Few months ago, Professor Hasso Plattner held the keynote “Your Road to SAP S/4HANA and Beyond” during SAPPHIRE NOW in Orlando.
For 97 minutes he talked how SAP S/4HANA strategy enables a whole new way of doing business with the advances in hardware and the new ERP’s Suite.
Since SAP TechEd is just around the corner and we know that S/4HANA will be the hottest topic, I want to summarizes insights and highlights the topics he brought to 20,000 people that went to Orange Convention Center in Orlando and to more than 300,000 people watching live from all around the world. I will also add some of my opinion in some of the topics he covered. If you didn’t watch his Keynote, I recommend to do. Find below the link to watch the 3 key notes help in SAP SAPPHIRE’s Conference this year.
|Bill McDermott Live, SAP CEO : Run Live, Run Simple||Link|
|Prof. Hasso Plattner Live, Chairman of the SAP Supervisory Board: Your Road to SAP S/4HANA and Beyond||Link|
|Rob Enslin, Bernd Leukert, Steve Singh Live||Link|
S/4HANA and the Digital Transformation
The number of companies going for S/4HANA is growing exponentially and the S/4HANA adoption is the fastest in whole SAP history. The true behind those statements is that many customers already own the S/4HANA as part of a package offered with the SAP HANA licensing but the majority of them are not fully operating in S/4HANA. In fact, there are many customers migrating to SAP HANA database and waiting a more clear direction from SAP. It is a general consensus that not moving this step forward will be comparable to moving 10 steps back. Especially when your customers and competitors will already be there and taking all the advantages of the new Enterprise Suite and your company not.
The numbers in August 2016 were: 3,700+ Licensed Customers, 1,200+ projects running, 270+ Customers Live in S/4HANA across 25 industries in 74 countries.
Why is S/4HANA is so good and why every company running SAP should take it? What is the business benefit of it?
It is not just about the architecture, the speed, flexibility and the simplicity… It is how to get there and re-think how to run your business and making the impossible now be possible. Everything that you couldn’t imagine doing before because of technology boundaries, think again. Now it is possible. S/4HANA can delivery business value with massive simplifications and innovations, built on in-memory database architecture, HANA, and designed in a much more modern user experience with SAP Fiori.
3 or 2 Tier Architecture?
In the current SAP R/3 based architecture, the 3 tier architecture (Frontend, Application Server and ABAP) and then the separated Database, each of them running on their own hardware (x86, Power, SPARC, AS/400, Mainframe), whenever a change is done in SAP, they have to go through testing, to guarantee that the changes will be supported by all the existing structure (that is shown in the multiple lines between the DB and Hardware in the picture above). Therefore releases are coming only every 18 months, which is a very slow and conservative strategy.
That was okay in early 90’s, but in today’s business model, this is suicide. It is all about speed and changing application as fast as business is changing. Today we need to be ahead of our customers (and competitors) with technology. With this landscape, it is impossible to manage updates in a fast-manner. Thinking on that, SAP decided to go to a single database (using columnar data storage, in-memory SAP HANA database), one platform (ABAP and JAVA) and two hardware platforms (x86 and IBM Power). SAP also decided to go to a more browser like frontend (Fiori) at the same time that they built a partnership with Apple, going for a mobile’s app frontend too. Can you imagine, so many iOS app developers all over the world developing applications for SAP that you can use in your company?
As Bill McDermott stated, giving people an agile and intuitive business experience, empowering them to know more, caring more and doing more. Combining the powerful capabilities of SAP HANA Cloud Platform and SAP S/4HANA, together with iOS, helping deliver live data to people wherever and whenever they choose to work.
So, how does the future looks like?
It still can be used in a classical 3 tier or 2 tier architecture where the 3 tier architecture consists of a client, an application server and a database layer and the 2 tier architecture has an application server built into the SAP HANA (SAP HANA XS – an extension integrated into SAP HANA). Besides the full application server, SAP HANA XS also brings a Web server and a development environment where SAP HANA appliance itself.
Where is data coming from?
From Hana VORA on Hadoop*, new data service services, BW, ETL, and data can even come from other DBs that are not HANA.
All the programs moved for HANA, were redesigned, all the Applications, programs and services, eliminating namespace conflicts, using the same structure for BW, Business Suites and any piece or Enterprise software re-written in S/4HANA and BW they can all mix and match as they use the same technology, same DB, and etc. HANA is not just an In-Memory DB.. there are tons of capabilities on HANA technology designed from scratch for HANA and S/4 HANA, simplifying adoption, coding, compatibility and etc.
*SAP HANA Vora is an in-memory query engine that plugs into the Apache Spark execution framework to provide enriched interactive analytics on Hadoop.
With HANA Clould Platform integration with other softwares, utilities and business applications is easier via interface or already loaded in HANA Cloud, bringing additional data to your business. Connecting with other applications will bring an infinite of possibilities, combining data that has nothing to do with the core of SAP (logistics, sales, finance and etc.), but can add value to your business, like for example a company that produces an application that monitors marketing campaigns over the social media, or demographic data versus consumer preferences and etc.
Over the 40 years, SAP introduced many overlapping functionalities to perform the same processes or business results, creating a confusion not only to their customers but also to the consulting community and themselves. With S/4HANA, SAP reduced the number of tables, data elements and transactions roughly by 50%, getting rid of redundant functionalities and offering a simple solution to the business. The system is now half of the size, which means, half of the complexity and reduces the probability of problems in the system too.
With the removal of aggregates, the system is now checking incoming data and insert it. After that, it is only Algorithms, accumulating data, predicting data, analysis and etc. There is no physical changes in the DB, aggregation is always on the fly, in-memory. If an error occurs, there is no ETL anymore, just algorithms changes and the results are now correct. Processes that would take 2 weeks, it’s gone. A simple system is so important. It does the same, run faster and simple, allowing explode to new applications.
S/4 HANA runs on Intel x86 and IBM Power. It’s necessary to clean custom codes and also standard code. Most of the codes in S/4HANA are new.
Moving to S/4HANA allows simplification and lowest downtime. The reduction of complexity helped also reducing the development complexity and the technology behind in-memory, SAP HANA and tables, code, transactions, objects review, offering 7x times more performance on transactional application with 10x less data footprint, removing complexity and enabling the impossible to be possible. Historical and Old data can be archived on HADOOP and be accessed by SAP HANA (more efficiently using SAP HANA Vora) in order to further reduce the online footprint.
S/4 HANA HW Setup
SAP came initially with the HANA Appliance term, which was a machine specifically designed for HANA, more flash, more memory and less disk, more CPU and multiple cores, top of line and they were going to certify the HW. But there were lot of bureaucracy to certify the hardware and besides that the HW manufactures wanted to increase the HW price because that was going to be a specific HW for HANA, adding a surcharge over the “normal” price to the same type of equipment. That was not where SAP wanted to go when they planned the Hana Appliance. The hardware is x86 like any other. It doesn’t mean you can use the hardware you want. Check here for the Certified and Supported SAP HANA Hardware:
This is a suggestion of the hardware you will going to need to the transactional system, in one machine, been possible to have more servers. According to SAP, the hardware was never cheaper than it is now, but you still need to replace your old hardware, servers to accommodate the new S/4HANA and HANA landscape, and you will want that. The 18-core CPU’s are new in the market, it is most like you are not using them. Not that the S/4HANA can’t be used in the 15-core CPU’s, but there is no better time to a cleanup and upgrade your hardware than now and make sure that you will reach the unprecedented short response times, allowing for much faster development cycles of new applications in your company.
Among the current existing customers, majority of them (48%) needed a small hardware package while a minority (14%) required an extra-large capacity hardware setup.
It took 7 years to SAP introduce the Digital-boardroom concept. Large screen, touch screen, multiple people conversation, changing and simulating data real-time.
The digital boardroom is a fully interactive analytical dashboard, real-time business intelligence and ad hoc analysis. It is a powerful tool for collaboration with different areas interacting over the same screens during a meeting for example. It helps solving an issue, discussing a change, definition of a path forward and etc.
Among the characteristics, the Digital boardroom is very intuitive and presents a self-explanatory interface, incorporating text and images, graphics, video streaming, live and dynamic data. It allows to perform planning and simulation to explore alternatives and impacts to the subject in discussion, sales prediction and etc., using 20 years of data for that, with results in matter of few seconds.
The concept of the digital boardroom is that the company is a human body and the digital boardroom is the nervous center. It is so complete that I am thinking and dedicate one blog post entirely to this subject.
Simple, Fast, Intelligent
Speed matters to feel good, and S/4HANA allows empowering business users with insights to act in the moment. System is intelligent and goes beyond automation to provide predictive suggestions giving the level of confidence that companies need to take fast and accurate decisions to react to the dynamism of the global market and the new era of the business economy going beyond automation, to predictive suggestion. The possibility of doing analytics using data sources that was never considered before, like IoT and Social Media Sentiment, Geographic data, Data from Sensors in your manufacturing equipment or even on products. Data can also be pulled in from Millions of webpages, unstructured files and documents, from different formats and database. Thinks about how can you do business with more analytical data and less transactional. SAP S/4HANA breaks the limit of the past, with a simple data model, modern user experience.
SAP has predicted that the next year, the digital transformation will be around the A.I., machine learning and augmented reality. Thanks to the Big Data, powerful hardware, and the new system’s technologies, including the in-memory database. And it is based on this prediction that SAP developed the S/4HANA Suite and a new layer to support companies progressing in this area. The capabilities of S/4HANA allows your company to understand what the next steps are, based on algorithms and data inputs from multiple sources, historical data and etc. We always had a large amount of data in the system and some of those algorithms are 10 years old, but we didn’t have the technology to read the data and find patterns among the different sources of data and make the right connections between them. This is something that can be explored better with the usage of SAP HANA VORA, which together with Hadoop, can support the machine learning process by reading data from so many different sources and formats.
Using the machine learning capabilities, one of the APPs developed by SAP intends to help making recruiting a decision that can be taken relying on the system and not only on human’s judgment. With matching algorithms not only recruiting new people but also helps to find the right people to a new job or to a customer. It is very handy for consulting companies for example. Think in companies like IBM, Accenture, Deloitte or even SAP for example, who has over than 76k employees and let’s say half of them are consultants. How to quickly identify the best resource to a customer’s project? So this process was improved with machine learning.
Another good example of machine learning improvements came from invoice matching. In the past a lower number of invoice matching was possible in the system and a higher number was relying on human interaction. SAP achieved a result of 95% on invoice matching now, reducing manual work, increasing the speed, avoiding late payments and etc.
How to get there?
SAP offers 3 transition scenarios to S/4HANA, one of them is what is called the greenfield, a new and fresh implementation available on-premise or cloud using the cloud solution of your choice.
The other scenario is called System Conversion, and basically it allows you convert from SAP ERP 6.x to SAP HANA DB and S/4HANA at one single step, only available on-premise.
You can also opt for a Landscape Transformation, if you are already running SAP ERP 6.x and had migrated your Database to HANA, and this option is available both on-premise or cloud.
How do we get from SAP ERP to S/4HANA? How do we move data, processes, what do we do with the custom codes?
First of all, it is important to understand that some functionalities may no longer be required anymore, others were replaces by SAP and you had never tried to use, but they were available and are more modern and robust, like companies that are still running the SAP R/3 4.7 for example, and never tasted the ECC and their functionalities, but now wants to move to S/4HANA. There are applications and extensions that now it might be time to change, as you can do it better, exploring what the technology gap didn’t let you try before. It is estimated that a reduction of 50% of customer custom codes can be dropped as they can now be supported by new tools.
Transition Path to SAP S/4HANA
To start the system conversion, SAP made available the Maintenance Planner. The Maintenance Planner is the strategic tool that enables easy and efficient planning of all changes in your IT landscape. This tool will check among the data if your current ECC environment is ready to S/4HANA.
Check here the minimum requirements / pre-requisites: Business Suite and S/4HANA Roadmap and Release Information
If the system meets the requirement, it will be checked the current configuration, add-ons, business functions, industry specific solution to ensure that the S/4HANA will have compatibility. Then a check over the custom codes to identify scope and data structure conflicts based on the S/4HANA Simplification Database. This check is done through the Readiness Check Tool, a Fiori dashboard, simple and clean with the check’s results and recommendations. Keep in mind that some custom codes might not be able to migrate, and those will have to be redesigned or in many cases, retired, as SAP can provide a functionality for that in the standard.
The next step would be the Source and Target systems check, including Hardware, OS and file system, users and access. After that the DMO run start, which is the actual conversion to the S/4HANA in one step, using the database migration option of SUM. And finally, the post conversion checks, which include the connectivity, users access, 3rd party integration validation and etc.
Check here a good step by step of the Maintenance Planner:
How to use Maintenance Planner for S/4HANA Conversion
If everything goes okay with the system conversion, then the new system can be released to users and they will start their experience by using the SAP Fiori Logon screen.
The true is that SAP made a huge effort to make sure that the transaction from ERP to S/4 would be fast, clean and secure with a very short downtime.
So, are you ready to take the pill?