Thinking outside the box is the only way to get rid of the obstacles on the road to an unlimited S/4Hana. [shutterstock: 568640905, Lightspring]
Talking about S/4Hana is impossible without also mentioning the digital core. Aside from marketing catchphrases, what does this term actually mean, and what does it entail for your company?
The new ERP platform SAP S/4Hana has been available for three and a half years now. Even though a lot of licenses have already been sold, many companies still hesitate with its implementation. Customers are wondering what benefits it actually has, apart from new Fiori icons and a little bit more speed, and shy away from the costs of transitioning. However, S/4Hana is not just a new user interface for old processes. S/4Hana is vital for transforming the ERP system into a fully integrated digital platform. Transitioning means decisive changes not only in IT strategies, but also in operational processes.
Opening the doors to the outside world
In a paradigm shift, SAP opens ERP up for other systems, applications and products. S/4 establishes the guiding principle of an API controlled microservice architecture in the SAP realm. On the one hand, ECC was not an isolated system either (cue EDI and BAPI), but the possibilities of opening the doors to the outside world were limited. S/4Hana on the other hand is an open system which uses standard technologies for data exchange. However, S/4Hana is only really beneficial after integration with the SAP Cloud Platform (SCP). Because in the future, it will not matter if you host your systems in the cloud or on-premise, but if you control data exchange through open interfaces inside a hybrid system landscape, which will be orchestrated by the SCP.
IoT and AI
It is precisely here that the currently much discussed topics IoT and artificial intelligence come into play. Because with the approach described above, sensor data as well as machine learning applications can easily be connected to ERP data – without having to worry about if you use SAP Leonardo or Open Source technology. It will not matter if you use machine learning capacities included in S/4 or if you prefer external applications. In both cases, the integration will be stable, seamless and successful.
Embedded analytics give a comprehensive overview
Apart from these strategic considerations, there are also operative reasons for switching to S/4Hana. While SAP ECC is a receipt-based system, S/4Hana adds to this concept and focuses on the management of the whole process. Embedded analytics make it possible for every employee to get a quick and comprehensive overview of processes. Therefore, S/4Hana includes standard applications to evaluate if the supplier will deliver on time or if the method of payment of a customer changes. With these analytics, SAP is laying the foundation for a digitized process which can operate independently. Employees only have to check if there are anomalies or if an optimization is required.
The accounting clerk is therefore transforming into a micromanager who actively furthers the company’s success and is in charge of processes instead of just executing them. At least if everything goes according to plan.
The digital core
How should you be imaging the digital core, though? That’s what we are currently exploring with different customers. The results of this research will be presented with Allgeier’s IoT Boxx. The IoT Boxx is a pop-up store integrated into SAP which tries to execute new technological developments in retail. For example, we are currently testing with a pharmacist how companies can benefit from electronic shelf labels integrated into an IoT platform.
At the same time, we are, together with a fashion company, testing digital changing rooms and the possibility of creating a more comfortable shopping experience with digital mirrors. The customer should be addressed individually and according to his preferences, so that traditional shops distinguish themselves from the ones online.