- 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:
- I included the supposed simplicity of Fiori in What is Actually in the Fiori Box?.
- I covered the supposed simplicity of the SAP S/4HANA data model in the article titled Does S/4 HANA has a Simplified Data Model?
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.
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.
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.
I cover how to interpret risk for IT projects in the following book.
The Risk Estimation Book
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.
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