How Accurate Was Hasso Plattner on Customers Being Too Risk Adverse for SAP S/4 HANA?

Executive Summary

  • Hasso Plattner makes an enormous number of inaccurate statements about S/4HANA.
  • How much of what Hasso Plattner said about S/4HANA was true?

Introduction

On November 30, 2015, Hasso Plattner published How to Understand the Business Benefits of SAP S/4 HANA Better.

This article shows some apparent frustration on the part of Plattner with the well-documented fact that SAP’s customers are having a problem seeing the value in SAP S/4 HANA.

Let us understand each of observations by Plattner and see how they stack up. You can first read the article by Plattner, which I have provided the link above and then read this one as I have taken out what I think are the most relevant quotes. I have each of the quotes and my comments organized under the specific headings that are from the article by Hasso Plattner.

Let us begin at the end of the article.

Slow MRP

Hasso’s Introduction

“It is sad to still hear the same arguments after all the sales success, the implementations in record time and happy productive customers. We have written books, where we describe dozens of new or improved application scenarios, specific events are taking place throughout the world and we have many success stories on our website. I just heard of a Chinese fashion manufacturer who installed SAP S/4HANA and reports a game changing improvement of the MRP2 run from more than 24 hours to under two hours. My advice for the smaller and midsize SAP Business Suite customers is to carefully watch the early adopters, soon approaching 2000, especially in related industries.” – Hasso Pattner

In the first part of the quotation, Hasso declares the sadness to hear some general arguments against HANA due to sales success. However, has HANA had sales success? No. HANA has been the most significant marketing initiative ever undertaken in the enterprise software space, however, while SAP has “sold” quite a few HANA licenses (at a debatable cost), the number of live HANA instances is tiny. I have seen HANA at literally one of my customers, and of course, it was for BW. So this success is an assumption made by Hasso that merely is untrue.

On the next topic of the case study that Hasso presents above, why is MRP taking 24 hours to run at this Chinese company?

Interpretation

Let us start off by understanding that MRP is the simplest of the supply and production planning methods and it was first designed to run on hardware from the 1970s.

It is true that current MRP goes further down the bill of materials then perhaps MRP runs did in the 1970s. Still, if MRP is taking 24 hours to run in any system then either the hardware is tiny, or there is something wrong with how MRP is setup — which is strange because MRP in SAP has very few settings. If a company is taking 24 hours to run MRP, something is very wrong and needs to be evaluated. Hasso did not explain if this evaluation happened, but instead stopped and declared that the solution was implementing HANA. However, implementing HANA for MRP means implementing S/4HANA — which is a major issue. This means a Chinese company, which tend not to be new technology adopters, and do not have significant IT budgets compared to the US and European companies — decided to implement HANA.

  • I cover MRP in the book Supply Planning with MRP, DRP, and APS Software, and have extensive experience with MRP and all of the supply and production planning methods, and Hasso’s statements here do not make any sense.
  • Secondly, in my book Repairing your MRP System, I explain that a significant factor which holds back running MRP well is the fact that MRP is so frequently run from the ERP system — and ECC and S/4 HANA are ERP systems.

This is because ERP systems provide poor quality MRP functionality when compared to applications that specialize in supply planning. For instance, if I talked about a 24 hour MRP runtime with the best of breed vendors that I know of that can run MRP they would fall laughing. We better move one, because I am starting to laugh thinking about this proposal myself.

There is something very fishy about this story of a 24 hour MRP processing run. Much more would need to be explained, but under no scenario should it take anywhere close to that amount of time to run MRP.

Hasso on The Reduction in Complexity from S/4 HANA

“For years our customers complained about the complexity of the business suite and asked for simplification. Now some fear they have to relearn a lot and that will cost time and money. The simplification of the UI is real and will save time with the first day of productive use. The business functionality of the transactions is still the same but comes in a much more efficient form.

The dramatic simplification of the data model, the fact that any field can be used as an index for selecting data and the unprecedented short response times are allowing for much faster development cycles of new applications. The deployment of extensions in SAP HANA Cloud Platform is an elegant way to enhance SAP S/4 HANA systems or to build completely new applications. SAP S/4 HANA combines the proven set of core business functionality, in many languages and for nearly all countries, with the ability to venture into completely new dimensions of applications. This capability is key when business processes are developing at an ever increasing speed and core enterprise systems cannot just be complemented by point solutions but have to also accommodate these changes.  This reduction in complexity also lowers the threshold for smaller companies to switch to SAP S/4 HANA.”

Let’s look into the detail in each area brought up by Hasso.

  • For Years Our Customers Complained About the Complexity of the Business Suite (ECC): Yes, this is true. However, most of the complaints did not have to do with what HANA is improving (which is primarily analytics). Many of the companies complained about complexity with the SAPGUI, or areas of functionality that did not work, or problematic help that made the feature difficult to decipher, or a long list of complicated items that make up SAP software. So Hasso seems to be mingling a number of issues here. However, again SAP buyers cannot expect Fiori to cover many of the ECC screens for some time. So Fiori will be used along the same old SAPGUI. Therefore, complaints will continue.
  • The Dramatic Simplification of the Data Model: I cover in Getting Clear on S/4 HANA, that it is debatable whether HANA simplifies the data model.
  • ..The Ability to Venture into Completely New Dimensions of Applications: It’s hard to see how this is true. S/4 has a (partially) new UI. And Fiori can be customized much more easily than SAPGUI. However, it’s still a lot of work, and there is not a consensus on Fiori yet regarding whether it will stick long term. The later part of this paragraph is fanciful sales talk, and it is difficult to address what Hasso is describing.

Interpretation

This quotation is mostly incorrect.

Hasso Plattner on How Disruptive is SAP S/4 HANA

“All master and transactional data will be migrated, all the business processes are still available, the new UI is easy to comprehend and most importantly the application configuration can also be carried forward. Many long term SAP customers are contributing in the design efforts of the new user interaction. By applying the principles of design thinking, end users, consultants, domain experts and developers interact till the most comprehensive solution is found. All predefined aggregate data (totals, info cubes) have been eliminated and the system offers now the highest flexibility in reporting and analysing business data.

The first step in an SAP S/4 HANA project should be the evaluation of the system without the company specific modifications and extensions but using the customer production data set. Many new features are added and may make modifications obsolete. Don’t extrapolate the amount of work and training from previous experience with ERP release changes. Once the data is carried over to SAP S/4 HANA everything will be much faster. In case of an on-premise or hosted deployment, the previous UI will still be available in order to ease the transition phase.”

The first part of this quotation is not really to be commented upon because of there it is generalized. For instance, the idea that all the business processes are still available is evident, as S/4HANA directly takes ECC functionality and puts it onto HANA. But later on in the first paragraph, there is something to comment on.

  • All Predefined Aggregate Data (Totals, Info Cubes) Have Been Eliminated?: Yes, this is true. All of the things that used to be performed on the backend in the BW now is not necessary for HANA.
  • Don’t Extrapolate the Amount of Work and Training from Previous Experience: Not only is Hasso’s proposal here untrue, but it will also be significantly more work, and it is indeed more risk to upgrade to S/4 HANA. S/4 HANA has a new database and a new user interface. It changes all of the enhancements that SAP customers have because the tables structures have changes, which means the already existing improvements must be modified. There is all manner of questions as to S/4 HANA implement ability as Simple Logistics was just very recently released. It is merely an absurd contention that S/4 will be less work to upgrade than previous versions of SAP’s ERP system.
  • Once the Data is Carried Over to SAP S/4 HANA Everything Will be Much Faster?:  The fact that S/4 HANA will be faster should not be blended with the amount of work and training and risk associated with implementing such a new and lightly implemented application. And analytics will be faster, but transactions will only process faster because of the hardware advantage of HANA. Columnar databases are sub-optimized for transactions, or that is most of what SAP’s ERP systems do. I cover this in detail in the article What Makes HANA So Fast? 
  • The previous UI will Still be Available to Ease the Transition Phase: This contradicts earlier statements that the UI or Fiori will be so much easier than SAPGUI. However, potential buyers of S/4 HANA should also know that probably a more important reason that the SAPGUI will be used no matter what is because Fiori is not complete for all of the old ECC screens, a fact that Hasso is leaving out of his article. I cover this topic is What is Actually in the Fiori Box? 

Interpretation

This quotation is mostly incorrect.

Hasso on How Complete SAP S/4 HANA Is

“One of the reasons why companies have more long-term plans for SAP  S/4 HANA is the completeness of the product. To recreate the wealth of functionality of the business suite is quite a challenge, but now financials, sales and logistics are available and most of the industry specific solutions will follow soon. SAP wants to achieve a better separation between the industries in order to reduce potential conflicts between them. Every transition case from SAP ECC 6.0 to SAP S/4 HANA has to be evaluated individually but most of the installed base should be covered by now. Many clients choose to become familiar with SAP HANA by moving the business warehouse onto SAP S/4 HANA or start with completely new projects in product research or service including internet of things scenarios.”

Interpretation

This is not at all correct. Let bulletize this list because there is a lot here:

  • Companies Have S/4 HANA in Long-Term Plans? I don’t think its established that companies have long-term plans for SAP S/4 HANA. SAP has an enormous installed base, and they have heavily pushed S/4 HANA, and there are still extremely few clients live on S/4 HANA. There are many questions regarding its actual implement ability.
  • Recreate the Wealth of Functionality of the Business Suite: I don’t know why Hasso is phrasing it this way. SAP is not recreating anything – it is porting ECC functionality to a new set of tables, the columnar tables of HANA. And secondly, not all functionality in ECC is making it over to S/4HANA.
  • Industry Specific Solutions: Most of the SAP Industry Solutions are more for marketing than anything else. Once you get to implementing you will find that there is little to leverage. I have gone through this with many different industry solutions. They are primarily marketing fiddle-faddle. For example, SAP has a Repetitive Manufacturing Industry Solution, and after you get through analyzing it, it makes no sense to turn on, but you can waste a lot of time analyzing and testing it. So, whether S/4 HANA is ported to “Industry Solutions” it’s not real.
  • Converting the Installed Base to S/4 HANA: The idea that most of the installed base should be converted to S/4 HANA now, considering that there are so many implementation questions about S/4 HANA’s readiness, considering the extra cost, considering that all the previous customizations that customers have written will need to be rewritten, considering a number of other items are utterly delusional.
  • BW: BW can be moved to HANA most easily because HANA is primarily an analytics database. BW’s implementation onto HANA is quite smooth. However, HANA happens to undermine many of the functionality of BW, which can be the topic of a future post.

HANA Disruptive

Hasso Plattner on How Disruptive is SAP S/4 HANA

“All master and transactional data will be migrated, all the business processes are still available, the new UI is easy to comprehend and most importantly the application configuration can also be carried forward. Many long term SAP customers are contributing in the design efforts of the new user interaction. By applying the principles of design thinking, end users, consultants, domain experts and developers interact till the most comprehensive solution is found. All predefined aggregate data (totals, info cubes) have been eliminated and the system offers now the highest flexibility in reporting and analysing business data.

The first step in an SAP S/4 HANA project should be the evaluation of the system without the company specific modifications and extensions but using the customer production data set. Many new features are added and may make modifications obsolete. Don’t extrapolate the amount of work and training from previous experience with ERP release changes. Once the data is carried over to SAP S/4 HANA everything will be much faster. In case of an on-premise or hosted deployment, the previous UI will still be available in order to ease the transition phase.”

The first part of this quotation is not really to be commented upon because of there it is generalized. For instance, the idea that all the business processes are still available is evident, as S/4HANA directly takes ECC functionality and puts it onto HANA. But later on in the first paragraph, there is something to comment on.

  • All Predefined Aggregate Data (Totals, Info Cubes) Have Been Eliminated?: Yes, this is true. All of the things that used to be performed on the backend in the BW now is not necessary for HANA.
  • Don’t Extrapolate the Amount of Work and Training from Previous Experience: Not only is Hasso’s proposal here untrue, but it will also entirely be significantly more work, and it is indeed more risk to upgrade to S/4 HANA. S/4 HANA has as new database and a new user interface. It changes all of the enhancements that SAP customers have because the tables structures have changes, which means the already existing improvements must be modified. There is all manner of questions as to S/4 HANA implement ability as Simple Logistics was just very recently released. It is merely an absurd contention that S/4 will be less work to upgrade than previous versions of SAP’s ERP system.
  • Once the Data is Carried Over to SAP S/4 HANA Everything Will be Much Faster?:  The fact that S/4 HANA will be faster should not be blended with the amount of work and training and risk associated with implementing such a new and lightly executed application. And analytics will be faster, but transactions will only process faster because of the hardware advantage of HANA. Columnar databases are sub-optimized for transactions, or that is most of what SAP’s ERP systems do. I cover this in detail in the article What Makes HANA So Fast? 
  • The previous UI will Still be Available to Ease the Transition Phase: This contradicts earlier statements that the UI or Fiori will be so much easier than SAPGUI. However, potential buyers of S/4 HANA should also know that probably a more important reason that the SAPGUI will be used no matter what is because Fiori is not complete for all of the old ECC screens, a fact that Hasso is leaving out of this article. I cover this topic is What is Actually in the Fiori Box? 

Interpretation

This is a tough portion of the article from Hasso Plattner. There is lots of commingling of separate concepts and things that do not make sense.

S_4 HANA New

Hasso Plattner on The New Concepts for Sales, Customer Support, Product Development

“After the simplification of the main application in sales, logistics and finance, the development of new functionality has started and will be rolled out in short release cycles. It is paramount that SAP and its community learns how to efficiently deal with shorter release cycles, without introducing any kind of instability. The reduced complexity of the data model and the removal of transactional data aggregation clearly improves robustness.  The focus on the SAP HANA platform allows for better applications, because the technical advantages of SAP HANA can now be exploited without consideration for compliancy with other platforms. This is a formidable advantage and as mentioned before a strategy taken by all other providers of cloud services.”

Interpretation

  • Simplified Sales, Logistics and Finance and Shorter Release Cycles: It is not clear how sales, logistics, and finance were simplified with S/4. And SAP could have developed new functionality over a decade ago for ECC but chose not to. The reason was to get more sales from non-ERP products that they could sell a new license for. So this seems to be an empty promise. SAP should learn how to deal with shorter release cycles without introducing any stability efficiently, but currently, SAP has problems even with very long release cycles without introducing functionality that is broken upon arrival. So it’s a strange thing overall for Hasso to say.
  • The Focus on the SAP HANA Platform Allows for Better Applications Because the Technical Advantages of SAP HANA Can Now be Exploited Without Consideration for Compliancy with Other Platforms: Why is this true? Hasso is repeatedly referring to advantages of S/4HANA and HANA without providing any reason at all to think this is true. SAP is only one part of the picture within SAP customers, so SAP must always content with other platforms. Secondly, Hasso is speaking in such an unspecific manner that it can be difficult to confirm or disconfirm his statements, this one being a perfect example, because he is not even clear what he means. It is difficult to see why that is true. Why is being compliant with other platforms, not a consideration? Nothing has changed here. Any system must be implemented with consideration with how it connects to other systems.

Curious about the reality of S/4HANA implementations? See our The S/4HANA Implementation Study, for real story and details on actual S/4HANA implementations.

Conclusions

There is not much to take away from this section of the paper by Hasso Plattner. The statements are not substantiated.

SAP’s Inaccurate Messaging on S/4HANA as Communicated in SAP Videos

Fact-Checking SAP Information on S/4HANA

This video is filled with extensive falsehoods. We will address them in the sequence they are stated in this video.

SAP Video Accuracy Mesurement

Appleby's StatementAccuracy % of the CommentExplanationLink to Analysis Article
S/4HANA is what allows key processes to be digitized.
0%
ECC was already fully digitized and digitized across key business functions.The Problem with Using the Term Digital Transformation on IT Projects
HANA is a Platform
0%
HANA is not a platform, it is a database.How to Deflect You Were Wrong About HANA
Fiori is a major advantage for S/4HANA.
10%
In S/4HANA implementations Fiori is infrequently used when S/4HANA. How Accurate Was SAP on the Number of Fiori Apps?
Fiori is far more efficient than what came before.
10%
In testing Fiori and S/4HANA, Sven Deneken's statements did not hold up. There was a particular weakness in actually making changes after noticing something needed to be changed, and we found the efficiency below that of ECC with of course SAPGUI.
S/4HANA is innovative as it brings "real time inventory."
0%
Sven Deneken brings up the topic of "real-time capabilities," however there is nothing particularly real-time or different in terms of a reaction than ECC. Whenever you make a change in ECC or any other ERP systems for that matter, the entry is real-time. Sven Deneken states that "the physical inventory is the same as the digital inventory." However, under what system would this not be true?What Happened to the Term Perpetual Inventory?
S/4HANA is innovative because it allows access to supplier information.
0%
Sven Deneken states that information about the supplier is "just a fingertip away." Sven Deneken may be familiar with ECC, where supplier data is also a fingertip, or say mouse click away. It called the Vendor Master in ECC.
Sven Deneken says that the cycle could be changed to daily or sub-daily.
0%
Why would that occur? This is a very strange scenario that is being laid out.
S/4HANA is innovative because it allows MRP to be rerun interactively for a product location.
0%
Sven Deneken is extremely confused when he states that S/4HANA allows a fresh MRP run to be performed for a specific product location and that this is a differentiator for S/4HANA. For a single product location, there is no ERP system that cannot run MRP for a single location. Secondly re-running MRP does not remove uncertainties. MRP can be re-run when something changes. For example, when the forecast changes.Performance Problems with HANA and MRP
Sven Deneken states this demo shows SAP has reimagined inventory management.
0%
However, all of this functionality, save for several of the graphics shown in the video have already been available in ECC for many years, in fact, decades.

The Problem: A Lack of Fact-Checking of S/4HANA

There are two fundamental problems around S/4HANA. The first is the exaggeration of S/4HANA, which means that companies that purchased S/4HANA end up getting far less than they were promised. The second is that the SAP consulting companies simply repeat whatever SAP says. This means that on virtually all accounts there is no independent entity that can contradict statements by SAP.

Being Part of the Solution: What to Do About S/4HANA

We can provide feedback from multiple HANA accounts that provide realistic information around S/4HANA — and this reduces the dependence on biased entities like SAP and all of the large SAP consulting firms that parrot what SAP says. We offer fact-checking services that are entirely research-based and that can stop inaccurate information dead in its tracks. SAP and the consulting firms rely on providing information without any fact-checking entity to contradict the information they provide. This is how companies end up paying for a database which is exorbitantly priced, exorbitantly expensive to implement and exorbitantly expensive to maintain. When SAP or their consulting firm are asked to explain these discrepancies, we have found that they further lie to the customer/client and often turn the issue around on the account, as we covered in the article How SAP Will Gaslight You When Their Software Does Not Work as Promised.

If you need independent advice and fact-checking that is outside of the SAP and SAP consulting system, reach out to us with the form below or with the messenger to the bottom right of the page.

Financial Disclosure

Financial Bias Disclosure

Neither this article nor any other article on the Brightwork website is paid for by a software vendor, including Oracle, SAP or their competitors. As part of our commitment to publishing independent, unbiased research; no paid media placements, commissions or incentives of any nature are allowed.

S/4HANA Implementation Research

We offer the most accurate and detailed research into S/4HANA and its implementation history. It is information not available anywhere else and is critical correctly interpreting S/4HANA, as well as moderating against massive amounts of inaccurate information pushed by SAP and their financially biased consulting ecosystem.

Select the description that best matches you.

Option #1: Do You Work in Sales for a Vendor?

See this link for an explanation to sales teams.

Option #2: Do You Work for an Investment Entity that Covers SAP?

See this link for an explanation for investment entities. 

Option #3: Are You a Buyer Evaluating S/4HANA?

For companies evaluating S/4HANA for purchase. See this link for an explanation to software buyers

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References

https://news.sap.com/how-to-understand-the-business-benefits-of-s4hana-better/

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