The digital transformation changes the ERP system's role within the company. How the future's ERP could look is shown by the S/4 Hana applications suite that is to form the core of the digital business models. A critical status review highlights the advantages and the limitations.
The digital transition presents huge challenges to companies, in all business sectors and of all sizes. The complexity of the processes and value-chains is increasing: at the same time, the use of internet-of-things (IoT) technologies in Industry 4.0 scenarios is giving rise to vast data quantities (‘big data’). S/4 can help moving into the future.
The requirements associated with the digital transformation can no longer be satisfactorily mastered by means of a ‘classic’ ERP system, such as SAP ERP.
With S/4, SAP has now launched onto the market an applications suite that draws together (on the one hand) the advantages of the in-memory platform SAP Hana, as regards data processing, analysis and real-time simulation, and (on the other) the advantages of the intuitive user interfaces provided by SAP Fiori.
It can be installed on-premise or used as an individual system in a managed cloud or respectively as a standardised edition in the public cloud, as well as in the form of a hybrid model. Honouring the ‘Run Simple’ credo, by using digital and simplified business processes, S/4 makes possible the smooth transition into the digitalised world.
The cleansed data-model – dispensing with redundant data-layers, aggregates and indices – reduces the data quantity to be processed by a factor of ten (on average), and the IT infrastructure was also slimmed down.
An absolutely key contribution to this is that PLM, SCM, CRM, SRM and BI elements of functionality or the global authorisation check (Global ATP) are fetched back from SAP APO and into the core. In SAP APO’s case, this makes it superfluous both to install a system of one’s own and also to have the redundant maintenance of data, or respectively data duplication, between ERP and APO.
Unlike the modular application SAP ERP, S/4 is built-up in a consistently process-oriented way and thus has a greatly simplified architecture. The tasks and data from individual business areas, such as Sales, Finance or Logistics, are brought together in the S/4 suite – namely in S/4 Sales, S/4 Finance (formerly SAP Simple Finance) or S/4 Supply Chain – opening up wholly new possibilities for the end-user.
For instance, at any time, in S/4 Finance the user can carry out a soft close of the profit and loss calculation to a great degree of detail. All finance data are stored centrally in a repository and are processed, almost in real-time, at the level of individual items.
This abandons the separation between Controlling and Accounts, meaning greater transparency. This way, each event that is booked in Accounts appears in Controlling and vice versa. Complex MRP runs, requiring as much as a day in Batch mode, can be simulated ad hoc in S/4 Supply Chain. This also means that they can be conducted several times per day.
Hence there is particular benefit to the processes in Production; decisions regarding the deployment of material, machines and personnel can now be reached on the basis of real-time data. Other SAP solutions – whether on-premise or in the cloud – can be integrated seamlessly into the applications packages that form the ‘digital core’ of the new suite, until ultimately what emerges is digitalised end-to-end processes.
For instance, if S/4 Sales is linked up with the client-management solution SAP Cloud for Customer, a start-to-finish concept can be realised for the entire commitment to the customer – online as well as offline and on every end-device.
Externally, the run-simple principle makes itself evident in the SAP Fiori apps. The apps are exactly tailored to the respective application-user group; depending on the role and the authorisation, they bring all relevant data to the subject-specialist application-user, on the desktop, the smartphone or the tablet.
Using the SAP Fiori launchpad, the user can access the transactional apps and the analytical apps that are allocated to him and are also on fact-sheets and SAP Smart Business Apps. In a cockpit, in a way that provides a good overview, the SAP Smart Business Apps compile important operative and strategic real-time key figures for certain activity areas: these include planning of demand and turnover, or project management.
This way, at any moment, the material planner knows how many delayed orders there are, or orders not covered by resources, or top-priority orders not sufficiently covered by resources. Likewise, the project manager maintains his sound overview on all cases of cost deviation, parts that exhibit errors, and overdue milestones or PSP elements.
The KPIs can be analysed to the smallest detail, via drill-down; this puts those responsible into a position to recognise deviations or problems at an early stage and to introduce counter-measures immediately. Unlike with Fiori, in certain cases a user-friendly, personalised web interface can be produced for the transactions and Abap in-house developments, executed in an SAP GUI: this uses the add-on screen personas, by means of drag and drop.
Conversely, for use in production and intralogistics, the Orbis Multi-Process Suite (MPS) is outstandingly suitable – an Abap-based, secure and stable application from Orbis.
Orbis MPS automatically takes the SAP software and ties into it the real-time data from sensors, the personnel involved and also bar-codes and RFID-tags, as well as the activity sequences in production and in intralogistics; it visualises these elements according to the push-principle, in a role-based way and with a user-friendly overview, on interfaces suitable for industry.
Because the app can be used at the desktop, as well as on a smartphone or tablet, the specialist application-user has the latest information readily to hand at all times – even when out and about, online and offline.
Orbis MPS also offers the possibility to bring together various SAP-Fiori apps in one single user interface. Companies considering a switch to S/4 should not make the switch without being accompanied by an experienced partner with consultancy and process skill that spans across modules, one that has comprehensive technology expertise in the SAP environment.
This partner can provide highly-competent advice to the customer in choosing the correct user interfaces (SAP Fiori, SAP Screen Personas, Orbis MPS) and also choosing the suitable operating models (on-premise, cloud, hybrid); the partner also determines the suitable, precisely-tailored sizing of the SAP Hana database (working memory, discs, CPU).
To complete the introduction in a way that precisely matches the budget and the schedule, the partner should make use of a highly-flexible method of introduction, such as SAP Activate.
The path to S/4
If an SAP established customer is already using SAP ERP 6.0 with Unicode, an upgrade must be carried out to the respective latest enhancement package (EHP) – in this case it is EHP 7. Only then is the switch to the Hana database made and finally the SAP-S/4-Hana innovations are fed-in.
The individual SAP installations can either be converted in one single operation or step-by-step. If the customer is already using the SAP Business Suite powered by SAP Hana, all that is needed for the change is for the ‘old’ code to be replaced by the new code.
For new customers the only option is the complete new introduction of S/4, yet this is also the recommended option for established customers with a multi-ERP environment. The latter should initially introduce the suite in one branch facility that does not yet use SAP software, before the suite is rolled-out in all remaining sites.