At SAPPHIRE NOW keynotes 2019, SAP Co-Founder Hasso Plattner confirmed IT is trending toward the cloud saying, «Public Cloud is the way to go». Rightfully, the public option of SAP S/4HANA Cloud, delivers multiple business benefits.
What is SAP S/4HANA Cloud?
SAP S/4HANA Cloud is SAP's newest software as a service (SaaS) ERP product: the "full-cloud" version of S/4HANA. SAP software is accessed online, using an URL, rather than bought and installed on servers and infrastructure.
SAP S/4HANA Cloud stands for «S/4» (referring to the previous ERP generation called R/3) and «SAP HANA», the name of its database. SAP HANA database uses in-memory technology that allows the processing of massive amounts of real-time data in a short time, which was not possible with others legacy database such as SQL or Oracle. Results from customer transaction are instantaneous, data analysis becomes more accurate.
What are SAP S/4HANA Cloud advantages?
1) Speed of Innovation
When your company runs on SAP S/4HANA Cloud, you stay ahead of the competition in terms of innovation.
SAP S/4HANA Cloud has quicker innovation cycles than on-premise solutions since updates are delivered every three months rather than on a yearly basis.
SAP S/4HANA Cloud is the digital core for cloud innovation: «Because we move in the cloud much faster than anywhere else, future development of SAP is taking place in the cloud first», said Plattner at SAPPHIRE NOW keynotes 2019.
So, not only your system stays constantly compliant with national and international regulations, but you also benefit from the latest development, such as Leonardo, from the development platform called SAP Cloud Platform. As an example of Leonardo intelligent technologies, SAP Cash application involves matching incoming bank statements with open receivables. It is based on defined rules and leave unmatched bank statements for manual post-processing. Thanks to machine learning, a model is trained with data from past manual actions in order to learn from it and apply this information to new data to achieve a higher rate of automatic clearing.
The ‘Cloud Release Assessment and Scope Dependency’ tool, (RASD) is the personalized application SAP made available for customers to understand the impact of release changes.
The tool considers activated scope and allows you to choose the scope items based on usage.
The tool highlight changes and suggests test cases to be done and provides recommendations on innovations or new scope items that might be relevant for you.
The tool enables customers to understand the impact of quarterly release changes to the activated scope items in their SAP S/4HANA Cloud system
With S/4HANA Cloud, Integration possibilities are tremendous, either predefined or customized to you.
If your landscape includes multiple systems from various vendors used for different purposes, how do you integrate SAP S/4HANA Cloud with your already existing software landscape?
You might use preconfigured integration scenario with various SAP systems and adapt the content delivered to a lesser extent (native integration with SAP Ariba, SAP SuccessFactors…). In this case, the advantage is quarterly releases won't impact the extensions in any way.
But if you look for a combination of integrated systems that is not covered, SAP fills all functionality gaps via hooks into your outside applications: a set of application programming interfaces (APIs). Thanks to those APIs, we can create custom-defined integration to meet your unique integration needs. For example, the integration may be with a third-party system that is not covered in the best-practice content, or with processes that are not included in the best-practice content.
Using solutions that come from the same vendor and share the same code base reduces the volume of non-core ERP systems and enables the solutions to easily share the same master data and business processes, reducing the need for manual reconciliation.
SAP S/4HANA Cloud is a best in class Two-Tier ERP landscape for these combinations:
Headquarters-Subsidiary model: if your organization employs an inorganic growth policy aided by Mergers & Acquisitions, your headquarters can run on SAP S/4HANA On-Premise whereas your subsidiary run on SAP S/4HANA Cloud. Indeed, because the business needs of your subsidiaries are quite different from those of your headquarters, traditional software used by the headquarters may not be best suited for the subsidiary due to its high cost and inflexibility.
Extended Supply Chain: original equipment manufacturers use SAP S/4HANA On Premise or SAP ERP while the suppliers, subcontractors, dealers and distributors can use SAP S/4HANA Cloud.
Line of Businesses functions: your organization might also expand organically, through diversification of Line of Businesses (LoBs). In this case the legacy processes run on SAP S/4HANA On-Premise and the new LoBs run on SAP S/4HANA Cloud.
SAP S/4HANA Cloud: Two-Tier ERP deployment options
4) SAP S/4HANA Cloud Pricing model
A major benefit of SAP S/4HANA Cloud is being able to spread out costs over time. Indeed, the cloud offers the best possible cost of ownership (TCO).
With a SaaS solution, you avoid the hidden costs, very often not considered when you compare the cost of a SaaS versus an On-prem solution. In On-prem, not only you spend for licences and servers’ acquisition, but also for supervision and monitoring (archiving, disaster recovery…) and for qualified IT personnel, and again a large amount the following years: maintenance fees, higher storage capacity hardware, software upgrade, IT personnel...
When going for the cloud solution, SAP take care of it all: both hardware and software operation and maintenance is the provider's responsibility.
In the cloud world the pricing model shift from license and maintenance to subscriptions and "pay what-you-use" concepts.
When it comes to implementation costs, they are automatically reduced since the project implementation time is shrunk. Indeed, SAP S/4HANA Cloud guarantee faster implementation thanks to accelerators, best practices and the Activate methodology.
5) A guided project methodology: SAP S/4HANA Cloud Implementation portal
SAP Activate methodology for cloud provides an implementation framework and even an implementation portal, as of February 2019. SAP launched a new product on the market called SAP Cloud application life cycle management (SAP Cloud ALM) and the implementation portal is the first use case available for SAP S/4HANA Cloud customer. The portal consumes the SAP best practices and the Activate project task lists.
Implementation portal for SAP S/4HANA Cloud shows real time progress of your project
Is your organization «Cloud ready»?
The cloud offers a host of advantages including standardization. However, «Fit to standard» approach might be very challenging if your company has highly customized processes. As mentioned, you can still develop extensions using SAP Cloud Platform, but any public cloud infrastructure is not meant for massive customization.
SAP S/4HANA Cloud imposes a discipline to remain standardized. Since it might, to some extend, changes the way you do business, moving to a public cloud is more of a change management project than a technology project, as pointed out by Stefan Fruehauf, Global Project and Change Leader of PwC at SAPPHIRE NOW keynotes 2019.
We know simplification is easier to manage and enable agility to remain competitive in the digital economy. SAP S/4HANA Cloud gives you the opportunity to simplify your processes and your IT landscape.
Createch can help you to make the leap – as change management is a key component in each of our project- or guide you to the right approach based on your organization’s requirements.