The Hidden S/4HANA S Oliver and KPS Failure

Executive Summary

  • S Oliver failed in its implementation of S/4HANA, a fact that has been kept secret.
  • We cover this failed S/4HANA case study.

Introduction

We have been warning people about S/4HANA’s implementation problems for several years now. We covered this in the article Why Did SAP Fake S/4HANA Maturity So Aggressively? and explaining how both SAP and consulting firms have greatly misrepresented S/4HANA’s maturity. We covered this in the article Analysis of Mark Chalfen’s Article on S/4HANA Maturity

In this article, we cover a failed implementation that has yet to be published.

Failure at S Oliver

S Oliver is a clothing retailer that sells in multiple European countries. This is a screenshot from their website.

KPS Strikes Again?

KPS Consulting, which was part of the ridiculous Lidl failure, which we covered in the article KPS Continues to Promote HANA for Retail for Lidl After Failure, and also the Home24 failure, which we covered in the article The Hidden S/4HANA Home24 and KPS Failure. KPS was also the implementer with S Oliver. In fact, this is listed directly on the KPS website.

According to KPS, as with Home24, the S Oliver S/4HANA implementation was a massive success.

Prepare to digest the impressive facts about the implementation (according to KPS)

The solution portfolio to be implemented comprises SAP S4 FMS on HANA, SAP Retail, SAP CAR, SAP EWM, SAP BW, Finance, Controlling.

However, what is listed on the KPS websites is not actually what happened on the project.

Scope Issues with the S/4HANA and Other SAP Application Implementation

Actually, the first thing we noted was the scope of the project versus the size of the company. Let us review some of the peculiar issues on an application by application basis.

  • SAP S / 4HANA FMS: FMS is the Fashion Management Solution. S/4HANA is not at the point of development where it has much in the way of industry solutions.
  • SAP Retail: SAP Retail is another industry solution.
  • SAP CAR: SAP Customer Activity Repository is supposed to provide customer information in a central repository. It was introduced in 2014 and very rarely comes up as a solution sold by SAP.
  • SAP EWM: EWM is very complicated and troublesome application.
  • SAP BW / BI: This is SAP’s business warehouse.

*All of the items in red are what we consider high-risk implementation SAP products.

The total expense of these combined applications both in terms of the license fee but more importantly the implementation and maintenance overhead is absolutely ridiculous for this size of a company. And this is not the extent of what was sold. S/4HANA requires HANA, which is one of the highest overhead databases that one can implement. It is not mentioned by KPS, but S/4HANA can’t be implemented without it.

Notice the risk level of the multiple products that were sold to S Oliver.

Selling SAP Without Any Concern for Implementability

Our analysis of what was sold to S Oliver is very similar to what KPS and SAP sold to Home24. That is that it was entirely built around trying to sell the most recent items to S Oliver rather than focusing on more mature applications that worked. We recently had a client that was about to purchase a smaller set of SAP products, but the set or BOM included S/4HANA. We told them that their sales BOM was extremely risky. As we explained why it became apparent that the junior CIO did not want to actually hear this.

In our view, S Oliver only had the good probability of going live on just a few of the SAP applications they were sold, with S/4HANA being one of them.

This overall configuration of the sale brings up the question of Is it Right to Lead Clients into SAP Software Failure? Because this is clearly what SAP and KPS by recommending these applications to S Oliver. SAP and KPS took advantage of what S Oliver did not know, and without any concern for their ability to implement, they stuffed S Oliver with an unimplementable combination of experimental applications, and applications that were not a good fit for S Oliver. 

EWM Implementation

This is a video from S Oliver that was published several years ago. The plan was to implement EWM first and then connect it to the S/4HANA system that would replace the previous ERP system.

KPS’s Performance at S Oliver

The problems at Lidl and Home24 have impacted the S Oliver implementation as well. KPS does not appear to have sufficient knowledge to implement SAP, and is has a multi-project strategy of configuring the implementation so that they are required to be at the client for as long as possible.

S Oliver’s Fault in the Failure

S Oliver’s first failure was not having advice that was independent of SAP. This meant they were told a number of fairy tales around S/4HANA and other SAP products and apparently bought them.

How Prepared Was S Oliver to Even Engage in This Implementation?

There is also a question as to whether S Oliver was ready for such an expansive implementation as they simply did not have experience managing SAP implementations or anything like this scope before they embarked on this implementation.

How Incompetent is KPS?

After Lidl, the details of which read like they needed their own laugh track, and S Oliver where they (along with SAP) jammed in a very large scope of work and then lacked any understanding of how to pull off such a project, KPS is now on our list of highly problematic SAP implementation companies.

This brings up the question of how many KPS projects have failed or are currently in the process of failing.

What is KPS Currently Doing at S Oliver?

The strategy used by KPS appears to be to come in an make a lot of promises, then get the project started, and then make it so they can’t be removed. KPS is very specific about not providing customers with documentation. This keeps the client from ever being able to replace KPS.

Information from the S Oliver project is that the account is being milked. KPS has to keep bringing in new consultants, which while the project is a mess, it allows people to get S/4HANA on their resumes. The intent of KPS is to stick around as long as possible.

The long term cost of the implementation will greatly exceed what KPS fixed priced the project for, but that was never a realistic number. S Oliver is now afraid to fire KPS as they know how the systems are set up, and they are also afraid to go public with the fact that they were tricked by KPS and SAP as to do so would signal that they don’t know how to manage their own software implementations. Therefore, they are stuck — in their mind — having to continue to pay KPS under the hope that eventually they can get it right.

The consulting companies have some maturity issues they would like to hide from you. This is why they can’t be listened to — the only thing they look out for is their interests. They are happy to recommend inappropriate applications and to create miniature disasters within their clients, as long as they can get their financial needs met. 

SAP’s Inaccurate Messaging on S/4HANA as Communicated in SAP Videos

Fact-Checking SAP Information on S/4HANA

This video is filled with extensive falsehoods. We will address them in the sequence they are stated in this video.

SAP Video Accuracy Mesurement

Appleby's StatementAccuracy % of the CommentExplanationLink to Analysis Article
S/4HANA is what allows key processes to be digitized.
0%
ECC was already fully digitized and digitized across key business functions.The Problem with Using the Term Digital Transformation on IT Projects
HANA is a Platform
0%
HANA is not a platform, it is a database.How to Deflect You Were Wrong About HANA
Fiori is a major advantage for S/4HANA.
10%
In S/4HANA implementations Fiori is infrequently used when S/4HANA. How Accurate Was SAP on the Number of Fiori Apps?
Fiori is far more efficient than what came before.
10%
In testing Fiori and S/4HANA, Sven Deneken's statements did not hold up. There was a particular weakness in actually making changes after noticing something needed to be changed, and we found the efficiency below that of ECC with of course SAPGUI.
S/4HANA is innovative as it brings "real time inventory."
0%
Sven Deneken brings up the topic of "real-time capabilities," however there is nothing particularly real-time or different in terms of a reaction than ECC. Whenever you make a change in ECC or any other ERP systems for that matter, the entry is real-time. Sven Deneken states that "the physical inventory is the same as the digital inventory." However, under what system would this not be true?What Happened to the Term Perpetual Inventory?
S/4HANA is innovative because it allows access to supplier information.
0%
Sven Deneken states that information about the supplier is "just a fingertip away." Sven Deneken may be familiar with ECC, where supplier data is also a fingertip, or say mouse click away. It called the Vendor Master in ECC.
Sven Deneken says that the cycle could be changed to daily or sub-daily.
0%
Why would that occur? This is a very strange scenario that is being laid out.
S/4HANA is innovative because it allows MRP to be rerun interactively for a product location.
0%
Sven Deneken is extremely confused when he states that S/4HANA allows a fresh MRP run to be performed for a specific product location and that this is a differentiator for S/4HANA. For a single product location, there is no ERP system that cannot run MRP for a single location. Secondly re-running MRP does not remove uncertainties. MRP can be re-run when something changes. For example, when the forecast changes.Performance Problems with HANA and MRP
Sven Deneken states this demo shows SAP has reimagined inventory management.
0%
However, all of this functionality, save for several of the graphics shown in the video have already been available in ECC for many years, in fact, decades.

Conclusion

This project’s outcome has been effectively hidden from view. KPS still shows it as a success, but there is no publication on the part of SAP or S Oliver. As we have been saying, S/4HANA projects have a very high failure rate. And this is not being acknowledged by the industry, because the coverage on these topics is mostly controlled by SAP and the SAP consulting firms.

The Problem: A Lack of Fact-Checking of S/4HANA

There are two fundamental problems around S/4HANA. The first is the exaggeration of S/4HANA, which means that companies that purchased S/4HANA end up getting far less than they were promised. The second is that the SAP consulting companies simply repeat whatever SAP says. This means that on virtually all accounts there is no independent entity that can contradict statements by SAP.

Being Part of the Solution: What to Do About S/4HANA

We can provide feedback from multiple HANA accounts that provide realistic information around S/4HANA — and this reduces the dependence on biased entities like SAP and all of the large SAP consulting firms that parrot what SAP says. We offer fact-checking services that are entirely research-based and that can stop inaccurate information dead in its tracks. SAP and the consulting firms rely on providing information without any fact-checking entity to contradict the information they provide. This is how companies end up paying for a database which is exorbitantly priced, exorbitantly expensive to implement and exorbitantly expensive to maintain. When SAP or their consulting firm are asked to explain these discrepancies, we have found that they further lie to the customer/client and often turn the issue around on the account, as we covered in the article How SAP Will Gaslight You When Their Software Does Not Work as Promised.

If you need independent advice and fact-checking that is outside of the SAP and SAP consulting system, reach out to us with the form below or with the messenger to the bottom right of the page.

Financial Disclosure

Financial Bias Disclosure

Neither this article nor any other article on the Brightwork website is paid for by a software vendor, including Oracle, SAP or their competitors. As part of our commitment to publishing independent, unbiased research; no paid media placements, commissions or incentives of any nature are allowed.

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References

https://kps.com/en/successes/s–oliver.html

https://www.igz.com/en/current-events/news/soliver-with-sap-ewm-is-achieving-the-highest-level-of-throughput-in-textile-distribution/

The Hidden S/4HANA Home24 and KPS Failure

Executive Summary

  • Home24 failed in its implementation of S/4HANA, a fact that has been kept secret.
  • We cover this failed S/4HANA case study.

Introduction

We have been warning people about S/4HANA’s implementation problems for several years now. We covered this in the article Why Did SAP Fake S/4HANA Maturity So Aggressively? and explaining how both SAP and consulting firms have greatly misrepresented S/4HANA’s maturity. We covered this in the article Analysis of Mark Chalfen’s Article on S/4HANA Maturity

In this article, we cover a failed implementation that has yet to be published.

Failure at Home24

Home24 is a startup that sells furniture over the Internet in Europe and Brazil. This is their website.

However, curiously, there is no mention of the problems at Home24 being related to S/4HANA.

Business Issues at Home24

Home24 has had major fulfillment issues as is shown in the following TrustPilot score.

On TrustRadius 43% of Home24’s ratings are poor or bad. Hold off judgment for a moment, as we later were to discover something else we did not expect to that calls the percentages listed here for each category into question. 

A sampling of the issues includes the following.

Review Example #1: Delayed Delivery

After relocating to Germany, only to be told that it would be delayed by 5 weeks (planned for it to arrive upon moving in). It arrive today to my relief + excitement, but it was the wrong product! I ordered a 160×200, h2 mattress (which was printed on the box), but when I opened it, it was a 100×200, h4 mattress.

Review Example #2: 10 Weeks of Waiting?

We have received the bed after 10 weeks waiting. However, the assembly instructions are missing. And all the items used for assembling the bed – bed bolts, screws and others are missing. We are not sure which are the items missing as we do not have an assembly instruction.

What should have taken two weeks to will now take more than one month. Also, they’re good at selling quick, but they do take their time to give proper customer care.

Review Example #3: Never Again?

Never again!!!
ordered and payed end of April2019 – projected delivery end of August 2019.

I really wonder why this company is still exist, the worst purchase experience I have ever had!
Now I sleep on the ground ,sit on the ground, all clothes and trousers are in mess. I can’t believe this will happen to me in Germany!
Update:
Now it‘s totally 8 weeks ,still no one contact me ,end up with cancelling all items , they return credit so quickly.

Review Example #4: Worst Purchase Experience Ever – Legal Action Eminent?

WARNING – DO NOT PURCHASE ANYTHING FROM THIS COMPANY – WORST SERVICE EVER, WORST COMPANY EVER – The Reasons are: 1) DELIVERY TAKES FOREVER: they quoted 8 weeks delivery time initially which then extended to 10 weeks and then extended to 12 weeks (with no explanation as to why).

Looking at the fact there are SO MANY terrible reviews for Home24 on Trustpilot, I strongly believe someone needs to take Home24 to court as they are likely in BREACH OF CONTRACT with regards consumers rights (as they have not supplied the goods/services that they were contracted [paid] to deliver) and certainly not in a reasonable time frame. I will now be seeking LEGAL ADVICE and how to pursue this.

**UPDATE 2**
it has now been 158 days and we still do not have the functional item. This is more than 22 weeks, or 5 months & 8 days. Obviously this is absolutely unacceptable. Legal action is now being pursued.

Worst experience I have ever had ordering something online. This company is a joke, and I am scared to admit that home24 is a scam. I ordered a sofa over two months ago, and they don’t know where it is. The delivery status has stated 2 business days for the last 3 weeks.

Review Example #5: Home24 is Fraudulent?

Seriously, avoid this company like the plague. They are running a major scam.

Delivery date on order said 1-2 weeks. After ordering it was changed to 2-3 weeks. 3 weeks passes, and after calling home24 three times as well as the delivery company, no one can tell me when the couch is coming. I have canceled my order and will be indicating to my credit card company that home24 is fraudulent.

Review Example #6: The Worst Furniture Retailer in Europe?

No other furniture business I’ve given business to in Europe has exhibited to me a similar deceiving practice. Conforama, Maisons du Monde and Ikea have been 100% accurate in their delivery time in my experience.

Review Example #7: Potentially Problems with a Back Office Inventory or Partner Inventory System?

When one reads how many reviews share the same experience with home24 on delivery times, it looks to me that this is either a cultural problem within the company and a chosen business practice OR a broken back-office inventory and partner management system.

Review Example #8: A Major System Meltdown?

On the hotline, before you can talk to anyone, you are asked by the system if your order was made before the 20th or April. This probably marks the time some major meltdown happened in either their accounting or their logistics system,(emphasis added) and they have obviously messed up thousands of orders ever since, and have also been unable to fix it. It’s too much of a coincidence that a major flow of 1-star reviews has started ever since that time, and is still going strong. 

Interpreting the Reviews

Nearly all companies have bad reviews, however, the items listed above, as well as many others illustrate a serious problem with delivering on orders.

There are many questions that arise.

  1. If S/4HANA has available to promise functionality, why is there such a large discrepancy between when the items are ordered and planned to arrive and when they arrive?
  2. According to Sven Deneken S/4HANA has amazing inventory management capabilities. Yet, these comments and many more call into question what Home24 got from KPS in terms of managing inventory appropriately.

The most common problems seem to be unconfirmed delivery times, wrong/incomplete/damaged products sent, no refund, slow customer service, etc. The latest negative reviews are from August. So it is clear that Home24 is still struggling with S/4HANA.

It seems that even some of the customers writing reviews have at least guessed that Home24 had a major disruption with their systems.

What Appear to be Fake Reviews Posted by Home24

Furthermore, while we thought our first estimate of the number of bad or poor reviews was accurate. When we read the Excellent we review we noticed something off.

Most of the Excellent reviews don’t have details filled out. 

One of the reviews declares that the home page is Super. We found the repeated use of the word “Super” and also the use of multiple exclamation points in the Excellent reviews. 

The reviews in the Excellent category are clearly faked by Home24. This means that the statistics that are listed in terms of the percentage that fall into each category are faked. 

And we weren’t the only ones to notice this. This observation was pointed out by several reviewers, including this one.

I can’t believe Home24 actually posted so many positive, probably fake reviews just to cover the real customers experience!

A week ago, most of the reviews were negative, not going over 2 stars, but now hundreds of new, 4-5 stars reviews appeared. That talks a lot of about transparency and actual worth of Trustpilot reviews.

The Implications for Home24

Home24 appears to be a company on the ropes that is falsifying its online reviews to keep from going under.

Recall, S/4HANA was supposed to revolutionize how Home24 manages its finance and supply chain functions. See the Sven Deneken video at the end of this article for what SAP and KPS would have promised Home24. What Home24 actually should have invested in is software that falsifies reviews, because it is too easy to tell that the reviews on TrustPilot for Home24 are falsified.

On June 19th 2019 Handelsblatt covered a meeting of Home24 and shareholders in Berlin.

“We have experienced a course disaster within just one year after the IPO. This leaves scorched earth and is unprecedented, “railed Michael Kunert of the shareholders’ association SdK.

Because not only several profit warnings pushed the share price in the cellar, but also constant share sales of Rocket Internet. Currently, Berlin still hold 18.8 percent of the shares, so have sold almost half of their shares since the IPO. “The partial exit from Rocket is not a good sign,” angered Kunert.

“We are aware that we have lost confidence and are working hard to regain it,” (CEO) Appelhoff announced. The time for the IPO nine years after founding was right. However, two effects had hit Home24 at the same time last year: a change in the merchandise management system had caused delays in deliveries,(Brightwork Insert: this is the SAP sales BOM) and the hot summer kept customers from buying furniture across the industry.

Interestingly Appelhoff did not declare what systems are part of this “merchandise management system.” However, the timing matches the S/4HANA roll out. Furthermore, the evidence from reviews very starkly illustrates that Home24 has major problems in order management, inventory management, and delivery.

Notice this response from someone in attendance.

Shareholder protector Kunert appealed to Appelhoff: “As bizarre as I find the explanation with the hot summer – the hope that the course can work its up again, is quite there,” he said.

That is right, the hot summer is a strange excuse. The hot summer does not explain Home24 enormous problems with basic sales fulfillment and it does not explain why there are what appears to be a large number of fake reviews out at TrustPilot. Curiously, the article does not show shareholders asking for details around the change in the merchandise management system.

  • Why did it cause problems?
  • What system was used?
  • Who was the implementor?

We found out the answers to all of these questions, but not from Home24. And not from SAP. And also not from the KPS website.

The only information coming from any of these entities is inaccuracies around their problems.

KPS Strikes Again?

KPS Consulting, which was part of the ridiculous Lidl failure, which we covered in the article KPS Continues to Promote HANA for Retail for Lidl After Failure, was also the implementer with Home24. In fact, this is listed directly on the KPS website.

According to KPS, the Home24 S/4HANA implementation was a massive success.

Prepare to digest the impressive facts about the implementation (according to KPS)

CONTEXT

Innovative, ambitious company with a start-up character

Strong commitment from the executive team, business driven project

Historically grown, complex IT landscape that made process improvement impossible or extremely slow

High number of interfaces, inefficient and cost-intensive processes

Complex fulfillment requirements

Cloud hosting the new solution, “one stop shop” decision (emphasis added)

Aggressive timeframe: 13 months from prototype to go-live

It is unclear what the actual cloud hosting solution was, but the customer when with what KPS and SAP recommended.

This is a problem for all SAP customers because SAP recommends cloud providers based not on the capabilities of the provider but based on their ability to mark up that provider. SAP’s entire cloud strategy is now based upon marking up the services of other providers as we cover in the article SAP’s Upcharge as a Service and we get into the specific upcharge percentage in the article SAP’s Cloud Upcharge on AWS Storage. For our review of a specific recommended cloud service provider see the article Comparison of SAP HEC with Virtustream Versus AWS.

USE

Implemented end-to-end processes

High transparency, “single point of truth”

Fast and reliable customer service feedback to customers

Extension of the service portfolio

High availability, transparency and consistency of data

Reduction in the number of systems

ACTION

KPS Rapid-Transformation® method with rapid prototyping of end-to-end processes

Wide use of SAP standard processes, reduction of developments and deviations to an absolute minimum

Go live by country, big-bang approach

No migration of customer orders

Take note of these statements by KPS. Not only did the majority of these things not happen, but the project was no able to provide even fundamental inventory management, order management, and delivery management capabilities to Home24.

See our coverage of SAP’s rapid tools in the article The SAP RDS Rapid Deployment Solutions?

TECHNOLOGY

SAP S / 4HANA Merchandise Mgmt

SAP EWM

SAP Customer Experience Suite

SAP Commerce Cloud (PIM, Billing)

SAP Service Cloud

SAP VIM

SAP BW / BI

However, what is listed on the KPS websites is not actually what happened on the project.

Scope Issues with the S/4HANA and Other SAP Application Implementation

Actually, the first thing we noted was the scope of the project versus the size of the company. Let us review some of the peculiar issues on an application by application basis.

  • SAP S / 4HANA Merchandise Mgmt: S/4HANA is not at the point of development where it has much in the way of industry solutions.
  • SAP EWM: EWM is very complicated and troublesome application. It is also far too expensive and complicated for a company the size of Home24. Home24 states there are 1364 people that work at the company, but those that know the company dispute this. In Berlin, there are estimated to be between 100 to 150 people. This is where the implementation was performed. This is far too few people as only a small subset of this would have supported the EWM implementation.
  • SAP Customer Experience Suite: This is Qualtrics, which is fine, it does not take much effort to implement.
  • SAP Commerce Cloud (PIM, Billing): This is a very new application that is not mature.
  • SAP Service Cloud: This is also not really a ready to deploy application.
  • SAP VIM: No comment
  • SAP BW / BI: This is again, very much overkill for a 100 to 150 person company at headquarters.

*All of the items in red are what we consider high-risk implementation SAP products.

The total expense of these combined applications both in terms of the license fee but more importantly the implementation and maintenance overhead is absolutely ridiculous for this size of a company. And this is not the extent of what was sold. S/4HANA requires HANA, which is one of the highest overhead databases that one can implement. It is not mentioned by KPS, but S/4HANA can’t be implemented without it.

KPS was not the only implementor involved, Logventus was as well, however, LogVentus is a warehousing/logistics specialized firm.

For this reason, it is unlikely they had much to do with the S/4HANA implementation but instead focused on EWM. 

Selling SAP Without Any Concern for Implementability

Our analysis of what was sold to Home24 is that it was entirely built around trying to sell the most recent items to Home24 rather than focusing on more mature applications that worked. We recently had a client that was about to purchase a smaller set of SAP products, but the set or BOM included S/4HANA. We told them that their sales BOM was extremely risky. As we explained why it became apparent that the junior CIO did not want to actually hear this.

In our view, Home24 only had the good probability of going live on just a few of the SAP applications they were sold, with S/4HANA being one of them.

This overall configuration of the sale brings up the question of Is it Right to Lead Clients into SAP Software Failure? Because this is clearly what SAP and KPS and potentially Log Ventus did by recommending these applications to Home24. SAP, KPS and Log Ventus took advantage of what Home24 did not know, and without any concern for their ability to implement, they stuffed Home24 with an unimplementable combination of experimental applications, and applications that were not a good fit for Home24. 

What Was Implemented?

Information from the project also indicates that many products on the sales BOM or listed by KPS were not implemented. This means that KPS is lying about what occurred at Home24 in multiple dimensions.

KPS’s Performance at Home24

After the project got underway, the information we obtained from an anonymous source very familiar with the Home24 SAP implementation, is that KPS had no idea how to implement. We won’t be more specific than this, to prevent any readers associated with KPS or SAP from backward engineering our source from the information we provide. However, we can say that very basic steps that are normally part of an SAP implementation were skipped, and KPS did not appear to have sufficient knowledge of how important these steps were.

One of the major issues is that the timing of the overall project was just completely unrealistic, and has nothing at all to do with the official duration — which is listed as 13 months — on the KPS website. One of the ways that KPS has been getting so many S/4HANA projects is that they have been bidding them at a fixed price, which makes it additionally difficult to properly implement the project when KPS has to hire so many contractors as they lack the internal resources in may areas that they claim to have employee coverage.

Secondly, these implementation problems lead to operational problems which lowered Home24’s reputation. That is the SAP implementation was critical to undermining Home24 as a functioning company.

Home24’s Fault in the Failure

Home24’s first failure was not having advice that was independent of SAP. This meant they were told a number of fairy tales around S/4HANA and other SAP products and apparently bought them.

How Prepared Was Home24 to Even Engage in This Implementation?

There is also a question as to whether Home24 was ready for such an expansive implementation as they simply did not have experience managing SAP implementations or anything like this scope before they embarked on this implementation.

How Incompetent is KPS?

After Lidl, the details of which read like they needed their own laugh track, and Home24 where they (along with SAP) jammed in a very large scope of work and then lacked any understanding of how to pull off such a project, KPS is now on our list of highly problematic SAP implementation companies. While we were analyzing this case study, we received a separate communication about problems at another S/4HANA which is problematic S/4HANA implementation, which once again shows as a successful S/4HANA implementation on the KPS website.

This brings up the question of how many KPS projects have failed or are currently in the process of failing.

What is KPS Currently Doing at Home24?

The strategy used by KPS appears to be to come in an make a lot of promises, then get the project started, and then make it so they can’t be removed. I cover this strategy in the article The Bait and Switch SAP Implementation Partners. KPS is very specific about not providing customers with documentation. This keeps the client from ever being able to replace KPS.

Information from the Home24 project is that the account is being milked. KPS has to keep bringing in new consultants, which while the project is a mess, it allows people to get S/4HANA on their resumes. The intent of KPS is to stick around as long as possible.

The long term cost of the implementation will greatly exceed what KPS fixed priced the project for, but that was never a realistic number. Home24 is now afraid to fire KPS as they know how the systems are set up, and they are also afraid to go public with the fact that they were tricked by KPS and SAP as to do so would signal that they don’t know how to manage their own software implementations. Therefore, they are stuck — in their mind — having to continue to pay KPS under the hope that eventually they can get it right.

How KPS and SAP Would Like the Story to be Told

If Home24 goes under and is eventually purchased by another furniture company unless this story about what happened with Home24 and how SAP and KPS drained Home24, the problems would have been attributed to other things and SAP and KPS would have got off scot-free. However, there are many case studies where SAP and a consulting firm combine to bring down a company due to two factors:

  1. Massive project expenditures.
  2. Damaging the business by reducing the operations of the business.

Both of these things happened with Revlon with S/4HANA a story we covered in the article What Was the Real Story with the Revlon S/4HANA Failure?
In the case of Revlon, they have also been sued by shareholders for hiding their S/4HANA failure. Notice in the article that our analysis of Revlon’s damage control was that it made no sense. Revlon will have problems for some time with getting their business back on track.

With Lidl, it took 7 years and $500 million Euros until they canceled the project. That as a terrible project for Lidl, but it was a great project for KPS because a significant portion of that total expenditure when to KPS. There is no reason that KPS can’t continue to function this way, lying to get projects, dropping in a low fixed price bid, failing on the project, and then milking the account.

Will SAP, which is entirely knowledgable of what KPS is doing stop them? Of course not, KPS is helping SAP sell deals. And with SAP’s current quarter focus, the only thing important to SAP is selling software so they can make that next quarter. If you work in sales, and you don’t make your quota, you won’t be around to worry about whether what is sold works or does not work at your customer.

The consulting companies have some maturity issues they would like to hide from you. This is why they can’t be listened to — the only thing they look out for is their interests. They are happy to recommend inappropriate applications and to create miniature disasters within their clients, as long as they can get their financial needs met. 

SAP’s Inaccurate Messaging on S/4HANA as Communicated in SAP Videos

Fact-Checking SAP Information on S/4HANA

This video is filled with extensive falsehoods. We will address them in the sequence they are stated in this video.

SAP Video Accuracy Mesurement

Appleby's StatementAccuracy % of the CommentExplanationLink to Analysis Article
S/4HANA is what allows key processes to be digitized.
0%
ECC was already fully digitized and digitized across key business functions.The Problem with Using the Term Digital Transformation on IT Projects
HANA is a Platform
0%
HANA is not a platform, it is a database.How to Deflect You Were Wrong About HANA
Fiori is a major advantage for S/4HANA.
10%
In S/4HANA implementations Fiori is infrequently used when S/4HANA. How Accurate Was SAP on the Number of Fiori Apps?
Fiori is far more efficient than what came before.
10%
In testing Fiori and S/4HANA, Sven Deneken's statements did not hold up. There was a particular weakness in actually making changes after noticing something needed to be changed, and we found the efficiency below that of ECC with of course SAPGUI.
S/4HANA is innovative as it brings "real time inventory."
0%
Sven Deneken brings up the topic of "real-time capabilities," however there is nothing particularly real-time or different in terms of a reaction than ECC. Whenever you make a change in ECC or any other ERP systems for that matter, the entry is real-time. Sven Deneken states that "the physical inventory is the same as the digital inventory." However, under what system would this not be true?What Happened to the Term Perpetual Inventory?
S/4HANA is innovative because it allows access to supplier information.
0%
Sven Deneken states that information about the supplier is "just a fingertip away." Sven Deneken may be familiar with ECC, where supplier data is also a fingertip, or say mouse click away. It called the Vendor Master in ECC.
Sven Deneken says that the cycle could be changed to daily or sub-daily.
0%
Why would that occur? This is a very strange scenario that is being laid out.
S/4HANA is innovative because it allows MRP to be rerun interactively for a product location.
0%
Sven Deneken is extremely confused when he states that S/4HANA allows a fresh MRP run to be performed for a specific product location and that this is a differentiator for S/4HANA. For a single product location, there is no ERP system that cannot run MRP for a single location. Secondly re-running MRP does not remove uncertainties. MRP can be re-run when something changes. For example, when the forecast changes.Performance Problems with HANA and MRP
Sven Deneken states this demo shows SAP has reimagined inventory management.
0%
However, all of this functionality, save for several of the graphics shown in the video have already been available in ECC for many years, in fact, decades.

Conclusion

This project’s outcome has been effectively hidden from view. KPS still shows it as a success, but there is no publication on the part of SAP or Home24. As we have been saying, S/4HANA projects have a very high failure rate. And this is not being acknowledged by the industry, because the coverage on these topics is mostly controlled by SAP and the SAP consulting firms.

This brings up the topic of what is implementation failure. If a system is live, but it has significantly degraded your business — then I count this as a failure. Vendors and consulting firms only want the benefits of their product/work measured — and any projects like Home24 removed from the discussion. Every time I have a discussion with a vendor or consulting firm rep about their projects I am directed to their successes. When I discuss the failures — they switch the conversation very quickly back to the successes. After I check the successes, even the successes are overstated. It seems as if I am not allowed to discuss failed projects without causing a lot of offense and then receiving personal attacks. You have one right as a researcher in the software space and that is to discuss project successes. One can talk about failures — but only if one is willing to point any blame at the customer. This is what noted “failure expert” Michael Krigsman does (or did as he has become less prominent as of late) as I analyzed in the article The Art of Blaming the Client When SAP Fails and in the article How S/4HANA Cost Overruns and Failures are Suppressed.

In the article Personally Attacking Those that Critique ERP Failures I note how any investigation into SAP failures invariably leads to personal attacks. After this article was shared on LinkedIn an SAP employee wrote a comment that the article was a “hot mess” and that it had inaccuracies which she could resolve if reached out to in private. Upon interaction, I found that she had no information about the Home24 implementation. The intent of SAP commenters is to simply try to reduce the credibility of the author and the article.

The strategy of dealing with authors who have the temerity to cover project failures is the following.

  • Every failed project like Home24 is to be ignored and denied by vendors and consulting firms.
  • Every author writing about project failures either has bad information, bad intentions or lacks the background to write the article.
  • Any author covering project failures has an ax to grind (the specific ax is never to be mentioned)
  • All software failure is to be blamed on customers.
  • Any calculation of the average ROI of projects to have case studies like Home24 removed. The ROI is to be only of the top 25% of projects, with the rest of the projects buried from view.

This case study is very important for several different reasons. First, it should be a wake-up call to companies currently being proposed high-risk sales BOMs from SAP.

Projecting the Future for Home24

It looks quite likely that Home24 will not be able to recover from their systems implementation. Home24 was doing better prior to its migration than after the migration to S/4HANA and related SAP products. Home24 has not only damaged its reputation with customers but the trust in the company among shareholders has significantly declined since the implementation. It is getting hit from multiple sides — both continuing implementation and remediation costs paid to KPS and declining revenues. Home24 is also burning through and burning out its employees. The sad feature of this is that it is entirely obvious that Home24 did not need most of the items that were sold to it by SAP and KPS.

The Problem: A Lack of Fact-Checking of S/4HANA

There are two fundamental problems around S/4HANA. The first is the exaggeration of S/4HANA, which means that companies that purchased S/4HANA end up getting far less than they were promised. The second is that the SAP consulting companies simply repeat whatever SAP says. This means that on virtually all accounts there is no independent entity that can contradict statements by SAP.

Being Part of the Solution: What to Do About S/4HANA

We can provide feedback from multiple HANA accounts that provide realistic information around S/4HANA — and this reduces the dependence on biased entities like SAP and all of the large SAP consulting firms that parrot what SAP says. We offer fact-checking services that are entirely research-based and that can stop inaccurate information dead in its tracks. SAP and the consulting firms rely on providing information without any fact-checking entity to contradict the information they provide. This is how companies end up paying for a database which is exorbitantly priced, exorbitantly expensive to implement and exorbitantly expensive to maintain. When SAP or their consulting firm are asked to explain these discrepancies, we have found that they further lie to the customer/client and often turn the issue around on the account, as we covered in the article How SAP Will Gaslight You When Their Software Does Not Work as Promised.

If you need independent advice and fact-checking that is outside of the SAP and SAP consulting system, reach out to us with the form below or with the messenger to the bottom right of the page.

Financial Disclosure

Financial Bias Disclosure

Neither this article nor any other article on the Brightwork website is paid for by a software vendor, including Oracle, SAP or their competitors. As part of our commitment to publishing independent, unbiased research; no paid media placements, commissions or incentives of any nature are allowed.

HANA & S/4HANA Research Contact

  • Interested in Research on S/4HANA & HANA?

    It is difficult for most companies to make improvements in S/4HANA and HANA without outside advice. And it is not possible 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.

S/4HANA Implementation Research

We offer the most accurate and detailed research into S/4HANA and its implementation history. It is information not available anywhere else and is critical correctly interpreting S/4HANA, as well as moderating against massive amounts of inaccurate information pushed by SAP and their financially biased consulting ecosystem.

Select the description that best matches you.

Option #1: Do You Work in Sales for a Vendor?

See this link for an explanation to sales teams.

Option #2: Do You Work for an Investment Entity that Covers SAP?

See this link for an explanation for investment entities. 

Option #3: Are You a Buyer Evaluating S/4HANA?

For companies evaluating S/4HANA for purchase. See this link for an explanation to software buyers

Search Our Other S/4HANA Content

References

https://kps.com/de/successes/home24.html

https://www.trustpilot.com/review/home24.de

*https://www.en24.news/2019/09/rocket-internet-repels-more-home24-stocks.html

https://www.handelsblatt.com/unternehmen/handel-konsumgueter/hauptversammlung-home24-aktionaere-machen-rocket-internet-fuer-kursdesaster-verantwortlich/

https://www.logventus.com/en/

Why Pressure SAP to Port S/4HANA to AnyDB?

Executive Summary

  • Oracle presents an excellent case for not following SAP on implementing S/4HANA.
  • We explain the logic for pressuring SAP on creating S/4AnyDB.

Introduction

SAP aggressively pushed for companies to implement S/4HANA. However, S/4HANA has a large liability in its data model which requires extensive code remediation.

Code Remediation for S/4HANA

As S/4HANA has a radically different data model, with 10,000 tables becoming 3,000 tables. It means that every adapter or customization that exists an ECC customer will need to be rewritten. This is a major effort, and the problem is that it does not come with a corresponding benefit because HANA underperforms competing databases, and the database design of HANA is a poor fit for ERP as we cover in the article Mismatch Between HANA and S/4HANA and ECC. SAP refuses to benchmark its database against competing databases and created an entirely new benchmark that is not a good fit for how S/4HANA or any ERP systems used, as we cover in the article How to Understand the Issues with BW EML Benchmarks.

The upshot of it is that SAP is imposing a highly expensive and high overhead database with a large remediation overhead (in addition to the overall high overhead of HANA) onto customers.

SAP and the SAP consulting companies have been minimizing is the code remediation effort for S/4HANA so they can lull customers into a false sense of the work effort involved increasing their ability to sell customers on S/4HANA. At one recent account, there was not a single mention of the code remediation to the customer by either SAP or Deloitte.

We disagree with the major SAP consulting firms, our recommendation has been to pull forward the code remediation analysis to before the project begin date and to ignore all advice come from either SAP or SAP consulting firms on this topic as we cover in the article Why it is Important to Pull Forward S/4HANA Code Remediation.

Oracle’s Proposal on its Data Model for SAP

in August of 2019, Oracle published a document called Oracle for SAP Database Update.

The new column format is a pure in-memory format. Tables are stored on disk using Oracle’s existing row-based formats. Since tables as such are never stored in columnar format on disk, there are no additional storage costs or storage synchronization issues. Nor is there a need to modify the database. Oracle Database 12c In-Memory can be implemented without a database migration or a table reorganization.

As a result, the new Oracle Database 12c In-Memory feature is fully compatible with existing standard or optional database features such as table and index compression, table encryption, and table partitioning. It is also compatible with the scale-out architecture provided by Real Application Clusters (RAC) and with all existing high availability technologies (such as Data Guard).

This following anonymous provides more details.

In Oracle DB, the tables are always stored in row format and only exist in column format in memory only for those tables that are needed for analytics. Totally transparent to the application codes.

In fact the coding can be even simpler as the coder does not need to worry whether a table is row or column based, the DB engine will decide based on the query to use the row format or the column format.

The Logic of Using HANA for Other Applications

HANA is a particularly poor value for any ERP system, and it is better suited to an entirely analytics application, which is why the most comment implementation of HANA up to this point has been for BW. However, while HANA is far better suited for BW than for S/4HANA it is still not competitive with AnyDB on the basis of cost, performance or maintenance overhead. And this quote from Oracle illustrates the misleading descriptions that SAP uses to trick people into thinking they must use HANA to gain certain capabilities.

From a business or user perspective what looks like one single “cube”, is actually a set of multiple tables, and the relationships between them can be described as a multi-level hierarchy. But this complex structure, which requires many joins when a query or a report is executed, slows down in-memory databases considerably. Therefore, SAP designed a new, simpler data model for SAP BW on HANA and consequently called it HANA-Optimized InfoCubes.

This also means that much of the benefit of the BW application is reduced because in the BW Data Workbench was where the star schemas were created. Once HANA was introduced and by extension other databases that have columnar capabilities, the work done in BW greatly is reduced, which reduces the reason for using BW in the first place. This observation is left out of any SAP or consulting firm commentary on this topic.

Oracle continues…

However, this new data model is not only optimized for HANA. It is optimized for in-memory computing in general. Therefore SAP on Oracle users who have activated Oracle Database In-Memory can implement it as well, the only difference being the name (Flat InfoCubes or simply Flat Cubes). A less famous, yet important optimization is Table Declustering. A cluster table stores a complete (logical) record in one single (physical) table column. Such a complex value can be interpreted by the SAP Application Server, but not by a database server – which means that code pushdown is not possible, if a cluster table is involved. Therefore SAP now supports Table Declustering, for HANA as well as for the Oracle Database.

Naming flat infocubes “HANA optimized” according to Oracle is deceptive (and I agree). They are simply infocubes that are not based upon star schemas. But when a customer reads they are “HANA optimized” the impression is that one needs to have HANA to leverage them.

The Problem with S/4HANA’s Data Model

In the book Software Wasteland, Dave McComb makes the following statement about data models developed by application vendors.

All enterprise applications have data models. Many of them are documented and up to date. Data models come with packaged software, and often these models are either intentionally or unintentionally hidden from the data consumer. Even hidden though, their presence is felt through the myriad screens and reports they create. These models are the antithesis of elegant. We routinely see data models with thousands of tables and tens of thousands of columns, to solve simple problems. Most large enterprises have hundreds of thousands of these data models.

S/4HANA is an example of an application that imposes a data model that is inefficient for the majority of what S/4HANA does as a system, which is transaction processing. SAP jumped the gun, and following Hasso Plattner, presumed they had knowledge in database modeling that they did not have. What is a good sign that a person is faking his understanding of a topic? Well, if a person has an honorary degree, and tries to pass it off as a real Ph.D., this is a good indicator as we cover in the article Does Hasso Plattner Have a PhD?

For the same reason, if you find a medical doctor who states they have an MD, and they don’t, then it is a good idea to skip the medical advice of this person also.

S/4HANA’s data model is a problem and will impose not only a performance issue but significant technical debt on those that migrate to S/4HANA.

What is even more amazing is that for years SAP sold this ineffective data model change under the marketing construct of data simplification, as we cover in the article Does HANA Have a Simplified Data Model?

That is SAP has presented their neophyte data model which overly relies on columnar tables, and which has had to have row-oriented tables added to its initial design.

It is important to remember that when HANA was first introduced, it was introduced as a 100% column-oriented table database. This is explained in the following quotation from John Appleby.

With ERP on HANA, we, of course, don’t need separate row and column stores for transactional and operational reporting data. Plus as Hasso Plattner says, we can use the DR instance for read-only queries for operational reporting.

That is what SAP thought at this time, but then in SPS08, suddenly SAP added rows oriented tables to HANA. Yes running an entirely column-oriented database for a transaction processing system never made any sense. Appleby himself describes this change in our critique of his article in How Accurate Was John Appleby on HANA SPS08? This article is written in November 2014, and in June of 2014, or seven months later SAP already had to change its design.

Therefore, what Appleby states here is reversed. HANA’s performance for ERP systems must have been absolutely atrocious before they added row oriented stores.

More analysis of this quote can be found in the article John Appleby, Beaten by Chris Eaton in Debate and Required Saving by Hasso Plattner.

This is strong evidence that SAP did know what it was doing when it first designed the S/4HANA data model and has been backtracking from its original design through successive releases. Its earlier statements are contradicted by adjustments it made to the data model in later releases of HANA.

SAP’s Inaccurate Messaging on HANA as Communicated in SAP Videos

Fact-Checking SAP’s HANA Information

This video is filled with extensive falsehoods. We will address them in the sequence they are stated in this video.

SAP Video Accuracy Measurement

SAP's Statement
Accuracy
Brightwork Fact Check
Link to Analysis Article
HANA is a Platform
0%
HANA is not a platform, it is a database.How to Deflect You Were Wrong About HANA
HANA runs more "in-memory" than other databases.
10%
HANA uses a lot of memory, but the entire database is not loaded into memory.How to Understand the In-Memory Myth
S/4HANA Simplifies the Data Model
0%
HANA does not simplify the data model from ECC. There are significant questions as to the benefit of the S/4HANA data model over ECC.Does HANA Have a Simplified Data Model?
Databases that are not HANA are legacy.
0%
There is zero basis for SAP to call all databases that are not HANA legacy.SAP Calling All Non-HANA DBs Legacy.
Aggregates should be removed and replaced with real time recalculation.
0%
Aggregates are very valuable, and all RDBMS have them (including HANA) and they should not be removed or minimized in importance.Is Hasso Plattner Correct on Database Aggregates?
Reducing the number of tables reduces database complexity.
0%
Reducing the number of tables does not necessarily decrease the complexity of a database. The fewer tables in HANA are more complicated than the larger number of tables pre-HANA.Why Pressure SAP to Port S/4HANA to AnyDB?
HANA is 100% columnar tables.
0%
HANA does not run entirely with columnar tables. HANA has many row-oriented tables, as much as 1/3 of the database.Why Pressure SAP to Port S/4HANA to AnyDB?
S/4HANA eliminates reconciliation.
0%
S/4HANA does not eliminate reconciliation or reduce the time to perform reconciliation to any significant degree.Does HANA Have a Simplified Data Model and Faster Reconciliation?
HANA outperforms all other databases.
0%
Our research shows that not only can competing databases do more than HANA, but they are also a better fit for ERP systems.How to Understand the Mismatch Between HANA and S/4HANA and ECC.

The Problem: The Negative Consequences of Using S/4HANA

This is why independent advice is necessary on SAP S/4HANA and HANA because SAP is providing false information and their consulting partners simply parrot this false information. Oracle has the incentive to provide inaccurate information that moves customers away from BW on HANA, but while the incentive is there, here Oracle is correct. Secondly, SAP S/4HANA design is wasteful. It requires extensive code remediation to adjust for a radically different data model but does not lead to performance improvements in S/4HANA. Oracle, and other database vendors that have made similar adjustments to their database offer the opportunity to use S/4HANA without a major reconfiguration of the data model. The problem, of course, is that SAP does not allow this option.

Being Part of the Solution: What to Do About S/4HANA

SAP still does not have S/4HANA ready to be implemented. Most companies that have tried to implement S/4HANA have failed to bring S/4HANA live. In the case of Revlon, it caused a major disruption to their business as we covered in the article What Was the Real Story with the Revlon S/4HANA Failure? SAP has little leverage to force companies to migrate to S/4HANA, but both SAP and SAP consulting companies are desperate for license revenue and implementation money from S/4HANA. This means that SAP customers could coordinate to push SAP to port S/4HANA to other databases. There is no reason, aside from migrating some of the code out of HANA to the application layer, why this could not occur. If SAP customers were savvy, they could coordinate and demand that S/4HANA be ported to S/4AnyDB, and this would mean using the previous data model (that is with adjustments for the removal of S/4HANA functionality that occurred from ECC to S/4HANA). That would meet the requirements for companies to move to S/4. If this topic interests you, reach out to us at the form below or in the chat window on the bottom right of this page.

Financial Disclosure

Financial Bias Disclosure

Neither this article nor any other article on the Brightwork website is paid for by a software vendor, including Oracle, SAP or their competitors. As part of our commitment to publishing independent, unbiased research; no paid media placements, commissions or incentives of any nature are allowed.

S/4HANA Implementation Research

We offer the most accurate and detailed research into S/4HANA and its implementation history. It is information not available anywhere else and is critical correctly interpreting S/4HANA, as well as moderating against massive amounts of inaccurate information pushed by SAP and their financially biased consulting ecosystem.

Select the description that best matches you.

Option #1: Do You Work in Sales for a Vendor?

See this link for an explanation to sales teams.

Option #2: Do You Work for an Investment Entity that Covers SAP?

See this link for an explanation for investment entities. 

Option #3: Are You a Buyer Evaluating S/4HANA?

For companies evaluating S/4HANA for purchase. See this link for an explanation to software buyers

Search Our Other S/4HANA Content

References

https://www.computerweekly.com/news/252464278/SAP-disruption-leads-to-Revlon-class-action-lawsuit

*https://specialreport.247wallst.com/consumer-products/2019/03/20/whats-really-wrong-with-revlon

https://www.wipro.com/en-US/blogs/pradeep-nair/sap-s4hana-the-core-of-a-digital-business/

*https://www.amazon.com/Software-Wasteland-Application-Centric-Hobbling-Enterprises/dp/1634623169

https://seekingalpha.com/article/4249619-revlons-rev-ceo-debbie-perelman-q4-2018-results-earnings-call-transcript?part=single

http://blog.asug.com/asugs-2019-state-of-the-community-study-reveals-sap-customer-insights-challenges-and-opportunities

https://www.riministreet.com/Documents/Collateral/Nucleus_6-out-of-10-customers-wouldnt-buy-SAP-again_June-2016.pdf

What Was the Real Story with the Revlon S/4HANA Failure?

Executive Summary

  • Revlon failed at a S/4HANA implementation back in Feb of 2017 and this failure came to light in a quarterly call in March of 2019.
  • We cover this failed S/4HANA case study.

Introduction

We have been warning people about S/4HANA’s implementation problems for several years now. We covered this in the article Why Did SAP Fake S/4HANA Maturity So Aggressively? and explaining how both SAP and consulting firms have greatly misrepresented S/4HANA’s maturity. We covered this in the article Analysis of Mark Chalfen’s Article on S/4HANA Maturity

How S/4HANA Operationally and Financially Damaged Revlon

Notice this quote from Revlon’s Q4 2018 call (which occurred in May of 2019).

As highlighted previously, the company has identified a material weakness in it’s internal controls, primarily related to the lack of design and makings of effective controls in connection with the implementation of its new SAP ERP system in the U.S. We have already developed and begun to implement a remediation plan to address this finding and we’ll continue to enhance our internal control environment as we move forward. The company expects that this matter will not result in any changes to its financial results.”

The company’s problems with the ERP system surfaced shortly after Revlon launched S/4HANA in February 2017.

The 2017 Statement from Revlon About the S/4HANA Implementation

Such systems are designed to integrate everything from a company’s inventory of manufacturing goods to its customer relationships. In its annual report for fiscal year 2017, Revlon revealed the difficulties at its Oxford, North Carolina, manufacturing facility:

“[T]he Company launched the new ERP system in the U.S., which caused its Oxford, N.C. manufacturing facility to experience service level disruptions that have impacted the Company’s ability to manufacture certain quantities of finished goods and fulfill shipments to several large retail customers in the U.S. The Company cannot provide assurances that it will remedy the ERP systems issues in time to fully recover these sales and/or that the ERP implementation will not continue to disrupt the Company’s operations and its ability to fulfill customer orders.”

The disruptions have continued, apparently, and Revlon’s warning a year ago has come true:

“To the extent that these disruptions occur in larger magnitudes or continue to persist over time, it could negatively impact the Company’s competitive position and its relationships with its customers and thus could have a material adverse effect on the Company’s business, prospects, results of operations, financial condition and/or cash flows.”

The Remediation Plan?

I am not sure what the remediation plan will be for S/4HANA, but any ERP system that has been taken live that is running the business in production will cause large issues across that business. According to the quotes from ComputerWeekly.

“She attributed $54m of direct cost to remediating the SAP disruption.”

Most likely the actual number will end up being a good deal higher than this. Budgets for such remediation nearly always underestimate the total costs.

However, Revlon also stated the following.

“There is not a plan for future implementations at this point.”

This sounds like the project has failed. And this caused investors to note an inconsistency.

“According to the class action lawsuit, the company made false or misleading statements and failed to disclose the extent of its issues with the SAP implementation.”

How Revlon Could Have Avoided from the S/4HANA Failure

It turns out very easily.

We will cover something about this story that the mainline IT media entities, consulting firms and IT analysts will not touch — and the reason being that nearly every entity that reports on SAP, is also financially connected to SAP. And they do not declare their financial connections to SAP, appearing to be independent.

  • Revlon could have stayed entirely out of this by not listening to their consulting firm.
  • This software was implemented back in 2017 so the project would have begun in 2016. This was a timeframe when the chance of taking S/4HANA live in a production setting would have been close to zero. However, Revlon was encouraged to implement this software by both SAP and the consulting partner. Since S/4HANA was first introduced, there has been every attempt by SAP and the consulting ecosystem to hide the maturity of S/4HANA from potential customers — as we covered in the article Why Did SAP Fake S/4HANA Maturity So Aggressively?

Let us review a sample of the public statements around S/4HANA by some of the largest SAP implementation firms.

Getting Inaccurate Information About S/4HANA from SAP Consulting Firm’s Website

The Deloitte Website on S/4HANA

The material on Deloitte’s website, as is the material on all of the major SAP consulting companies websites leaves out the question of maturity.

Consulting companies want S/4HANA implementations, and this causes them to entirely leave out the maturity of the application. Other claims untethered to the maturity of S/4HANA also are highly dubious.

Let us look at two examples:

  • S/4HANA “is at the center of many major digital transformations projects today.” In terms of the number of ongoing projects, it depends on what “many means” but it is not being widely implemented. Secondly, the number of S/4HANA projects that go live is very low. Is the success of the system measured by how many projects are ongoing (and billing hours) or what percentage go live? For Deloitte, the measure is naturally the number billing.
  • How is S/4HANA a “game-changer” if it has no new functionality over ECC, its performance is not very good due to the mismatch between HANA and TP, and Fiori is rarely implemented?

The CapGemini Website

Many of the statements by the SAP consulting firms around S/4HANA are non-sensical. Companies that implement S/4HANA are replacing previous legacy or ERP systems, they are not moving from paper to digital, and are therefore not “digitizing” their business. The digitization process for the vast majority of companies that can afford a CapGemini implementation of S/4HANA would have most likely occurred in the 1970s or 1980s. 

We covered the illogical term of digital transformation in the article The Problem with the Term Digital Transformation.

In working with several SAP consulting firms and reviewing the material of others, it is clear that they have little interest in either knowing or communicating the maturity issues with S/4HANA. This is reminiscent of a quote from Dave McComb’s book Software Wasteland.

One of the main problems with our industry is that there is far more money to be made by being incompetent than there is for being competent. There are still far too many contractors who make far more money not implementing systems that there are contractors that can implement productively.

Dave McComb’s analysis is that consulting companies may even prefer if the applications they implement are immature. They are paid hourly, so whether the project actually goes live, does not matter. If they can get the project sold, then they can get paid even more as the innumerable problems requires the client to keep the consulting company around even longer. And this translates to more billing hours.

The consulting companies have some maturity issues they would like to hide from you. This is why they can’t be listened to — the only thing they look out for is their interests. They are happy to recommend inappropriate applications and to create miniature disasters within their clients, as long as they can get their financial needs met. 

SAP’s Inaccurate Messaging on S/4HANA as Communicated in SAP Videos

Fact-Checking SAP Information on S/4HANA

This video is filled with extensive falsehoods. We will address them in the sequence they are stated in this video.

SAP Video Accuracy Mesurement

Appleby's StatementAccuracy % of the CommentExplanationLink to Analysis Article
S/4HANA is what allows key processes to be digitized.
0%
ECC was already fully digitized and digitized across key business functions.The Problem with Using the Term Digital Transformation on IT Projects
HANA is a Platform
0%
HANA is not a platform, it is a database.How to Deflect You Were Wrong About HANA
Fiori is a major advantage for S/4HANA.
10%
In S/4HANA implementations Fiori is infrequently used when S/4HANA. How Accurate Was SAP on the Number of Fiori Apps?
Fiori is far more efficient than what came before.
10%
In testing Fiori and S/4HANA, Sven Deneken's statements did not hold up. There was a particular weakness in actually making changes after noticing something needed to be changed, and we found the efficiency below that of ECC with of course SAPGUI.
S/4HANA is innovative as it brings "real time inventory."
0%
Sven Deneken brings up the topic of "real-time capabilities," however there is nothing particularly real-time or different in terms of a reaction than ECC. Whenever you make a change in ECC or any other ERP systems for that matter, the entry is real-time. Sven Deneken states that "the physical inventory is the same as the digital inventory." However, under what system would this not be true?What Happened to the Term Perpetual Inventory?
S/4HANA is innovative because it allows access to supplier information.
0%
Sven Deneken states that information about the supplier is "just a fingertip away." Sven Deneken may be familiar with ECC, where supplier data is also a fingertip, or say mouse click away. It called the Vendor Master in ECC.
Sven Deneken says that the cycle could be changed to daily or sub-daily.
0%
Why would that occur? This is a very strange scenario that is being laid out.
S/4HANA is innovative because it allows MRP to be rerun interactively for a product location.
0%
Sven Deneken is extremely confused when he states that S/4HANA allows a fresh MRP run to be performed for a specific product location and that this is a differentiator for S/4HANA. For a single product location, there is no ERP system that cannot run MRP for a single location. Secondly re-running MRP does not remove uncertainties. MRP can be re-run when something changes. For example, when the forecast changes.Performance Problems with HANA and MRP
Sven Deneken states this demo shows SAP has reimagined inventory management.
0%
However, all of this functionality, save for several of the graphics shown in the video have already been available in ECC for many years, in fact, decades.

The Concept of Truth-Telling in SAP and Consulting Firms: Catch Us if You Can!

The major SAP consulting companies have never shown concern for S/4HANA’s immaturity and began promotion S/4HANA as ready for implementation as soon as S/4HANA was introduced back in Feb 2015. At this time, only S/4HANA Finance, or the finance module (aka FI/CO) was available to be implemented. And SAP consulting companies pressed their clients to upgrade to just the finance module without the rest of the ERP system anyway.

If you talk to senior members of consulting firms in private (as I have) they will not acknowledge any responsibility except to maximize the revenues of the consulting companies. The approach is that they present whatever they want, and it is the buyer’s responsibility to do their own research to fact check the consulting firm.

If we look at the legal defense of WiPro versus National Grid, WiPro stated that while the references they provided were fake, it was the responsibility of National Grid to check them. WiPro had no responsibility to provide accurate references, as we covered in the article How to Understand Wipro’s Position on Lying.

The Problems with Financial Bias in the S/4HANA Decision

  • Financial Bias: Revlon, on the basis of financially biased information, and perhaps financial bias within IT implemented an ERP system with the highest level of risk associated with it of any ERP system that we track.
  • Financial Bias of IT and Consulting Firms: The financial bias of SAP consulting companies is indisputable, but IT departments can appear to act as agents of vendors than of the company’s they “work for.” This can be due to the revolving door of senior decision-makers between implementing companies and consulting firms, and the idea that implementing or overseeing the implementation of the most recent SAP applications is good for their career.
  • The Established Pattern with S/4HANA Implementations: The Revlon failure fits into a long term pattern of S/4HANA project failures being suppressed. This is covered in the article How S/4HANA Cost Overruns and Failures are Suppressed?

Revlon’s Failure with S/4HANA Had “Nothing to do with S/4HANA’s Maturity?”

Several commenters who specialize in ERP failure analysis have stated that Revlon’s problems with S/4HANA had nothing to do with S/4HANA’s maturity issues.

As we are the only entity that we are aware of that honestly tracks S/4HANA maturity (see our critique of ASUG’s coverage in How Accurate Was ASUG on its S/HANA Poll?), and as these individuals do not work on S/4HANA implementations, its difficult to see how they would know this. It is virtually impossible to find any industry commenters who will point out the maturity of products that fail, as they look to vendors for payment or for promotion. Therefore, without performing any research they will offer the view that the application is solid.

The previous version of S/4HANA, ECC, was mature — but this says nothing about S/4HANA. S/4HANA made many changes, particularly to the technical backdrop of the application that greatly reduced its implement-ability.

This is not to say that Revlon’s management of the implementation was not problematic (we don’t know if was or wasn’t), or if the implementation company did a poor job (they normally do), but if the product itself is not ready to be implemented, it is nonsensical to remove this issue from consideration as a prime contributor to the failure.

The S/4HANA Market is Filled with Entities Providing False Information About S/4HANA Readiness for Implementation

Virtually every SAP consultant that publishes or comments underestimates the difficulty with implementing S/4HANA and misrepresents S/4HANA to prospects. We have brought up the point of whether these consulting companies are implementing projects that they know will fail, or have the highest probability of failure, but simply don’t care. We covered this in the article Is it Right to Lead Clients into SAP Software Failure?

If you are a customer interested in implementing S/4HANA and want the worst possible advice, don’t forget to check our SAP Deception and Corruption Quadrant. Any of these firms will lie to you about S/4HANA, but they are all SAP Certified partners, so they are your approved sources, and you can choose from any of them. All of them will rob you. But there is a choice. As my previous clients have said..

“we know the consulting firm is lying to us, but they have been recommended to us by SAP.”

There are so many characters like “Grima Wormtongue” consulting firms providing false information its necessary for a Gandalf type figure to bring technical accuracy and reality to IT departments.

Conclusion

The Revlon S/4HANA case study provides important insight into how implementation failures are covered up.

It almost appears the release of information by Revlon was 1/2 unplanned. And the failure was not presented as a failure, but rather the failure was presented within the context of a ready-made plan to remediate failure. This shows the management as totally in “control of the situation,” however, a more accurate depiction is they have been played for fools by SAP and their consulting partner. We can be quite confident that if we were to cultivate contacts within those that know at Revlon, they would tell us a very different story than that told in the quarterly call. The very amount of the remediation costs combined with the statements indicate that S/4HANA was cutover into production prematurely and that Revlon has had long term problems with S/4HANA.

Revlon said several inconsistent things, first that they lose money because SAP prevented them from fulfilling orders, and then that SAP was not stopping them from performing production. If Revlon is restricted in fulfilling it is impacting production if it isn’t stopping production. Furthermore, an ERP can’t “stop” production. It does not have a body that can turn the production line “off.” Therefore the statement here is misleading. What the ERP system can do is order incorrect amounts of materials, and generally, create havoc in the manufacturing process.

Furthermore, Revlon would naturally be incurring all other types of internal costs. When National Grid failed in its SAP implementation (not S/4HANA), National Grid claimed the following remediation costs in their lawsuit against Wipro.

“The problems were so profound that the cleanup took more than two years to complete with a calculated cost of $585M, more than $150% of the cost of implementation.” – How National Grid’s SAP Implementation Damaged a Company

The investor lawsuit was initiated because some investors felt they had not been informed of the problems with the SAP implementation.

Revlon is unified with SAP in hiding the failure of this S/4HANA implementation from investors. We have added Revlon to our current research into S/4HANA implementations. (scroll down for details)

SAP’s Inaccurate Messaging on S/4HANA as Communicated in SAP Videos

Fact-Checking SAP Information on S/4HANA

This video is filled with extensive falsehoods. We will address them in the sequence they are stated in this video.

SAP Video Accuracy Mesurement

Appleby's StatementAccuracy % of the CommentExplanationLink to Analysis Article
S/4HANA is what allows key processes to be digitized.
0%
ECC was already fully digitized and digitized across key business functions.The Problem with Using the Term Digital Transformation on IT Projects
HANA is a Platform
0%
HANA is not a platform, it is a database.How to Deflect You Were Wrong About HANA
Fiori is a major advantage for S/4HANA.
10%
In S/4HANA implementations Fiori is infrequently used when S/4HANA. How Accurate Was SAP on the Number of Fiori Apps?
Fiori is far more efficient than what came before.
10%
In testing Fiori and S/4HANA, Sven Deneken's statements did not hold up. There was a particular weakness in actually making changes after noticing something needed to be changed, and we found the efficiency below that of ECC with of course SAPGUI.
S/4HANA is innovative as it brings "real time inventory."
0%
Sven Deneken brings up the topic of "real-time capabilities," however there is nothing particularly real-time or different in terms of a reaction than ECC. Whenever you make a change in ECC or any other ERP systems for that matter, the entry is real-time. Sven Deneken states that "the physical inventory is the same as the digital inventory." However, under what system would this not be true?What Happened to the Term Perpetual Inventory?
S/4HANA is innovative because it allows access to supplier information.
0%
Sven Deneken states that information about the supplier is "just a fingertip away." Sven Deneken may be familiar with ECC, where supplier data is also a fingertip, or say mouse click away. It called the Vendor Master in ECC.
Sven Deneken says that the cycle could be changed to daily or sub-daily.
0%
Why would that occur? This is a very strange scenario that is being laid out.
S/4HANA is innovative because it allows MRP to be rerun interactively for a product location.
0%
Sven Deneken is extremely confused when he states that S/4HANA allows a fresh MRP run to be performed for a specific product location and that this is a differentiator for S/4HANA. For a single product location, there is no ERP system that cannot run MRP for a single location. Secondly re-running MRP does not remove uncertainties. MRP can be re-run when something changes. For example, when the forecast changes.Performance Problems with HANA and MRP
Sven Deneken states this demo shows SAP has reimagined inventory management.
0%
However, all of this functionality, save for several of the graphics shown in the video have already been available in ECC for many years, in fact, decades.

The Problem: A Lack of Fact-Checking of S/4HANA

There are two fundamental problems around S/4HANA. The first is the exaggeration of S/4HANA, which means that companies that purchased S/4HANA end up getting far less than they were promised. The second is that the SAP consulting companies simply repeat whatever SAP says. This means that on virtually all accounts there is no independent entity that can contradict statements by SAP.

Being Part of the Solution: What to Do About S/4HANA

We can provide feedback from multiple HANA accounts that provide realistic information around S/4HANA — and this reduces the dependence on biased entities like SAP and all of the large SAP consulting firms that parrot what SAP says. We offer fact-checking services that are entirely research-based and that can stop inaccurate information dead in its tracks. SAP and the consulting firms rely on providing information without any fact-checking entity to contradict the information they provide. This is how companies end up paying for a database which is exorbitantly priced, exorbitantly expensive to implement and exorbitantly expensive to maintain. When SAP or their consulting firm are asked to explain these discrepancies, we have found that they further lie to the customer/client and often turn the issue around on the account, as we covered in the article How SAP Will Gaslight You When Their Software Does Not Work as Promised.

If you need independent advice and fact-checking that is outside of the SAP and SAP consulting system, reach out to us with the form below or with the messenger to the bottom right of the page.

Financial Disclosure

Financial Bias Disclosure

Neither this article nor any other article on the Brightwork website is paid for by a software vendor, including Oracle, SAP or their competitors. As part of our commitment to publishing independent, unbiased research; no paid media placements, commissions or incentives of any nature are allowed.

S/4HANA Implementation Research

We offer the most accurate and detailed research into S/4HANA and its implementation history. It is information not available anywhere else and is critical correctly interpreting S/4HANA, as well as moderating against massive amounts of inaccurate information pushed by SAP and their financially biased consulting ecosystem.

Select the description that best matches you.

Option #1: Do You Work in Sales for a Vendor?

See this link for an explanation to sales teams.

Option #2: Do You Work for an Investment Entity that Covers SAP?

See this link for an explanation for investment entities. 

Option #3: Are You a Buyer Evaluating S/4HANA?

For companies evaluating S/4HANA for purchase. See this link for an explanation to software buyers

Search Our Other S/4HANA Content

References

https://www.computerweekly.com/news/252464278/SAP-disruption-leads-to-Revlon-class-action-lawsuit

*https://specialreport.247wallst.com/consumer-products/2019/03/20/whats-really-wrong-with-revlon

https://www.wipro.com/en-US/blogs/pradeep-nair/sap-s4hana-the-core-of-a-digital-business/

*https://www.amazon.com/Software-Wasteland-Application-Centric-Hobbling-Enterprises/dp/1634623169

https://seekingalpha.com/article/4249619-revlons-rev-ceo-debbie-perelman-q4-2018-results-earnings-call-transcript?part=single

http://blog.asug.com/asugs-2019-state-of-the-community-study-reveals-sap-customer-insights-challenges-and-opportunities

https://www.riministreet.com/Documents/Collateral/Nucleus_6-out-of-10-customers-wouldnt-buy-SAP-again_June-2016.pdf

2019 Update: How Many Live SOH and S/4HANA Customers Are There?

Executive Summary

  • SAP has proposed 3500 go-lives for S/4HANA. What SAP says is normally repeated by those that cover SAP.
  • What is the reality of the S/4HANA go-lives in 2019?

Introduction

We have been tracking S/4HANA numbers for roughly 3 years. We covered this of live S/4HANA customers in 2017 in The S/4HANA Implementation Study, and in 2018 we covered this topic How Accurate Was SAP on S/4HANA’s Go Live Numbers?

We decided to write this article to update readers as to the background for our current estimate for 2019, or at least for mid-2019.

Taking the AOK Hessen S/4HANA Case Study as an Example

Typically when a case study is published, information is communicated that SAP and the customer and implementation partner did not want critically analyzed.

This is a good example of the issues with some of the S/4HANA case studies.

AOK Hessen is an insurance company. They stated that they implemented performance management and financial accounting. They stated that they integrated the..

“SAP HANA in-memory database and data structures tailored to this technology, applications can leverage their full potential and achieve significant speed advantages.”

We know that part of this is untrue and that AOK would have seen a performance decline for transactions, which is, of course, most of what S/4HANA does, as we covered in the article HANA as a Mismatch for S/4HANA and ERP.

They also stated with S/4HANA they took..

“A big step in digitization and in our fields of action Automation, Simplification and Big Data Management.” For future S/4HANA applications,”

This would not have happened and HANA is not simplified and S/4HANA has nothing to do with Big Data Management. This is a common feature of S/4HANA go-lives. They have a strong tendency to refer to things that are not within the domain of ERP or that don’t come as part of S/4HANA. AOK Hessen goes on to make this claim around Fiori.

“SAP Fiori will be used. Fiori enables ergonomic and reduced-click user interfaces, which greatly accelerate the processing of mass processes and make them more efficient. In conjunction with intelligent regulations and process automation, it is possible to process insured claims more quickly.”

First, why is this statement in the future tense? If the system is live, it would be Fiori is used. Furthermore, there is no evidence that Fiori allows for users to processes transactions faster than SAPGUI. In fact, user testing often shows that Fiori slows the process versus SAPGUI.

  1. One question that comes to mind is why it sounds like SAP wrote this case study, AOK Hessen or AOK Hessen being coached by SAP. If a case study includes talking points from SAP marketing that are known to not be part of the reality of the system, then the independence of the company from the influence of SAP can be questioned.
  2. But secondly, this shows a common feature of S/4HANA implementations that they tend to not be in manufacturing or distribution companies — which is the core of ECC’s customer base, and the primary logic for ERP (that it ties together finance, sales, production and materials management) This case study does not prove that the S/4HANA suite is ready, because AOK Systems would have implemented only a small part of it.

The Swiss Property S/4HANA Example

SAP is very good at making glossy case studies like this. Swiss Property is a tiny company that appears to have been given some type of incentive to “implement” S/4HANA, and their business processes not only does not map to S/4HANA, but they also don’t map to ERP. 

SAP’s Inaccurate Messaging as Communicated in SAP Videos

Fact-Checking SAP Information

This video is filled with extensive falsehoods. We will address them in the sequence they are stated in this video.

SAP Video Accuracy Mesurement

Appleby's StatementAccuracy % of the CommentExplanationLink to Analysis Article
S/4HANA is what allows key processes to be digitized.
0%
ECC was already fully digitized and digitized across key business functions.The Problem with Using the Term Digital Transformation on IT Projects
HANA is a Platform
0%
HANA is not a platform, it is a database.How to Deflect You Were Wrong About HANA
Fiori is a major advantage for S/4HANA.
10%
In S/4HANA implementations Fiori is infrequently used when S/4HANA. How Accurate Was SAP on the Number of Fiori Apps?
Fiori is far more efficient than what came before.
10%
In testing Fiori and S/4HANA, Sven Deneken's statements did not hold up. There was a particular weakness in actually making changes after noticing something needed to be changed, and we found the efficiency below that of ECC with of course SAPGUI.
S/4HANA is innovative as it brings "real time inventory."
0%
Sven Deneken brings up the topic of "real-time capabilities," however there is nothing particularly real-time or different in terms of a reaction than ECC. Whenever you make a change in ECC or any other ERP systems for that matter, the entry is real-time. Sven Deneken states that "the physical inventory is the same as the digital inventory." However, under what system would this not be true?What Happened to the Term Perpetual Inventory?
S/4HANA is innovative because it allows access to supplier information.
0%
Sven Deneken states that information about the supplier is "just a fingertip away." Sven Deneken may be familiar with ECC, where supplier data is also a fingertip, or say mouse click away. It called the Vendor Master in ECC.
Sven Deneken says that the cycle could be changed to daily or sub-daily.
0%
Why would that occur? This is a very strange scenario that is being laid out.
S/4HANA is innovative because it allows MRP to be rerun interactively for a product location.
0%
Sven Deneken is extremely confused when he states that S/4HANA allows a fresh MRP run to be performed for a specific product location and that this is a differentiator for S/4HANA. For a single product location, there is no ERP system that cannot run MRP for a single location. Secondly re-running MRP does not remove uncertainties. MRP can be re-run when something changes. For example, when the forecast changes.Performance Problems with HANA and MRP
Sven Deneken states this demo shows SAP has reimagined inventory management.
0%
However, all of this functionality, save for several of the graphics shown in the video have already been available in ECC for many years, in fact, decades.

The Typical Technique for Analyzing S/4HANA

Every article we have read on S/4HANA implementations, a specific case study assumes that everything published in the case study and every number reported by SAP is true. This ignores the fact that the primary reason information is released about S/4HANA is to promote S/4HANA, HANA, and related consulting services. The only releases of information that contradict this is when a S/4HANA project goes south and information leaks out. And even here, the information is typically highly censored, with the statements from the customer being that there has been just a “brief hiccup” and soon the project will be back on track.

S/4HANA Paid Research Benefits Listing

 
Benefits
Description
1Accuracy on S/4HANAThe most accurate information on S/4HANA implementations anywhere entirely devoid of any SAP influence. This make us the only entity we are aware of (and we are aware of all of them) ACTUALLY interested in communicating the real story about S/4HANA's implementation history. Nearly all that publish material on S/4HANA emphasize promoting S/4HANA. This is in our estimation the only studies that has not rigged the results to continue to receive funding from SAP. The study's customer is you, or the research purchaser, not SAP or Deloitte.
2Detailed S/4HANA Case Study AnalysisDetailed analysis of close two hundred S/4HANA case studies. This cross case study analysis includes insights that are not available anywhere else. This research has competitive intelligence, software buyer and investment implications.
3Based in SAP Project Domain ExpertiseNearly all of the coverage of S/4HANA implementations is by either biased SAP consulting firms, or by media or IT analysts who have never worked on an an SAP project, and in many cases never touched SAP software. We have worked on many SAP projects going back to the late 1990s. Our conclusions are based upon a combination of the case studies along with our expertise in as the top researchers into S/4HANA (with the most, and most accurate material published) and SAP implementations to determine fact from marketing hyperbole.
4Estimating the Fit of S/4HANA to Client Business RequirementsThose that cover S/4HANA implementations never discuss the fit of S/4HANA to the customer. It is simply assumed that the application was a good fit because it was selected by the customer. However, this is critical to understanding the potential benefits of S/4HANA. Our analysis uses the estimate of the fit between S/4HANA and each implementation to provide insights as to what the outcome likely is per implementation. We then take this to an analysis of the overall fit as aggregated for the implementation data set.
5Forecasting the Implications of the ImplementationsThe S/4HANA implementation history has implications for SAP competitors, third party support providers, investors, and IT departments. We cover the major implications of the observed pattern of S/4HANA implementations. Due to the unfortunate fact that all of these entities receive rigged information on the topic of S/4HANA and therefore have by in large formulated inaccurate opinions regarding S/4HANA's history and its future.
6Related Links and Supporting InformationWe frequently refer to previous articles that support our analysis of different features of case studies. These links are included in this research offering in order to provide readers with the appropriate background.
7Evidence for Prospects During Sales InitiativesThis research provides ability to be shared with prospects. (each prospect requires a separate use license)

Who you use to obtain information about S/4HANA is of critical importance. The following table tells you about us and what makes our research different.

How Our Technique Differs from Other Reporting on S/4HANA Numbers

 
Category
Description
1Our Independence from SAPFirst, and most importantly, we are entirely independent of SAP trying to sell SAP projects or paid by SAP to promote S/4HANA, we are a research entity without any conflicts. There is no other entity that studies S/4HANA at out level of detail that can credibly make this claim.
2Depth of AnalysisWe both analyze each case study in depth, but then perform analytics on the batch of case studies, which drives further insights. When we do this, curious or interesting observations come from the overall case study analysis.
3Case Study AnalysisCase studies are designed for decision-makers to read, most implementers don't read the case study, that means that the case studies aren't designed to impress those people that know, but those people that do not know.
4Non Published SourcesWe often combine the published research with our contacts that provide very different information from the published case study.

S/4HANA Implementation Research

We offer the most accurate and detailed research into S/4HANA and its implementation history. It is information not available anywhere else and is critical correctly interpreting S/4HANA, as well as moderating against massive amounts of inaccurate information pushed by SAP and their financially biased consulting ecosystem.

Select the description that best matches you.

Option #1: Do You Work in Sales for a Vendor?

See this link for an explanation to sales teams.

Option #2: Do You Work for an Investment Entity that Covers SAP?

See this link for an explanation for investment entities. 

Option #3: Are You a Buyer Evaluating S/4HANA?

For companies evaluating S/4HANA for purchase. See this link for an explanation to software buyers

Search Our Other S/4HANA Content

Financial Disclosure

Financial Bias Disclosure

Neither this article nor any other article on the Brightwork website is paid for by a software vendor, including Oracle, SAP or their competitors. As part of our commitment to publishing independent, unbiased research; no paid media placements, commissions or incentives of any nature are allowed.

References

https://searchsap.techtarget.com/news/252463458/Plattner-Cloud-is-the-way-forward-for-S-4HANA-systems

*https://news.sap.com/2017/11/sap-s-4hana-at-jti-change-as-opportunity/

https://www.sap.com/documents/2016/12/300f5998-9d7c-0010-82c7-eda71af511fa.html#

https://www.sapvirtualagency.com/FileExplorer/Partners/S4HANA%20smb/Flipbook_S4_Partner_SME_Customer_Stories.pdf

https://www.sap.com/documents/2017/07/c2743ffd-c87c-0010-82c7-eda71af511fa.html

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

Is SAP Justified in Lying About S/4HANA?

Executive Summary

  • SAP told enormous lies about S/4HANA.
  • Is SAP justified in lying about S/4HANA for competitive reasons?

Introduction

This article is in response to a question we received about the reports of problems with S/4HANA.

Is It Ok For S/4HANA to Lie?

“You may have plenty of evidence of SAP marketing machine running strong…However, the world is also spinning awfully fast. Prior to iPhone’s introduction, Nokia was selling 1 out of every two mobile phones in the world. Few could have foreseen its demise in merely a few years… In a winner take all world today, customers rightfully and perhaps naively demand flashy solutions as the key for survival. Many also demanded faster IT solution refresh cycles under the name of Agile, which again could be debatable. SalesForce came out of a small office in SF to be the king of CRM, essentially forcing SAP to reboot through internal and external moves….. Under customer and competitive pressure, SAP has every reason to market forward-looking solutions… If you decide to buy a car only based on a TV commercial, is it all the fault of car companies?”

Our Response

“If S/4HANA were a car, it could not be purchased. Consumer protection laws are in place that would stop it from being sold as it would be an incomplete car missing various components. So I would stay away from any examples in the consumer market. I found this comment you made odd. “You may have plenty of evidence of SAP marketing machine running strong…However, the world is also spinning awfully fast. ” So this is a problematic comment. It puts you in the category of people who do not care what is true.

Now let us look at this part of your comment. “In a winner take all world today, customers rightfully and perhaps naively demand flashy solutions as the key for survival. Many also demanded faster IT solution refresh cycles under the name of Agile, which again could be debatable.” This translates into a justification for lying. But SAP has no justification for lying like this. No company deserves to “win” by lying. And lying makes the market less efficient, not more efficient. This is similar to the catch me if you can argument used by salespeople that I covered in this article Caveat Emptor: Catch Me if You Can. SAP is not “keeping pace” with other liars in a “winner take all world.” It is the pacesetter. See this article where we put SAP in the bottom category of vendors in terms of accuracy Honest Vendors Ratings for SAP.”

Conclusions

Customers were aggressively misled and the culprits are obvious. Now there is an attempt by those that make money from SAP are about justifying this lying by any means necessary.

Financial Disclosure

Financial Bias Disclosure

Neither this article nor any other article on the Brightwork website is paid for by a software vendor, including Oracle, SAP or their competitors. As part of our commitment to publishing independent, unbiased research; no paid media placements, commissions or incentives of any nature are allowed.

S/4HANA Implementation Research

We offer the most accurate and detailed research into S/4HANA and its implementation history. It is information not available anywhere else and is critical correctly interpreting S/4HANA, as well as moderating against massive amounts of inaccurate information pushed by SAP and their financially biased consulting ecosystem.

Select the description that best matches you.

Option #1: Do You Work in Sales for a Vendor?

See this link for an explanation to sales teams.

Option #2: Do You Work for an Investment Entity that Covers SAP?

See this link for an explanation for investment entities. 

Option #3: Are You a Buyer Evaluating S/4HANA?

For companies evaluating S/4HANA for purchase. See this link for an explanation to software buyers

Search Our Other S/4HANA Content

References

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

What Should Customers Do About S/4HANA Failures?

Executive Summary

  • S/4HANA has sucked massive amounts of resources from SAP customers that implemented it.
  • We will recommend what to do about this now that S/4HANA has failed so dramatically.

Introduction

As the S/4HANA failures have piled up, the question is sometimes asked what customers should do about this. We are the only independent entity that covers S/4HANA failures. We are updating this article for September of 2019, and since this article was published we have covered S/4HANA failures in the article What Was the Real Story with the Revlon S/4HANA Failure? the article The Hidden S/4HANA Home24 and KPS Failure, and The Hidden S/4HANA S Oliver and KPS Failure.

This article is in response to a question we received about the reports of problems with S/4HANA. These are some obvious things that SAP customers can do to protect themselves.

1. Adjust Who One Interprets as Sources of Information on S/4HANA

Stop listening to SAP or Deloitte & co or any of the entities laid out in the article Who Was Right About S/4HANA Readiness? without finding independent corroboration. The controlled sources like ASUG write nothing but promotional articles around S/4HANA as we cover in the article How Accurate Was ASUG on its S/4HANA Poll?

SAP also paid Forrester to produce a ridiculous study using three customers (why only three?) that estimated an S/4HANA implementation should cost around $887,000 as we cover in the article Forrester’s Fake S/4HANA TCO Study.

Consulting companies predicted S/4HANA complete incorrectly as an example we evaluated the accuracy of one consulting firm prognosticator in the article Mark Chaflen Accuracy Checker.

Just about all of these entities are financially connected to SAP or make money from selling S/4HANA consulting services, and therefore they are an unreliable source of information on the reality of S/4HANA.

Without fact-checking these entities, customers are guaranteed to be lied to.

None of our studies or research into S/4HANA has been paid for by SAP or any other vendor or any other entity.

2. Just Say No to Vendor NDAs

Never accept an NDA from a vendor. Never implement software that has an NDA attached. SAP has been doing shady things by making customers sign NDAs. As a publisher who covers stories that none of the other information providers in the space will cover, project problems are already sufficiently censored, further secrecy is really not necessary — unless you have major problems with your product of course.

3. Inform SAP and Your Consulting Partner You Know You Were Lied To

Inform SAP that continual lying will not be tolerated and that immature products cannot simply be misrepresented without consequences.

It is amazing to me how many of the clients accept lying from both SAP and the consulting firm. By not calling out the lying, you encourage more of it. The fact is both SAP and SAP consulting firms lie a lot — and we have the evidence to prove it. The intent of the lying is to be able to charge more for things that are often not true and to cover up previous lies that were told to try to sell or otherwise influence.

If you tolerate lying, SAP and the consulting company will continue to lie to you.

4. Request Compensation

Demand compensation for implementing a product that SAP knew was defective or lacking in maturity as we cover in the article How Accurate Was SAP on S/4HANA Being Complete?  and the article Why Did SAP Fake S/4HANA Maturity so Aggressively? and in the article Mark Chalfen on S/4HANA Maturity and the article How S/4HANA Suite Missed Release Deadlines when it was being sold. This means that SAP would be liable beyond the license amount, but also for restitution of implementation monies.

There is a broader question around S/4HANA — which is why is being charged for at all for customers that have paid their support for ECC. S/4HANA is simply the next version of ECC. We cover this topic in detail in the article

5. Question Compliant IT Departments

IT departments are also culpable in this equation. Many IT departments wanted to implement S/4HANA so they could get the fact they had managed a S/4HANA project on their resume. If the business in companies continues to allow their IT departments to be so easily manipulated by software vendors and consultancies, they will not get the systems that they need to run their business. The waste in the SAP space is enormous and will continue until the point where other parts of the company begin to ask questions.

If you are from the business reading this, you may want to read the article Where Does The IT Department Owe Allegiance? as you may have to confront your IT department for giving SAP and the consulting firm a pass.

6. Public Audits

Public and government agencies that implemented S/4HANA should demand audits of these implementations. What was promised prior to the S/4HANA implementation and what was actually delivered? It is well known that SAP and SAP consulting firms consider public firms easy targets.

They will continue to take this view as long as no one requests that public taxpayer-funded entities are audited.

7. Don’t Buy the 2025 Deadline.

Any entity financially connected to SAP has been highly reticent to call out the 2025 deadline for what it is, which is a fake deadline designed to create a burning platform to make customers jump to S/4HANA. We cover in the article How to SAP and Oracle’s Support Profit Margins Compare to Pablo Escobar’s Profit Margins, that there is no way SAP will walk from supporting customers that are willing to pay.

However, even though SAP’s has enormous margins on ECC support, they will continue to pummel customers by requesting a premium for this support as we cover in the article Why SAP Will Charge a Premium for 2025 ECC Support

Conclusions

Customers were aggressively misled and the culprits are obvious. Furthermore, there are specific steps that SAP customers can take to use the information of S/4HANA to make positive changes in how they manage SAP.

SAP’s Inaccurate Messaging on S/4HANA as Communicated in SAP Videos

Fact-Checking SAP Information on S/4HANA

This video is filled with extensive falsehoods. We will address them in the sequence they are stated in this video.

SAP Video Accuracy Mesurement

Appleby's StatementAccuracy % of the CommentExplanationLink to Analysis Article
S/4HANA is what allows key processes to be digitized.
0%
ECC was already fully digitized and digitized across key business functions.The Problem with Using the Term Digital Transformation on IT Projects
HANA is a Platform
0%
HANA is not a platform, it is a database.How to Deflect You Were Wrong About HANA
Fiori is a major advantage for S/4HANA.
10%
In S/4HANA implementations Fiori is infrequently used when S/4HANA. How Accurate Was SAP on the Number of Fiori Apps?
Fiori is far more efficient than what came before.
10%
In testing Fiori and S/4HANA, Sven Deneken's statements did not hold up. There was a particular weakness in actually making changes after noticing something needed to be changed, and we found the efficiency below that of ECC with of course SAPGUI.
S/4HANA is innovative as it brings "real time inventory."
0%
Sven Deneken brings up the topic of "real-time capabilities," however there is nothing particularly real-time or different in terms of a reaction than ECC. Whenever you make a change in ECC or any other ERP systems for that matter, the entry is real-time. Sven Deneken states that "the physical inventory is the same as the digital inventory." However, under what system would this not be true?What Happened to the Term Perpetual Inventory?
S/4HANA is innovative because it allows access to supplier information.
0%
Sven Deneken states that information about the supplier is "just a fingertip away." Sven Deneken may be familiar with ECC, where supplier data is also a fingertip, or say mouse click away. It called the Vendor Master in ECC.
Sven Deneken says that the cycle could be changed to daily or sub-daily.
0%
Why would that occur? This is a very strange scenario that is being laid out.
S/4HANA is innovative because it allows MRP to be rerun interactively for a product location.
0%
Sven Deneken is extremely confused when he states that S/4HANA allows a fresh MRP run to be performed for a specific product location and that this is a differentiator for S/4HANA. For a single product location, there is no ERP system that cannot run MRP for a single location. Secondly re-running MRP does not remove uncertainties. MRP can be re-run when something changes. For example, when the forecast changes.Performance Problems with HANA and MRP
Sven Deneken states this demo shows SAP has reimagined inventory management.
0%
However, all of this functionality, save for several of the graphics shown in the video have already been available in ECC for many years, in fact, decades.

The Problem: A Lack of Fact-Checking of S/4HANA

There are two fundamental problems around S/4HANA. The first is the exaggeration of S/4HANA, which means that companies that purchased S/4HANA end up getting far less than they were promised. The second is that the SAP consulting companies simply repeat whatever SAP says. This means that on virtually all accounts there is no independent entity that can contradict statements by SAP.

Being Part of the Solution: What to Do About S/4HANA

We can provide feedback from multiple HANA accounts that provide realistic information around S/4HANA — and this reduces the dependence on biased entities like SAP and all of the large SAP consulting firms that parrot what SAP says. We offer fact-checking services that are entirely research-based and that can stop inaccurate information dead in its tracks. SAP and the consulting firms rely on providing information without any fact-checking entity to contradict the information they provide. This is how companies end up paying for a database which is exorbitantly priced, exorbitantly expensive to implement and exorbitantly expensive to maintain. When SAP or their consulting firm are asked to explain these discrepancies, we have found that they further lie to the customer/client and often turn the issue around on the account, as we covered in the article How SAP Will Gaslight You When Their Software Does Not Work as Promised.

If you need independent advice and fact-checking that is outside of the SAP and SAP consulting system, reach out to us with the form below or with the messenger to the bottom right of the page.

Financial Disclosure

Financial Bias Disclosure

Neither this article nor any other article on the Brightwork website is paid for by a software vendor, including Oracle, SAP or their competitors. As part of our commitment to publishing independent, unbiased research; no paid media placements, commissions or incentives of any nature are allowed.

S/4HANA Implementation Research

We offer the most accurate and detailed research into S/4HANA and its implementation history. It is information not available anywhere else and is critical correctly interpreting S/4HANA, as well as moderating against massive amounts of inaccurate information pushed by SAP and their financially biased consulting ecosystem.

Select the description that best matches you.

Option #1: Do You Work in Sales for a Vendor?

See this link for an explanation to sales teams.

Option #2: Do You Work for an Investment Entity that Covers SAP?

See this link for an explanation for investment entities. 

Option #3: Are You a Buyer Evaluating S/4HANA?

For companies evaluating S/4HANA for purchase. See this link for an explanation to software buyers

Search Our Other S/4HANA Content

References

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

Is it Really Easy to Point Fingers at SAP?

Executive Summary

  • When we exposed the falsehoods proposed by SAP around S/4HANA we were told it was easy to point fingers at SAP.
  • We provide the reasons why this is a false argument.

Introduction

This article is in response to a question we received about the reports of problems with S/4HANA.

The Quote on How Easy it is to Point Fingers

Easy to point fingers,now what? Name one mega ERP provider, there are major disasters associated with it…from SAP to workday. Two sides of the coin..three in this case: Software developer, SI and customer. SAP has brilliant minds, I am lucky to know many, but SAP does not own the customers’ processes. Deloitte abounds best consultants, I was there, but Deloitte might not have the best insight into new SAP products or the customers’ real requirements. Customer is not always right here and can certainly be at fault for turning blind eyes counting on SAP or SI to take you down to the unnumbered new house. Until a day everybody runs a process that spells 1,2,3, best chance of success always goes to the three-horse carriage.

Our Response

“The first premise of your comment is not correct. The SAP space is primarily filled with financially biased entities that rig information against buyers. They not only don’t point fingers, they mindlessly repeat whatever SAP says. So as we are one of the only entities of many thousands to call out SAP, it appears that pointing fingers at SAP is in practice quite difficult.

Secondly, we pointed fingers before any of this happened. We predicted the wide-scale problems with S/4HANA while Deloitte and co. were telling everyone they should move to S/4HANA.  Just one of our articles dealing with clear exaggerations around S/4HANA goes back to April 2016 in When Articles Exaggerate SAP S/4HANA Benefits.

We covered who got S/4HANA right and who got it wrong in this article Who Was Right About S/4HANA Readiness.

As far as ERP projects having high failure rates this is true, but S/4HANA has a higher failure rate than any other we track — and this is for one obvious reason. Since its introduction 4 years ago, S/4HANA has not been ready to be implemented. SAP has falsified an enormous number of its go-lives. See our research for the details. http://bit.ly/2EuoqPv

S/4HANA has failed as much as it has because it was a product that was immature but presented as ready. If companies had known the actual maturity of S/4HANA, it would likely have not been implemented.

Neither the article nor any of the comments have anything to do with the topic of the customer’s processes, and does not state or take the position that the customer is always right. In any case, these were not the primary factors for the S/4HANA failures. Many of the S/4HANA customers were already ECC customers, and S/4HANA has no new functionality, so why would the customer processes be related to the issue? Secondly, customers are actively hiding S/4HANA failures. So this is not customers making the claim. This is the evidence coming out through direct contacts from lower level employees direct to us, or from media coverage.

We called this correctly years ago, while all of the brilliant minds you talked about in SAP mislead customers about S/4HANA. If you want to talk about solutions, companies and taxpayers could have saved many hundreds of millions if they had listened to us rather than Deloitte and co. That seems like a pretty good solution to us.”

Conclusions

One of the biggest false claims is that it is easy to point fingers at SAP. In fact, it is very rarely done. The reason being that most of the entities in SAP are incentivized not to point fingers at SAP.

Search Our Other S/4HANA Content

Financial Disclosure

Financial Bias Disclosure

Neither this article nor any other article on the Brightwork website is paid for by a software vendor, including Oracle, SAP or their competitors. As part of our commitment to publishing independent, unbiased research; no paid media placements, commissions or incentives of any nature are allowed.

HANA & S/4HANA Research Contact

  • Interested in Research on S/4HANA & HANA?

    It is difficult for most companies to make improvements in S/4HANA and HANA without outside advice. And it is not possible 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

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 Do SAP S/4HANA Customers Have to Sign an NDA?

Executive Summary

  • SAP makes S/4HANA customers sign NDAs.
  • What does this say about the maturity and quality of S/4HANA?

Introduction

This article is in response to a question we received about the reports of problems with S/4HANA.

The Quote on How Much S/4HANA Failures are Published

But to be fair – this is the case for all embarrassing things both companies and persons does. We all tend to exaggerate the good things we do and not talk about the bad things.

Our Response

“Now on your comment about observing data points, is generally true. However, in this case, I don’t think it applies very well. I know of many failed S/4HANA implementations that never became public. People within those companies reached out to me. The Under Armour situation is far worse than reported — and is being covered up by IT. So the problems with S/4HANA are suppressed, not exaggerated. IT departments routinely suppress their failures. I can walk into any SAP account and find large numbers of applications that are not working as advertised or just on zombie servers, and it is in secret. And there is something else. Customers sign NDAs when they implement S/4HANA. This is very odd, and the question is why. The only conclusion I can come to is that SAP knew the issues they would have with S/4HANA and needed to put a muzzle on their customers.”

Conclusion

This should be a good lesson for customers of SAP or other vendors. If a vendor asks you to sign an NDA as part of purchasing an application, this is an indicator that the application is highly problematic. As soon as an NDA is part of a software purchase, this is a good indicator that you should pass on the application. No vendor should ever submit an NDA to a customer as part of an application purchase.

Search Our Other S/4HANA Content

Financial Disclosure

Financial Bias Disclosure

Neither this article nor any other article on the Brightwork website is paid for by a software vendor, including Oracle, SAP or their competitors. As part of our commitment to publishing independent, unbiased research; no paid media placements, commissions or incentives of any nature are allowed.

HANA & S/4HANA Research Contact

  • Interested in Research on S/4HANA & HANA?

    It is difficult for most companies to make improvements in S/4HANA and HANA without outside advice. And it is not possible 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

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 Did SAP Fake S/4HANA Maturity So Aggressively?

Executive Summary

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

Introduction

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

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

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

How Much did SAP Know?

All of this was known and premeditated on the part of SAP. We have the dates of the statements around S/4HANA and S/4HANA’s immaturity, and we can pinpoint when the statements were made and the state of S/4HANA at the time of the announcement.

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

As time has progressed, the ratio of “live” S/4HANA customers to those that hold a license has been steady at roughly 1/5 or 20%.  SAP has stated that there are thousands of current S/4HANA implementations underway, but evaluation of job postings does not support this claim.

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

Why Such Extreme Fakery?

So why? It all sounds illogical.

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

Conclusion

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

Financial Disclosure

Financial Bias Disclosure

Neither this article nor any other article on the Brightwork website is paid for by a software vendor, including Oracle, SAP or their competitors. As part of our commitment to publishing independent, unbiased research; no paid media placements, commissions or incentives of any nature are allowed.

S/4HANA Implementation Research

We offer the most accurate and detailed research into S/4HANA and its implementation history. It is information not available anywhere else and is critical correctly interpreting S/4HANA, as well as moderating against massive amounts of inaccurate information pushed by SAP and their financially biased consulting ecosystem.

Select the description that best matches you.

Option #1: Do You Work in Sales for a Vendor?

See this link for an explanation to sales teams.

Option #2: Do You Work for an Investment Entity that Covers SAP?

See this link for an explanation for investment entities. 

Option #3: Are You a Buyer Evaluating S/4HANA?

For companies evaluating S/4HANA for purchase. See this link for an explanation to software buyers

Search Our Other S/4HANA Content

References

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