Why Did SAP Fake S/4HANA Maturity So Aggressively?

Executive Summary

  • S/4HANA was massively exaggerated in terms of maturity by SAP.
  • The question answered by this article is why SAP did it.

Introduction

If you observe the comment debates that I had with SAP consultants previous to around nine months ago, they debated me aggressively on S/4HANA. They then did the same thing on HANA. S/4HANA has performed a massive face plant in implementation. It is difficult to see how a major new ERP version could be less successful than S/4HANA. Once you take into account how falsified the S/4HANA go live numbers as we covered in How SAP Controls Perceptions with Numbers are and how most companies that have the S/4HANA license are not implementing it, you see a failed product launch. Those people that promoted S/4HANA look quite inept or corrupt (take your pick) right about now.

How SAP Introduced S/4HANA and its Completeness

Let us begin with how S/4HANA was introduced.

S/4HANA was explained as having two major phases of introduction. One was S/4HANA Simple Finance (which was the new FI/CO). SAP customers were told that the rest of the suite would follow shortly.

This second part did not happen as stated by SAP. We covered the missed deadlines of the rest of the S/4HANA suite in the article The Evidence that S/4HANA Missed its Release Deadlines.

It is now going into 2018, and S/4HANA is still not complete. This means that companies that purchased SAP Simple Finance (now just Finance) under the impression that the rest of  S/4HANA have a problem.

Becoming Increasingly Complete?

SAP has repeatedly released information that has attempted to make S/4HANA seem more complete than it is.

“If you look at the S/4HANA system that we released in November of last year that we are calling 1511, we can say that this is already a complete ERP system,” said Uwe Grigoleit, SAP global head of business development for Business Suite on HANA and HANA applications.”

“Why can we say this? If we are looking at pure modules we are shipping already, S/4HANA spans across financials, material management, inventory management, procurement, distribution, product and planning,” he explained. “It’s going across the vast majority of the ERP system already.”

That statement was made in March of 2016.

As we said at the time:

“This gets away entirely from the question of the completeness of each of these modules. Therefore, Uwe Grigoleit is staying away from whether the modules are complete. Uwe is stating that the modules are being released. But released is not necessarily complete.”

The Actual Story with S/4HANA’s Completeness

In our article Why the S/4HANA Suite is Not Yet Released, we explained.

“There has been and will continue to be a tremendous amount written about S/4 HANA. Interestingly there is lots of confusion as to what parts of S/4 HANA are ready to be implemented. SAP has misrepresented the readiness of S/4 HANA on just about every occasion, and it has an army of SAP partners that do the same.

This army is all about getting S/4 HANA implementation business, so they are actively misleading their prospects about S/4 HANA. Additionally, these partners are also misleading prospects about the consulting experience with S/4 HANA.”

The Attempt by SAP to Minimize the Issue with S/4HANA’s Completeness

SAP’s communication around S/4HANA’s timelines have been inaccurate since S/4HANA was first released. The lack of S/4HANA’s completeness has been a significant factor as to why S/4HANA has so few go-lives globally, as is covered in the article A Study into S/4HANA Implementations. However, SAP can continue to predict future completed states without the worry of anyone publicly calling out SAP for this, because virtually no one fact checks SAP.

One example of the storyline of when S/4HANA will be complete is illustrated by an article that was published by ComputerWeekly in March of 2016 entitled SAP S/4HANA functional completeness in the eye of the beholder.

Before we analyze the article itself, let us explain what ComputerWeekly is.

ComputerWeekly used to be a legitimate IT magazine. However, in 2011 after they were demonetized due to publications moving to the Internet, they were purchased by TechTarget. TechTarget is primarily a marketing automation entity that uses various online websites like ComputerWeekly to capture email addresses that are then sold to software vendors. TechTarget is just one of many media entities whose primary purpose is to promote IT company marketing interests in return for payment. 

This is all covered in the article ComputerWeekly is a Front for Marketing Automation. What this means is that ComputerWeekly will publish whatever it’s customers, which are software vendors and consulting companies want them to publish.

Computer Weekly as a Passive Message Repeater of SAP

Now that we have explained ComputerWeekly as a passive message repeater for its customers, we can get into the interesting article SAP S/4HANA functional completeness in the eye of the beholder.

In this article, ComputerWeekly uses the following sources.

In this article Uwe Grigoleit attempts to present a storyline where S/4HANA cannot be compared to the functionality in ECC.

“Along the way, SAP S/4HANA is also evolving beyond SAP Business Suite in capability, which in turn starts to change the nature of how you compare traditional Business Suite capabilities to new S/4HANA capabilities.”

Seeing Where Uwe is Going

See what Uwe is going. S/4HANA’s functionality completeness would compare very poorly versus ECC, so Uwe’s simple answer is to do away with the comparison altogether because its “evolving beyond SAP Business Suite.” This is also curious because S/4HANA is exceptionally close in functionality to ECC, except it has less of it.

Uwe is expert at talking in circles as the following quotations also attest.

“For something like maintenance, he said, SAP is changing classical maintenance with machine-to-machine communication, which helps generate “predictive maintenance scenarios.””

It should be clear from this that Uwe is a hype man, and one cannot discern anything from actually listening to Uwe.

Ding Ding Ding!

Uwe Grigoleit wins our coveted Golden Pinocchio award virtually every time he completes a sentence. He wins yet another one for his inverted and false explanation of how SAP is moving to “machine to machine communication.” If Uwe’s total compensation is tallied for one year, and the number of lies he tells is divided into this value, we could approximate what SAP pays Uwe per lie. Unfortunately, his everyday lies can’t be tracked. 

John Appleby Enters the Funhouse

Next up is John Appleby, who ComputerWeekly or TechTarget does not explain has a long history of making inaccurate statements about SAP, and who’s incentives are to sell S/4HANA and HANA business. Yet ComputerWeekly or TechTarget provides no inkling to the reader of John Appleby’s background and history.

TechTarget, did not think to consider what John Appleby’s financial bias may be. What has Appleby’s historical accuracy been, which we performed a study on in The Appleby Accuracy Checker: A Study into John Appleby’s Accuracy on HANA. No, instead TechTarget just prints Appleby’s quotations. 

However, there is no doubt that SAP told TechTarget that John Appleby is an approved source. SAP determines which sources TechTarget “reporters” speak to.

“In some cases, [you have to] wait 18 months and do a ‘big bang’ implementation, and in other cases [you can] start now, so we can phase the program. Every customer we’re working with is planning that journey to S/4HANA,” said Jon Appleby, global head of SAP HANA for Bluefin Solutions.

“I’ll give you an example,” Appleby explained. “I’m working with a U.S. customer in telecommunications, and the feds have told them they have to change the way they do revenue recognition, which they have to do before April of next year. They don’t think they can do what they need on Oracle, so they want to implement Suite on HANA, which will work well enough to do the new revenue recognition.”

Notice that Appleby accomplishes several things with this quote. First, he takes a dig at Oracle. He does this because Appleby’s company, Bluefin Solutions primarily implements SAP. Curiously, Appleby seems to be supporting the solution for which his company can make the most money.

How surprising.

What John Appleby Proposes

Appleby is proposing that companies purchase and implement an application that is not ready to be implemented, and that they simply push off the parts of S/4HANA that are not ready to later parts of the project.

However, first, what will the completed parts of the S/4HANA application connect to? Secondly, how does anyone know when S/4HANA will be complete. SAP has badly missed its deadlines up to this point.

And why is Appleby recommending this?

Did ComputerWeekly think for a minute that perhaps Jon Appleby has a financial bias in getting companies to use his services to implement S/4HANA? Perhaps is John Appleby trying to sell SAP consulting services and he benefits by implementing anything, even an immature application?

Appleby goes on to say.

“And what about SAP S/4HANA? “They’re saying, ‘We’ll deal with S/4HANA sometime later.”

So what Appleby is proposing is that customers implement the revenue recognition module first.

Then S/4HANA later.

But why does revenue recognition have to be implemented at all? Revenue recognition is supposed to be functionality within the ECC FI/CO module.

ECC can be updated to the most current version, so why isn’t the latest revenue recognition logic included in this update?

“For a lot of customers who haven’t done a fast close, it’s a quick win. If your finance processes are a little outdated, you can get your finance enhancements all in one go,” Appleby said.

This statement gets into the claim of how S/4HANA speeds the reconciliation process. We have thoroughly analyzed this claim and found it completely meritless as we cover in the article Does HANA Have a Simplified Data Model and Faster Reconciliation?

Ding Ding Ding!

When Uwe Grigoleit and John Appleby are quoted in the same article, it is a Golden Pinocchio Award fiesta! The lies come so fast, that so do the Golden Pinocchio Awards. 

And John Appleby is not the only individual pushing this narrative. I worked with a low-grade consulting firm that was obsessed with pushing SAP’s bizarre separate revenue recognition module (which is separate from FI/CO for some mystery reason) to customers.

S/4HANA Finance Implemented by Itself???

If S/4HANA Finance is implemented without the rest of S/4HANA, expensive adapters must be written back to ECC, as well as parts of ECC deactivated and S/4HANA activated. Why does this give financial enhancement “all in one go?”

Appleby finishes off with a final touch.

So does it matter if SAP S/4HANA is functionally complete? Not necessarily, Appleby said, because each roadmap is unique. “They are all different because every company has different priorities.”

Interesting, so if software that was promised in 2015 is still not ready, then it is not necessarily a negative, because companies have “unique requirements.”

This statement just takes stupidity to new levels and makes us think of creating a separate award.

Ding Ding Ding!

This is our inaugural bestowment of The Dan Quayle Indiocy Award — in commemoration of the stupidest Vice President in the history of the US.

This award could be called the John Appleby Award, but we decided to go with Dan Quayle instead. This is the second award given to John Appleby in this article.

Our Coverage of S/4HANA’s Maturity

We have covered in this many times, but the IT media is more often than not the recipient of income from SAP. And therefore, there has been very little coverage of the completeness of S/4HANA. Previously we published the article Why the S/4HANA Suite is Not Yet Released.

Recently we found an article that looks quite suspicious to us and attempts to craft the storyline around S/4HANA in a way that appears deceptive. In this article, we will explain how SAP coordinates and pays or compensates not only the media entity to distribute their story but how the media entity then go to sources that are both compensated by SAP, all in an attempt to mislead buyers.

Where Did All the Pro-S/4HANA SAP Consultants Go?

Those SAP consultants have mostly disappeared from commenting on my shares on LinkedIn. When they start to bring up SAP’s talking points, I bring up the known history of these two products and they gradually get exposed. They don’t like this. So they don’t comment on my articles anymore; instead, they are looking for soft targets. So they are saying the same things but to people that don’t research and don’t know.

How Did So Many Customers End Up With Unimplemented S/4HANA Licenses?

As time has progressed, the ratio of “live” S/4HANA customers to those that hold a license has been steady at roughly 1/5 or 20%. This is of course highly exaggerated as there are nowhere close to the number of live instances of S/4HANA that SAP claims.

SAP has stated that there are thousands of current S/4HANA implementations underway, but evaluation of job postings does not support this claim.

When SAP sold S/4HANA to many customers, they both knew they would not use it, and pressured many customers to purchase S/4HANA to satisfy an indirect access claim or through adding it to the BOM of other products. This was done to exaggerate the numbers of S/4HANA sales to Wall Street and prospects. They would have to have known that a large percentage if not most of those that engaged in a S/4HANA implementation would fail.

Why Such Extreme Fakery?

So why?

My conclusion is for short term gain. Some executives need to get paid and show Wall Street they are making progress as soon as possible. Pulling S/4HANA forward or releasing it early enabled SAP to make a splash in the market earlier. However, they got caught with their pants down. This is because development has made so little progress since S/4HANA’s introduction. So it makes the initial statements around S/4HANA look even more inaccurate than the executives thought they were at the time. But when you gut your development, and offshore a significant component of it, then there are consequences. SAP now has enormous numbers of low paid developers working on things.

Conclusion

Executive compensation and how SAP selects executives is critical to understanding how SAP made so many false statements around S/4HANA’s maturity. SAP selects only the most unrealistic executives, executives like Vishal Sikka, Bernd Leukert, Rob Enslin, Bill McDermott, Luca Mucic. People that will say anything without consideration for what is true.

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.

The Necessity of Fact Checking

We ask a question that anyone working in enterprise software should ask.

Should decisions be made based on sales information from 100% financially biased parties like consulting firms, IT analysts, and vendors to companies that do not specialize in fact-checking?

If the answer is “No,” then perhaps there should be a change to the present approach to IT decision making.

In a market where inaccurate information is commonplace, our conclusion from our research is that software project problems and failures correlate to a lack of fact checking of the claims made by vendors and consulting firms. If you are worried that you don’t have the real story from your current sources, we offer the solution.

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

Search Our SAP S/4HANA Maturity Content

References

https://searchsap.techtarget.com/feature/SAP-S-4HANA-functional-completeness-in-eye-of-the-beholder

https://en.wikipedia.org/wiki/Computer_Weekly

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