Why It Is Important to Pull Forward S/4HANA Code Remediation

Executive Summary

  • S/4HANA code remediation is one of the most critical parts of S/4HANA implementations.
  • In this article, we will explain why it is important to pull the remediation effort forward.

Introduction

S/4HANA means radical changes in the code that companies have developed. In this article, we will make the proposal that companies that plan to move to S/4HANA should not wait until the implementation to perform the code remediation analysis.

The Problem Getting Accurate Information on S/4HANA Code Remediation

SAP has published its perspective on remediating code for S/4HANA. Both SAP has its consulting partners have consistently underrepresented the complexity involved in code remediation to customers in order to make the migration to S/4HANA seem to be less work and less cost than it actually is. In this article, we review the material on remediation without any SAP bias.

The Confusing Aspects of S/4HANA Code Remediation

SAP’s explanations of the process and how to use the tools for S/4HANA code remediation are extremely confusing and requires determining a path independent of SAP.

The Major Factors in S/4HANA Code Remediation

S/4HANA means using HANA and this means that the tables change, that code that was originally written to be portable between databases now has to be altered for only HANA. It means that SQL must change. Overall, S/4HANA upgrades will be the most extensive and trouble-prone code remediations that an SAP customer will normally have faced (for their SAP systems at least).

Code Remediation Analysis Versus Code Remediation

Code remediation analysis is different than actually performing the code remediation. The code remediation analysis or CRA is simply the process of determining what items need to be changed and then planning the work effort and even the resourcing. One typically attempts to obtain a list of code items to be remediated, and then determining the severity of most of the remediations, and then applying an appropriate time estimate (which then goes to budget) for each remediation. This can be done without owning any S/4HANA software because the rules of how the code needs to be changed are known.

The Approach of SAP and their Consulting Partners

SAP and SAP consulting companies typically want this analysis to be pushed into the implementation when they are firmly in control of the project. The strategy is to keep the unappealing details away from the customer until they have signed so that it reduces the resistance on the part of the customer to move to S/4HANA or to move to S/4HANA in a particular timeframe.

Conclusion

Rather than listening to SAP or their compliant consulting partner and perform the code remediation into the project it actually makes much more sense to pull the remediation analysis forward so that the implementing company can incorporate the remediation estimate into the project plan before consultants or SAP hit the project in force.

References

HANA & S/4HANA Question Box

  • Have Questions About S/4HANA & HANA?

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

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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

The Realities of Upgrading SAP and Oracle Cloud ERP

Executive Summary

  • Upgrades for cloud ERP applications are not very straightforward.
  • Often organizations using ERP have limited resources to devote to adopting new capabilities as they are released by vendors. They’re also wary of pushing aggressive updates that can have a large impact on various aspects of the business.
  • In the case of SAP and Oracle, their cloud ERP applications have far less functionality than their on-premises counterparts.
  • S/4HANA, which SAP promises will have 20% more functionality every quarter, is marketed as having a speed of innovation that will amount to instability for its client user base. Brightwork does not recommend S/4HANA Cloud for production environments before 2019.
  • Oracle ERP Cloud accounts for a small percentage of its overall ERP business. Money being funneled into Oracle ERP Cloud has not translated into application benefits or ease of upgrades.
  • Oracle does not push its Cloud ERP customers to its latest updates, so organizations can adopt changes at a pace that fits their business. Field experience shows that these Oracle ERP Cloud upgrades are in fact difficult and lead to substantial downtime.
  • Not all vendors are equal in the cloud. Oracle ERP Cloud works better with vendors like Workday or ERPNext, which started in the cloud and have a long history of providing updates while minimizing disruption for their customers.

*Disclaimer. This article makes statements that apply to SAP S/4HANA Cloud and Oracle ERP Cloud . It does not generalize to NetSuite (an acquired cloud ERP by Oracle) or to SAP’s acquired cloud applications. Brightwork Research & Analysis categorizes Oracle and SAP’s internally developed cloud applications separately from their acquisitions. 

Introduction: The Issues with Upgrading SAP and Oracle Cloud

This article will describe what is often an overlooked aspect of cloud ERP. Moreover, this is the reality of upgrades for cloud ERP. You will learn about the reality of upgrading SAP and Oracle ERP.

A Brief History of Cloud/SaaS Vendors

Cloud/SaaS vendors started up around 15 years ago as a way to leverage the Internet to compete with on-premises vendors that had more abundant resources, marketing budgets, sales teams and other big vendor luxuries. The first SaaS vendors were concentrated in simpler applications (CRM being the defining SaaS application, with Salesforce the defining SaaS vendor) that could allow all or nearly all of the customers to work off of a single database instance (in many cases) but most importantly a single application instance. This eventually came to be known as multi-tenancy. SaaS vendors also provided free trial access to their software and easy cancellation terms. The concept was that rather than following the standard and expensive sales process where viewing the system was controlled by pre-sales demo teams, the prospects could test out the application often for free. I became enamored by the Arena PLM application in 2008 following this exact process.

Everyone reading this article right now uses some type of cloud application, be it Gmail, a cloud invoicing program, Facebook, etc.. We often don’t think of them as cloud/SaaS, we just think of them as “websites.” However, they are in fact cloud/SaaS applications.

In the rush to embrace the cloud, application categories that have never been historically “cloud” inherited cloud expectations. Wall Street, with its cadre of technically shallow analysts, has yet to get the memo that not all enterprise applications are equally straightforward for migration to the cloud.

One of these non-historically cloud application categories is ERP. And one of the inherited cloud expectations became pushed upgrades.

Upgrading Cloud ERP Applications

Diginomic published the article “Workday Bows to Enterprise, Reins in Release Cycle” in 2013. The following quotations from the co-CEO Aneel Bhusri caught my eye.

“I just want to crank out new functionality but our customer groups said no, we need more time to do these updates,” he explained.

It’s a totemic shift for Workday, which has hitherto made a selling point of the frequency of updates compared to the once-every-three-years-or-worse cycles of its on-premise competitors. Release 23 next August will be the last of the current regime, after which Workday will fall in with the same twice-yearly release schedule and Summer and Winter naming system as cloud CRM giant Salesforce.com.

The shift is a reflection of a paradox that many cloud application vendors face as they win increased adoption among established enterprises. For all the agility that such organizations aspire to, there are limits to the management resources they can devote to supporting new capabilities as they’re introduced. Workday has had to throttle back the frequency of updates to match those constraints.

The irony is that — although Workday presumably intends to maintain the same rate of innovation under its sparser release cycle — those looking on from the faster-moving, consumer-led end of the cloud industry may see it as evidence Workday is becoming more like the traditional enterprise software vendors that it claims to supplant.

In another move designed to ease the update cycle further, Workday has added a 4-week preview phase to the release process. As well as having 2-3 weeks for technology testing of a sandbox release instance before rolling out the production instance, customers will in the future have the option of letting users access a preview instance where they can try out new features or test new business processes.”

Facing the Reality of Cloud Updates

The Diginomica article on Workday demonstrates the challenges faced when upgrading an ERPish system (I say “ish,” as Workday does not have supply chain functionality) in the cloud.

If we can all recall, the original idea of SaaS was that the upgrades would be performed in a way that is seamless for the user. Multi-tenancy combined with a single code base for all customers.

Why is this Wall Street analyst so happy? Well, he thinks that all enterprise systems can be as easily migrated to the cloud as CRM. This makes him see reduced operational expenses for the software vendors he tracks as far as the eye can see.

Does the Cloud = Money?

This is a reason that Wall Street bid up the price of cloud companies and is promoting SAP and Oracle to overstate their “cloudiness.” This tantalizing prospect is the idea of many customers shared over a far smaller investment than with on premises software. This profitability for cloud vendors promised by Wall Street has yet to appear. The most profitable vendors continue to be the major monopoly on-premises vendors. (Salesforce has weak profitability, as does Azure. The only impressive profitability of any size comes from AWS.)

While some simple software categories, notably CRM, works like that, ERP systems do not work this way. This Diginomica article back in 2013 on Workday’s upgrade process gave us a hint of these complicating factors. Moreover, all of this is quite common for cloud ERP vendors.

The following quotation is from Rushabh Mehta of ERPNext who is very upfront about their cloud upgrade process.

“We push minor upgrades seamlessly without the customer knowing, but a major release takes 2-3 months for us to push across the customers… unlike GMail or CRM, ERP has enormous implications on things like finance, payroll, etc., so any change in configuration could be disastrous, so customers are naturally wary of pushing aggressive upgrades.

There needs to be a fine line here. Some customers can get a longer window so they can schedule any potential disruption.”Rushabh Mehta

Unequal Cloud Capabilities

SAP internally developed products that don’t “do the cloud” very well. Oracle’s long-term problematic unifying development project, one of the longest in the history of enterprise software, was called Fusion, which is now Oracle ERP Cloud (in part). However, both of these applications have far less functionality than their on-premises counterparts and also come with the negative implication of SAP and Oracle’s cloud.

Unfortunately for the major monopoly enterprise software vendors, it is not that easy to be good in the cloud. If all vendors could be, they would be. Furthermore, it is one thing to bring out a good cloud CRM system, it is quite another thing to create a cloud ERP system. It can’t be something a vendor is doing because it is trendy, but this seems to be the case with both SAP and Oracle.

Back when the cloud was just starting off, SAP and Oracle did everything they could to undermine it. SAP and Oracle speak of the cloud now because Wall Street has informed them they have no alternative. SAP and Oracle, however, have zero interest in upsetting their on-premises software business, which has been amazingly profitable for both of them.

Taking a Step Back with SAP and Oracle Cloud

This brings up the question of why a company would want to get what amounts to a weak host with S/4HANA Cloud and Oracle ERP Cloud (i.e., choosing SAP or Oracle as your hosting provider) versus just putting the much larger S/4HANA “on premises” edition on AWS.

The historically on-premises vendors have tried to propose that they are the equal of historically cloud vendors. It has become more than apparent at this point that cloud capabilities are a distinct capability. AWS gets it. Google gets it. SAP and Oracle do not get it.

It’s the difference between doing something because it is trendy, versus doing something because you believe in it.

What SAP Has Been Telling Customers About S/4HANA Cloud Development/Upgrades

SAP warned the audience in several S/4HANA Cloud presentations given at SAPPHIRE 2018 that S/4HANA Cloud has so much “innovation” that customers need to accept the risk of having what SAP calls,

“20% more S/4HANA Cloud functionality every quarter.”

SAP presenters in S/4HANA Cloud told audience members to only focus on S/4HANA Cloud for the most innovative areas of their business.

This is a euphemism for “get ready for instability.”

Is S/4HANA Cloud Ready for Production?

It’s difficult not to interpret S/4HANA Cloud as a development box. All one has to do is review the number of changes/improvements along with the frequency of improvements. It sounds like a curious statement as S/4HANA Cloud + S/4HANA on premises is touted by SAP as being used by more than 1,500 customers (SAP combined the numbers of S/4HANA Cloud and S/4HANA on premises because it would be embarrassing if it reported the S/4HANA Cloud customers by themselves.). Moreover, the application has been out for several years. But, if we strip away the name for a moment and all of the SAP marketing literature to look at the underlying facts, it is not actually a difficult determination to make.

A Question for IT Directors

If one were to approach an IT director with the following question…

“How do you feel about going live and running the business with a system that will have an automated push every quarter with a large amount of untested functionality by a development team trying to create product that was released too early?”

Simply by the nature of the releases, they would designate the S/4HANA Cloud as a development environment.

All of this brings up the question, who could possibly live with S/4HANA Cloud?

SAP has a number of slick S/4HANA Cloud videos, none of which correspond to the actual S/4HANA Cloud product. If you want to find out what is not true about S/4HANA Cloud, be sure to listen to Sven Deneken. There is no lie about S/4HANA Cloud that Sven Deneken is unprepared to tell. I can’t be sure, but Sven may moonlight as a standup comedian. 

I would not recommend S/4HANA Cloud, in its current state out until 2019, for production environments.

Why?

Because there is no way such a system can be relied upon, and the overhead of dealing with pushed updates is too high. The costs imposed by the system, even if the small footprint of functionality is ignored momentarily, would put a company’s business at risk.

Could there be some reason almost every company on this slide of S/4HANA Cloud implementations is an SAP consulting partner? How many of these companies would claim to have gone live with S/4HANA Cloud for marketing purposes, while using something else to run their business?

Do I have to say it? 

Notice Anything Odd About the S/4HANA Cloud Customers?

This is one reason why so many of S/4HANA Cloud customers are small and why there are so few of them. Nearly every S/4HANA Cloud customer can either be traced to an SAP consulting partner or an insubstantial entity that implemented the application to raise its marketing profile in some way. (The overall exaggerated nature of S/4HANA implementations (on premises + cloud) was covered in our research, A Study into S/4HANA Implementations.)

What SAP is calling innovation with S/4HANA Cloud is really just a euphemism for development. This development is so extensive because the application was announced far too early (to impress Wall Street) and it’s still going through its primary development phase. 

Buying a Ticket on the S/4HANA Cloud Rollercoaster

SAP is projecting a high degree of disruption for S/4HANA Cloud going out at least until 2019. However, the distinction between S/4HANA Cloud and Workday and SuccessFactors is that S/4HANA Cloud has few customers using the system for production. For this reason, you don’t hear very much about customers running into problems with S/4HANA Cloud upgrades. Moreover, this brings up an important question.

To see why, let us start with several of SAP’s statements:

  • SAP proposes a lot of changes to S/4HANA Cloud on a quarterly basis.
  • SAP proposes that there are over hundreds of S/4HANA Cloud customers.

If you search, you cannot find complaints about upgrade issues with S/4HANA Cloud (on SAP message boards, articles (even if sanitized), etc.). Given the instability of S/4HANA Cloud, we should see complaints. That lack of these complaints gives us a clue about the S/4HANA Cloud uptake/usage, even if I had not performed the detailed research into the subject to already know.

Oracle’s Cloud Updates

Oracle’s cloud ERP is very similar to SAP’s cloud ERP in many respects. Like SAP, Oracle ERP Cloud is a small percentage of the overall ERP business for Oracle. Still, Oracle ERP Cloud has been around much longer than S/4HANA Cloud and it has quite a few more live customers. Unlike S/4HANA Cloud, Oracle does not push Oracle ERP Cloud customers to the latest update.

Let’s review Oracle’s Cloud ERP upgrade policies.

  • Oracle ERP Cloud has upgrades every other quarter.
  • Oracle ERP Cloud also has monthly patching.
  • Oracle ERP Cloud  is tested and cutover like any on-premises application.

Experienced Oracle ERP Cloud  consultants know that changes to the application to meet new business requirements are different than on-premises, with which the upgrades are generally less frequent, and therefore the system is more stable and controllable. Oracle keeps funneling money into Oracle ERP Cloud as noted by the following quotation from Rimini Steet.

“Currently Oracle is pouring vast funds into Cloud ERP with little innovation being built for EBS. It’s unlikely that there will be a new feature in a release in the next 5 years beyond 12.2 that will be critical for your business. If EBS 12.2 has some important new functionality you want, upgrade on your own timeline and when there is a real business need.”

However, this is not translating into that much benefit to the application, or to its ease of upgrading. From a marketing perspective, Oracle has been fighting this reality.

Asserting the Opposite of What is True with Against Type Marketing

In June 2018 Oracle introduced “Soar,” which is ostensibly a way of automating the upgrade process of Oracle applications, including Oracle ERP Cloud. Oracle and Ellison began with making very similar claims around their database and have now moved to make the same claims around their SaaS applications.

As was covered in the article, How Real is Oracle’s Automated Database, I determined Oracle’s automated database claims to be not only inaccurate but impossible. This is due to the number of Oracle databases that customers want on previous versions of the Oracle database and that have dropped Oracle support.

It is also curious how automation impacted both Oracle’s applications and databases in such close timing to one another, especially considering the fact that the technology for automating database and application upgrades (only one aspect of automation) is not the same. This is referred to as “against-type” marketing. It is where you take a known weakness and assert the opposite.

SAP did this with their “Run Simple” marketing program. Before the Run Simple campaign, SAP was for decades the most complex software to implement with the highest TCO. Therefore, SAP’s Run Simple program simply asserted the opposite (as did every SAP consulting partner, aka “Team Parrot”). Oldsmobile did the same thing with their “Not Your Father’s Oldsmobile” to try to dispel the fact that Oldsmobiles were boring.

Against type marketing programs do not have much of a history of success. They are most often attempts by marketing to change perception, without the changes being incorporated into the actual product. The campaigns usually boil down to sales reps being tired of hearing something about the product that is true, and marketing deciding to assert the opposite. 

Oracle Puts in the Effort to Improve and “Automate” Updates (Through its Marketing)

Oracle puts most its emphasis on improved updates and automation in marketing rather than anything real. The reality from the field is that Oracle Cloud products have historically not only been difficult to upgrade but have substantial downtime, as explained by Mark Dalton of AutoDeploy.

“Every Oracle Cloud customer has to deal with a maintenance window that starts out as 1 hour and runs into multiple days. If their systems are autonomous, why all this manual work? And why would any customer want this disruption to their business?”

While Larry Ellison is putting batteries in his presentation “reality distortion field generator” and making ludicrous statements to please Wall Street (which is easy, as Wall Street analysts don’t work with the actual software), AWS and Google Cloud Services are making true strides in upgrading and downtime reduction. The level of documentation on the topic of upgrades and downtime available at AWS and GCS is far beyond anything that either SAP or Oracle have. The reports from the field on AWS and GSC is also far beyond anything SAP or Oracle are capable of.

Conclusion

S/4HANA Cloud is a glorified development box with a quarterly push of changes that cannot be relied upon for a company that is interested in doing something other than using the implementation to sell implementation services to other companies. S/4HANA Cloud contains a shadow of the functionality of S/4HANA on premises, which is itself a shadow of the functionality in ECC.

As for Oracle, it is misleading customers as to the upgrading required for the Oracle ERP Cloud . Ellison believes he can market his way around Oracle ERP Cloud’s limitations, using monopolistic profits to shovel money at Gartner to obtain a preposterous score, above that of Workday.

Not all vendors are equal in the cloud. Cloud ERP works better with companies like Workday or ERPNext, which started in the cloud and have a long history of providing updates while minimizing disruption for their customers. This makes both SAP’s and Oracle’s cloud ERP a liability for current and potential customers. SAP and Oracle’s cloud ERP is a great story for Wall Street, but not much of a story for customers.

Brightwork Disclosure

Financial Bias Disclosure

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

HANA & S/4HANA Question Box

  • Have Questions About S/4HANA & HANA?

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

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

References

There are three different types of multi-tenancy

1. Shared application, a separate database
2. Shared application, shared database, a separate table
3. Shared application, shared table (pure multitenancy) – Bezemer & Zaidman

Cor-Paul Bezemer, Andy Ziadman, Multi-Tenant SaaS Applications: Maintenance Dream or Nightmare?, Association of Computing Machinery, Sept 2010

Thanks to Ahmed Azmi and Mark Dalton for feedback on the article.

Workday Bows Enterprise Reins Release Cycle, Phil Wainewright, Diginomica, 2013

https://www.asug.com/news/sap-s-4hana-customer-adoption-live-customers-implementations

 

https://godsofadvertising.wordpress.com/tag/not-your-fathers-oldsmobile/

Something that I did not know, as I do not study marketing outside of software marketing, is that against type marketing occurs when the brand is in decline. Examples of this are Oldsmobile, Buick (Is That a Buick?).

Is Salesforce Profitable Enough To Take On Microsoft, Oracle In Merger Deals?

Rimini Street White Paper Five Upgrade Strategies or Oracle E Business Suite Customers to Consider

“Business Disruption — Upgrading to EBS 12 in a complicated process that could tie up your IT team for 12–18 months and have unintended consequences for the business. Sometimes an upgrade “backfires,” leading to unpleasant and expensive results. One CIO of a mid-market light fixture company commented around their Oracle upgrade: “Long story short, we went through the pain of doing this upgrade only to find that not only there’s no functionality there that we could use, but, also in essence, we had to upgrade our hardware because performance fell back and we’re still not at the performance we were before!”

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

The Real Story on ERP Book

ERPThe Real Story Behind ERP: Separating Fiction From Reality

How This Book is Structured

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

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

Break the Bank for ERP?

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

By reading this book you will:

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

Chapters

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

How Accurate Was ASUG About Migrating to HANA?

Executive Summary

  • ASUG wrote a number of inaccurate statements about HANA and has provided really broken logic regarding SAP being a customer’s long-term partner, stating that other customers should move away from other vendors.
  • One thing that ASUG will not address is the TCO of HANA.

Introduction

As we have proposed for some time, there is no longer any difference between SAP and the marketing outlet that goes by the name of ASUG which poses as a user group for SAP.

In the article About Those Oracle Runtime Licenses That You Own, Geoff Scott proposes that it is time to migrate to HANA from Oracle.

“If you run your SAP software on Oracle databases, and you purchased your Oracle licenses through SAP (referred to as “runtime” licenses), your cost is now 7 percent higher than it was just two years ago.”

Creating that Burning Platform

So this is one part of the “burning platform” that ASUG attempts to create. And then comes the second part.

“Another important thing to note is that the SAP-Oracle database licensing agreement is again up for renewal in 2017.

What happens next can be anything from additional price increases to an end to the agreement, to something in between. In other words, uncertainty—which is a hard thing to plan for.”

So ASUG proposes here that the SAP-Oracle licensing agreement could be terminated? Did ASUG think this was within the realm of possibility when they wrote this or was this just FUD? If that did happen, what a massive change of the rules that would have been.

This article was written in 2016. However, when the agreement was reviewed, it was extended, which we covered in the article. How SAP Has Quietly Changed Strategy on HANA and Oracle.

He then finishes with:

“It’s hard not to conclude that if SAP is your long-term enterprise software partner, you need to make a move to SAP HANA, Suite on HANA or SAP S/4HANA. All of the other options are intermediate stop-gaps, which require time and money. Better to do this once and right than have to do it multiple times.”

Thus, the answer is to remove all other databases and replace them all with HANA!

Are Vendors Also Partners?

Did it occur to ASUG that these other vendors are also “partners” with these customers in the same way that SAP is a “partner”? In fact, the term partner is just misleading. SAP as with Oracle expects to get paid by their customers. Therefore, these are customers and SAP, and Oracle is vendors. This reframing of customer/vendor relationships as partnering is a highly inaccurate way to describe entities that pay and that are paid. Partners frequently team up to service another customer together. Partners often don’t transfer funds for goods and services.

The words in the English language have already been created to explain these relationships. Furthermore, many customers have had SAP as a vendor and have also had Oracle, IBM or Microsoft as vendors. Why is this logic to move more business over to one vendor versus the other?

What is the TCO of HANA?

Something that ASUG may be interested in knowing is that they think a 7% increase over two years is high, they should read the Brightwork HANA TCO Study which estimates that HANA is more than 2x the TCO of “AnyDB.”

Conclusion

Once again, is ASUG the user group that it claims and just looking out for their member’s interests, or are they a marketing channel for SAP. Was this advice offered by them looking out for the interests of their members, or only what SAP wanted their customers to do? We know that this article lays out precisely what SAP would like customers to do. There is just no way that following this advice would result in anything but higher costs and a worse value for the customers that followed this path.

ASUG receives a 1 out of 10 for accuracy on this article.

*This article was written without any consideration from any vendor of any kind. Unlike ASUG, we are independent of any entity that we provide information.

Brightwork Disclosure

Financial Bias Disclosure

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

HANA & S/4HANA Question Box

  • Have Questions About S/4HANA & HANA?

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

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

References

https://www.asug.com/news/about-those-oracle-runtime-licenses-that-you-own

The Discrepancy Between SAP and DSAG on S/4HANA’s Growth

Executive Summary

  • DSAG, the German-speaking SAP user group’s survey of S/4HANA adoptions showed important distinctions from what SAP has been reporting to Wall Street.

Introduction

We have been saying for some time that SAP’s numbers on S/4HANA do not add up. When perusing a survey by DSAG, which is the German-speaking countries user group for SAP, we found interesting discrepancies between what SAP is reporting to Wall Street and what DSAG found.

DSAG on S/4HANA

We will be begin by listing the most interesting quotations from the study.

“Just like last year, DSAG members were also asked about the relevance of Business Suite and S/4HANA, both on-premise and in the cloud. The survey found that there has been no further shift towards S/4HANA. In fact, main and mid-size investments in Business Suite fell by around 10 percent (from fall 2017) to 48 percent. However, this did not affect investments in S/4HANA projects, which remained almost constant. But there is a noticeable increase in the use of S/4HANA as a cloud solution (up 4 percent).”

And on the topic of S/4HANA Migration

“The survey also found that DSAG members’ plans on when to migrate to S/4HANA remained unchanged from last year, although 3 percent of members are already using S/4HANA (up 1 percent). 5 percent of those surveyed plan to migrate to S/4HANA this year, and one-third plan to do so in three years. A quarter of survey participants have not yet decided when to migrate and 13 percent plan to stay on Business Suite. For Marco Lenck, this is a noteworthy finding. He says: “The growth of 4 percent migration to S/4HANA that was forecast last year wasn’t realized.” And despite a large of number of projects, the number of migrations hasn’t significantly grown. Marco Lenck continues: “This could be because the transition is more complex than expected, meaning S/4HANA projects couldn’t yet be completed.”

This is as we have stated. S/4HANA is seeing little growth. One should be careful not to take the “planned to…” estimates as hard commitments. Many companies plan to do things, and it in many cases it does not mean that it occurs within that time frame or at all. Notice that the “planned to” numbers are higher than the “currently” numbers.

What SAP Communicates About S/4HANA Adoption to Wall Steet

Now notice how different what SAP tells Wall Street about S/4HANA.

These following quotations are from the Q4 2017 analyst call.

Question 1: Ross MacMillan

“Thank so much. Maybe one for Luka, I think by my math, we’re just over 20% of the core ERP base on S/4HANA and I just wondered if you could maybe remind us, where do you expect as to be in terms of conversion of base as we look out to our 2020 target? And then a follow-up and I don’t know if this is for Bill or Bernd, but your comments on S/4 cloud are obviously bullish.”

Notice the statement. Ross MacMillian has repeated what SAP said that they had converted 20% of their ERP customer base. But here Ross is repeating the language that converts the “sale” of a S/4HANA license with the “conversion” of the customer. This is highly problematic as the vast majority of S/4HANA licenses are shelfware. Many of them either unpaid for or part of an indirect access dispute that resulted in S/4HANA being “purchased.”

Notice Luka Mucic’s answer

Answer 1: Luka Mucic

“Yes. Then just very quickly, I would definitely expect that by 2020, we should be done with half of the customer base and having it converted let’s not forget that with our current S/4 customer count. We also have net new customers on top, not only installed base conversions. So that implies that I expect to see now an acceleration of the migration curve as customers have waited in some cases for the full round out of functional capabilities of S/4HANA as that work is now complete. They are starting their programs. So that will be my indication. We would do something wrong as by 2020. We have not already migrated at least half of our installed base.”

Once again, SAP is referring to licenses sold by SAP. Luka Mucic is, therefore, saying that by 2020 1/2 of SAP ECC customers will hold a license of S/4HANA. That is the actual translation of what Luca Mucic is saying, but this is not what SAP wants the analysts to believe. SAP has adopted the term “conversion” to deliberately blur the distinction between a license purchase and a software implementation.

Conclusion

Ever since SAP introduced S/4HANA its proposals about S/4HANA’s adoption have been misleading. We covered this in several articles, including How SAP Controls Perceptions with Customer Numbers. And SAP is intent on deceiving as many people for as long as possible regarding the uptake of S/4HANA.

Brightwork Disclosure

Financial Bias Disclosure

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

HANA & S/4HANA Question Box

  • Have Questions About S/4HANA & HANA?

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

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

References

https://www.sap.com/documents/2018/02/de1db6cd-ee7c-0010-82c7-eda71af511fa.html

https://www.dsag.de/pressemitteilungen/budgets-feel-impact-digitalization?lipi=urn%3Ali%3Apage%3Ad_flagship3_detail_base%3B3MEpvRfCSCGzPbgmLJFKtg%3D%3D

https://seekingalpha.com/article/4141369-saps-sap-ceo-william-mcdermott-q4-2017-results-earnings-call-transcript?part=single&lipi=urn%3Ali%3Apage%3Ad_flagship3_messaging%3BRIvReRndQI%2BYe9AQnj6ASw%3D%3D

DSAG Survey scope
“In total, 334 CIOs and company representatives from DSAG member firms in German-speaking countries took part in the online survey between November 2017 and January 2018. One contact was surveyed per company. Nearly 60 percent of those surveyed come from companies with between 1,000 and 4,999 employees, and nearly 30 percent come from companies with over 5,000 employees. 52 companies in Switzerland took part and 37 in Austria.”

How Accurate is SAP on the Use of the Term Extensible for S/4HANA in the Cloud?

Executive Summary

  • SAP has proposed that Fiori makes sense to customize, that Fiori is extensible and that customization has been a major driver for R/3 and ECC acceptance. Furthermore, that R/3 was popular because it had cost efficient extensions.
  • In this article, we cover how all of these proposals are false.
  • SAP also proposes that it has improved the upgradeability of S/4HANA, which is also not true.
  • Finally, we analyze the statements around the SAP Cloud Platform’s health.

Introduction

SAP proposed in the document SAP S/4HANA Extensibility for Customers and Partners, some claims regarding S/4HANA and its customization.

In this article, we will review the accuracy of this SAP article.

The Quotations

Customizing Fiori?

“Customers using the side-by-side extensibility approach can use SAP HANA Cloud Platform to build completely new UIs based on the SAP Fiori user experience or integrate with other cloud applications from SAP.”

As we cover in the article What is Actually in the Fiori Box? Fiori is well known to be extremely difficult to customize. Projects where customization of Fiori are estimated end up being stratospheric and often get canceled. Regardless, this document is stating that customization is a good idea.

ABAP as a Good Value?

“They can also build completely new applications and business logic that natively run on the SAP HANA platform or that are loosely coupled to the ABAP programming language back end of SAP S/4HANA.”

As we covered in the article ABAP programming language back end of SAP S/4HANA.

ABAP is an inefficient programming language which is increasingly limited as development goes to the cloud.

Extensibility, A New Synonym for Customization?

“In SAP S/4HANA on premise, full flexibility to ABAP through ABAP in Eclipse (a development platform) is guaranteed.”

Extensibility means it can be extended, but all application are extendable. SAP can also be extended through using any programming language that can connect to SAP function modules. It is not SAP that guarantees extensibility, is the nature of any application.

SAP R/3 Was Popular Because of Cost Efficient Extensions?

“For many years, SAP has implemented successful processes for scalable and cost-efficient extensions in all product versions.”

Has SAP cost efficient extensions? Having been on SAP projects for decades, I am unaware as to what this is. Either these extensions are a secret or SAP is referring to customization.

Furthermore, does SAP seriously expect to leave with any credibility after proposing that customizing SAP is “cost efficient?”

That is odd. Becuase SAP projects are known for their exorbitant customization costs. Some failed SAP projects have run into the billions of dollars. How did that happen without high priced customizations?

This document must be referring to another company called SAP that sold an application called R/3.

Ding Ding Ding!

This statement by SAP regarding low-cost customizations earns our Golden Pinocchio for being as false and as deliberately misleading as a statement can be. 

Ease of Customization Was a Major Driver for R/3 Acceptance?

“This was a major driver of the large acceptance and adoption of SAP R/3 software, the SAP ERP application, and SAP Business Suite software (for example, by using the SAP NetWeaver technology platform for on-premise extensions of SAP Business Suite).”

SAP R/3 was adopted for many reasons, one being an arrangement between SAP and large consulting companies where the consulting companies sold out the interests of their customers so they could profit maximize at their customers. SAP was the vendor that allowed them to make the most money.

SAP is not more customizable than competing applications; it is less customizable. It has the highest cost of customization and maintenance of any vendor that we track at Brightwork. Furthermore, NetWeaver as a specific product never existed, as we covered in the article Did Netweaver Ever Exist?

SAP’s Proposal for Improved Upgradability of S/4HANA: A Whole Lot of Nothing

SAP performs a significant sleight of hand with the following few paragraphs. Now watch how the masters at SAP Marketing set up a false conclusion, without most readers ever noticing.

Step 1: SAP begins the deception by making a true statement.

“When implementing software extensions using a traditional approach, many organizations run large implementation projects with significant modifications to the standard enterprise software. At first, the high degree of flexibility may be regarded as a benefit. However, during subsequent phases of the lifecycle of the extensions, modifications may become pitfalls:”

This statement is mostly correct, but it glosses over the reason for the customizations. We won’t go into it now, let us see where SAP goes next.

“Since business experts usually do not implement extensions, interaction between the line of business (LoB) and IT often works like a waterfall model for large projects (no interconnected requirements determination and implementation phase) and thus increases time to value.”

Yes, the people writing the customizations (i.e., enhancement in SAP’s strange new vocabulary) are not the business. And writing customizations does increase the time to value, but that is true of all customizations. There is nothing new here.

“Large effort occurs for tests, validations, and adaptations necessary at every upgrade of the standard software to a new version due to (mostly) hidden dependencies between standard and extensions. The result is slow implementation of require-
ments from the LoB and delay of adoption of innovations due to the upgrade effort mentioned above.”

A bit of beating a dead horse, but also true. Once again none of the reason for the customization is given in this sequence. These are all negatives of customizations being listed by SAP.

“Today, this approach is taken to the next level with SAP S/4HANA: You can apply a tool-based and platform-based methodology, which is scalable for companies ranging from small startups to large enterprises and which intrinsically avoids the drawbacks mentioned above by using the following extensibility qualities:

  • “End-to-end tools:  Business users, experts, and implementation consultants can easily apply changes in their area of responsibility without risk.
  • Pace layer IT: Custom extensions are loosely coupled with core business processes; that is, they need robust data, process, and UI integration, but the software lifecycle of extensions is decoupled from stable systems of records.
  • The ecosystem of SAP partners: Customers get support to apply these principles and to implement differentiating solutions. In particular, partners often require a platform as a service (PaaS) for development, distribution, and maintenance of their solutions.”

The problem? None of these things lead to increased upgradeability.

  • SAP does not offer end to end tools that allow the entities mentioned to apply changes quickly. How would that even work? Customization must be adjusted in preparation for an upgrade. That means the code must be modified. Why is that all of a sudden easily applied “without risk” with S/4HANA in the cloud? That is just a marketing fiction.
  • Pace layers IT is made up. “tight data, process and UI integration” does not mean anything. And SAP has not had such a high cost of customization has not been because of “loose” data, process and UI integration.
  • SAP already has an ecosystem of SAP partners. This did nothing to ameliorate the high costs of customizing SAP in the past. In fact, it fed into it. That “ecosystem of SAP partners” is about billing as many hours for ABAP and possible. This would be like saying people will run faster before because now they will have legs. Yes, but they had legs before.

After all that build up the result regarding what SAP offers for S/4HANA regarding enhanced upgradeability is….nothing at all. 

A Comprehensive Set of Tools, Platforms, and Methodologies?

“SAP S/4HANA extensibility provides a comprehensive set of tools, platforms, and methodologies to serve the needs of customers and partners with the qualities outlined above.”

Perhaps, but how is it different from what was offered by ECC? Furthermore just because SAP provides something does not mean it should be used. For example, VW offers the diesel Golf, but we don’t recommend you buy one.

Again, SAP offered many tools for ECC and an SDK for iOS, but none of these items have proven to be competitive with using open tools.

“Since SAP HANA Cloud Platform is a full-fledged development platform, they can even build completely new solutions with a loose coupling to SAP back-end systems. SAP HANA Cloud Platform is designed to be 100% compliant with open standards (for example, using open source software from Eclipse and Apache).”

SAP’s development tools and related products have proven to be uncompetitive in the past and to increase the costs to customers. If SAP were in favor of open standards, they would make their applications accessible to already existing PaaS environments instead of channeling their customers to using 100% SAP items. The idea that SAP supports open standards is “fall laughing” amusing. It is a massive lie.

A Healthy Ecosystem for the HCP?

“When using SAP HANA Cloud Platform, you will therefore benefit from a healthy ecosystem of partners that contribute value to existing solutions and services. With this scenario, you can establish “best of breed” for small and large extensions. By definition, side-by-side extensions are loosely coupled with core SAP systems and therefore support a pace-layered IT.”

Does HCP have a vibrant ecosystem surrounding it? That is news to us.

Does ABAP have a vibrant ecosystem around it? Well yes, if the definition of a “vibrant ecosystem” is a huge group of consultants and employees who will charge customers to do things inefficiently. Furthermore, would anyone use HCP if the environment were not SAP? No? Then that tells you how competitive the offering is. HCP is a highly uncompetitive offering which is forced into companies through SAP’s pressure and by misinforming customers that the HCP is necessary for customizing SAP. SAP played the same tricks with ABAP for decades.

Conclusion

Upon reading the document, it is apparent that SAP plans to push companies from on-premises ABAP to using S/4HANA with the HCP. However, once again, SAP is dictating the programming environment, which has not lead to good outcomes in the past.

SAP presents itself as if it has all the answers on these topics when it doesn’t. For one, S/4HANA in the cloud has a small customer base. But secondly, the terminology used by SAP must be dissected. What is “extensibility?” It seems to be a code word for custom code. What happens when an application is customized? That is right, multitenant is out the window. And multitenant is a foundational underpinning of SaaS and a primary way it leads to cost savings through improved sustainability and lower maintenance. This is why S/4HANA customers in the cloud are small — they don’t customize.

Ding Ding Ding!

SAP receives a Fake Marketing Word Alert for its creation and usage of a new mysterious IT term called extensibility. 

Some are consulting companies that are trying to suck up to SAP and use an “implementation of S/4HANA” to get consulting business. That is they barely need S/4HANA but need Quickbooks, and invoicing system and HR system, all of which they could purchase in the cloud for peanuts.

With SAP using the word “extensibility” it makes it seem like it is not customization. Extensibility means it can be extended, but all application are extendable. This is SAP marketing working overtime to mislead customers by coming up with more deceptive words.

There is just all manner of inaccuracies in the document from SAP.

This document receives a 1 out of 10 for accuracy. It is a work of pure marketing fluff and relied upon an enormous number of inaccurate assumptions. It won both a Golden Pinocchio as well as a Fake Marketing Word Alert.

It is a document in search of soft targets.

HANA & S/4HANA Question Box

  • Have Questions About S/4HANA & HANA?

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

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

References

https://www.sap.com/documents/2015/07/2ad59b27-347c-0010-82c7-eda71af511fa.html?lipi=urn:li:page:d_flagship3_detail_base%3BShgR4b%2B1TmehKQvyr%2FsYQg%3D%3D

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

What This Article Covers

  • Checking with Experienced Database Resources
  • The Typical Coverage Available

Introduction

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

Quotations

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

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

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

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

ASUG’s Independent from SAP?

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

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

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

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

SAP’s Support

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

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

It is difficult to know what this means.

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

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

The Data Footprint Reduction?

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

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

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

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

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

What Compression?

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

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

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

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

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

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

The Reliability of Jon Appleby?

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

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

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

The Reliability of Steve Lucas?

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

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

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

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

Conclusion

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

Brightwork Disclosure

Financial Bias Disclosure

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

HANA & S/4HANA Question Box

  • Have Questions About S/4HANA & HANA?

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

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

References

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

How to Understand Why In Memory Computing is a Myth

Executive Summary

  • Non in memory computing makes no sense, therefore memory computing makes no sense.
  • AWS covers HANA’s in memory nature. Placing a database 100% placed into memory is not a good thing.
  • We cover the long history of database memory optimization.

Introduction to In Memory Computing

SAP has been one of the major proponents of something called “in memory computing.” Hasso Plattner has written four books on the topic. You will learn how in memory for databases works.

Hasso Plattner has been pushing the importance of in-memory computing for a number of years. Hasso Plattner’s books aren’t books in the traditional sense. They are sales material for SAP. The books we have read by Hasso Plattner uniformly contain exaggerations as to the benefits one can expect from “in memory computing.”

However, there have been some inaccuracies concerning the specific topic of memory management with HANA.

What is Non In Memory Computing?

So all computing occurs in memory there is no form of computing that is performed without memory because the results would be unacceptable. Computing has been using more and more memory as anyone who purchases a computer can see for themselves. While at one time a personal computer might sell with 4 GB of memory (or RAM), 16 GB is now quite common on new computers.

The Problem with the Term In Memory Computing

SAP took a shortcut when they used the phrase “in memory” computing. The computer I am typing on has loaded the program into memory. So the term “in-memory computing” is a meaningless term.

Instead, what makes HANA different is it requires more of the database to be loaded into memory. And HANA is the only database I cover that works that way. With this in mind, the term should have been

“more database in memory computing.”

**There is a debate as to how may tables are loaded into memory. Not the large tables and not the column-oriented tables. This is the opposite of what SAP has said about HANA. The reason for this debate is SAP has provided contradictory information on this topic. 

That is accurate. SAP’s term may roll off the tongue better, but it has the unfortunate consequence of being inaccurate.

And it can’t be argued that it is correct.

Here is a quote from AWS’s guide on SAP HANA, which is going to tend to be more accurate than anything SAP says about HANA.

“Storage Configuration for SAP HANA: SAP HANA stores and processes all or most of its data in memory, and provides protection against data loss by saving the data in persistent storage locations. To achieve optimal performance, the storage solution used for SAP HANA data and log volumes should meet SAP’s storage KPI.”

However, interestingly, this following statement by AWS on HANA’s sizing is incorrect.

“Before you begin deployment, please consult the SAP documentation listed in this section to determine memory sizing for your needs. This evaluation will help you choose Amazon EC2 instances during deployment. (Note that the links in this section require SAP support portal credentials.)”

Yet it is likely, not feasible for AWS to observe that SAP’s sizing documentation will cause the customer to undersize the database so that the customer will purchase HANA licenses on false pretenses and then have to go back to purchase more HANA licenses after the decision to go with HANA has already been made.

Bullet Based Guns?

Calling HANA “in-memory computing” is the same as saying “bullet based shooting,” when discussing firearms.

Let us ask the question: How would one shoot a firearm without using a bullet?

If someone were to say their gun was better than your gun (which in essence SAP does regarding its in-memory computing) and the reason they give is that they used “with bullet shooting technology,” you would be justified in asking what they are smoking. A gun is a bullet based technology.

How to Use a Term to Create Confusion Automatically

This has also lead to a great deal of confusion about how memory is used by computers among those that don’t spend their days focusing on these types of issues. And this is not exclusive to SAP. Oracle now uses the term in-memory computing as do many IT entities. Oracle references the term also as can be seen in the following screenshot taken from their website.

Is 100% of the Database Placed into Memory a Good Thing?

However, the question is whether it is a good or necessary thing. And it is difficult to see how it is.

It means that with S/4HANA even though only a small fraction of the tables are part of a query or transaction, the entire database of tables is in memory at all times.

Now, let us consider the implications of what this means for a moment. Just think for a moment how many tables SAP’s applications have, and how many are in use at any one time.

Why do tables not involved in the present activity, even tables that are very rarely accessed need to be in memory at all times?

The Long History of Database Memory Optimization

People should be aware that IBM and Oracle and Microsoft all have specialists that focus on something called memory optimization.

Microsoft has documents on this topic at this link.

Outsystems, which is a PaaS development environment that connects exclusively to SQL Server has its own page on memory optimization to the database which you can see at this link.

The specialists that work in this area figure out how to program the database to have the right table in memory to meet the demands of the system, and there has been quite a lot of work in this area for quite a long time. Outside of SAP, there is little dispute that this is the logical way to design the relationship between the database and the hardware’s memory.

Conclusion

In summary, if a person says “in-memory computing” the response should be “can we be more specific.” Clear thinking requires the use of accurate terms as a logical beginning point.

SAP’s assertion the entire database must be loaded into memory is unproven. A statement cannot be accepted if it both has no meaning and if what it actually means (as in the entire database in memory) is unproven.

Brightwork Disclosure

Financial Bias Disclosure

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

HANA & S/4HANA Question Box

  • Have Questions About S/4HANA & HANA?

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

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

References

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

The Risk Estimation Book

 

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

Better Managing Software Risk

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

Finding What Works and What Doesn’t

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

Chapters

Chapter 1: Introduction
Chapter 2: Enterprise Software Risk Management
Chapter 3: The Basics of Enterprise Software Risk Management
Chapter 4: Understanding the Enterprise Software Market
Chapter 5: Software Sell-ability versus Implementability
Chapter 6: Selecting the Right IT Consultant
Chapter 7: How to Use the Reports of Analysts Like Gartner
Chapter 8: How to Interpret Vendor-Provided Information to Reduce Project Risk
Chapter 9: Evaluating Implementation Preparedness
Chapter 10: Using TCO for Decision Making
Chapter 11: The Software Decisions’ Risk Component Model

Risk Estimation and Calculation

Risk Estimation and Calculation

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

project_software_risk

https://www.ibm.com/blogs/research/2017/10/ibm-scientists-demonstrate-memory-computing-1-million-devices-applications-ai/

https://docs.microsoft.com/en-us/azure/sql-database/sql-database-in-memory

https://s3.amazonaws.com/quickstart-reference/sap/hana/latest/doc/SAP+HANA+Quick+Start.pdf

 

Is it True That Few SAP Customers Care About Databases?

Executive Summary

  • Should SAP’s Claims About HANA Not be Verified Because Most People Don’t Care About Database Performance?
  • How SAP Uses HANA’s Performance Claims to Push for Customers to Switch Databases
  • SAP’s HANA Claims Fact-Checked

Introduction

In a recent article titled SAP HANA as a Mismatch for ERP and S/4HANA.

We received a response that seemed to minimize the importance of our verification of the claims made by SAP about HANA because. as the commenter put it..

“…no one cares about the db outside of a very small tech bubble – it’s all about people and process.”

This statement seems to be an attempt to pivot away from the question of whether SAP’s claims regarding SAP are true.

How SAP Uses HANA’s Performance Claims to Push for Customers to Switch Databases

SAP has very aggressively promoting customers to move to HANA under the logic that the database is incredibly important.

Here are a few examples.

  1. Restricting S/4HANA to HANA has been justified on the basis that no other database can offer acceptable performance versus HANA. SAP has stated that they need to design or optimize S/4HANA around a single database for performance reasons. According to Jon Appleby, who is a proxy for SAP, due to HANA’s capabilities in innovation and unparalleled performance advantage over all other databases that SAP is finished Oracle DB as is covered in the article Why Jon Appleby Was So Wrong In His HANA Predictions.
  2. SAP is proposing, and SAP consulting companies are relaying the message word for word (I have many of the emails that are forwarded to me from the recipients of this advice) that solutions ranging from TPM to CRM need to have HANA or the applications will not properly support the application’s functionality.

This is suspicious. It is dubious because other vendors that I track do restrict the database options of their customers in this way.

SAP’s HANA Claims Fact-Checked

Secondly, SAP’s performance claims for HANA are not only not holding up, every data point we obtain works in the opposite direction from SAP’s claims. One performance claim for HANA is true.

HANA will outperform a non-column data store database for analytics (but only within a data warehouse environment).

For all other database processing, the performance is worse. That is a serious issue that I am not sure how any pivot or alteration of the point of discussion can change what are now quite a few observations of this fact. We are not tracking performance issues with S/4HANA on multiple accounts. These observations tell a story of S/4HANA’s performance negatively impacting the project.

SAP is using the argument of HANA’s performance combined with what appear to me to be faux arguments about application compatibility between SAP’s applications and to their database to push existing databases out of SAP account. If you have read the Brightwork Study into HANA’s TCO, you might imagine that there are most likely severe implications for the customer’s IT budget to following this advice.

Conclusion

As this is a primary strategy of SAP, it would seem to be reasonable to validate if SAP’s statements about HANA’s performance are true. Therefore, we consider it highly relevant as to whether SAP’s claims regarding HANA’s performance are true.

The topic of the compatibility argument that increasing numbers of SAP’s applications are proposed by SAP and by SAP’s consulting partners to only be supported by HANA is another topic.

HANA & S/4HANA Question Box

  • Have Questions About S/4HANA & HANA?

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

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

References

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

The Risk Estimation Book

 

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

Better Managing Software Risk

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

Finding What Works and What Doesn’t

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

Chapters

Chapter 1: Introduction
Chapter 2: Enterprise Software Risk Management
Chapter 3: The Basics of Enterprise Software Risk Management
Chapter 4: Understanding the Enterprise Software Market
Chapter 5: Software Sell-ability versus Implementability
Chapter 6: Selecting the Right IT Consultant
Chapter 7: How to Use the Reports of Analysts Like Gartner
Chapter 8: How to Interpret Vendor-Provided Information to Reduce Project Risk
Chapter 9: Evaluating Implementation Preparedness
Chapter 10: Using TCO for Decision Making
Chapter 11: The Software Decisions’ Risk Component Model

Risk Estimation and Calculation

Risk Estimation and Calculation

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

project_software_risk

SAP’s Misleading Storyline for S/4HANA Being Complete

What This Article Covers

  • How SAP Introduced S/4HANA and its Completeness
  • Becoming Increasingly Complete?
  • The Actual Story with S/4HANA’s Completeness
  • Our Coverage of S/4HANA’s Completeness Versus the Standard IT Media
  • The Attempt by SAP to Minimize the Issue with S/4HANA’s Completeness
  • Computer Weekly as a Passive Message Repeater of SAP
  • Jon Appleby Enters the Funhouse
  • What John Appleby Proposes
  • S/4HANA Finance Implemented by Itself

Introduction

We have covered S/4HANA’s completeness in great detail since around a year and a half after its introduction. While SAP consulting companies and IT media entities have been covering up this story, we published Why the S/4HANA Suite is Not Yet Released.

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

How SAP Introduced S/4HANA and its Completeness

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

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

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

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

Becoming Increasingly Complete?

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

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

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

That statement was made in March of 2016.

As we said at the time,

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

The Actual Story with S/4HANA’s Completeness

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

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

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

Our Coverage of S/4HANA’s Completeness Versus the Standard IT Media

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

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

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

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

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

ComputerWeekly used to be a legitimate IT magazine. However, in 2011 they were purchased by TechTarget. TechTarget is primarily a marketing automation entity that uses various online websites like ComputerWeekly to capture email addresses that are then sold to software vendors. This is covered in the article ComputerWeekly is a Front for Marketing Automation. What this means is that ComputerWeekly will publish whatever its customers, which are software vendors and consulting companies want them to publish.

Computer Weekly as a Passive Message Repeater of SAP

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

In this article, ComputerWeekly uses the following sources.

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

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

Seeing Where Uwe is Going

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

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

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

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

Jon Appleby Enters the Funhouse

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

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

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

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

What John Appleby Proposes

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

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

And why is Appleby recommending this? Did ComputerWeekly think for a minute that perhaps Jon Appleby has a financial bias in getting companies to use his services to implement S/4HANA?

He goes on to say.

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

So what Appleby is proposing is that customers implement the revenue recognition module first. Then S/4HANA later. But why does revenue recognition have to be implemented at all? Revenue recognition is supposed to be functionality within the ECC FI/CO module. ECC can be updated to the most current version, so why isn’t the latest revenue recognition logic included in this update?

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

S/4HANA Finance Implemented by Itself

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

Appleby finishes off with a final touch.

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

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

Conclusion

This is the type of article that gets published when media entity conspires with the software vendors, that is a major funder of the entity. Every single source in this article is biased in favor of SAP, and were indeed selected by SAP to be interviewed by ComputerWeekly.

HANA & S/4HANA Question Box

  • Have Questions About S/4HANA & HANA?

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

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

References

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

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

The Risk Estimation Book

 

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

Better Managing Software Risk

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

Finding What Works and What Doesn’t

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

Chapters

Chapter 1: Introduction
Chapter 2: Enterprise Software Risk Management
Chapter 3: The Basics of Enterprise Software Risk Management
Chapter 4: Understanding the Enterprise Software Market
Chapter 5: Software Sell-ability versus Implementability
Chapter 6: Selecting the Right IT Consultant
Chapter 7: How to Use the Reports of Analysts Like Gartner
Chapter 8: How to Interpret Vendor-Provided Information to Reduce Project Risk
Chapter 9: Evaluating Implementation Preparedness
Chapter 10: Using TCO for Decision Making
Chapter 11: The Software Decisions’ Risk Component Model

Risk Estimation and Calculation

Risk Estimation and Calculation

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

project_software_risk

SAP’s S/4HANA Clause Restricting Installing Other Applications

What This Article Covers

  • The Unusual Clause
  • SAP’s Often Deliberately Obtuse Clauses

Introduction

I recently had a colleague send me this quotation from the S/4HANA 1610 Simplification List. He was extremely surprised by this quotation and asked me to analyze it.

In this article, we will review this clause, what it most likely means and what it means for S/4HANA customers.

The Unusual Clause

“In addition, customers should be aware of the fact that only SAP S/4HANA packages (and no other software) shall be deployed on an SAP S/4HANA installation. Details are provided in the Software Use
Rights Document.”

“….For clarity the preceding sentence only applies to software licensed from SAP, its affiliates and or its authorized distributors and resellers.”

I don’t see how that clarifies anything except to say this is only for SAP software.

Also, the Software Use Rights Document does not clarify what this means. Therefore, SAP is telling customers to check another document for clarification, which does not do what SAP says it does.

I searched it for every appearance of the term S/4HANA, and there was no more information on this topic within the document at least concerning S/4HANA.

SAP is known to add clauses that are deliberately obtuse, and they come by later and say it meant XYZ and you signed the agreement.

SAP’s Often Deliberately Obtuse Clauses

If the customer reads this and then reads the supposed supporting document it is not clear what they are talking about in this quotation.

But that is the point.

If we take one possible interpretation, then no non-SAP system can be integrated to S/4HANA. That is not exactly what the clause sounds like. But at first, it was difficult to see what else the clause could be referring to. That is until I conferred with a resource with the first-hand experience on S/4HANA implementations. He had the following to say.

“They mean you cannot install non-SAP software on the S/4 platform. Nothing to do with IA or integration.

This is to avoid performance and conflict on resource issues. It also stops customers from doing this because if they do, SAP cannot see where data starts and stops…:)”

This is odd because, on all of the SAP projects I have been on, I don’t recall the topic of other software being installed on the ERP hardware being brought up. But with S/4HANA, apparently, customers spend so much money on S4 hardware that they have been running other applications on the hardware to manage their budget.

Conclusion

S/4HANA projects routinely underestimate their hardware size and therefore the eventual hardware cost. This has led some S/4HANA customers to try to save money by installing other applications on top of the S/4HANA hardware. This is why the clause was added to the Software Use Rights Document, where it was not there before.

Brightwork Disclosure

Financial Bias Disclosure

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

HANA & S/4HANA Question Box

  • Have Questions About S/4HANA & HANA?

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

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

References

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

The Risk Estimation Book

 

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

Better Managing Software Risk

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

Finding What Works and What Doesn’t

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

Chapters

Chapter 1: Introduction
Chapter 2: Enterprise Software Risk Management
Chapter 3: The Basics of Enterprise Software Risk Management
Chapter 4: Understanding the Enterprise Software Market
Chapter 5: Software Sell-ability versus Implementability
Chapter 6: Selecting the Right IT Consultant
Chapter 7: How to Use the Reports of Analysts Like Gartner
Chapter 8: How to Interpret Vendor-Provided Information to Reduce Project Risk
Chapter 9: Evaluating Implementation Preparedness
Chapter 10: Using TCO for Decision Making
Chapter 11: The Software Decisions’ Risk Component Model

Risk Estimation and Calculation

Risk Estimation and Calculation

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

project_software_risk