How Accurate Was Computerworld on Run Simple and S/4HANA?

What This Article Covers

  • Checking with Experienced Database Resources
  • The Typical Coverage Available

Introduction

The SAP Run Simple is a widely derided joke in SAP circles. In this article, we question how much ComputerWorld got right regarding Run Simple.

Quotations

“Nothing has earned a reputation for head-banging complexity among IT professionals more than ERP, but as enterprise-resource planning leader SAP tries to recast its image with the slogan “Run simple,” there’s no guarantee that customers will buy it.

SAP hammered the simplicity mantra home in virtually every keynote, conversation and bit of signage at its annual Sapphire user conference last week. Still, the fact remains that enterprise platforms like SAP’s are anything but simple, and neither are their customers. SAP sells to large, multifaceted enterprises, and implementations are a big deal, often requiring outside help.”

At this point, the article makes it seem that it is going to head down a truthful path. The Run Simple program was in exact opposition to how SAP’s software actually works.

“Most organizations don’t buy SAP because they have simple problems to solve,” said Geoff Scott, CEO of the Americas’ SAP Users’ Group (ASUG). “You purchase it because you’re a complex organization with complex business processes.”

ASUG’s Independent from SAP?

ASUG is in SAP’s pocket, and this is an idiotic justification why SAP’s software is co complicated to use and so expensive to implement. It is false because there are many things related to SAP’s complexity that has nothing to do with the organizations that buy SAP, but instead to SAP’s design. However, ASUG only makes statements that are designed to defend SAP.

“It is nice to see that SAP acknowledged that it hasn’t always been a poster child for simplicity, and that clients have struggled in navigating the many offerings and resources available in this huge company,” said Monique Hesseling, a partner with Strategy Meets Action. But it will take time and effort for SAP to overcome the perception that it’s big, complicated, and sometimes difficult to work with, she added.

SAP did not acknowledge this with their Run Simple marketing program. Rather, they stated that customers could run more “simple” with SAP than with competing solutions. This seems to be a projection on the part of Monique Hesseling.

“She does see signs of progress, though, particularly in SAP’s delivery to insurance clients, which are the focus of her firm. Maintenance and service tickets get escalated and dealt with significantly faster than in the past, she said.”

SAP’s Support

This is false. SAP’s support has been in long-term decline as we covered in the article What to Do About SAP’s Declining Support. 

“SAP also responds faster and more accurately to requests for proposals, and she has found greater openness and interest in understanding the customer within the company at all levels.”

It is difficult to know what this means.

“Some of the credit for the pared-down approach goes to SAP’s new S4/Hana in-memory platform, which has simplified much of the technological foundation. By eliminating fixed database aggregates and redundancy, for example, the new system can reduce a company’s data footprint by a factor of 10, SAP says.”

This has nothing to do with the previous statement. One is a statement about being open and understanding the customer, and the transition is to a statement about a technology, which then launches into a nonsensical term called “in memory” which we covered in the article How to Understand Why In-Memory Computing is a Myth.

The Data Footprint Reduction?

The claims of data footprint reduction are also false as we cover in the article The Secret to Not Talking About The Cost of SAP HANA.

“By performing both transactional and analytic processing in the same system, the technology promises throughput that’s between three and seven times faster than the traditional SAP implementation. Analytics can be as much as 1,800 times faster.”

This is not what benchmarking on HANA indicates, as covered in the article HANA as a Mismatch for S/4HANA and ERP. SAP has no benchmarking or other data points to support the claim of analytics being 1,800 faster.

“Overall, SAP cofounder and chairman Hasso Plattner said in a keynote at the conference, the goal is to enable the “boardroom of the future,” where an entire corporation can be run from a smart watch or phone.”

We have already covered this as a “pants on fire” inaccuracy in the article Did Fiori and S/4HANA Actually Run on a SmartWatch?

What Compression?

“You’ve taken a 20TB database and compressed it to 10TB or 5TB — I get that,” he said. “But to us, simple is also about faster and easier configuration, getting people up to speed faster and getting changes into production super fast.”

What is SAP’s obsession with compressing databases? The answer is that HANA is priced per GB. But overall the topic of database compression is not very relevant to non-HANA databases. Oracle 12c and IBM DB2 have no size limit. Database compression does not translate to business value.

“That’s where I want to hold their proverbial feet to the fire,” Scott said. “SAP, if you can deliver on that promise, wow.”

Scott works for ASUG, which is a proxy for SAP. Scott will not be holding SAP’s feet to the fire on any claim.

“SAP needs to make software easier to buy and consume, with modernized deployment options, and it also needs to transform the services market so that software is faster to configure, without as much need for specialist consultants, agreed John Appleby, global head of SAP Hana at Bluefin Solutions.”

This has been proposed for decades, but nothing SAP has introduced, from ASAP to RDS has changed the complexity, implementation duration or cost of SAP implementations. For multiple articles on previous items that were presented to accomplish these objectives see the Brightwork research list A Study Into the Accuracy of SAP.

The Reliability of Jon Appleby?

“S/4Hana is a big step in the right direction,” Appleby said. “The user experience is modern and user-centric, the functional configuration is guided and therefore much faster, and deployment options are varied and meet the needs of modern businesses.

Appleby believes that most customers would embrace the paradigms of S/4Hana if they could, but some may have found their decision delayed by business events or other IT operational issues.”

Jon Appleby is one of the least reliable sources on SAP. He not only has repeatedly been found to provide highly inaccurate information on SAP products, How John Appleby Was So Wrong About His HANA Predictions, but he is Hasso Plattner’s “goto” guy to make massively exaggerated claims about SAP products.

The Reliability of Steve Lucas?

“Steve Lucas, global president of the SAP Platform Solutions Group, acknowledges the challenges associated with promising simplicity in a highly complex technological landscape.

“What we learned after 40 years of building apps is that the stack for building apps had become unreasonably complex,” he said.”

In 2015 Steve Lucas had worked for SAP for a short time, and he came to SAP through an acquisition. Therefore, this quotation seems a bit deceptive. But like Appleby, Steve Lucas has a long history of making inaccurate statements as we covered in the article Analysis of Steve Lucas’ Article on What Oracle Won’t Tell You About HANA.

In our analysis, Steve Lucas not only misleads listeners but does not understand many of the topics on which he speaks.

Conclusion

This article receives a score of 3 out of 10, for the acknowledgment that SAP’s applications are complex.

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.

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References

https://www.computerworld.com/article/2923212/enterprise-applications/sap-touts-simplicity-but-customers-still-live-in-a-complex-world.html

Is SAP’s “Running Simple” Real?

What This Article Covers

  • The High-Level Concept
  • Understanding the Marketing of “SAP Run Simple.”
  • A Simpler Code Base\A Simpler User Interface: Simpler to implement?:
  • Cloud Deployment Simplifying Ongoing Support
  • SAP Run Simple and the Media
  • The Effort Put Behind The SAP Run Simple Program
  • Was SAP Run Simple Ever Accurate as a Concept?
  • What Happened to SAP Run Simple?
  • The Effort Put Behind The SAP Run Simple Program
  • Was SAP Run Simple Ever Accurate as a Concept?
  • What Happened to SAP Run Simple
  • Our Work on SAP HANA

Simplify

Introduction

For several years now SAP has been using the term simple in its marketing and sales. There is Simple Finance, Simple Logistics, the term “Running Simple,” or “Run Simple,” that is used in many SAP presentations. So what does all this simple stuff mean? In this article, I will cover what is behind it and how the concept should be interpreted by buyers and those that study SAP.

I will begin by analyzing some the statements I was able to find about simplicity from SAP and determine the accuracy of these statements to come to a general conclusion about running simple.

The Effort Put Behind SAP Run Simple

At SAP conferences, SAP and partners drove the concept of SAP Run Simple into the ground. Each partner seemed to have simply worked into their catchphrase “Run Simple with E&Y.” “Let IBM Show You How to Run Simple.”

For a while there everything was “SAP Run Simple” and a lot of people who had never worked with the software, or had but had forgotten how it worked, were running around saying how simple everything was going to be. SAP Run Simple was the catchphrase that was on SAP marketing literature and SAP Run Simple was woven into many different areas of SAP messaging. Of course, the SAP partners picked up SAP Run Simple with an uncountable number of consulting companies using different takes on SAP Run Simple in order to co-promote with SAP. With SAP Run Simple everything was supposed to now be simple in SAP.

In his book SAP Nation, Vinnie Mirchandani does a very thorough job of covering the history of SAP’s use of the term simple or proposing they will simplify going back to the 1990’s.

The High-Level Concept of SAP Run Simple

At the high level, SAP has been fighting the perception that it ‘s hard to use and that it is expensive. Problems are fighting those perceptions, as they are both true.

  • Is SAP is Difficult to Use?: If you want to produce a forecast, approve a PO, check on inventory, it will be more difficult than in other applications. SAP is known as the most complex of the enterprise software applications. I say this complexity is a perception — however, as a long time SAP consultant I can say that it is true. One example of this is how long it takes to get things done in the user interface or the SAPGUI. Another is example is how SAP makes integration more difficult than other vendors by preventing the direct interrogation of its database. They are still the only vendor I know of that uses an intermediate document, a relic from the hierarchical data formats of the mainframe era for application integration. Now one might say the complexity is worth it. Whether something is worth it’s inherent complexity is really a separate discussion from whether something is complex. Interestingly, much of the marketing by SAP that promotes S/4 HANA is how much it simplifies what were complicated things in SAP. The problem though is that it relies upon simplistic platitudes regarding a simplified data model and on the use of Fiori. However, Fiori is not a user interface, it is a series of apps with a very hazy future. I cover this in the article What is in the Fiori Box? Also, is SAP agreeing that their software is very sophisticated right now?
  • Implementation Costs: SAP has the highest cost implementations in nearly any software category that you want to compare. I know this from working on many SAP projects and comparing them to non-SAP projects. Full TCO calculators on SAP and non-SAP applications show this research and allow people to calculate the TCO for their projects. It is precisely why so many consulting companies recommend SAP. No consulting company suggests lower cost SaaS solutions which they can’t make the most money on.

I am bringing up this information above as simply background as to why SAP is motivated to present their systems as easier to use.

Clearly, the “simple” campaign is part of changing the perception.

Understanding the Marketing of SAP Run Simple

Let us take a look of some of the marketing statements on Running Simple. Here is one that caught my eye.

If we simplify everything, we can do anything. SAP helps you streamline your processes, so you have the agility to create new growth opportunities for your business with the world’s most innovative platform.

There are a lot of statements like this on the SAP website. The first part of the paragraph is a platitude or a nursery rhyme. Much like the phrase “if you don’t stand for anything you will far for everything,” or “if the glove does not fit you must acquit.” It is a sentence designed to appeal to our reptilian brains. The last part of the paragraph is completely untrue.

SAP is not the world’s most innovative platform. Also, SAP is not a platform. Every single area of functionality that SAP internally developed it has copied from someplace else (I speak only of the applications SAP developed. I don’t know the acquired applications well enough to make that claim — but those are not SAP applications). That is not necessarily a bad thing, as long as it is credited, but saying you are the most innovative platform does not acknowledge where you obtained these ideas. Like Microsoft, SAP can say that it is big. It can say that it is successful. It can claim enormous monopoly power, that it has the most highly compensated consultants in IT.

However, it cannot claim innovation.

I can list of vendor after vendor that has participated in true innovation. I don’t want to just list them here, but I point out innovative functionality in software vendors at SCM Focus. Let us show some respect for the true innovators. This actually reminds me of a tension-filled interaction between Tywin Lannister and Joeffry on Game of Thrones. At one point Jeoffry, in an effort to establish his authority states “I am King!” Tywin Lanister responds “Any King who has to say “I am King!” is no true king.”

It is amusing. See the clip below:


Wouldn’t Tywin say the same thing to SAP for saying they are the most innovative platform in enterprise software? I think he would.

In an article on the topic of making things simple by Frank Scavo, he presented the following areas where SAP was proposing it was more simple with its newer products.

  1. A Simpler Code Base
  2. A Simpler User Interface
  3. Simpler to Implement
  4. Cloud Deployment Simplifying Ongoing Support
  5. Making SAP Simple to Deal With

Let’s go through each of the quotations individually, and then analyze whether the information provided by SAP in each area is true or likely to be true.

A Simpler Code Base

Under HANA the applications can now simply record transactions and not have to create any summarized data fields for later reporting. With HANA, reporting always goes back to the source data in memory to build aggregated data fields on the fly. This shrinks the size of the programs, greatly reducing the number of lines of code, making them less error-prone and easier to debug. It also means that users can now drill down from summary data to details in any way they choose, without having to write special reports or customize the code.

True of False?: Some aspects of column based databases are more simple than row-based databases (what HANA proposes to replace). However, nothing definitive can be said either way. I cover this in Does S/4 HANA Have a Simplified Data Model? SAP has been like a dog with a bone on this one, and they are completely mistaken on this topic.

These are a second point that the code in the application layer has been cut down and simplified. This has repeatedly been referred to by SAP. However, this comment by an architect in the book SAP Nation 2.0 makes me question this proposal.

“What SAP has done with S/4 is simplify the underlying structure through database views in HANA. So it’s another layer on top of the database that compounds very granular underlying database tables into logical business constructs; something that has always been done by the application logic in SAP (the data in SAP is dumb — all the intelligence is in the logic) And since that SAP logic is all process driven in the “order to cash” or “procure to pay” themes, making business sense of that data can be a real bitch. What it is NOT is a material reduction in tables or a simplification of the data structure. Buy definition, it can’t be because those hundreds of million lines of ABAP code all point to those original tables in some way; so until the code is rewritten, the tables still need to exist. And that includes all the customer customizations…”

Additionally, I find this quotation very confusing, because my understanding was that all the ECC tables had been converted into columnar tables and all the code in S/4 in the application layer had been rewritten to address those column based tables.

This quotation calls this into question.

“It’s another layer on top of the layers that already exist. It is additive. And the more layers, the more issues with context and integrity — and the more challenges in maintaining relationships when the underlying tables change. Also, though the views are great for getting things out, but they really can’t put  things back. So it’s really analytics only. To put it back in SAP, you have to follow the old rules and it has to go to the original tables.”

If this architect is correct, then I was misled by several people from SAP that pitched S/4 HANA to a broader group over a year ago and me. Of course, they were just repeating a message they were told to repeat and probably did not know themselves.

Secondly, HANA will take longer to implement, and there is less in the way of skills to manage any HANA complexity compared to competing databases. This is because there are fewer HANA skills in the market than for the competing databases that could be used. This is similar to buying an uncommonly purchased car — it will mean less available mechanics to work on it.

So more likely that not, HANA is a more complex implementation than implementing without HANA. There may be some maintenance benefits from HANA versus more traditional databases, as there are fewer indexes, (which I cover in several articles here) but again HANA has other complexities that come along with it. Here are why SAP’s comments on HANA are so unreliable:

  • SAP misstates both the origin and advantages of column-based databases. None of the technological underpinnings to HANA are exclusive to SAP, and in fact, none of them were invented by SAP.
  • SAP routinely lists the advantages of HANA without listing the disadvantages.

That means any statement by SAP on HANA must be put through a reality blender, to get a balanced final output.

The Verdict? Most Likely Untrue.

A Simpler User Interface:

SAP Fiori provides the user interface for Simple Finance. Fiori apps operate across desktop and mobile devices to provide a simplified user interface for SAP’s applications. They are not just a new presentation layer but in many cases combine SAP transactions into a single user process. For example, entering a manual payment in Accounts Payable can now be done in a single screen instead of the multiple screens it previously required in SAP. On a side note, after much push-back from customers, SAP announced that Fiori apps will now be delivered at no charge to customers under maintenance, removing one barrier to adoption of Simple Finance.

True or False?: Fiori cannot be the user interface for Simple Finance, or what is now just “Finance.” It can’t be the user interface for all of S/4 HANA when it is eventually released in what now looks like next year. I explain why this is the case in the article What is in the Fiori Box?

The user interface for S/4 HANA will be the same (outside of some Fiori apps here and there) will be SAPGUI. Companies that want to get a modern interface need to seek out third parties that are far better at modifying and representing the SAPGUI than SAP is.

The Verdict? Untrue.

Simpler to implement?:

Implementation tools and methodologies are built right into the application, based on SAP’s previous work with its Rapid Deployment Services. These include wizard-like tools to guide and configure the applications. There are data migration tools to map data from existing systems into Simple Finance—whether from previous versions of SAP or from other systems. Implementation testing is also managed within the system itself. In addition, Simple Finance is integrated with SAP’s collaboration system, Jam, to encourage knowledge exchange. If a user runs into problems, for example, he or she can reach out to other users for help.

True or False?: The Rapid Deployment Services of RDSs are a hodgepodge of mostly already existing material that has been repackaged. For instance, it includes:

  • Best Practices documentation, which isn’t best practices. That is another topic which I cover in this article Evidence for SAP’s Best Practice Claims.
  • Configuration documentation
  • Some confusing flow charts
  • Various documents of different types depending upon the RDS in question.
  • Some demo data, again very much depending upon the RDS in question.

A lot of this has been around for quite some time, and is just repackaged into “RDSs.”

I can’t speak to the proposed data migration tools mentioned in the quote. It ‘s hard to see how implementation testing could be performed in the application.

Jam is an unknown quantity at this point, and it is not enough to hang your hat on. Overall, one would have to see new SAP applications installed more quickly than older applications before anything definitive can be said.

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

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

Lets understand each of Hasso’s observations and see how they stack up. You can first read Hasso’s article, which I have provided the link above and then read this one as I have taken out what I think are the most important quotes. I have each of the quotes and my comments organized under the exact headings that are from Hasso’s article.

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/4HANA systems or to build completely new applications. SAP S/4HANA 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/4HANA.”

Lets 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. Many of the companies did have to do with the SAPGUI. 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 its is debatable whether HANA actually simplifies the data model.
  • ..The Ability to Venture into Completely New Dimensions of Applications: Its 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, its still a lot of work, and there is not really a consensus on Fiori yet in terms of whether it will actually stick longterm. The later part of  this paragraph is sort of fanciful sales talk and its difficult to really address what Hasso is describing.

The Verdict? Some Things are Untrue; Others are Unknown.

Cloud Deployment Simplifying Ongoing Support

SAP also wants run simple in how customers keep their applications up-to-date. Like most traditional on-premises vendors, the majority of SAP customers are not on the latest releases of its products. The reason is that applying new versions (in SAP lingo, “enhancement packs”) is often a labor-intensive activity—testing the new code, retrofitting any customizations, regression testing to be sure nothing gets broken, and migrating data. SAP’s solution is to take over these responsibilities by hosting customers’ systems in SAP’s HANA Enterprise Cloud (HEC). This program, already rolled out to some early SAP customers, is essentially a managed services offering in which SAP takes all responsibility for day to day operation of the system in SAP’s own data centers. Notably, SAP also takes responsibility for keeping the customer’s system up to date with the latest enhancement packs and bug fixes. It even supports systems with custom modifications.

True or False?: This one is pretty easy. This quote is several years old, and this has not happened. Some of this may be related to price, and some to simply SAP trying to be good at something that it does not have experience in. However, there is no momentum for this year after the HEC was introduced. Everything at the beginning of this quotation above is still the case today.

The Verdict? Untrue.

Making SAP Simple to Deal With

Bill McDermott is always good for some major whoppers. I question how good McDermott is a spokesman at this point for SAP because he has built up a history of saying things that turn out not to be true. It is probably a good time for him to take is stock options and for SAP to bring in a new fresh face to pitch this crazy stuff.

He (McDermott) continued: “For customers, we’re committed to a beautiful user experience. We will make it simple to do business with SAP: simple pricing, pay-as-you-go in the cloud, simple web experience.”

Those are big promises. Anyone who has negotiated an acquisition of SAP software knows that SAP contracts are incredibly complex.  Pricing is opaque, with many various types of named users defined for each product. SAP’s terms and conditions around indirect access (when other systems access information from an SAP system) are onerous.

The result is that it is nearly impossible for an SAP customer to be fully compliant. When SAP does an audit of a customer’s use of SAP products—which it has the right to do—it will find problem, if it looks hard enough.

Even finding the right person in SAP’s organization to deal with is not a simple matter. Whether it is the result of having a worldwide organization or peculiarities of German corporate governance, it is difficult to understand who reports to whom, or who is responsible for what.

True?: I don’t think I need to add anything to what Frank Scavo said.

The Verdict? Untrue.

SAP Run Simple and the Media

SAP has huge media influence. The advantages of being big are real. SAP can simply reach out to most media outlets and find them compliant to most messages that SAP has to give them. SAP is a major advertiser so that combined with being big goes a long way to getting their message out.

If a media outlet presents this information without commentary, which they often do, and if SAP does this through a lot of media outlets, then it can seem that the media outlet is endorsing SAP’s marketing machine, when that may not be their real intent. However, if SAP quotations are provided without objective commentary from the article author, then its very easy to create an echo chamber. That is a lot of pollyannish statements are made by SAP that becomes taken for granted.

Was SAP Run Simple Ever and Accurate Concept?

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

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

“SAS Outstanding Forecast Server”

See…it just does not work.

Secondly, S/4HANA is not simple. Parts of S/4 HANA can use the Fiori user interface, but quite a bit about S/4HANA is actually more complex. This includes all the changes that are a part of S/4HANA that need time to be understood and incorporated properly into companies.

What Happened to Run Simple?

Then just as quickly as SAP Run Simple had arrived on the scene, the term was removed from the SAP marketing literature. Simple Finance was rename to just Finance. Simple Logistics was renamed to a number of different items, but the word simple was no longer used. SAP Run Simple had run its course as a term to use.

Conclusion

SAP Run Simple, which is supposed to apply to S/4HANA really makes no sense, particularly when SAP Run Simple is supposed to apply to just about everything from S/4 to Fiori to HANA, when all of these items are new and will require years of burn in to reach the stability of the products they are replacing.

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.

Basically, for all of SAP’s emphasis on their Simple program, it ‘s hard to find any substance to any of it. That is there is no evidence that new SAP applications will be any simpler, in actually any dimension than previous applications.

  • SAP has made some proposals, but they are easily disproven and are designed to exploit those with little understanding of SAP.
  • Other proposals are unknown and depend upon seeing the results in the field. However, they are presented as if they are already proven. This is a consistent theme in SAP’s writing. Unproven conjecture and bragging are presented as if it is an academically researched and settled topic.

As far as I can tell, “Run Simple” is directed at simpletons.

Our Work on HANA

We are the most prominent research entity that tells the real story HANA and S/4HANA. Both Forrester and Gartner take money from SAP, and Forrester created a false research report on how HANA reduces TCO in return for money. Companies like IBM, Deloitte, and Accenture have mindlessly repeated all of the SAP marketing talking points on HANA and S/4HANA have encouraged their customers to only accept HANA and S/4HANA so they can get the implementation business.

  • Are you a company interested the actual performance benefit from HANA and S/4HANA?
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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

Does SAP S/4HANA Actually Have a Simplified Data Model & Faster Financial Reconciliation?

Executive Summary

  • SAP has proposed that HANA and S/4HANA has a simplified data model.
  • We validated these claims including different account silos, faster reconciliation, understanding the performance of the columnar database.

Introduction: A Simplified Data Model?

SAP has been very consistent in pointing to the benefits of S/4HANA’s simplified data model and as part of its SAP Run Simple marketing program.

However, after listening to this sometimes, and reading on quite a bit of SAP marketing literature, I began to question this assertion of the SAP Run Simple program. In this article, you will learn whether S/4HANA has a simplified data model.

Interpreting SAP Run Simple Related to S/4HANA and HANA

When watching a presentation by SAP, or reading through documents related to S/4HANA and HANA generally, the proposed benefits “come at you” very fast.

It takes some time to sit down and look at each of the proposals individually to determine if they are either true or likely to be true.

Importance of Verifying the Simplified Data Model for SAP Run Simple

Understanding the concept of SAP’s proposal regarding a simplified data model is important as it is used as a foundation on which to build an argument for other benefits, one of the most important beings that overall S/4HANA is more simple to use. However, the one I will use in this article is the proposed benefits to financial reconciliation.

The SAP states clearly regarding S/4HANA having a simplified data model for SAP Run Simple.

Jens Kruger from SAP has a video on S/4HANA, and he states that.

“S/4HANA offers a simplified data model.”

And that…

“All data is available without reconciliation, leaving financial departments to strategic tasks instead of  just doing administrative functions. How can this be done? This is based upon a simplified data model. The simplified data model enables insights into financials data. “

He then goes on to say:

 “All of those silos required a reconciliation in order to get a consistent view on the data. And therefore getting instant insight into data across all silos is not possible. Therefore, the power of SAP HANA underneath the universal journal entry creates a single source of truth, and there is no reconciliation needed.”

 “Under a traditional close, it is consists of a lot of steps. They must be performed in a batch fashion since they are just running too long. With the SAP HANA platform we are now able to reduce this.”

And Jen also provides specific speed improvements.

Here is where the proposed speed improvements are declared by SAP. This is interesting because I had never heard that reconciliation was negatively impacting so many global FI/CO implementations, which is what Jens Kruger is proposing. 

Different Accounting Silos?

Jens identification of Financial Accounting Documents, Controlling Documents and Profitability Documents as separate silos are strange. These are all integrated transactions within the FI/CO module currently in ECC. However, his point seems to be that reconciliation times in ECC presently make them break into different silos.

S/4HANA’s Data Model

Let us clarify what a data model is before we go through to validate the claim regarding its simplification.

A data model is the set of tables and the relationship between tables that are used — in this case — for the application to call upon. I have included just a small part of the data model in SAP ECC related to Work Centers, the Bill of Materials and the Production Version.

A simplified data model would mean that the tables and the relationships, as well as the primary versus secondary or supporting tables, are simplified. However, it can only partially say to be true of HANA. Here is why: 

  1. The Use of Columnar Tables
  2. Relationships Between the Tables
  3. Fewer Indices and Aggregation Tables

The Use of Columnar Tables

HANA uses columnar tables, which means that many tables are a single column. This of course significantly increases the number of tables that are necessary, and because the previous tables need to be emulated for people that need to see and work with the data, the data model is not simplified.

Relationships Between the Tables

SAP’s point is probably that they cleaned up the relationships, and having reviewed many previous SAP tables and modeled the tables in ERD diagrams, I can say that many of the tables and the relationships between the tables were indeed convoluted in their design.

When software development happens, the idea is that all the tables are laid out ahead of time, but the reality is that often the tables are added in a way that is more holistic, and much of ECC was written before more advanced data modeling tools were available.

Fewer Indices and Aggregation Tables

There are fewer database speeding mechanisms needed like aggregates and indices, but this is not the actual data model. SAP may be using a shorthand here that when they refer to the term “data model” they mean all of the tables used in the database. I think that could be a fair point. It is true that columnar databases tend to need fewer supporting tables. However, HANA still uses aggregates, although they call it something else. In fact, it is right on the SAP HANA website. Aggregates are beneficial because they are precomputed combinations that are always reused.

What should be apparent from the bullet points above is that the “data model” simplification that is so breezily referred to by SAP is not definitive in any shape or form. With a columnar database, some areas become more simple, other areas more involved. Overall, there are also complexities involved with a new database, so I would predict that HANA will be more complicated than a company’s previous database installation. That is the issue with new products, and the more new, the more unpredictable outcomes.

I cover these type of risk interpretation topics in the book Rethinking Enterprise Software Risk: Controlling the Main Risk Factors on IT Projects. One of the issues I bring up in the book is if the software vendor has too much influence over the consulting company, the outcome can be highly risky projects being proposed.

Simplified Data Model = Faster Reconciliation as Part of SAP Run Simple

Is it the simplified data model that speeds reconciliation and therefore creates a single version of the truth? As I just discussed, using a columnar database uses fewer assisting or secondary tables, But it also creates a lot more tables, with many more relationships, in addition to having to generate the views of the previous tables of ECC. As it is illogical to work with just a bunch of columnar tables.

If you go into ECC on HANA, you will see all the same tables that you have seen before because they are emulated by HANA — so how much this is simpler depends upon your point of view.

Understanding the Performance of the Columnar Database

Secondly, a columnar database like HANA will underperform a standard row based (aka relational database) in transaction processing — and this includes year-end close (all other things being equal).

When HANA is proposed to be universally virtuous in performance in all situations, remember that a columnar database only outperforms relational databases for analytical applications. However S/4HANA is intended to sit only on HANA (although I see this exclusivity changing in the future), but HANA uses much more expensive and higher speed hardware, so the increase in speed, in this apparent non-analytical application, will come from more costly and higher speed hardware only.

Therefore, the statement that HANA’s “simplified data model” will lead to faster reconciliation is not true.

Why Faster Hardware is Actually What Will Lead to Faster Reconciliation

However, if we give it some consideration, this faster settlement will be equally available a company that would simply port its current ECC system to faster hardware.

Multiple Versions of the Truth?

It seems that SAP is changing the previous story on ECC to make points for S/4HANA. I don’t think that SAP would be talking about how terribly slow its reconciliation and period closing is in ECC if they were not trying to sell S/4HANA (call me cynical). If this is all true about reconciliation latency, then the question is do other software vendors face this issue.

To find out I reached out to two financials vendors, Intacct and FinancialForce, two accomplished vendors in the area of financial applications, to determine if they have similar reconciliation problems. Neither of them uses an in-memory database. Neither of them seemed to have heard of the problems with reconciliation and period closing that is described by SAP. When I spoke to FinancialForce they had the following to say about reconciliation and period closing in their system:

“You need to do all the things to setup the year end, and we have an automated button that performs all of the reconciliation. The a button is hit and the journals are created for you. This is not even a batch job process — in that it may take 30 minutes to 2 hours, with 2 hours being on the very long side.”

Therefore, what amounts to a quarterly or yearly process takes in most cases roughly 45 minutes. So if we take SAP’s proposal, S/4HANA will cause save 420 hours on the quarterly close. If that is the number of hours saved, how many total hours are present ECC systems taking exactly? That just sounds terrible.

Something which is not being adequately explained by SAP is that there are things to check before reconciliation is performed.

Reconciliation Speed Issues?

ECC’s hardware, not the data model of ECC versus S/4HANA is what is attributed to reconciliation speed changes. But secondly, two financial vendors are unaware of the batch problems in their systems that SAP has attributed to ECC.

Here are some important things to consider when interpreting the message of reconciliation and period closing as described by SAP:

  • It should be remembered quarterly closing is only a small portion of the activities performed within FI/CO.
  • Finance is not an area which requires a lot of computing power, and SAP is stretching here to find something that can help sell S/4 Simple Finance.

Conclusion

The information provided by SAP on this topic is convoluted, and once broken down into its constituent pieces it does not add up. Jens Kruger of SAP is commingling several different topics to make a case for S/4HANA Simple Finance, but the items that he attributes to HANA are not related to what he calls out. All of this is part of the attempt to fit into the SAP Run Simple marketing program. However, SAP Run Simple has little to do with reality. SAP Run Simple is nothing more than a marketing construct.

There is also appears to be the exaggeration on the part of SAP as to the impact of quarterly closes. This is not the first time I have seen this type of proposal from SAP. SAP also uses the example of long run times for MRP used to justify Simple Logistics. Why these issues have not been brought up more on articles on S/4HANA is a concern. However, I suppose that gives me the opportunity to provide some very good value to my readers and my clients. But it brings up a lot of issues regarding either the knowledge level or the independence of many of the media outlets that carry stories and are supposed to analyze SAP. For software buyers, if you have a consulting company that is proposing to you that the SAP S/4HANA data model is simplified, that would bear explanation on their part as to why that is. If they are just blindly agreeing with SAP on everything, then they will be limited in how much they can help you.

Recommendation

My recommendation is that the time required for reconciliation and quarterly closes be benchmarked in the client’s current ECC system to determine whether or not this is an issue. Statements about the reconciliation and quarterly close time should not be looked at in a separate matter but checked against what other software vendors in the area have to say on the topic.

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.

How Much Do You Know About S/4HANA?

SAP S/4HANA Quiz

This quiz will ask basic questions around S/4HANA.

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.

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References

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Chapter 7: How to Use the Reports of Analysts Like Gartner
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