Who Was Right About S/4HANA’s Readiness?

Executive Summary

  • SAP along with many entities made projections about S/4HANA’s ability to be implemented.
  • Four years into S/4HANA who was right and who was wrong?

Introduction

This article was published on Feb 8th 2019. S/4HANA just had its 4th birthday as it was introduced in Feb 3rd, 2015. S/4HANA has been a highly promoted application with many entities making projections about it. Four years is quite a while for an application to build up a history. In this article, we will cover who got it right and who got it wrong.

Overestimation of S/4HANA’s Usage

SAP has been playing a game for four years where they have exaggerated the implementation success of S/4HANA. The following is a common set of statements made about S/4HANA by SAP. This is from the Q2 2018 analyst call.

“Driven by fast adoption of SAP S/4HANA, cloud and software revenue grew by a stellar 10%.

And, remember that new high-growth cloud solutions like S/4HANA Cloud and C/4HANA will have more impact on growth as they scale to be a bigger part of the mix.

And then, maybe, coming back to S/4HANA, obviously, very successful ramp-up with customers.

We have close to 2,000 live customers on S/4HANA by now already (Q2 2018), and we have another close to 3,000 ongoing implementation projects, which means that given the implementation timeframe for S/4HANA is greatly reduced versus traditional ECC implementations of the past decade, we will soon have 5,000 reference customers to speak for us.”

Large Numbers of S/4HANA Reference Customers on Wall Street Calls, But Only Three for Forrester

Interestingly, when it came to having Forrester perform an SAP funded study to evaluate S/4HANA implementations SAP provided Forrester with a grand total of three customers to talk to. Of 2000 customers, SAP, which is obviously aware of every single one of the 2000 “live” customers were able to come up with three names. And of those three, all three had tiny implementation timelines and costs. 

When SAP is talking to Wall Street. But when it comes to providing clients, Forrester gets three clients. Let us do some math. 3/2000 = .0015. We covered Forrester’s “study” in the article How to Understand Forrester’s Fake S/4HANA TCO Study.

What is the Risk Level of S/4HANA When Implemented?

Since S/4HANA was first introduced we rated as the highest risk of applications. This was primarily due to the immaturity of the application which we determined through first-hand testing of the application. S/4HANA in our view was release several years too early, which we covered in the article How Accurate Was SAP on S/4HANA Being Complete?

Our estimate was recently supported by UpperEdge who stated the following about S/4HANA projects.

“While 32% of S/4 clients have a go-live date, our research shows project failure rates go as high as 70%.”

We have never performed an estimate, but we do know that S/4HANA failures are quite common.

The Recent High Priced S/4HANA Failures

S/4HANA has had a number of high profile failures or postponements which include the following:

Uncovered in the IT media is that fact that there have been countless postponements of S/4HANA projects and very few of the 2100 estimated customers that SAP states as live are actually live, which we covered in the article A Study into S/4HANA Implementations.

How did we figure this out?

Well, the first clue was the immaturity of S/4HANA when we tested it. Then we started getting complaints from companies implementing S/4HANA about that exact thing. Finally, we evaluated every S/4HANA case study (both public and private) and analyzed each. When we did this we found that most made no sense.

SAP marketing had released information that they did not realize allowed us to figure out that many of the go-lives were fake, exaggerated, not really live, etc.. This is true even though S/4HANA has appeared like wildfire on resumes, and is now currently one of the most falsified skills in the SAP space, along with its cousin HANA.

Who Was Right About S/4HANA?

Two entities stand out.

  • One is us. Brightwork Research & Analysis published more accurate information about S/4HANA than anyone else in the market.
  • Two is UpperEdge. UpperEdge consistently told the truth about what it saw from working with SAP clients around S/4HANA. Like Brightwork, UpperEdge is not a partner with SAP, and they are not controlled by SAP, and generally, it is apparent from what they published that they don’t care what SAP thinks.

Who Was Wrong About S/4HANA?

This is a long list indeed. However, the primary culprits are the following:

  • SAP: (obviously, and the worst offender as they knew they were lying more than any of the following parties).
  • The SAP Consulting Companies: One cannot know what was said in every private meeting, but generally the SAP consulting companies I worked with or knew of provided my clients with terrible advice on S/4HANA and really only seemed to care about selling S/4HANA projects and staffing S/4HANA resources. We could include the links of our analysis of SAP consulting firms inaccurate articles on S/4HANA, but then this article would be 1/2 links.
  • IT Media: Nearly all the IT media is paid by SAP to run paid placements. They wrote mostly what SAP wanted them to write.
  • ASUG: ASUS is really just a marketing arm of SAP that masquerades as a user group. We only list them separately from SAP because many people think that they are independent from SAP.
  • Gartner and Forrester: Forrester has egg all over their face from the S/4HANA TCO/ROI study they produced, but Gartner was less active in promoting S/4HANA. However, neither of them did anything to educate their customers as to the reality of S/4HANA.

Conclusion

The past four years have been a torrent of false information about S/4HANA from all the major information providing entities in IT. Two entities got it right, and they were the two that are not partners with SAP and are not paid by SAP. That is no coincidence.

HANA & S/4HANA Question Box

  • Have Questions About S/4HANA & HANA?

    It is difficult for most companies to make improvements in S/4HANA and HANA without outside advice. And it is close to impossible to get honest S/4HANA and HANA advice from large consulting companies. We offer remote unbiased multi-dimension S/4HANA and HANA support.

    Just fill out the form below and we'll be in touch.

References

*https://upperedge.com/sap/timing-your-move-to-s-4hana/

*https://upperedge.com/sap/migrating-to-sap-s-4hana-could-get-you-fired-not-deciding-on-s-4hana-will-probably-get-you-fired/

https://www.fool.com/earnings/call-transcripts/2018/07/19/sap-se-sap-q2-2018-earnings-conference-call-transc.aspx

TCO Book

 

TCO3

Enterprise Software TCO: Calculating and Using Total Cost of Ownership for Decision Making

Getting to the Detail of TCO

One aspect of making a software purchasing decision is to compare the Total Cost of Ownership, or TCO, of the applications under consideration: what will the software cost you over its lifespan? But most companies don’t understand what dollar amounts to include in the TCO analysis or where to source these figures, or, if using TCO studies produced by consulting and IT analyst firms, how the TCO amounts were calculated and how to compare TCO across applications.

The Mechanics of TCO

Not only will this book help you appreciate the mechanics of TCO, but you will also gain insight as to the importance of TCO and understand how to strip away the biases and outside influences to make a real TCO comparison between applications.
By reading this book you will:
  • Understand why you need to look at TCO and not just ROI when making your purchasing decision.
  • Discover how an application, which at first glance may seem inexpensive when compared to its competition, could end up being more costly in the long run.
  • Gain an in-depth understanding of the cost, categories to include in an accurate and complete TCO analysis.
  • Learn why ERP systems are not a significant investment, based on their TCO.
  • Find out how to recognize and avoid superficial, incomplete or incorrect TCO analyses that could negatively impact your software purchase decision.
  • Appreciate the importance and cost-effectiveness of a TCO audit.
  • Learn how SCM Focus can provide you with unbiased and well-researched TCO analyses to assist you in your software selection.
Chapters
  • Chapter 1:  Introduction
  • Chapter 2:  The Basics of TCO
  • Chapter 3:  The State of Enterprise TCO
  • Chapter 4:  ERP: The Multi-Billion Dollar TCO Analysis Failure
  • Chapter 5:  The TCO Method Used by Software Decisions
  • Chapter 6:  Using TCO for Better Decision Making

Why Does S/4HANA Need B/4HANA for Analytics?

Executive Summary

  • For years SAP proposed that applications on HANA would remove the need for a data warehouse.
  • Now the message is changing, and B/4HANA is back in the mix.

Introduction

The original presentation of S/4HANA was that because of HANA, and the reporting schemas would no longer be necessary. The elimination of the data warehouse would be possible because S/4HANA would report directly off of the column-oriented tables, which were optimized for reporting.

Part of the point of S/4HANA was to minimize the use of the need for the data warehouse. The idea went, that if all SAP applications used HANA, and a company used all SAP applications than they would no longer need a data warehouse. SAP described this as using embedded analytics, which we covered in the article What is the Value and Future of SAP Embedded Analytics?. This vision, of course, left out entirely the reports that go across applications, which of course still required a central repository, which shall we call a “data warehouse.” We quote from the following to illustrate how on SAP consulting company explains this obvious fact.

“To achieve this, you need a system that can collect, merge and harmonize data from various sources. A single S/4 system cannot achieve this. SAP does not recommend using embedded analytics to consolidate data from multiple systems, and it is meant for operational reporting only. Even though the S/4 system comes with an embedded BW system, it is not designed to be used as your enterprise data warehouse.”

And illustrated in this slide.

And this quote from SAP.

“Most of us would have for sure thought for once that Embedded BW on S4HANA would replace BW as whole and would not need BW in future. Which is kind of myth looking at the basic nature and capabilities of the EDW(Enterprise Data Warehouse). Its correct the Embedded BW can be used to support certain business processes on SAP Business Suite and S4HANA like BPC optimized. However, there are many other reasons why we can’t use Embedded BW for all the EDW needs. Based on many documents and notes following are the major reasons for which it becomes obvious to use SAP BW4HANA”

Again, who created this “myth?” Lets not be coy about this. SAP proposed this myth.

Over a span of several years, I don’t recall telling people that HANA would lead to the elimination of the data warehouse. Quite the opposite, and those people telling me that I need to get with the “brave new world of analytics” within each application were SAP consultants. Even in private, with no one listening, the adherence to SAP talking points by SAP consultants never ceases to amaze me. 

Who Thought This Illogical Approach Would Work and Evangelized The Design?

Normally the less technical the resource, the more they thought this would happen, with salespeople who had never personally worked with databases or analytics software being the most vociferous that this was the future that HANA allowed. They topped this off by proposing that only SAP had the vision to make this happen. This following quotation is verbatim.

“Hasso Plattner always hated analytics systems. He saw them as a failure of the application to provide the reporting. His vision is to eliminate the data warehouse, and HANA is how he will do it.”

SAP Analytics Products are All Jumbled In

Another undiscussed issue is how many products are now part of this solution. Let us review a slide.

This slide is already a bit out of date as Lumira has been discontinued, and Cloud for Analytics is the replacement product. But let us review all of the products that are part of this design.

  1. SAP Cloud for Analytics
  2. SAP Business Objects
  3. SAP Lumira

How much are all of those licenses going to add up to? Is this us or does this appear like a confusing combination of items?

The New Reality of S/4HANA and the Data Warehouse

Years after SAP presented this vision, and they are now changing their story regarding data warehousing. SAP is now proposing that customers use something called embedded BW which is the junior version or BW/4HANA which is the more advanced version that is merely the rebranded stand along BW but which of course only runs on HANA and pushes out other database vendors from the mix. Embedded BW is implemented within S/4HANA and according to SAP is for “strategic analysis” rather than the standardly embedded analytics that are for more or less canned analytics.

We have been saying for some time that the embedded analytics in S/4HANA are simply for canned analytics. Because they are canned, they don’t even leverage HANA as they can be pre-compiled, with only net change information updated.

One of the reasons its very easy to overestimate the number of apps, or tiles of functionality included in S/4HANA is because so many of the tiles are really just reports, as the slide above illustrates. Once in the transaction/report, there is normally not much that one can do other than some basic searching or filtering. 

Why BW4/HANA?

It is understood that more analytics than the canned “embedded analytics” are required for non-standard reporting, but why did SAP port an obsolete product like BW to S/4HANA? One of the main points of HANA was that a heavy overhead BI environment with their very heavy maintenance overheads like the SAP BW was supposed to be no longer necessary.

Column-Oriented Tables: A Simplified Data Model

Recall the simplified data model? We covered the topic in the article, and contradicted the notion that S/4HANA had a simplified data model in the article Does S/4HANA Have a Simplified Data Model?

However, while the data model is no simpler, it is, that is column-oriented tables, are certainly more optimized for read access or that is for reporting and analytics. The idea that was presented by SAP was that a simpler lighter BI environment, for instance like Lumira (now discontinued), or SAP Analytics Cloud (not yet ready to be implemented) or a mature visualization product like Tableau or Qlik was supposed to be able to be used. So far the number of application of HANA has been for the BW, which speeds BW, but does little to reduce the lengthy reporting queues sitting behind most BW implementations globally.

Continuing to Work Off of Data Cubes?

Something else odd was that there are graphics that show both embedded BW and B/4HANA using data cubes. They also work off of Core Data Services that feed the data cubes which we covered in the article How to Understand HANA Lock in with Core Data Services.

Again why are either of these products using data cubes? Data cubes are actually not cubes, they are star schemas which are designed to speed row oriented tables. The point of using columnar tables is so that they can read accessed very quickly without any intermediate object such as a star schema.

SAP Backtracks on the Design Proposals of HANA

The story around SAP analytics keeps getting weirder and more complicated, and it contradicts what were supposed to be the original benefits of HANA.

With new articles coming from compliant SAP consulting companies, we have the explanation that companies still need a data warehouse, which means that SAP’s vision of entirely embedded analytics has failed. Alternatively, should we say, what SAP stated about doing away with the data warehouse because of the embedded analytics will never come true? We knew it would never come true, as it never made any sense. We told many SAP consultants this in discussions, but they overrode the concerns and told us this all made sense at SAP. Five or six years after the fact, SAP is finally changing its messaging (although not admitting it is changing its messaging).

References

*https://www.yash.com/blog/10-reasons-sap-bw4hana-is-unavoidable/

https://n-spro.com/blog/do-we-need-a-separate-bw-system-with-sap-s-4hana-embedded-analytics

https://blogs.sap.com/2018/04/24/why-bw4hana-is-still-required-even-after-embedded-bw-on-sap4hana/

https://www.adfahrer.com/files/2017/sap%20sbn%20hana%20reporting%20capabilities.pdf

HANA & S/4HANA Question Box

  • Have Questions About S/4HANA & HANA?

    It is difficult for most companies to make improvements in S/4HANA and HANA without outside advice. And it is close to impossible to get honest S/4HANA and HANA advice from large consulting companies. We offer remote unbiased multi-dimension S/4HANA and HANA support.

    Just fill out the form below and we'll be in touch.

Brightwork Disclosure

Financial Bias Disclosure

This article and no other article on the Brightwork website is paid for by a software vendor, including Oracle and SAP. Brightwork does offer competitive intelligence work to vendors as part of its business, but no published research or articles are written with any financial consideration. As part of Brightwork’s commitment to publishing independent, unbiased research, the company’s business model is driven by consulting services; no paid media placements are accepted.

The Risk Estimation Book

 

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

Better Managing Software Risk

The software implementation is risky business and success is not a certainty. But you can reduce risk with the strategies in this book. Undertaking software selection and implementation without approximating the project’s risk is a poor way to make decisions about either projects or software. But that’s the way many companies do business, even though 50 percent of IT implementations are deemed failures.

Finding What Works and What Doesn’t

In this book, you will review the strategies commonly used by most companies for mitigating software project risk–and learn why these plans don’t work–and then acquire practical and realistic strategies that will help you to maximize success on your software implementation.

Chapters

Chapter 1: Introduction
Chapter 2: Enterprise Software Risk Management
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

How Accurate is SAP’s Page on S/4HANA?

Executive Summary

  • SAP’s S/4HANA Web Page
  • The Next Generation ERP Suite with Big Data and IoT?
  • Immediate, Intelligent, and Integrated ERP?
  • Core Finance: Achieve operational excellence and innovation–company-wide
  • Digital World Requirements?
  • Accelerate your SAP S/4HANA Deployment?
  • Transition to SAP S/4HANA?

Introduction

In this article, we will review SAP’s S/4HANA page and check it for accuracy.

Quotes from the SAP’s S/4HANA Page

The Next Generation ERP Suite with Big Data an IoT?

The next-generation ERP business suite

Run a truly live business with SAP S/4HANA, an intelligent ERP suite designed specifically for in-memory computing. SAP S/4HANA is the digital core that connects your enterprise with people, business networks, the internet of things, big data, and more. Take control and run a live business with SAP S/4HANA and experience the power of a digital core.

SAP has been using the term “digital core” for some time now to describe their ERP system. However, it is not clear why. SAP then states that S/4HANA connects your enterprise with people (true), business networks (true), the internet of things (false), big data (false) and more (whatever that might be.

I cover SAP’s IoT solution in the article Why SAP’s Leonardo Seems So Fake. SAP has basically no Big Data business, and Big Data has nothing to do with ERP systems, SAP or non-SAP. So this part of SAP’s web article is simply false.

What is S/4HANA?

SAP S/4HANA is a real-time enterprise resource management suite for digital business. It is built on our advanced in-memory platform, SAP HANA, and offers a personalized, consumer-grade user experience with SAP Fiori. Deployable in the cloud or on premise, SAP S/4HANA can drive instant value across all lines of business – no matter your industry or business size.

It is unclear what SAP even means with the beginning of this paragraph. It is simply sales talk.

S/4HANA is built on an advanced in-memory platform. No other vendor offers in memory for ERP systems, but not because they can’t but because it does not make very much sense. And it is very expensive to do so.

SAP offers Fiori, but Fiori is still being developed and almost no customer uses Fiori, which is covered in the article The Math of Probable S/4HANA and Fiori Usage. No matter what, if a company implements S/4HANA, they will need to use the SAPGUI. This is covered in the article What is Actually in the Fiori Box?

Hmmm….there is absolutely no evidence that S/4HANA can drive instant value across all lines of business. S/4HANA has very few live clients. SAP would have no way of even knowing if this sentence regarding value is true.

Immediate, Intelligent, and Integrated ERP?

SAP S/4HANA is the digital core – the nerve center – of your entire business. It consolidates internal and external elements into a single, living structure that goes beyond traditional ERP software. In other words, it connects all of your processes, provides you with live information and insights, and seamlessly integrates your enterprise with the digital world at large.

S/4HANA does not go beyond traditional ERP software. S/4HANA is roughly 93% identical to ECC’s code, (based upon a code analysis).

S/4HANA does what ECC does. It does not provide live information more than ECC. S/4HANA’s reports are faster (because it sits on an analytical database). But it is unclear how much customers will use this capability versus reporting off of the business warehouse.

It is difficult to tell if SAP wrote the last sentence as comedy or is simply trying to see how much they can pull on people, but S/4HANA does not “seamlessly integrate your enterprise with the digital world at large.” Who would even write such a thing? If true, it would mean that S/4HANA is already perfectly integrated with all digital applications that exist. Which rather obviously it doesn’t.

Core Finance: Achieve operational excellence and innovation–company-wide

Provide world-class support for local market requirements, languages, and currencies with solutions from SAP. Our scalable and open architecture optimized for in-memory databases can help you simplify and accelerate your financial operations – enabling you to improve performance and focus on growth and innovation.

Yes, S/4HANA has strong support for multiple languages and currencies…as did ECC.

The statement regarding an in-memory database simplifying and accelerating financial operations has been extensively studied by Brightwork and was found to be false. This was covered in An Analysis of the SAP S/4HANA 1610 Information.

Digital World Requirements?

In today’s digital world, organizations need greater flexibility and the ability to execute without limitations. Learn how SAP S/4HANA can help your organization address every opportunity in the digital world.

The world has been digital for some time. Why is SAP focusing on items being digital as of 2016 and 2017? This fixation with the term digital to sell software and consulting services is covered in the article The Problem with Digitial Transformation and Modern IT Projects.

Accelerate your SAP S/4HANA Deployment?

Utilize our industry-leading SAP HANA Enterprise Cloud to shorten your time-to-value and deploy a digital core. Enjoy the full power of SAP HANA in a private, managed cloud environment that is supported by the most knowledgeable resources in the industry – from infrastructure to applications.

No that is quite untrue. First SAP HANA Enterprise Cloud is not industry leading. AWS is the widely acknowledged industry leader in cloud hosting. In fact, it does not make very much sense to host with SAP. And SAP itself has mostly given up competing directly with AWS as they demonstrated with their mulicloud announcement at SAPPHIRE 2017 which is covered in the article How to Best Understand SAP’s Multicloud Announcement.

Furthermore, the most knowledgeable resources on the cloud, PaaS, IaaS, etc, would tend to work at AWS as they have a much more significant business in the cloud than does SAP and they are the clear industry leaders.

Transition to SAP S/4HANA?

Our Digital Business Services organization and partner ecosystem is committed to your success. They will provide guidance at every stage of your digital transformation, based on your unique business needs and goals, so you can take full advantage of S/4HANA innovations.

That is curious. Almost no SAP consulting partners have any experience with S/4HANA because it is so lightly installed. It is true that SAP will provide guidance every stage of the project, but not of the digital transformation because unless the company is moving from a system which is not based in computers, no S/4HANA implementations is a digital transformation.

Conclusion

SAP really pulled out all the stops to falsify information for this article.

This SAP article has a Brightwork Accuracy Score of 1 out of 10. There is no score lower than this.

This article is part of The S/4HANA Implementation Study. Please see that study for the overall conclusions.

HANA & S/4HANA Question Box

  • Have Questions About S/4HANA & HANA?

    It is difficult for most companies to make improvements in S/4HANA and HANA without outside advice. And it is close to impossible to get honest S/4HANA and HANA advice from large consulting companies. We offer remote unbiased multi-dimension S/4HANA and HANA support.

    Just fill out the form below and we'll be in touch.

References

https://www.sap.com/products/s4hana-erp.plan-to-product.html

The Real Story on ERP Book

ERPThe Real Story Behind ERP: Separating Fiction From Reality

How This Book is Structured

This book combines a meta-analysis of all of the academic research on the benefits of ERP, coupled with on project experience.

ERP has had a remarkable impact on most companies that implemented it. Unplanned expenses for customization, failed implementations, integration, and applications to meet the business requirements that ERP could not–have added up to a higher Total Cost of Ownership for ERP were all unexpected, and account control, on the part of ERP vendors — is now a significant issue affecting IT performance.

Break the Bank for ERP?

Many companies that have broken the bank to implement ERP projects have seen their KPIs go down— but the question is why this is the case. Major consulting companies are some of the largest promoters of ERP systems, but given the massive profits they make on ERP implementations — can they be trusted to provide the real story on ERP? Probably not, however, written by the Managing Editor of SCM Focus, Shaun Snapp — an author with many years of experience with ERP system. A supply chain software expert and well known for providing authentic information on the topics he covers, you can trust this book to provide all the detail that no consulting firm will.

By reading this book you will:

  • Examine the high failure rates of ERP implementations.
  • Demystify the convincing arguments ERP vendors use to sell ERP.
  • See how ERP vendors take control of client accounts with ERP.
  • Understand why single-instance ERP is not typically feasible.
  • Calculate the total cost of ownership and return on investment for your ERP implementation.
  • Understand the alternatives to ERP.

Chapters

  • Chapter 1: Introduction to ERP Software
  • Chapter 2: The History of ERP
  • Chapter 3: Logical Fallacies and the Logics Used to Sell ERP
  • Chapter 4: The Best Practice Logic for ERP
  • Chapter 5: The Integration Benefits Logic for ERP
  • Chapter 6: Analyzing The Logic Used to Sell ERP
  • Chapter 7: The High TCO and Low ROI of ERP
  • Chapter 8: ERP and the Problem with Institutional Decision Making
  • Chapter 9: How ERP Creates Redundant Systems
  • Chapter 10: How ERP Distracts Companies from Implementing Better Functionality
  • Chapter 11: Alternatives to ERP or Adjusting the Current ERP System
  • Chapter 12: Conclusion

How Accurate Was ASUG on S/4HANA’s Integration as R&D Priority?

Executive Summary

  • What is the Background of the Article on SAP Cloud Integration
  • Does Innovation Equal Acquisition?
  • How Innovative is S/4HANA?
  • SAP’s Continual Problems with Integration and Cloud Integration
  • Support Should Not be Used for Development?
  • S/4HANA Customers Should be Happy?

Introduction

In this article, we will review ASUG’s article on the S/4HANA and SAP cloud integration.

Quotes from the ASUG Article

Does Innovation Equal Acquisition?

“Bill McDermott started as Co-CEO of SAP, along with Jim Hagemann Snabe, in 2010, and has held the CEO position solely since 2014. During the past seven years under McDermott, SAP has been busy trying to meet the standard of the “Cloud Company Powered by HANA” vision. This has meant new product developments as well as large acquisitions.

“Since 2010, we’ve invested $50 billion in innovation,” says McDermott, who spoke on the main stage at SAP Ariba Live in Las Vegas last week.”

This seems misleading. Investing in innovation is typically reserved for R&D. Innovation is not considered acquisitions. In fact, a high number of acquisitions is actually evidence of a lowered ability to innovate. For instance, SAP cannot, in accounting, take acquisitions and place them into the R&D expense for tax purposes. So this linguistic inaccuracy is noteworthy on the part of Bill McDermott. Bill McDermott is a lifelong salesperson in character, and it is interesting to ponder how much he actually believes what he is saying.

Unsurprisingly, ASUG does not comment on McDermott’s inaccuracy.

“During a separate Q&A session with press and analysts at SAP Ariba Live, McDermott did confirm to me that the $50 billion number includes cloud mergers and acquisitions, such as Ariba, Concur, Fieldglass, SuccessFactors and Hybris — keep in the mind the Concur acquisition alone was more than $8 billion. That innovation also includes the development of S/4HANA, SAP’s next generation ERP suite and products such as the HANA Cloud Platform, which McDermott calls “the fastest growing software we have at the company.”

HANA Cloud Platform or SAP Cloud Platform has been the fastest growing software that SAP has because it is free. I logged into the SAP Cloud Platform to test it as well, and I assume my credentials count as a user, even though I never really did anything with it.

How Innovative is S/4HANA?

As for the commingling of S/4HANA development with software acquisitions, that is simply confusing. Also while S/4HANA development expenditures do meet the definition of R&D, they don’t meet the definition of innovation. S/4HANA development can be roughly categorized into the following changes:

  • Creating new tables that leverage HANA’s column-oriented design.
  • Code reduction and simplification.
  • Development of Fiori apps
  • Removal of ECC functionality

Most of these things can be considered sort of background housecleaning. But roughly 93% of S/4HANA is using code from ECC. I have logged in rooted around S/4HANA and it looks like ECC to me. Also, most companies that use S/4HANA don’t use the Fiori apps, so the effect of SAP’s improvements here have yet to be really used. As for the column-oriented table redesign, reports from the field is that transaction processing has suffered as a result. Therefore, not all “innovation” is necessarily good innovation. It is simply very difficult to see S/4HANA as an innovative application.

“With all those new products both homegrown and acquired, building native integration has been a challenge for SAP in the past seven years. If they want customers to sign on to the whole vision, with core ERP alongside SAP-owned cloud providers, integration is a key selling point. McDermott admits to the SAP Ariba main stage crowd that it hasn’t been easy.”

SAP’s Continual Problems with S/4HANA and SAP Cloud Integration

Integration has always been a challenge for SAP. For example, APO, which is now roughly 18 years old and thus is older than “the past 7 years,” has had the CIF, which has been a highly problematic integration component, as is covered in this article.

It also brings up the question of why SAP it has been so difficult to integration ERP to SAP’s cloud purchases and therefore before SAP cloud integration became an issue. SAP has enormous resources, but continually has such problems developing adapters promptly to its acquired applications. That should not be the case. It brings up the question of whether customers should simply wait at least five years or longer before buying any product acquired by SAP, so SAP can finally complete and adapter.

“When we bought other cloud assets, we had to integrate back to the core and I know that wasn’t always smooth,” he says.

I asked McDermott about what integrations customers can expect from SAP going forward, including integrations with S/4HANA’s predecessors, ECC and Business Suite. He says that S/4HANA is the focus.

“The No. 1 key R&D [research and development] initiative is whatever you do on innovation has to integrate seamless into S/4HANA,” says McDermott. “It’s an essential element in everything we do.”

Right, so companies that stay on ECC will not be integrated to SAP’s new applications or SAP cloud integration. This will be used to motivate customers to migrate to S/4HANA. However, it would be a bad decision to move to S/4HANA before it is ready to be implemented. Secondly, SAP’s acquired products are not differentiated in the market from other competitive applications. Therefore current ECC users may want to simply connect non-SAP applications to ECC. SAP is very much against this of course, as is covered in the article SAP’s Position on Non-SAP Application Integration.

S/4HANA Customers Should be Happy?

Finally, If S/4HANA is the focus on integration for SAP, customers that have bought into the whole SAP S/4HANA vision along with complementary cloud offerings will be happy.

I am not sure how happy those customers should be. Most of them are probably still pretty unhappy about how little they got from their S/4HANA implementations. But secondly, even when SAP does make integration a priority, they have a problem pulling out off. SuccessFactors and Ariba were purchased 5 years ago. Why have they not been fully integrated yet?

“Those looking to stick with ECC or Business Suite longer, but still take advantage of cloud products that haven’t yet been natively integrated, such as Concur, will likely have to look to third parties to complete those integrations. They can also expect those native integrations to be an S/4HANA selling point when talking with their favorite friendly SAP account executive.”

Hmmm…..ASUG could do a little better job of hiding their complete subordination to SAP a little better. ASUG is supposed to be a user group. It seems that ASUG needs to be constantly reminded of this fact and that they are not supposed to simply be a court jester for the mighty SAP.

Conclusion

ASUG did a fine job of publishing uncritical information about SAP cloud integration that put SAP in the best light possible. This is why I can never tell if an ASUG article is written by a person at ASUG or a person at SAP. It’s almost like they are one and the same! SAP will use its SAP cloud integration to S/4HANA, but there is no evidence that SAP customers should jump at this. In fact, it will in most cases be far better to stay with ECC and use better non-SAP cloud applications and skip the SAP cloud integration altogether. Or simply wait a while until SAP gets its SAP cloud integration issues worked out.

This ASUG article has a Brightwork Accuracy Score of 2 out of 10.

See our The S/4HANA Implementation Study. for real story and details on actual S/4HANA implementations.

HANA & S/4HANA Question Box

  • Have Questions About S/4HANA & HANA?

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    Just fill out the form below and we'll be in touch.

References

https://www.asug.com/news/sap-ceo-bill-mcdermott-s-4hana-integration-is-top-r-d-priority

The Real Story on ERP Book

ERPThe Real Story Behind ERP: Separating Fiction From Reality

How This Book is Structured

This book combines a meta-analysis of all of the academic research on the benefits of ERP, coupled with on project experience.

ERP has had a remarkable impact on most companies that implemented it. Unplanned expenses for customization, failed implementations, integration, and applications to meet the business requirements that ERP could not–have added up to a higher Total Cost of Ownership for ERP were all unexpected, and account control, on the part of ERP vendors — is now a significant issue affecting IT performance.

Break the Bank for ERP?

Many companies that have broken the bank to implement ERP projects have seen their KPIs go down— but the question is why this is the case. Major consulting companies are some of the largest promoters of ERP systems, but given the massive profits they make on ERP implementations — can they be trusted to provide the real story on ERP? Probably not, however, written by the Managing Editor of SCM Focus, Shaun Snapp — an author with many years of experience with ERP system. A supply chain software expert and well known for providing authentic information on the topics he covers, you can trust this book to provide all the detail that no consulting firm will.

By reading this book you will:

  • Examine the high failure rates of ERP implementations.
  • Demystify the convincing arguments ERP vendors use to sell ERP.
  • See how ERP vendors take control of client accounts with ERP.
  • Understand why single-instance ERP is not typically feasible.
  • Calculate the total cost of ownership and return on investment for your ERP implementation.
  • Understand the alternatives to ERP.

Chapters

  • Chapter 1: Introduction to ERP Software
  • Chapter 2: The History of ERP
  • Chapter 3: Logical Fallacies and the Logics Used to Sell ERP
  • Chapter 4: The Best Practice Logic for ERP
  • Chapter 5: The Integration Benefits Logic for ERP
  • Chapter 6: Analyzing The Logic Used to Sell ERP
  • Chapter 7: The High TCO and Low ROI of ERP
  • Chapter 8: ERP and the Problem with Institutional Decision Making
  • Chapter 9: How ERP Creates Redundant Systems
  • Chapter 10: How ERP Distracts Companies from Implementing Better Functionality
  • Chapter 11: Alternatives to ERP or Adjusting the Current ERP System
  • Chapter 12: Conclusion

The Math of Probable S/4HANA & Fiori Usage

Executive Summary

  • SAP has made exaggerated claims regarding the usage of S/4HANA and Fiori.
  • In this article, we estimate the actual usage which is quite distinct from these claims.

Introduction

SAP has been releasing false numbers regarding the uptake and usage of S4 HANA and Fiori for several years now. This is driven by the desire to make it appear as if their new offering is far more popular than it is. The more that they can seem to have a wide acceptance of these new products the more they can convince others to purchase S/4 HANA (and accompanying Fiori) and the more they can convince Wall Street that their strategy is working. SAP claims 4,200 customers of S/4 HANA. (I prefer to call S/4 HANA simply “S4” as I find S/4 HANA to be marketing centric as there is no reason to have the database as part of the application’s name). The evidence I bring is one cannot find another application with the database in its name.

This is a short article designed to show the actual usage of both S4 and by extension Fiori.

The Math for the Estimate

In order to estimate the amount of Fiori usage and how drastically it differs from the statements made by SAP, we have to isolate where Fiori is used.

  • Fiori has been designed to be used with the S4 ERP system, at least in the beginning. Fiori has been broadened out to work with other applications, but there are still very few S4 applications.
  • S4 only works with HANA, and Fiori only works with HANA for roughly 83% of its apps. (This is a correction. Bjorn comment can be read below this article. It is a good interchange. However, Bjorn’s estimate, upon review is also inaccurate. The number of Fiori apps requires its own article because of the confusing way that SAP has counted Fiori apps)

Therefore determining likely Fiori usage means estimating S4 usage.

According to SAP, they have 50,000 ERP customers across 25 industries. I have been on projects where it is claimed that SAP has upwards of 250,000 customers. However, this would mean any company that was in possession of an SAP license for any application. It would not necessarily include active customers. SAP may count customers that used their software 10 years ago and moved off of their software.

So for this estimate, I have gone with the 50,000 ERP customers to compare against the total number of S4 customers.

I have spent time estimating the number of customers using S4 with inputs from multiple sources and come to around 150. This is 150 global customers either in the current state of implementing S/4HANA, or having already implemented it (almost all only having implemented S4 Finance). The largest concentration of these implementations is in Germany, and they were not undertaken because of S4’s value (as it is a currently being developed application – set of applications) but because of the control that SAP has over these companies. (See this article for the surprising details on the implement-ability of S4)

That would mean that of the 50,000 customers, 150/50,000 or .003 of SAP ERP customers use S4. But this is not 150 live customers with S4.

However, this is not sufficient for estimating how small the usage of Fiori actually is. Unlike what has been proposed by Hasso Plattner, Fiori is not a replacement for SAPGUI. Fiori is only a series of a little over 1000 apps that are concentrated in low data intensive transaction. No company can use S4 without spending most of its time in SAPGUI. Companies would use S4 some percentage of the 1000 apps, but these apps replicate screens in the SAPGUI, and there would be a transitionary time and training required to use these Fiori apps.

  • Therefore of the 150 implementations of S4, some small subset of the overall transactions accessed by SAP customers that use S4 use some Fiori apps.
  • Of these 150 implementations, only some portion of which may be using some of the Fiori apps.

Conclusion

Understanding these limitations of the possible usage of Fiori indicates that Fiori’s overall usage must be incredibly small. This likely fact, combined with the fact that Fiori has been around for several years now, argues very poorly for Fiori’s likely survival.

What is also interesting about this is if you compare the numbers I have come up with versus pretty much every other number that is published — it is far off. This is because just about every IT media outlet just takes SAP’s word for how many companies are using the software. Wall Street and the traditional IT media are so easy for SAP to fool because they apply no filter to what they are told by SAP.

Brightwork Disclosure

Financial Bias Disclosure

This article and no other article on the Brightwork website is paid for by a software vendor, including Oracle and SAP. Brightwork does offer competitive intelligence work to vendors as part of its business, but no published research or articles are written with any financial consideration. As part of Brightwork’s commitment to publishing independent, unbiased research, the company’s business model is driven by consulting services; no paid media placements are accepted.

HANA & S/4HANA Question Box

  • Have Questions About S/4HANA & HANA?

    It is difficult for most companies to make improvements in S/4HANA and HANA without outside advice. And it is close to impossible to get honest S/4HANA and HANA advice from large consulting companies. We offer remote unbiased multi-dimension S/4HANA and HANA support.

    Just fill out the form below and we'll be in touch.

References

How Accurate is the Messaging on the SAP S/4HANA On Premises Roadmap?

Executive Summary

  • We analyze S/4HANA’s regarding the S/4HANA roadmap.
  • SAP has greatly misled customers and prospects regarding the maturity of S/4HANA.
  • SAP has been using the construct of agile in order to cover for the fact that S/4HANA’s development is so discombobulated.
  • Why S/4HANA’s development is extremely similar to Oracle Fusion.

Introduction to the S/4HANA Roadmap

SAP has been releasing strange information about the S/4HANA roadmap since S/4hANA was first released. You will learn about our analysis of SAP’s projections with S/4HANA.

What is S/4HANA?

S/4HANA is the first major upgrade to what was R/3.

  • ..aka ECC (Enterprise Core Component)
  • ..aka Business All in One
  • aka All in One…

This article will focus on making sense of the statements made about S/4HANA by SAP.

This should of value to people because the messaging on S/4HANA is confusing and requires translation as well as validation.

Understanding The Language of Selling and SAP Run Simple

Before we get into the evaluation of SAP’s slides on S/4HANA. What should be contemplated is that S/4HANA marketing documents are not necessarily designed to be true, but to sell S/4HANA.

That is why much of the S/4HANA material will seem strange to an experienced implementer.

SAP has teams of people who go around trying to pump up SAP partners on HANA, who in turn relay the message to their prospects. This group never implement software, they are compensated on how well they can convince people of this or that future. So their material tends to be quite divorced from reality, and it is the same material that will find it’s way to SAP’s website, or to the conference circuit.

So with that background let us get on with the analysis of the SAP S/4HANA slides.

S/4HANA Slide Analysis

SAP R/3 has been renamed over the years to ECC and then to SAP ERP (which never took) and then to Business All in One.

  • None of these names meant anything regarding referring to something new in the application; they were just marketing terminological changes.
  • R/3 has stabilized some years ago, which means that it has seen little in functionality enhancement since that time, with most of the development focused on non-ERP applications. This brings up the topic of the support that is paid to SAP for a stable application, which will be the subject of a future article.

Initial Slide Benefits

This SAP S/4HANA Roadmap slide states the following benefits:

  • Simplified Data Model: I moved this response over to a separate article titled Does S/4 HANA have a Simplified Data Model? 
  • Completely Fiori: Fiori is the new SAP user interface. However, Fiori is not a replacement for the SAPGUI, now or in the future. I covered this in detail in the article What is Actually in the Fiori Box? Interestingly, I was recently speaking with a custom UI vendor, and they were telling me that SAP has started backing off the “completely Fiori” proposal to saying that Fiori will be complementary to the SAPGUI. I have not seen the newest SAP messaging here, but I look forward to reviewing it when it comes to me.
  • Guided Configuration: I cropped this screenshot above too much when I took it, but the statement to the right in the slide above is “guided configuration.” I can’t tell you how many times over the years I have heard about guided configuration. I have never seen one of these guided configuration toolkits/etc.. work. SAP has been trying to sell RDS or Rapid Deployment Solutions as guided configuration, and the RDSs are not this at all. It should be remembered the IMG, which ships with the previous ERP version of SAP ERP, was also supposed to be guided configuration as well, but it never was. S/4HANA may have a few helpful screens, but it most assuredly won’t be guided configuration.
  • Reimagined Business Models: It is very unlikely that business models will be “reimagined,” instead what companies should look for is if S/4HANA can be made to work. They need first to check when the actual overall suite will be released. These are a lot of changes SAP is making, and they are clearly having problems making them, which is why S/4HANA Enterprise Management (i.e., the full suite) is late.
  • Reimagined Business Processes: Same thing, SAP is not offering new application functionality in S/4HANA. S/4HANA is about an infrastructure upgrade (with a tiny amount of UI improvement for the areas that can use Fiori). The business functionality is roughly the same as in ECC. SAP showed some sexy stuff in what was S/4HANA Simple Finance (now just S/4 HANA Finance), but given that it is now apparent that these are just a limited number of Fiori apps, it is hard to validate how much of this is completed.
  • No More Batch — All Processes in Real Time: S/4HANA is an ERP system, and that means it’s a transaction processing system. There are some processing that is performed in batch, such as MRP and closing the quarter for financial reconciliation, but this is a very simple type of processing. The batch processing is a small part of ERP processing already. Most processing in ECC/Business All in One is transactions and is already processed immediately or in real-time.
  • Reimagined Business Decisions: Hmmm…this one seems to propose massive differences in reporting for S/4HANA. Clearly, S/4HANA will be much faster. However, the idea of reporting would be so much better also depends upon the reporting application. HANA has several tools, such as HANA Live Browser, but this is not S/4HANA. All of these tools are too new and unproven to make big statements about them.

Process Time Slide Benefits

One slide shows the reducing in time for processing. However, it overestimates the time that the transaction processing system takes.

Yes, S/4HANA will faster, but companies currently don’t have a real problem with closing. I performed the research to be able to make this statement with confidence. It’s a nice to have, but SAP is overemphasizing the benefits here.

This slide is similar in that it focuses on the speed of the system. Again it focuses on the two most processing-intensive processing within ERP which is financial closing, reporting, and MRP.

This particular slide is misleading and confusing. Neither SAP TM (Transportation Management) nor Ariba runs on HANA. I can’t tell if that slide is trying to say that they do, or that S/4 simply can integrate with other SAP applications. S/4HANA does not run on HANA yet because the vast majority of S/4HANA is not yet released.

The slide also includes all the trendy terms, like the Internet of Things and Big Data — and one I had never heard of before, called Omni-Channel. Omni-Channel only means to offer a sales experience across multiple retail channels — such as online, offline, etc..

This has nothing to do with SAP as SAP has no product that does this — and these three things just tell the executive that “we do the new sexy.” It’s a subliminal messaging that “we get it.” 

Shrinking the DB?

A big message about S/4HANA has been getting lean. So SAP has a few good slides on this that explain how this works. The first slide shows database aggregates and indices in the database.

One of the benefits of columnar databases is that they require less aggregation and indices. The blue is the aggregates and indices that are still necessary with HANA. SAP states it was able to shrink the size of the data that S/4HANA takes up.

However, it also needs to be stressed that you will pay a lot more per GB when using anything on HANA, so these changes won’t translate to cost savings.

SAP proposes that transactions are currently pushed throughout the system. SAP proposes that data will now be pulled.

Why is this true? Is information currently pushed in R/3/ECC? This is the first time I have heard of this.

S/4HANA Options

There is a lot of talk about all the options available for S/4HANA. However, S/4HANA in the cloud is quite expensive. And being able to put an ERP system in the cloud, or any other application for that matter should not be considered a big deal.

I happen to find most of the SAP’s material on the cloud more confusing than anything.

I have spent so much time on sales proposals where the topic of either on-premise or cloud is discussed, and it always seems to break toward on-premise. Also, except for purchased applications like SuccessFactors or Ariba, most of the SAP purchases are still being sold on-premise.

SAP on Roadmap Specifics

“More recently, SAP released three new SAP S/4HANA “1603” cloud editions that provide industry-focused capabilities for marketing, professional services and more general enterprise ERP needs. In fact, the vendor is producing new updates for both cloud and on-premises SAP S/4HANA editions every quarter — so the answers to the question of functional completeness for S/4HANA are effectively changing every three months.”

As Uwe states, 1603 is the cloud edition of S/4 HANA. So 1603 contains focused industry capabilities for marketing and professional services.

So that would seem to imply that 1151 does not have these capabilities. It would make sense that professional services firms would be a better fit for 1603 – although overall S/4 HANA is overkill for a professional services firm. All a professional services firm needs is a finance module with professional services functions, which can be attained far more economically from Intacct of FinancialForce. Most companies that implement S/4 will only implement it so they can resell that experience in consulting. But this brings up a tangential question as to whether the cloud and on-premises editions are no longer the same set of functionalities.

S/4HANA Enterprise Management

SAP, through Uwe, is telling customers it’s S/4HANA Enterprise Management, which is the full suite, is ready to go. Notice at the end of the quotation, it contradicts itself, stating that the functional completeness of S/4HANA Roadmap changes every three months.

So is S/4 complete? What are we to learn from the S/4HANA Roadmap information?

Or on the other hand, is it becoming more complete every three months? It cannot be both. Let us see…I now have to check Wikipedia as SAP is using the term in a new and unprecedented way.

SAP is primarily using the term “complete” to mean “incomplete.” S/4 HANA is perfect, but it will become more and more complete every three months. Did you get that? Ok good, we can move on to more classic Uwe quotes.

Now this next quote is not related to the readiness of S/4, but it gives some more background as to where Uwe lives. It is from the same article.

“In S/4HANA, we are connecting classical ERP processes with new processes of the digital economy,” Grigoleit said. “For example, if we are talking about asset management as a classical ERP process, then we are making a connection to information networks so that you’re not entering data on your own — you’re getting the data out of the network automatically, connecting it to the asset management and location services.”

How Reliable is Uwe Grigoleit as a Source of Information?

Ok, so we can see from this quotation that Uwe likes to spin a good yarn.

You see the issue is that a quotation can be repeated that is taken from a high-level SAP business development resource like Uwe or Bill McDermott, but without the context that these types of spokesmen from SAP live in a permanent fantasy-land, and take huge numbers of meetings, but don’t themselves touch or test software.

With a heavy dose of stock options pushing them towards unprecedented (in fact they do have precedent, but I decided to adopt SAP’s hyperbolic way of making statements for this sentence) levels of optimism, it is understandable that so much unreliable information like this is generated. I would like it if they were more honest and said something like….

“S/4 HANA is going to help me make $5,000,000 off of my stock options!”

Now that at least would be true.

The S/4HANA Roadmap and Agile Development

SAP has missed its deadline on the rest of the S/4 suite versus the S/4HANA Roadmap, and it was now scrambling to get functionality released as soon as possible.

Agile has its benefits, and I use Agile on projects, but I don’t use the term Agile to cover up for lack of planning. What is completely apparent is that S/4 HANA was announced far too early and that the S/4HANA Roadmap was inaccurate from the beginning. All along SAP really misrepresented the S/4HANA Roadmap and made appear that they were much further along on S/4HANA than they were.

This is not Agile. This is marketing getting too far ahead of development and living too comfortably on Fantasy Island, and then putting development on the grill to deliver too quickly. It has been well-known for some time that making the types of changes to S/4 that SAP talked about making would result in many millions of lines of code being rewritten. Now the obvious conclusion is that SAP did not allocate enough time to allow for this to happen, or did not organize their internal teams appropriately to accomplish this task in their predicted timelines.

Oracle Fusion (Agile) Development Revisited

Interestingly what SAP is doing with S/4 has a precedent in the not too distant past and within a company that SAP does not like very much. That is right, what SAP is doing with the S/4HANA Roadmap is very similar to what was done with Oracle Fusion.

Oracle Fusion development went to Agile development, but the Fusion development just never seemed to end. Fusion was the subject of non-stop marketing on the part of Oracle, and Fusion never seemed to reach a point of finality. By 2016, pretty much everyone was burned out on hearing about Fusion has had very little market acceptance.

There is another similarity between Fusion and S/4 HANA. Like Fusion, the migration effort is enormous. See the following quotation from a comment on a Fusion article:

“Oracle is in a tough spot here because from what I understand, the move from the legacy apps onto Fusion Apps is not a straightforward “upgrade”, like you would expect from IBM, Microsoft or SAP but, rather, a complicated and expensive migration. This means when faced with the decision to move off e.g. PeopleSoft, customers are likely to evaluate Fusion vs Workday vs Successfactors (depending on use case). This is a tremendously dangerous place for Oracle to be in – none of the other ERP vendors have put themselves in this position, and SAP’s ability to upgrade from almost any version of R/3 (back to version 3.1I in 1998) to the latest version.”

The Similarity Between Fusion Problems and S/4HANA Problems?

This was written without consideration for S/4 HANA however. Mainly S/4 HANA faces the similar migration problems as Fusion as the change from ECC is so significant. This quotation was from John Appleby, the GM of Bluefin. Now while John Appleby notices that Fusion has enormous migration effort involved, he comments on an article. But when S/4 HANA is the same migration issues, he is silent on that topic. Why? Because Bluefin implements SAP.

That is the extent of much of the information available in enterprise software. The algorithm works something like this:

  • If the author can make money on it, then hide the downsides.
  • If one cannot make money on it, then be “objective” and bring up the downsides with competitor products. It’s all very scientific you see.

Conclusion

Statements about the S/4HANA Roadmap have to be analyzed because a lot of the information in these types of sales slides is fanciful. SAP needs to declare what parts of the S/4HANA Roadmap are ready currently. And they are not doing this.

It is easy to view a S/4HANA Roadmap slide and let it pass you by simply, and I think I tended to do this for a while on S/4HANA and HANA. It is another thing to evaluate if what is written makes sense. I have worked on S/4HANA sales pursuits, and I don’t like using these types of slides because they are inaccurate and they create expectations that are too high.

It is no easy feat keeping up with SAP’s S/4HANA Roadmap 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.

One of the reasons I wrote this article is that I am beginning to wonder myself how many people who have investigated S/4 and know that outside of Finance (which also has rough areas and a big question mark with how may Fiori apps can be used). S/4 as a suite is not ready to be implemented.

Brightwork Disclosure

Financial Bias Disclosure

This article and no other article on the Brightwork website is paid for by a software vendor, including Oracle and SAP. Brightwork does offer competitive intelligence work to vendors as part of its business, but no published research or articles are written with any financial consideration. As part of Brightwork’s commitment to publishing independent, unbiased research, the company’s business model is driven by consulting services; no paid media placements are accepted.

HANA & S/4HANA Question Box

  • Have Questions About S/4HANA & HANA?

    It is difficult for most companies to make improvements in S/4HANA and HANA without outside advice. And it is close to impossible to get honest S/4HANA and HANA advice from large consulting companies. We offer remote unbiased multi-dimension S/4HANA and HANA support.

    Just fill out the form below and we'll be in touch.

References

I cover how to interpret risk for IT projects in the following book.

The Risk Estimation Book

 

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

Better Managing Software Risk

The software implementation is risky business and success is not a certainty. But you can reduce risk with the strategies in this book. Undertaking software selection and implementation without approximating the project’s risk is a poor way to make decisions about either projects or software. But that’s the way many companies do business, even though 50 percent of IT implementations are deemed failures.

Finding What Works and What Doesn’t

In this book, you will review the strategies commonly used by most companies for mitigating software project risk–and learn why these plans don’t work–and then acquire practical and realistic strategies that will help you to maximize success on your software implementation.

Chapters

Chapter 1: Introduction
Chapter 2: Enterprise Software Risk Management
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

Risk Estimation and Calculation

Risk Estimation and Calculation

See our free project risk estimators that are available per application. The provide a method of risk analysis that is not available from other sources.

project_software_risk

Getting Clear on SAP S/4HANA Simple Finance & Simple Logistics

Executive Summary

  • The reason that HANA in the name of S/4HANA tells us interesting things about what SAP is communicating to customers.
  • It is unheard of to place the database in the name of the application.
  • Simple Finance and Simple Logistics are immature applications.
  • S/4HANA’s Simple Logistics missed its release date.

Introduction to S/4HANA Naming

There has been quite a bit of marketing information written on SAP S/4HANA. It is hard to overstate how much.

The first introduction of SAP S/4HANA 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

SAP S/4HANA 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
  • SAP S/4HANA is the ERP system, and HANA is the database is running on. Thus “S/4HANA.”

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. SAP S/4HANA 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 stick to the naming discussion for this article.

What is the State of Simple Finance?

For some time, the only part of SAP S/4HANA 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.

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 SAP S/4HANA Simple Logistics (which it would connect to) was coming right around the bend. Simple Logistics was the rest of the S/4 suite. SAP has historically put much more effort and functionality in finance than in the rest of the suite. But with Simple Finance and Simple Logistics, this is the first time they released the areas of their ERP application separately. That is with Simple Finance mostly done, and Simple Logistics still very much a work in process.

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. After researching this, both reviewing statements around SAP S/4HANA’s proposed simplified data model as well as the supposedly simplified user interface in Fiori and found these proposals to be incorrect.

This is covered in two articles:

Missing S/4HANA Simple Logistics’ Release Date

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

Making so many changes at once to SAP S/4HANA 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 SAP S/4HANA, 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/4HANA Enterprise Management now includes:

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

Can You Keep Up with SAP’s Terminology Changes on S/4HANA?

It is no easy feat keeping up with SAP’s S/4HANA 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. Simple Finance and Simple Logistics are now on their way out. SAP’s problems with its S/4HANA 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/4HANA 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.

Conclusion

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

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.

Brightwork Disclosure

Financial Bias Disclosure

This article and no other article on the Brightwork website is paid for by a software vendor, including Oracle and SAP. Brightwork does offer competitive intelligence work to vendors as part of its business, but no published research or articles are written with any financial consideration. As part of Brightwork’s commitment to publishing independent, unbiased research, the company’s business model is driven by consulting services; no paid media placements are accepted.

HANA & S/4HANA Question Box

  • Have Questions About S/4HANA & HANA?

    It is difficult for most companies to make improvements in S/4HANA and HANA without outside advice. And it is close to impossible to get honest S/4HANA and HANA advice from large consulting companies. We offer remote unbiased multi-dimension S/4HANA and HANA support.

    Just fill out the form below and we'll be in touch.

References

I cover how to interpret risk for IT projects in the following book.

The Risk Estimation Book

 

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

Better Managing Software Risk

The software implementation is risky business and success is not a certainty. But you can reduce risk with the strategies in this book. Undertaking software selection and implementation without approximating the project’s risk is a poor way to make decisions about either projects or software. But that’s the way many companies do business, even though 50 percent of IT implementations are deemed failures.

Finding What Works and What Doesn’t

In this book, you will review the strategies commonly used by most companies for mitigating software project risk–and learn why these plans don’t work–and then acquire practical and realistic strategies that will help you to maximize success on your software implementation.

Chapters

Chapter 1: Introduction
Chapter 2: Enterprise Software Risk Management
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

Risk Estimation and Calculation

Risk Estimation and Calculation

See our free project risk estimators that are available per application. The provide a method of risk analysis that is not available from other sources.

project_software_risk

How Accurate Was Hasso Plattner on 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?

Risk Adverse HANA

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, its 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.

HANA & S/4HANA Question Box

  • Have Questions About S/4HANA & HANA?

    It is difficult for most companies to make improvements in S/4HANA and HANA without outside advice. And it is close to impossible to get honest S/4HANA and HANA advice from large consulting companies. We offer remote unbiased multi-dimension S/4HANA and HANA support.

    Just fill out the form below and we'll be in touch.

References

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

I cover how to interpret risk for IT projects in the following book.

The Risk Estimation Book

 

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

Better Managing Software Risk

The software implementation is risky business and success is not a certainty. But you can reduce risk with the strategies in this book. Undertaking software selection and implementation without approximating the project’s risk is a poor way to make decisions about either projects or software. But that’s the way many companies do business, even though 50 percent of IT implementations are deemed failures.

Finding What Works and What Doesn’t

In this book, you will review the strategies commonly used by most companies for mitigating software project risk–and learn why these plans don’t work–and then acquire practical and realistic strategies that will help you to maximize success on your software implementation.

Chapters

Chapter 1: Introduction
Chapter 2: Enterprise Software Risk Management
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

Risk Estimation and Calculation

Risk Estimation and Calculation

See our free project risk estimators that are available per application. The provide a method of risk analysis that is not available from other sources.

project_software_risk