Navigating the Digital Transformation Journey with SAP S/4HANA

One of the biggest sporting events in Europe this year was its soccer championship, and many sports enthusiasts all over the world kept up with the results using apps on their smartphones. While checking sports scores using an app on your smartphone is now about as novel as checking the time, 10 years ago apps didn’t even exist, at least not as we understand them today. Smartphones were not very common among consumers back then — Apple introduced the first iPhone only in 2007 — and tablets even less so. Now these devices are part and parcel of many people’s daily experiences.

Technology has not only changed the way we live and play, it is also changing the way we do business — driving what is often referred to as a “digital transformation” within organizations, where a company integrates digital technologies such as mobile, analytics, and the cloud into the ways it operates and innovates. And these transformational changes are ongoing — new technologies emerge every day with the potential to transform how we think about business, such as how the Internet of Things (IoT) is changing manufacturing by enabling a vast array of things, from cars to refrigerators, to talk and interact.

With SAP S/4HANA, we provide customers with a proven path not just to achieving a digital transformation, but to becoming a digital enterprise that truly runs live, with real-time insight that enables you to act in the moment. And a key element to guide you on your digital journey is the help of an SAP partner.

Let’s take a closer look at how SAP S/4HANA addresses the unique challenges of running a business in the digital age and the role that partners can play in helping customers make a successful transition to running live.

A Digital Core for a Digital Age

With a digital transformation comes an influx of big data, both structured and unstructured, from a range of sources, such as social media, mobile devices, and web applications. Another growing driver of big data is individualized products. Henry Ford’s well-known quote — “Any customer can have a car painted any color that he wants as long as it is black” — no longer holds true as consumers come to expect tailored products and companies discover that offering customization can boost sales and increase margins.

Big data and individualized products can bring legacy databases and traditional processes to their limits, however. Traditional inventory planning, for example, simply cannot keep up. As new orders fly in at a high rate, slow batch update cycles lead to outdated information, resulting in limited visibility. This increases error rates and leads to supply shortages, which in turn affect available-to-promise levels and, finally, cause unacceptable customer churn. With individualized products, the value of each individual business transaction falls while the number of transactions increases arbitrarily by dimensions.

Organizations that want to fully reap the rewards of digital processes need a digital core to make effective use of the enormous amounts of data coming into their systems. Because it’s not the amount of data that’s important. It’s what you do with the data that matters — how you store, process, and analyze it for insights that lead to better strategic business decisions. SAP S/4HANA is the digital core that meets these needs. Based on the in-memory SAP HANA platform, SAP S/4HANA can store and process huge amounts of data while significantly reducing an organization’s data footprint. With SAP HANA, algorithms run directly in the database, eliminating the need for any pre-aggregation or redundant data structures, enabling transactional and analytical processes to run in a single system, and bringing a stable, simplified, end-to-end IT infrastructure to customers.

SAP S/4HANA, as the digital core, lets users take action based on live data. It enables real-time business processes, predictive analysis, and simulation, and offers a state-of-the-art user experience and increased agility and efficiency. Available in the cloud, on premise, or in a hybrid deployment, SAP S/4HANA has evolved from its initial incarnation as a finance-focused offering into a full ERP system for the digital age that can replace a traditional ERP solution across all lines of business, including finance, human resources, sales, service, marketing, procurement, manufacturing, asset management, supply chain, and research and development (see Figure 1).

Figure 1 — SAP S/4HANA provides a digital core for managing an enterprise across all lines of business

A Guided Path to Implementing SAP S/4HANA

At SAPPHIRE NOW in May 2016, we found that customers were not asking whether or why they should move to SAP S/4HANA — they were asking how to make the move most efficiently and with the maximum business benefit. The good news is that a solid framework of support is in place to help customers successfully make the transition to running live with SAP S/4HANA, anchored by SAP’s approach to change management and the expertise of SAP partners.

Customers can convert to SAP S/4HANA from their existing SAP systems, such as SAP Business Suite, or they can start from scratch. For some organizations, the move to SAP S/4HANA will be their first encounter with in-memory technology and thus an entirely new architecture. This type of transition requires a balance between protecting your existing investments and making the long-term changes required to prepare a system for the future.

To help manage this balance, SAP’s guiding principle is to give customers time and control over the changes required for the conversion to SAP S/4HANA. To support this approach, SAP created the Simplification List,¹ which details on a functional level how individual transactions and solution capabilities will change with SAP S/4HANA so that customers can prepare early in the planning phase. The Simplification List is complemented by the Custom Code Migration Worklist,² a worklist of custom code entities that do not comply with the new data structure and scope of SAP S/4HANA, which helps customers adapt their custom code for use with SAP S/4HANA.

The other critical component to achieving the right balance during an SAP S/4HANA implementation journey is the expertise of SAP partners. SAP’s partner ecosystem has played a fundamental role throughout SAP’s history, with partners selling, implementing, extending, and maintaining SAP solutions around the globe and in many micro-verticals. And SAP S/4HANA has joined those ranks, with partners closing a high percentage of software deals and performing the vast majority of SAP S/4HANA implementation projects. The SAP partner ecosystem is essential to SAP S/4HANA adoption, and SAP S/4HANA provides an opportunity for partners to support SAP customers with their implementation, integration, and development knowledge, including building apps for new markets, such as apps that use the Internet of Things (IoT) and localization.

More than 3,700 customers of all sizes, in all industries, have started the journey to SAP S/4HANA to digitize their business (see the sidebar “SAP S/4HANA in Action” for two examples), many with the guidance of experienced SAP partners — partners that can also help customers extend SAP S/4HANA to meet their unique needs using SAP HANA Cloud Platform.

Extending SAP S/4HANA with SAP HANA Cloud Platform

Customer needs are unique and changeable, and developers, independent software vendors (ISVs), systems integrators, and resellers must constantly adapt their business models to stay relevant. Partners can stay ahead of the curve and meet customer needs by using SAP HANA Cloud Platform to build extensions for SAP S/4HANA — and therefore new and profitable revenue streams — with minimal investment and at low risk.

The combination of SAP S/4HANA extensibility with SAP HANA Cloud Platform enables partners to use their unique business understanding and perspectives to quickly develop new assets that help customers achieve their business goals and become agile, digital enterprises. For example, SAP partner OpenText offers extensions to SAP S/4HANA that enable customers to realize the full potential of digital data by taking advantage of all relevant enterprise content in context. These also support digital transformations by providing capabilities for decommissioning legacy applications and archiving data and documents.

SAP HANA Cloud Platform is a natural fit for extending SAP S/4HANA. It is an open platform-as-a-service that provides access to cutting-edge technologies from SAP, such as SAP HANA, and serves as the development and runtime platform for SAP S/4HANA extensions. Partners can use SAP HANA Cloud Platform to rapidly build and deploy SAPUI5-based extensions for SAP S/4HANA that can be leveraged in the cloud, on premise, and in hybrid landscapes. The decoupled architecture of these extensions ensures security, simplifies and speeds deployment, and allows customers to consume them instantly and independent of the environment, without disrupting their existing landscapes.

Applications and extensions developed by partners on SAP HANA Cloud Platform are available in the SAP App Center (www.sapappcenter.com). The SAP App Center is designed to make it easy for customers to find the solutions that best fit their needs, and also to make it easy for partners to make their solutions available.

ERP for the Modern Business

The pace of innovation is fast and getting faster. Who knows how fans will be following sporting events a decade from now, or when we will see mass adoption of self-driving cars or 3D printing? It’s plain to see, however, that the digital economy is forcing organizations of all sizes and in all industries to transform — and SAP is no exception.

With SAP S/4HANA, SAP has created a next-generation ERP solution built on an architecture for the digital age. SAP S/4HANA is SAP’s technical and conceptual answer to the global digitalization trend, providing a proven path toward digital transformation that, with the support of SAP partners, customers can take with success and confidence.

New and emerging technologies, such as in-memory technology, IoT, and SAP HANA Cloud Platform, come together with SAP S/4HANA to give organizations the power and agility they need to truly run live. Going forward, we expect to see many more customers and partners join us on this journey into the digital age with SAP S/4HANA. Learn more at www.sap.com/s4hana.

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