Originally Posted By: Andrew Borresen

In early February 2015, SAP made what I believe is one of its most exciting announcements since its’ client server release of R/3 in 1992 – S/4HANA. You can read the press release here, but I’ve summarised more simply below.

Firstly, what is S/4HANA?

Many of us have already heard of SAP HANA in various contexts, most likely as an in-memory database platform.  S/4HANA is the 4th generation of the well-known, core SAP Business Suite (ERP, CRM etc) that was first released back in 1979 as R/2.  The product is really about the business applications that are now being built on the SAP HANA platform – so the focus is on the business value rather than technology for the sake of technology.  It’s about new types of business application which are now technically feasible because of the SAP HANA technology, for example; Simple Finance and Simple Logistics (coming later this year).  It is also about a great step forward in the user experience. It changes not only what the apps look like but how we can use them flexibly on any device, from smartphones and tablets, to desktops.

Many of you would have heard of SAP Fiori, and perhaps dabbled in it since its announcement in 2013. S/4HANA applications are completely “Fiori-tised” for a simple, easy and consistent user experience.

Why is S/4HANA significant? (This is the important part)

• It has a modern user experience – S/4HANA applications are designed from a user’s perspective with SAP Fioriapplications (who the user is and what the user needs to do). SAP’s has always been feature rich but this can breed complexity in performing system activities. S/4HANA is feature rich but also simple to use and is available on any device. To be able to develop a user-friendly app, the developers made sure to go through a FileMaker Training program.
• It’s a vote of confidence for existing SAP customers – SAP is continuing to invest heavily in its core Business Suite offering. Great if you are an existing SAP customer or evaluating what ERP solution to invest in
• The applications eliminate “old” ways of working – Take Simple Finance for example. The application eliminates month end batch processes making your financial close a “non-event”. If you are a professional services firm, you don’t need to wait to get visibility to your work in progress (WIP) – it’s always accessible so you can be more confident in your revenue forecast and earned value of your commercial engagements, while using other financial software, that you can find online, check printing service which is one of the most popular. If you’re a manufacturer and highly reliant on your supply chain, then having Material Requirements Planning (MRP) on demand, with S/4HANA, means more predictable scheduling, costing and less missing parts!
• You should consider migrating – S/4HANA applications are currently available if you are running SAP Business Suite on a HANA database. I know that is rather obvious, but I mention it because if you want to benefit from the S/4HANA apps you need to plan a migration if you are an existing SAP customer. The good news is SAP has thought of all this and provides the tools to do so. Clearly the version you’re currently on will determine the approach to moving up to S/4HANA.

SAP’s S4/HANA Master Plan: The Lingering Questions

Article Written By:  By Larry Dignan for Between the Lines

Summary: There are a few wild cards with SAP’s S4/HANA launch and the master plan to put its customer base on HANA. Here’s a look at a few issues for the boardroom to ponder.

SAP’s launch of S4/HANA previewed the company’s master plan to not only keep customers in the fold but dazzle them with business transforming applications.

However, there are a few lingering questions that’ll take months—if not years—to sort out. Here’s a look at the issues surrounding S4/HANA, which will be pitched on the boardroom level. CIOs will have a say, but initially SAP is expecting CFOs to be the ones drooling over the first installment—Simple Finance.

Our database (if you want S4). Executives at SAP’s S4/HANA launch repeatedly said that migrating databases wasn’t a big deal. “Migrating databases is not that difficult. It’s not that complicated,” said Rob Enslin, SAP executive board member and sales chief. CTO Quentin Clark reiterated that theme. But the reality is that Business Suite 4 requires HANA. It’s SAP’s database. Business Suite customers who choose Oracle or databases will be supported through 2025. Previously: SAP revamps Business Suite with new UI, HANA analytics

SAP’s argument is that the features of S4 on HANA are so compelling that customers aren’t going to sweat a database swap. The catch is that some customers may prefer Oracle or at the very least can’t get out of their contracts easily.

Bill McDermott, CEO of SAP, outlined how he thinks S4/HANA is a game changer.

We are running the entire Business Suite on HANA. The Business Suite has now been reinvented and natively built on HANA. The name of this product is S4 HANA. S stands for simple. 4 stands for fourth-generation. And HANA speaks for itself. It’s the world’s standard in-memory data platform for this generation, not the last one.

Why is it so substantial? Because, beyond TCO reduction, which is dramatic, it’s also about creating business value for the customer. Imagine your forecast and the accuracy around that, essentially segmenting the markets, the deals, and the flow so you have a greater outcome with more precise planning. Imagine if you could close your books 72 hours earlier, just to pick a number — it could be a lot better than that. And imagine the power to reinvent and simulate new business models completely on the fly and create the boardroom of the future, where the management team sit at a common area looking at all the operations of the company with real-time data, giving them feedback loops that they can make real decisions on — game changer.

Now SAP by running S4 on HANA isn’t doing something unheard of. Oracle’s stack is optimized for its database. Microsoft’s Dynamics runs on SQL. But a big chunk of SAP application customers happen to run on Oracle. You want the S4 innovation? The only way to get it is HANA. SAP argued it has to be that way.

SAP user group DSAG said it wants database freedom:

“We are very interested to see what further developments are in store for SAP S/4HANA. In terms of specific requirements, we want SAP to maintain a real freedom of choice for customers when it comes to databases, among other things. Alternatives to SAP’s HANA database must remain possible with no restrictions on functionality or performance.”

Two lines of code. SAP’s S4/HANA launch has created two lines of code. SAP apps on HANA. And SAP apps on other platforms. How SAP manages innovation, rolling out new features and keeping all customers happy should be closely watched. It’s not a huge leap to assume SAP will favor HANA-based apps. Another wrinkle: A two code line approach gives SAP customers even more of an excuse to look elsewhere as they ponder roadmaps. You’ll have to change code lines anyway so look at every option.

What’s the killer app for HANA? SAP argues that the killer app for the HANA platform is Business Suite, specifically Simple Finance, which will woo CFOs with the real-time visibility. Every revolution needs a spark and SAP execs were confident that in 2020 we’ll look back to Feb. 3, 2015 as a key inflection point. It’s all hockey stick from here, these execs say. The conundrum: You usually don’t see killer apps coming. And vendors usually don’t get to call their own killer apps.

Pricing. For early S4/HANA customers, the HANA portion of the equation is free for nine months. SAP’s Enslin said the company will evaluate pricing after the initial promotion is over. In a nutshell, HANA is 15 percent of the software cost. If that cost is $100 under the promotion, the price would be $115 after Sept. 30. CIOs seem to understand that you’ll pay for intellectual property. Expect IT buyers to analyze total cost of ownership of HANA vs. other databases and weigh the value of features.

 

That lock-in feeling. Let’s face it—any SAP customer considering HANA is already running the business on the software vendor’s app. The move to HANA doesn’t seem like much more lock-in—especially if SAP can undercut Oracle. What remains to be seen is whether SAP customers squirm at betting an entire stack on the company. At least with Oracle in the fold, there’s always another app provider to pit against SAP. Rest assured that Oracle and SAP are both playing the same optimized stack and business transformation game. At SAP’s launch at the New York Stock Exchange, Royal Dutch Shell CIO Alan Matula quipped: “Look at your current footprint. You’re already locked in.”

How long? S4/HANA is a look at SAP’s future, but many customers won’t be in a position to move quickly. SAP execs acknowledge that a move to HANA will take time. SAP will go over roadmaps with each customer plotting a move. Matula has more than 70 HANA projects running around Shell, but they are all smaller efforts for new applications and business cases. As for S4/HANA, Matula said he has to be comfortable that HANA has everything an enterprise-class database has and that the “price points make sense.” Any move to S4/HANA would be a multi-year affair at Shell’s scale. At SAP Sapphire in May, the company will roll out a managed cloud version of S4/HANA. That move will likely open up migration opportunities for customers.

 

About Larry Dignan

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet’s sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CN… Full Bio

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