used in advanced reporting and analytics contexts where detailed line item volume had prevented rapid insights — now that is no longer an issue with SAP HANA.
Comment from D HALL: For a company not yet on Business Suite on HANA, is the recommendation to now go straight to S/4HANA?
Lance Holbert: Hello, D HALL. There are many paths to S/4HANA, and creating a new instance (especially in the cloud) is a low barrier for entry into getting to S/4HANA. You do not need to have a previous instance of SAP to move directly onto S/4HANA.
Comment from Gopal V: What would be a typical scenario in which we can recommend Central Finance to a customer who is buying SAP Simple Finance on S/4HANA?
Lance Holbert: Hi, Gopal. There are many scenarios in which Central Finance would be useful. The most common use case we have seen from our customers is moving to a consolidated book of financials from a complicated, multi-ERP scenario. It allows for the creation of a central ledger to review the entire company’s financials at the line item level, and it helps avoid touching multiple ERP instances to close the books, perform a consolidation, do reporting and analysis, etc. It also helps establish a new set of business structures that would more accurately represent the business than perhaps what the legacy systems show independently.
We have materials that can describe a Central Finance scenario in great detail, so let me know if you would like more information.
Comment from Sujit: There’s a lot of news about Simple Logistics being in the pipeline. What will it take to migrate to Simple Logistics (when it is released) from the current ECC Logistics framework, especially when we have the IS OIL Downstream very heavily integrated into the current ECC Logistics?
Carl Dubler, SAP: We announced the latest update to S/4HANA on November 11, 2015. It is no longer called “Simple Logistics,” but it has much of the logistics scope that you have in ECC 6.0. In fact, with the November update, S/4HANA is now at functional parity with ECC 6. We do not have an oil and gas industry solution on S/4HANA yet, but that will come in a future update.
Comment from Sujit: My company is on ECC 6.0 with an industry solution for oil and gas. How are industry solutions supported in S/4HANA?
Carl Dubler: As of the November update, S/4HANA supports these industries: chemicals, life sciences, wholesale, high tech, mining, and industrial machinery and components (IM&C). Plus, we added capability to automotive, IM&C, aerospace and defense, and mill products.
Comment from Guest: How do I find teachable pieces for S/4HANA? Are there good YouTube clips about S/4HANA? Do I need to have BW before I can have some hands-on experience in HANA?
Lance Holbert: There are many teaching assets on S/4HANA that are publicly available on YouTube or on the SAP website. Also, you can search some of our event websites (such as SAPPHIRE and TechEd) for presentation materials. And there are training classes available.
Carl Dubler: I also recommend the SAP Learning Hub. There are great classes on S/4HANA there now. And for specific S/4HANA deployment articles, please see the Cookbook.
Comment from Gopal V: Let’s say the customer has adopted SAP Central Finance. Is it a permanent solution or can the customer stop using SAP Central Finance after some time? If so, what is the standard procedure in doing such a migration?
Lance Holbert: Actually, Central Finance is originally meant to help with the transition aspect from multiple ERPs. But as the legacy ERPs are sunsetted, the Central Finance instance can become the new core financial system for the company. In this use case, there can be a migration performed from legacy systems (of which we have many different approaches depending upon the situation, version, etc.), or simply a cut-over to execute business on the new S/4HANA instance. Just to be clear, Central Finance is an S/4HANA instance (full ERP).
Comment from Yves: If a customer is at ECC EhP7 and CRM EhP3 and BW 7.0 or later and there is an SAP team of 28 FTEs, what can help in determining if we should go to S/4HANA in the cloud versus on premise?
Carl Dubler: It depends on what you mean by “cloud.” If you are looking for a “private cloud,” then that is available now with SAP HANA Enterprise Cloud from SAP and our partners. The decision there would be pretty simple based on the benefits/drawbacks of outsourcing the IT infrastructure. But if you mean “public cloud,” then you would have to discuss if the scope and extensibility restrictions that are inherent to public cloud are acceptable. S/4HANA is available for both private and public cloud.
Comment from Yves: By cloud, I did mean private cloud such as “HEC.” Thank you.
Carl Dubler: In that case, if you want help from us in identifying why and how to put S/4HANA on SAP HANA Enterprise Cloud, I suggest contacting David Sweetman (firstname.lastname@example.org) and he can route you to the right resource.
Comment from Guest: What are the major quantifiable benefits of going to SAP HANA that can bring about ROI?
Lance Holbert: It can actually be different for each customer depending on their situation, industry, and current pain points. SAP has a value management database of quantifiable value drivers where we can quickly identify what metrics apply to your situation. The idea is introduce tangible ROI, as well as qualitative metrics such as productivity improvements, reduction of manual efforts, and even employee engagement.
Comment from Guest: What types of benefits have S/4HANA customers experienced so far?
Lance Holbert: Here are some recent customer examples with which I’ve been working:
- Real-time analytics/E2E visibility (in operations, HR, sales, inventory)
- Agility (economics, growth, shrink, international, reorganization, M&A)
- Using S/4HANA as a platform for master data reorganization
- Standardization/harmonization of multiple legacy ERP systems, digital transformation/business process innovation
- Central Finance
- Increased focus on statutory/regulatory/compliance
- Predictive profitability
- IPO readiness
- Liquidity/cash position/working capital
- Transfer pricing
- Soft close
Comment from Verol Thompson: My question has two parts. Part 1: SAP ERP software is divided into two tranches, commercial (private sector) and SAP ERP for public sector. Will S/4HANA also operate on two tranches, since governments tend to do things differently, especially now that SAP will be delivering canned apps [process] in SAP Fiori, which sits on top of S/4HANA? If there will be two tranches of S/4HANA, can you touch on the differences?
Part 2: After 18 years of implementing BW and its associated analytical components, I stopped working and have been focused the last three months on everything S/4HANA. (As it will eliminate the need for BW, which makes all the sense in the world. From BW’s inception, I realized we were just moving the same data around to report on it as best as we could). Does it make sense to focus on a career path in S/4HANA – I already do SAP HANA – or should I consider something else, like farming or writing?
Carl Dubler: For Part 1, there will continue to be industry solutions on S/4HANA, including for the public sector. I think this is the spirit of your question, let me know if not.
For Part 2, I am an old BI guy myself, and I think you are on the right track with moving your career toward the transactional side of the solution. That’s certainly what I’m doing. However, BW is not “dead” and won’t be for some time. We still need it for some apps like BPC. Or some customers might want non-ERP information in the warehouse. But I think you are on the right track here. Keep pushing your knowledge to be closer to the source transaction and understand how to apply S/4HANA to all kinds of use cases.
If you decide to go into farming, make sure you look at the IoT sensors for agriculture and get those integrated into S/4HANA! As for writing, there is no money in that, trust me.
Comment from Yves: This is a comment to Verol’s question and Carl’s answer: Where I sit in the healthcare world, we have heavy ECC and CRM usage and started using BW four years back. We are also a Cognos Enterprise Data warehouse shop. With the amount of headaches in extracting, staging, and cubing the information from our transactional environment and the little distance we covered using BW, I am definitely contemplating eliminating BW when I go to HANA if we will get there within two years.
Carl Dubler: I’m not surprised. I hear this comment a lot, and with S/4HANA, I think it is quite possible to do this. But I want to be sure to say that it is not our official position that BW is going away.
Comment from Matt: My company is conservative when it comes to upgrades and risk-taking, so although our ultimate goal is to get onto S/4HANA, we are currently planning a project just to upgrade to the latest ECC 6 enhancement pack, using SAP HANA as our database. Once we’re comfortable that nothing negatively affected our current business processes and we’re comfortably running on HANA, then we’d start the project to upgrade to S/4HANA. From what you’ve seen from other clients, does this seem like a logical approach, or are we being too timid to roll the HANA and S/4HANA project into one?
Lance Holbert: Hi, Matt. You are describing a situation of moving your current ECC on another database to HANA (we call that Suite on HANA). This is actually the lion’s share of the work, compared to the relatively simple step of moving from Suite on HANA to S/4HANA. In other words, you are most of the way there once you get the HANA database in place. The business process will remain largely the same, except for the enhancements you would get with the new Fiori interfaces, the simplified table structures, etc. It is generally a low-risk, low-disruption approach if you are planning an “apples to apples” migration. Of course, there is also a chance to introduce enhanced business processes along the way and use the migration as a transformation program as well. We have all of the pros/cons and risk considerations in mind when SAP Services gets involved to help plan these migrations and establish your custom roadmap to S/4HANA.
Comment from Guest: I have taught SAP ABAP for the past five years. I would like to see some potential in connecting my past experience in SAP with extension into HANA. Are the two totally irrelevant?
Lance Holbert: Not at all. We have many skilled ABAP technologists who have smoothly picked up the HANA skills. They work together nicely, and ABAP is not in any way becoming an obsolete skill set.
Comment from Guest: Are there certain S/4HANA adoption scenarios?
Lance Holbert: Yes, we have many adoption scenarios, use cases, and functional and technical roadmaps for S/4HANA. We can usually understand which are relevant to you in a quick discussion. You can contact Carl or me for a description and overview of these scenarios as they might apply to your situation.
Carl Dubler: I’d suggest looking at the cookbook for details. You can “convert” an ECC 6 installation to S/4HANA, or you can install a new instance of S/4HANA and use our various data migration tools to move the data.
Comment from Glenn: HANA is “in memory,” so for shops that have a traditional SAP BW system, is the BW data placed in memory or is the ECC data placed in memory? If ECC data is in memory, does HANA have the capability to run reporting straight off of ECC tables? My confusion is this: If I have SAP BW and HANA, which should I choose to do reporting in?
Carl Dubler: You could run both the Suite or BW on HANA, and there are many choices for how to do this. As I have said in other replies, BW is not “dead,” however many customers might find their need for BW is lessened thanks to what S/4HANA can do. I’m not sure you can “get rid” of BW without knowing what the application is; for example, if you run BPC, you still need BW. Or if you incorporate non-ERP data, you still might need BW.
Comment from Yves: In response to Carl’s reply on BW not going away, I agree. There is a need for some format to capture non-SAP data when using the consolidated analytics. Creating tables on HANA platform may do the trick — tables referring to non-SAP databases or tables collecting data from non-SAP systems and creating views. Thanks to you all for this session. Have a great year with these exciting times coming.
Carl Dubler: Thanks. Yes, exciting times ahead applying all the “simplifications” and new UX to business cases.
Comment from Guest: What are the requirements for moving to S/4HANA?
Carl Dubler: If you want to convert an existing ERP to S/4HANA then you start with ECC 6, any enhancement pack. Before our November update, you needed EhP 7, but that is no longer the case. You can be on any EhP and use SUM to go to the new code. And of course the database needs to be SAP HANA as well. There are a number of options to migrate to SAP HANA, but it could be as simple as using SUM with the DMO option. See the cookbook for more details.
Comment from Guest: How does SAP support a cloud deployment of S/4HANA?
Carl Dubler: You can run S/4HANA on a private could (SAP HANA Enterprise Cloud) or there are public cloud versions as well. The public cloud versions have a more focused scope than on premise, and like with any public cloud solution there are limits to how you can customize and extend.
Comment from Yves: Are SAP’s cloud apps on a HANA platform (SuccessFactors, Ariba, hybris, Concur, etc.)?
Lance Holbert: A key aspect of our roadmap is to power all of our solutions using S/4HANA as the digital core. Each of these will be integrated to the SAP HANA core, in which data from these applications will flow directly through HANA even with the option of cloud application integration to on-premise or private-managed cloud implementations of S/4HANA.
Comment from Wayne: When will SAP VC and APO be available on S4/HANA?
Carl Dubler: I'm not an APO expert, but I suggest reading about the roadmap of APO on SCN. There is a robust conversation about this and IBP.
Comment from Guest: I have not seen the logistics tactical side of ECC S/4HANA yet. I see the Simple Finance. When will the full SCM with S/4HANA be integrated, such as DP, SNP, SNC, and SPP? These all have their own processes and data.
Carl Dubler: With our November update to S/4HANA, we have functional parity with ECC 6. So this means more than just finance, but also the logistics components. There are plenty of documents about scope and use cases on SAP’s SCN site.
Natalie Miller: Many thanks to everyone for joining today’s chat. And a very special thank you to our SAP panelists, Lance and Carl!
Comment from Gopal V: Thanks for the session. It was really helpful to us all. Thanks to Lance and Carl!
Comment from Guest: Thanks for an informative session!
Lance Holbert: Thanks very much for joining our session. Feel free to reach out to me with any other questions at email@example.com.
Carl Dubler: Thanks for your questions, everyone. For one-stop shopping on S/4HANA technical information, I recommend this link to the SAP Community Network. You can also contact me at firstname.lastname@example.org.