How to Get Clear on S/4 HANA Terminology

Executive Summary

  • SAP has introduced a lot of terminology around S/4HANA, much of it confusing to SAP customers.
  • We analyst this terminology in this article.

Introduction

There has been quite a bit of marketing information written on S/4 HANA. It ‘s hard to overstate how much. However, the first introduction of S/4 HANA by SAP was quite confusing, and there has been another change since this first introduction. This article will (hopefully) help to explain what appears to be a moving target in SAP’s naming and strategy with its new ERP system.

Breaking Down the S/4 HANA Name

S/4 is the new ERP system. The overall naming convention is strange and confusing all by itself. But this is the reason for its naming…according to Hasso Plattner.

  • The “S” is supposed to stand for simple.
  • “4” being what would follow “3” as in R/3. So this would translate to “Simple 4rth major incarnation of the SAP ERP system.”
  • HANA is the database
  • S/4 is the ERP system, and HANA is the database is running on. Thus “S/4 HANA.”

Why Put the Database as Part of the Name of the Application?

This is the first time that SAP has offered an application and then named the database within the name. S/4 only runs on HANA (for now). However, it is either very uncommon or possibly unprecedented for any software vendor to declare the database that an application runs on as part of the name.

This would be like if Oracle only allowed JD Edwards EnterpriseOne ERP system only to run on Oracle, they would name it:

“JD Edwards EnterpriseOne Oracle 12C.”

SAP is naming things way because it is trying to emphasize how important HANA is to the new ERP system. In a future article, I will explain how this strategy is about to fall apart, but I will just stick to the naming discussion for this article.

For some time, the only part of S/4 HANA you could buy (i.e. that was released) was the finance area. It was referred to as “S/4 Simple Finance.” This is the first time that SAP released a module of the ERP system all by itself. All previous versions of SAP’s ERP system included the big four or SD, MM, PP & FI/CO. In fact, this integrated feature was SAP’s significant advantage when it came on the scene in the 1980’s and was it’s the main differentiator for many years.

S/4 Simple Finance represented the new version of what was the FI/CO module or financial and controlling in the ERP system.

With all the hype around S/4 Simple Finance, it has gone rather unobserved how strange it is for a vendor to bring out a single module of an ERP system all by itself. I have been scratching my head for over a year trying to figure out who would invest in a module of an ERP system, without getting the rest of it to connect to. With what I will explain, S/4 Simple Finance is now stranded due to development issues at SAP with the remainder of the S/4 suite.

Simple Simple Simple!

At SAP conferences, SAP and partners drove the concept of simple into the dirt. Each partner seemed to have simply worked into their catchphrase. For a while, there everything was “simple” and a lot of people who had never worked with the software, or had but had forgotten how it worked, were running around saying how simple everything was going to be. In his book SAP Nation, Vinnie Mirchandani does a very thorough job of covering the history of SAP’s use of the term simple or proposing they will simplify going back to the 1990’s.

I have worked in SAP since 1997, and I don’t recall anything in SAP to be simple. SAP may be the standard. It may be robust. But it is not simple. I have noticed a strong correlation between people who propose SAP’s new simplicity and how far away they are from SAP applications, and i.e. how little they know. And of course, it’s much easier to believe something complex is simple — if you don’t have to do the work yourself to configure or setup said system.

Secondly, there was always a problem with using the term “simple” as part of a production name that SAP marketing never picked up on. The word “simple” is a superlative adjective, and adjectives don’t make a lot of sense as part of application names. And after a while, it makes more sense to just drop the adjective as it just becomes redundant. This would be like calling a system “handsome” or “fantastic.” Let us apply this to another application, say the SAS Forecast Server, would become the:

“SAS Outstanding Forecast Server”

See…it just does not work.

Where Oh Where is Simple Logistics?

SAP has a bit of a problem that is not often discussed, but SAP as been telling companies to jump on board with S/4 Simple Finance because S/4 Simple Logistics(which it would connect to) was coming right around the bend. Simple Logistics was the rest of the S/4 suite.

I was told by several people that I needed to jump on board with Simple Finance because it was going to make everything so simple and it was of course SAP’s direction. I researched this, both reviewing statements around HANA’s proposed simplified data model as well as the supposedly simplified user interface in Fiori, and found these proposals to be incorrect. I covered this in two articles:

The problem is that SAP has very significantly missed its release date on Simple Logistics.

Making so many changes at once to S/4 was always risky with the timeline that SAP put out there. And now it is evident that SAP bit off more than they could chew.

Luckily, because so few companies implemented S/4, this will have little impact. Some German companies have implemented S/4 Simple Finance, but almost no companies outside of Germany. So for the vast majority of businesses, there will not be any impact. So it is a good thing that these companies passed on S/4 Simple Finance.

The Plot Thickens for S/4 HANA’s Name

As development has been doing its work, SAP marketing silently went through a change to the overall naming of the new ERP functionality. As I predicted the “simple” adjective is now gone. And S/4 HANA “overall” is now called S/4 HANA Enterprise Management.

SAP S/4 HANA Enterprise Management now includes:

  • S/4 HANA Finance (not “Simple Finance” mind you. Apparently finance is complicated once again!)
  • S/4 HANA Human Resources (Success Factors) (I saw no mention of Old SAP HR so that module has likely and thankfully been removed)
  • SAP S/4 HANA Sourcing & Procurement (Ariba) (I saw no mention of SRM or SAP’s pre-Ariba supplier product)
  • SAP S/4 HANA Supply Chain (Production, Inventory & Warehousing) (Old PP, MM & WM)
  • SAP S/4 HANA Manufacturing (Manufacturing Operations & Quality Management) (Old PP & QM)
  • SAP S/4 HANA Sales (Order and Contract Management)

Conclusion

It is no easy feat keeping up with SAP’s S/4 HANA terminology. SAP went through a period where they invested mightily in what was essentially a false marketing construct — that the new applications were somehow simple.

While little covered, SAP has a bumpy ride in trying to redo and introduce it’s new ERP system. Marketing is going through multiple name changes before the overall new ERP system is even ready to purchase. SAP’s problems with its S/4 HANA overall deadlines are a problem because SAP put so much of its credibility on the line that it would be able to bring out the rest of the S/4 HANA suite, and it raises the question of when the real release date of the suite will be. And then, how much after the publication date will the application be ready for actual implementation.

At this point is seems that S/4 Simple Finance was rolled out far too early. I was part of a sales team that was proposing S/4 Simple Finance just last year. Good thing that the companies we pitched this to did not purchase this as it is likely that a full functional S/4 ERP system (with all the standard modules released) is even now some time away.

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

Consulting companies simply went along with SAP’s terminology. Even when it was false. Even when it made no sense. SAP consulting companies agree to have their presentation of SAP controlled when they sign a partnership agreement as we cover in the article How to Best Understand the Pitfalls of Vendor Partnership with SAP.

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.

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References

The Risk Estimation Book

 

Software RiskRethinking Enterprise Software Risk: Controlling the Main Risk Factors on IT Projects

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Chapter 3: The Basics of Enterprise Software Risk Management
Chapter 4: Understanding the Enterprise Software Market
Chapter 5: Software Sell-ability versus Implementability
Chapter 6: Selecting the Right IT Consultant
Chapter 7: How to Use the Reports of Analysts Like Gartner
Chapter 8: How to Interpret Vendor-Provided Information to Reduce Project Risk
Chapter 9: Evaluating Implementation Preparedness
Chapter 10: Using TCO for Decision Making
Chapter 11: The Software Decisions’ Risk Component Model