How SAP Admitted in Court Documents to Copying from Open Source MySQL

Executive Summary

  • While trying to win its case against Teradata, SAP admitted to copying functionality from MySQL.
  • We analyze the meaning of this admission by SAP.

Introduction

The recent submissions to the court by Teradata outline what IP Teradata asserts was taken by SAP during their partnership with SAP. In one of the patent documents, they have claimed to have taken concepts from MySQL rather than Teradata.

One might think that this is a good strategy. After all, it provides a direct explanation as to where SAP obtained the IP that does not subject them to liability in the Teradata lawsuit.

The problem (for SAP) is that SAP is not allowed to do this under the terms of MySQL’s GNU General Public License or GPL.

This is covered by the following portions of the GNU GPL.

You may not propagate or modify a covered work except as expressly provided under this License. Any attempt otherwise to propagate or modify it is void, and will automatically terminate your rights under this License (including any patent licenses granted under the third paragraph of section 11).

For example, if you distribute copies of such a program, whether gratis or for a fee, you must pass on to the recipients the same freedoms that you received. You must make sure that they, too, receive or can get the source code. And you must show them these terms so they know their rights.

By contrast, the GNU General Public License is intended to guarantee your freedom to share and change all versions of a program–to make sure it remains free software for all its users. We, the Free Software Foundation, use the GNU General Public License for most of our software; it applies also to any other work released this way by its authors. You can apply it to your programs, too. – GNU

And it is explained by Markian Jaworsky.

One can only use that argument of copying from a GNU GPL covered code base if you are planning to make your product open-source as well.  Open-source being protected by both copyright and contract law.

Open-source is protected by copyright, so you can’t copy it to make money, and then contract law states that if you use open-source IP in your product, then by license agreement contract law, your product must also be open-source.

Conclusion

We have been saying for some time that SAP did not create new IP when it developed HANA. We cover this in the article Did SAP Just Reinvent the Wheel with HANA?

We were the only entity to publish this information and we did so years ago, while Gartner was being paid off to write ridiculously flattering articles about HANA as we cover in the article How Gartner Got HANA So Wrong.

Up until this point, SAP has been able get away with making untested assertions regarding the history of HANA, including creating a fake backstory as we covered in the article Did Hasso Plattner and His Ph.D. Students Invent HANA?

SAP is trying to win its case against Teradata, and this will force it to point out to other databases where it copied the things it lied about inventing internally. The HANA development team was put under enormous pressure from the beginning due to Hasso Plattner’s false claims around HANA. When the development was handed off to Vishal Sikka, Vishal continued the pattern begun by Hasso Plattner of making false claims around HANA.

However, within only a few years, SAP claimed to have developed a database that exceeded all other databases in the world, and that other databases (like Oracle) were finished being used with SAP applications (as we cover in the article How Accurate Was SAP on SAP Being Finished on Oracle?) When questioned on these claims, SAP surrogate John Appleby, crumbled under the pressure of debate with an experienced IBM resource, as we cover in the article John Appleby, Beaten by Chris Eaton in Debate and Required Saving by Hasso Plattner. It is our interpretation that it is only through the organizational influence of Hasso Plattner/SAP on IBM’s consulting services (Chris Eaton worked for IBM’s database group at that time, but the consulting services division is much more influential in IBM than the database group because its revenues from SAP alone are far higher) that Chris Eaton knew to back down in a public debate stage. And nothing Hasso Plattner said in the online debate made any sense or did anything but let Chris Eaton know that if he was going to continue to treat John Appleby like his personal punching bag that there were going to be repercussions.

Currently, of the database base/data warehouse vendors only Teradata is suing SAP, however, other database vendors were the victims of the same false claims made by SAP about HANA. Furthermore, these false claims where supported and reinforced in virtual uniformity by the SAP consulting partners.

Fact Checking SAP

We ask a fundamental question that everyone that works in enterprise software should ask themselves.

Should decisions be made based on sales information provided by 100% financially biased parties (consulting firms, IT analysts), to companies that do not have internal fact-checking capabilities?

If the answer is “No,” (contact us if you think the answer “Yes“) then perhaps the present system of decision making should be improved.

If you are worried about getting the real story, we can help. We have a history of proving accurate fact-checking analysis. We also have no financial connections to any entity we fact check.

Financial Disclosure

Financial Bias Disclosure

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

Search Our Other HANA Content

References

https://www.gnu.org/licenses/gpl-3.0.en.html

Evaluating The Quality of Gartner’s Advice on S/4HANA Licensing

Executive Summary

  • Gartner provides specific advice on how to best manage S/4HANA licenses and related topics.
  • We evaluate this advice for accuracy.

Introduction

Gartner states the following about S/4HANA software licenses in their article How to License SAP S/4HANA Software and their article Minimizing S/4HANA Migration Costs by Leveraging Conversion.

Gartner Begins by Providing the Shelfware Figures for S/4HANA?

Gartner states the following.

As of 3Q18, SAP announced that 9,500 ECC customers have licensed S/4HANA, which represents approximately 27% of the current ECC user base.

What is the relevance of stating this number when the actual number of live S/4HANA instances is so low?

SAP itself at his time only claimed a few thousand live instances of S/4HANA. If Gartner were independent of SAP they would INFORM their clients rather than reporting the shelfware that S/4HANA is taking up.

S/4HANA’s Relationship to ECC

This next quote is eye-crossing.

The S/4HANA migration is not a new release of SAP Business Suite — it is an independent product that requires a new license investment.

So this quote is confusing and is not accurate. S/4HANA is a new release of ECC, but it is different in some important ways from ECC. But the vast majority of the code is the same as ECC. We cover this in the article Why SAP S/4HANA Should be Free (to Existing ECC Customers).

Then Gartner continues.

As a result, many existing SAP customers struggle to determine how to optimize the costs of their often substantial legacy SAP ECC license portfolio when making the transition to S/4HANA and other related SAP offerings.

The SAP ECC license (it is unclear what a “license portfolio” is), but S/4HANA requires a new license. There is no ECC license to optimize.

Gartner goes on to claim that customers have the right to access SAP programs that allow customers to repurpose existing investments and optimize support spend and simplify pricing and contractual terms.

  1. This is only partially true. When a customer trades-in shelfware, the customer end up being highly constrained by SAP as they essentially call the shots. Secondly, many of SAP’s ways of “optimizing” support spend ends up being converted to subscriptions, which is often for “cloud” subscriptions that are then not used, or not used for some time. (what we have coined COP or “cloud on paper”)
  2. As for the last point, new SAP contracts are more restrictive and have more liabilities (say for instance more indirect access) than old contracts. Therefore this part rings false. SAP always encourages customers to get onto “new paper” because each year the contracts are worse for customers.

Gartner goes on to describe a convoluted product conversion program. However, they then say the following…

However, not all SPA products are eligible for the product conversion program. SAP has an S/4HANA product conversion grid outlining approximately 150 products that are eligible for the conversion.

And this is the issue. SAP’s conversion programs are about directing previous investments to new SAP products.

Here is an example of one such conversion. The problem? Well in this case, SAP Analytics Cloud has nothing to do with BusinessObjects — and it is highly unlikely that SAP Analytics Cloud is the best option for any customer. We cover this in the article How Competitive an Option is SAP Analytics Cloud? 

A primary reason that SAP is so keen on conversion programs is that they want to force new products into existing customers, but without having to go through a software selection — that they could lose. Yet Gartner writes their article as if none of this background exists.

There are many problems with following such programs. First, the new product may not be ready to be implemented. SAP has many such products in its stable. Secondly, Gartner has this entire exercise optimized around minimizing licensing costs. Our TCO research, which matches other research in the area indicates that licenses are only around 10% of the TCO of enterprise software. Therefore license optimization should never be the goal.

SAP has many ways to allowing a customer to manipulate license costs, but it is on SAP’s terms and it means not looking at the overall TCO, which should be a primary objective to be optimized – along with the value obtained from each product — or its ROI.

The SAP Digital Transformation Navigator

We covered the SAP Digital Transformation Navigator in the article How to Best Understand the SAP Digital Transformation Navigator and while it presents to be an “automated consultant,” in fact, it is just a sales tool that direct the user to buy more SAP without asking the question of whether the SAP application in question is the best application for that customer to purchase.

C/4HANA?

Gartner mentions C/4HANA being offered exclusively in the cloud — however, C/4HANA is still not released as a product. Therefore it would seem that Gartner should point this out to their readers.

Get SAP to Give You Their Price List?

For perpetual licensing: Obtain pricing list information and use it to quantify license needs and determine the level of discounting required to make a deal within ERP budget constraints.

This quote in response to his from a person who prefers to remain anonymous.

What does “detailed price list information” have to do with “quantify license needs” – Who would suggest the first can be used to get to the second? And good luck with the first one. SAP doesn’t give “list prices” or “price list” – I’ve never even heard that term from SAP before because id SAP used it that would suggest they have one and the client has a right to see it.

This commenter is correct.

SAP maintains that its pricing information is private and cannot be distributed. SAP partners are also not allowed to share pricing information with SAP.

Unbundling HEC Components?

Gartner then goes on to recommend unbundling any HANA Enterprise Cloud proposal into separate fees for licensing hosting and services.

However, there is no situation where HEC is desirable. Any company that uses the HEC will end up handing over a very large margin to SAP while some other company does all the work as we cover in the article How to Understand SAP’s Upcharge as a Service Cloud. For a review of an HEC provider see the article Our Comparison of SAP HEC with Virtustream Versus AWS Analysis.

Gartner also states that the transition to S/4HANA “is underway,” The problem is that we have seen no evidence of this, and in fact, the majority of S/4HANA implementations that have been attempted have failed. Gartner may be referring to interest on the part of their customers, but it is important not to confuse questions with live S/4HANA instances.

The Different Licenses for S/4HANA

Gartner proposes that SAP offers four different licenses for S/4HANA.

  • The Perpetual License
  • The subscription on HANA Enterprise Cloud
  • S/4HANA Cloud, Single Tenant
  • S/4HANA Public Cloud

While this is true, Gartner spends no time drawing any distinction between S/4HANA on-premises and S/4HANA Cloud. Yet this distinction is critical. Gartner’s coverage leaves out the small scope of S/4HANA Cloud, vis a vis S/4HANA on premises. It leaves out the fact that most companies of any size cannot implement S/4HANA Cloud.

We cover the issues that SAP has in comingling the on premises version and the cloud version of S/4HANA in the article How SAP Confuses People on S/4HANA On Premises Versus S/4HANA Cloud.

Overall, in their document, Gartner is performing this analysis without considering the product implications of the decision.

Customers Have Leverage with SAP When Negotiating on S/4HANA?

Gartner proposes that customers have the leverage when negotiating for S/4HANA with SAP.

However, again, what Gartner leaves out is that it is difficult to find live S/4HANA instances, and this is five years after S/4HANA has been introduced. Therefore, naturally, if a customer should have the leverage, but Gartner leaves out why this is the case. It is not unobserved by us that repeated emissions from Gartner about S/4HANA normally point back to information that would be negative for SAP if Gartner stated what was true.

License HANA as a Runtime Basis?

SAP has a way of tricking companies into thinking that HANA will be less expensive than it is. This is called the runtime license. The runtime license was instrumental in getting Forrester to dramatically underestimate the TCO of HANA as we cover in the article How Accurate Was The Forrester HANA TCO Study?

Eventually, when using HANA, the customer will end up converting the run time license into a normal license and the standard pricing will then apply, and it may apply without any discount (yet HANA is discounted as we cover in the article How to Understand S/4HANA and HANA Pricing). However, Gartner presents the run time edition of HANA as a real option, when it is simply a trick designed to get HANA in the door. 

Sizing Risk with HEC?

Gartner points out that the sizing risk sits with the customer when HEC is being selected.

However, Gartner leaves out the fact that public clouds mean no or very little sizing risk. At Brightwork Research & Analysis we spin up instances on AWS all the time for testing, and then delete them. A major point if public cloud is that it is elastic. However, SAP does not direct customers to the public cloud, because the public cloud pricing is published, and it greatly restricts SAP’s ability to markup cloud services.

And there is no commitment. Of course, once a production system is in place, there is stickiness from the technical perspective, but neither AWS nor GCP has any term restrictions. This is the opposite situation with the HEC which often has terms of 3 to 5 years.

We have yet to see a logical case for use the HEC when in addition, all of the HEC providers are essentially just cronies of SAP and all are of lower quality than public cloud options like AWS and GCP.

Getting back to the exercise that Gartner recommends where the customer is to ask for the HEC individual costs to be unbundled, the activity is unnecessary, as HEC can be skipped altogether.

HEC Locks the Customer into One Private Hosting Provider?

Gartner does mention that there is no way to terminate an HEC contract or switch it to a different provider. However, it does not finish the thought and explains that this commitment to whatever random SAP firm is recommended is completely unnecessary as the public cloud awaits any customer.

The Cloud Extension Program

We cover the SAP Cloud Extension Program in detail in the article A Brightwork Warning on SAP’s Cloud Extension Program and it is a terrible value for customers as you can read in the article and actually INCREASES lock-in, while using cloud terminology to describe something that is not cloud but is instead hosting (just as with the HEC).

However, Gartner describes the Cloud Extension Program in neutral terms, simply mentioning it as an option, and then describing the program’s rules.

Conclusion

It is difficult to see what Gartner’s contributing is in their article on S/4HANA. Nearly everything listed in Gartner’s report is simply what SAP would like customers to know. There are a few things SAP would not tell customers, but those things that Gartner does tell customers are not practical, such as asking for the price list, which SAP will not give to customers.

The advice on HEC is inaccurate and Gartner does nothing to explain what HEC actually is (hint, it is not SAP, but instead is outsourced to a host who is not cloud, not multitenant, does not have flexible termination terms, etc..)

The document shows Gartner’s deep relationship with SAP and very obvious things that are negative for the customer are not divulged. This is the problem when Gartner presents the pretense of offering independent advice, but then has a larger financial relationship with the vendor that they are proposing to offer negotiation advise against. Gartner has a major conflict of interest ina providing any negotiation advice against SAP, and it is immediately apparent when analyzing the content they provide in this area, with this article that was just analyzed being no exception.

Fact Checking SAP

We ask a fundamental question that everyone that works in enterprise software should ask themselves.

Should decisions be made based on sales information provided by 100% financially biased parties (consulting firms, IT analysts), to companies that do not have internal fact-checking capabilities?

If the answer is “No,” (contact us if you think the answer “Yes“) then perhaps the present system of decision making should be improved.

If you are worried about getting the real story, we can help. We have a history of proving accurate fact-checking analysis. We also have no financial connections to any entity we fact check.

Financial Disclosure

Financial Bias Disclosure

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

Search Our Other S/4HANA Content

References

https://www.gartner.com/en/documents/3970977/how-to-license-sap-s-4hana-software

https://www.gartner.com/en/documents/3893767/minimize-s-4hana-migration-costs-by-leveraging-conversio

Is S/4HANA Cloud The World’s First Hands Free ERP?

Executive Summary

  • We have been saying for some time that SAP makes ridiculous claims for S/4HANA.
  • With its claim to offer the first “hands free ERP” how accurate is this claim?

Introduction

SAP has a long tradition of making its software sound like it is much easier to implement and use than it actually is. Witness the Run Simple program that we covered in the article What is the Real Story with SAP’s Run Simple?, or SAP’s RDS methodology How Accurate Was SAP About Rapid Deployment Solutions Speeding Implementations? In each case, these were short term marketing constructs that had nothing to do with anything that was real, but was used to try to sell more SAP on the basis of false claims.

Hands Free ERP

Now SAP has given us and new simplification claim to evaluate, the so-called “hands free claim around S/4HANA.”

SAP’s hands free claim has to do with before and after snapshots. 1/2 of this scenario seems to have more do with faux female empowerment than anything to do with the S/4HANA software. What is the relevance of the user being a “rising star” or being on track “for a promotion? The system implication is that she has to manage a project. 

As for Pepijn (no word on his objectives in life) the fact that time sensitive compliance measures are to be rolled out does not tell the reader very much specific. We would have to take SAP’s word for the fact the risk would have been insurmountable without S/4HANA. However, SAP routinely calls any software that is not their software legacy as we cover in the article How SAP Used and Abused the Term Legacy.

Back to April, she apparently she did not get the numbers — but why would she be using and ERP system to perform financial forecasting in the first place? The vast majority of financial forecasts are performed spreadsheets, not ERP systems. She is appearing to be less qualified for that big promotion, as she should know this at this point in her career. 

Back to Pepijn, why S/4HANA Cloud is such a differentiator regarding seeing project data across the globe is not clear. Most ERP systems can do this. Secondly, having worked in many companies, I can attest to the fact that access to information does not directly translate to better decision making. SAP routinely makes this claim, as if the relationship is entirely direct. As an example, if access to nutrition information leads to better decisions, neither McDonald’s or Wendy’s would continue to function as businesses.

Did April consider asking to postpone the meeting due to data availability issues? And again, ERP systems are not places where one does financial forecasting. 

Back to Pepijn, SAP’s CoPilot is not really “a thing.”

We have extensively tested S/4HANA Cloud and never used it, and it is barely showcased — but it would not be surprising if SAP marketing did not know this as they have a long-standing habit of just making things up. Also, why issuing voice commands to an ERP system be desirable? Is Pepijn disabled in some way that is not explained in the article?

Is April’s senior management not apprised of the limitations of their systems? If not, this would be a good time to tell them. But again, the forecast should have been in an offline spreadsheet a while ago, there is no reason to perform forecasting in an ERP system. 

Back to Pepijn, he is now using machine learning in S/4HANA Cloud???

That is curious because we don’t recall seeing any machine learning in S/4HANA, and ML/AI is a main marketing hook that vendors have been using to lie to customers about the capabilities of their software. All ML/AI claims should, therefore, be immediately suspect. There is also no evidence that ML beats far more simple methods of performing forecasting. ML/AI works off of large data sets, not simple forecasting like Pepijin is performing (without the use of his hands)

April appears headed to an irrevocable overdose with a bottle of sleeping pills. SAP should have ended the story this way, that April committed suicide because she did not have the right ERP system. 

We have already covered the issue around where forecasting occurs, so the problem with April’s case study is that it is based upon false assumptions.

Pepijn, on the other hand, is probably headed to TGI Fridays after his glorious success. And at this point, the author of these case studies unveils their unnatural dog obsession, as a French bulldog ends up ignored because of April’s miscalculation, while Pepijn’s reward is spending time with two Chiweenie puppies. And as April is now dead, her French bulldog needs to find a new owner.

What a tragedy!

All of it could have been prevented by purchasing an SAP ERP system that Pepijn can speak to with voice commands. Well there you go, no further analysis is necessary.

Conclusion

This is a standard SAP marketing puff piece written by people who have never used and will never use an ERP system. The claims of differentiation between S/4HANA and other systems are simply not true.

SAP receives a 3 out of 10 for their claim, the “hands free claim” comes from S/4HANA’s ability to interpret voice commands. This may or may not be technically true (other ERP vendors would not doubt point out that a voice interpretation software could be used to partially drive their ERP systems) However, the major problem with the claim is that voice commands in ERP systems are not relevant. Voice commands are not very effective at much more than asking questions of Alexa or Google Home.

S/4HANA Cloud has many other issues that SAP should be addressing, for instance, performance, usability, a limited functionality footprint among other limitations.

Fact Checking SAP

We ask a fundamental question that everyone that works in enterprise software should ask themselves.

Should decisions be made based on sales information provided by 100% financially biased parties (consulting firms, IT analysts), to companies that do not have internal fact-checking capabilities?

If the answer is “No,” (contact us if you think the answer “Yes“) then perhaps the present system of decision making should be improved.

If you are worried about getting the real story, we can help. We have a history of proving accurate fact-checking analysis. We also have no financial connections to any entity we fact check.

Financial Disclosure

Financial Bias Disclosure

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

Search Our Other S/4HANA Content

References

https://www.sap.com/documents/2018/05/5a0f1de6-017d-0010-87a3-c30de2ffd8ff.html

How to Interpret itelligence’s Massive Lies on S/4HANA

Executive Summary

  • itelligence has a large amount of false information on its website around their S/4HANA experienced.
  • We cover itelligence’s blatant deception in this article.

Introduction

The lies on SAP consulting firm websites never cease to amaze us. In this article, we will go through each of itelligence’s false claims made on their S/4HANA website pages.

Digitization has nothing to do with anything. The ERP system that is replaced by S/4HANA is also a digital system. This would be like saying you are replacing your current car with a new car, which has an internal combustion engine. Yes, so does your current car.

S/4HANA has failed at the vast majority of companies that it has been attempted to be implemented. Lidl wrote off 500 M Euro due in part to a failed S/4HANA implementation. Nanshan is $336 M into its implementation and has suffered major dislocations. It is an odd statement that companies can not afford not to implement S/4HANA.

Secondly, S/4HANA does not contain functionality that is contained in ECC. In fact, functionality has been cut which we cover in our analysis in the article The S/4HANA Simplification List. S/4HANA is primarily a technical reorganization of ECC.

SAP is already offering post-2025 support at a premium as we cover in the article Why SAP Will Charge a Premium for 2025 ECC Support. We have already predicted that the 2025 deadline will be extended.

S/4HANA is a question of “if.” Many companies will not move to S/4HANA. Many companies will move off of ECC. Many companies will postpone S/4HANA until it is stable. The statement “it is not a question of if, but when is highly misleading.

Case Study: Clemens Food

itelligence proposes that they took Clemens Food live. However, as itelligence has been lying throughout their web pages, there is no reason to accept this is true without analysis. 

There is no reason that the previous ERP system not have been capable of scaling for the anticipated growth. S/4HANA has no scale capabilities beyond other ERP systems in terms of volumes. 

If the company had 70 disparate applications that needed to be integrated to S/4HANA the cost of this implementation must have been exorbitant.

S/4HANA is not a “modern integrated platform.” It has all of the same integration limitations of previous SAP ERP systems and is considerably more difficult to integrate to than other non SAP ERP systems. It is also impossible that Clemens Food will be able to replace all 70 systems with S/4HANA. 

This is most likely overstated. Clemens Food may have been able to go live, but 2017 is very early and S/4HANA still has maturity problems.

itelligence Falsehoods on S/4HANA Cloud

S/4HANA Cloud is barely implemented. And all of the statements around AI and ML are false. S/4HANA has no AI/ML functionality and does not need any. S/4HANA Cloud is not implemented for subsidiaries as proposed by itelligence. 

Is itelligence an S/4HANA Cloud Leader?

One can normally get whatever ranking one wants out of IDC by simply paying them. IDC has no integrity and is owned by a Chinese firm that has no standards of any kind. Secondly, being a leader in S/4HANA Cloud means little as there are so few S/4HANA Cloud implementations. 

S/4HANA Cloud Gives Constant Updates

The reason for these constant updates is that S/4HANA Cloud is still so immature it is unstable. This is why few companies can go live with the application, which is much smaller in scope than S/4HANA on-premises.

itelligence includes this SAP video, which is a highly inaccurate description of what is in S/4HANA Cloud. Companies do not use what is described in this video. 

itelligence on C/4HANA

C/4HANA is not yet released, however, that does not stop itelligence from writing about it as if it is a completed product. The first question to ask intelligent is can you sell me a functioning C/4HANA application? 

No this is false. C/4HANA is a hodgepodge of acquired applications including Hybris and CalladiusCloud (sales performance management) that does not actually have CRM functionality. CRM applications that follow a CRM workflow are not “legacy.” This continues SAP’s established pattern of calling any application that is not SAP “legacy.” 

Both of these products are not complete (SAP Analytics Cloud and C/4HANA) yet these videos discuss them as if they are finished products. 

Conclusion

itelligence misrepresented not only the state of S/4HANA but their experience in order to get S/4HANA projects.

itelligence receives a 1 out of 10 for accuracy for their articles on S/4HANA and C/4HANA.

Fact Checking SAP

We ask a fundamental question that everyone that works in enterprise software should ask themselves.

Should decisions be made based on sales information provided by 100% financially biased parties (consulting firms, IT analysts), to companies that do not have internal fact-checking capabilities?

If the answer is “No,” (contact us if you think the answer “Yes“) then perhaps the present system of decision making should be improved.

If you are worried about getting the real story, we can help. We have a history of proving accurate fact-checking analysis. We also have no financial connections to any entity we fact check.

Financial Disclosure

Financial Bias Disclosure

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

Search Our Other S/4HANA Content

References

*https://itelligencegroup.com/us/products/sap-s-4hana-cloud/

*https://itelligencegroup.com/us/products/sap-s-4hana-transition/

*https://itelligencegroup.com/us/products/sap-hybris/

The Results of the Brightwork SAP HANA Survey

Executive Summary

  • This is the publication of the results of our survey on SAP HANA.
  • These results are quite contrary to what both SAP and SAP’s consulting partners said about HANA.

Introduction

We ran a poll on the Brightwork website where we asked detailed questions of those that had experiences with HANA. We are publishing this poll now because we have 100 responses to the poll.

The Maintenance Overhead of HANA Versus Oracle or DB2?

Consistent with our research into HANA, the maintenance overhead is rated as higher by roughly 1/2 the respondents. But we did not expect any respondents to say it was lower than Oracle or DB2, primarily because it is indisputable that HANA is far less mature than either Oracle or DB2. 

HANA and Transaction Processing Performance

The result of 35% of the respondents replying that HANA is faster than Oracle or DB2 is not possible. This is covered in the article Why HANA Has Problems with Transaction Processing, John Appleby on HANA Not Working Fast for OLTP, and Issues with SD HANA Benchmarks. This is because SAP only added row oriented tables (which are better for TP) to HANA after it was first designed.

SAP, of course, promised enormous speed improvements but it is not clear from the responses.

But then again, the 35% of the respondents that stated it runs faster are incorrect. We know this because the design of HANA and because of SAP’s unwillingness to allow for any competitive benchmarking, and the fact that they created a new benchmark, the BW EML benchmark, as we cover in the article John Appleby on SAP BW EML Benchmark, after HANA failed to perform on the previous transaction processing benchmark (called the SD benchmark).

This makes me wonder how many respondents are themselves HANA consultants trying to promote HANA (hence the problem with reviews on G2Crowd, which is overflowing with consultant reviews.)

HANA Meeting Promises

This answer is very funny. How could HANA have possibly met the promises of SAP that 41% of the respondents stated that it did? Bill McDermott stated that HANA ran 100,000 times faster than any competing technology. Steve Lucas stated that HANA would improve worker productivity by an average of 5,000 times! 

I have reviewed the promises made about HANA to many customers at this point, and the promises are so absurd, there is no way for them to be met.

Of the many promises made there is one promise that could be met. If HANA was used for a pure analytics application, it could outperform previous versions of Oracle or DB2 on old hardware. If that was the only promise that 41% of the respondents replied “Yes” measured, then it would be possible.

Fifty-nine of the 100 respondents stated that HANA did not meet the promises.

Warning Companies About HANA?

Only 13% of the respondents recall if HANA not meeting its claims was ever discussed! However, 59% reported it did not meet its claims after the implementation.

This is quite standard in the SAP space, where both SAP and the SAP consulting partners mislead SAP customers in a unified manner. Gartner and Forrester would also be useless in warning customers, as they are both paid by SAP. In fact, Gartner published extremely false information about HANA as we cover in the article How Gartner Got HANA So Wrong.

Will Your Company Expand the Use of HANA?

The standard modality of HANA implementation is that we have tracked is that it tends to slow quickly after the first implementation. However, 1/2 of the respondents state that HANA will be expanded in used.

Again, as at least 35 of the respondents either deliberately falsified their answer on question one (or answered without knowing), and are therefore unreliable, therefore this 50% value is quite overstated.

Did SAP Pressure You Fill Out the Survey?

No one felt pressured by SAP to fill out the survey. Again, we are trying to get realistic and not rigged answers to the survey. 

Conclusion

The survey results were interesting. But an impossible answer to one of the questions shows the bias in the survey results. For those that work in HANA, they want to promote HANA and would like it if the survey were inaccurate and positively biased.

There is no doubt that this survey has been positively biased in favor of HANA. Survey bias is a common issue. Political polls, for example, are biased by the method used, which often results in a non-representative sample being used. Confirming identity is easier in person, but far more expensive. Online polls are easier to administer, but the very individuals that visit the site (and therefore take the poll) means that there is a bias in the sample. A very desirable online method is to send the poll to specific people, but only a small fraction of people sent a survey will fill out they survey, unless there is a strong relationship with the sender or sending organization.

Overall, there has been close to little attempt to get accurate information about HANA to customers or to the market. IBM belatedly pushed back on HANA’s claims as we cover in the article IBM Finally Fighting Back Against HANA, and individually John Appleby, Beaten by Chris Eaton in Debate and Required Saving by Hasso Plattner, but competitors have been restricted in critiquing HANA because each of them is partners with SAP. Overall, SAP’s powerful marketing machine has pushed inaccurate information about HANA into the market.

Fact Checking

We ask a fundamental question that everyone that works in enterprise software should ask themselves.

Should decisions be made based on sales information provided by 100% financially biased parties (consulting firms, IT analysts), to companies that do not have internal fact-checking capabilities?

If the answer is “No,” (contact us if you think the answer “Yes“) then perhaps the present system of decision making should be improved.

If you are worried about getting the real story, we can help. We have a history of proving accurate fact-checking analysis. We also have no financial connections to any entity we fact check.

Financial Disclosure

Financial Bias Disclosure

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

Search Our Other Accuracy on HANA Content

References

The Hidden S/4HANA Failure at LeasePlan

Executive Summary

  • LeasePlan made an announcement about their ERP failure, however, the announcement was in part a cover-up.
  • We explain what actually failed at LeasePlan.

Introduction

The leadership within LeasePlan decided to create a cover story for their € 100 million write off related to S/4HANA and other (unstated and indeterminate SAP products that were purchased as part of their 2017 purchase from SAP).

This case study of another S/4HANA failure shows much more than just than simply the failure, but illustrates the complicity on the part of SAP customers, SAP consulting firms, media entities and SAP consultants in keeping future S/4HANA customers in the dark about S/4HANA failures.

This failure first came to my attention through a share by Dan Woods on LinkedIn.

Some of the analysis is from the LinkedIn conversation that followed, but much of it is new and provide extra research that extends my comments. For those that participated or read the comment stream on LinkedIn, there is significantly more detail in this article.

Consultancy.uk’s Coverage of the LeasePlan Failure

We begin with the coverage by Consultancy.uk in the article Failed SAP implementation costs LeasePlan €100 million.

Consultancy.uk is mostly a promotional website that covers the consulting market. Consultancy.uk does appear to have some objectivity, for while they do allow marketing profiles of a number of consulting firms at their site, they have not shied away from covering unsavory issues in the consulting market, such as the involvement of PwC and EY and their potential for conflicts for offering faux auditing in exchange for consulting work and the Thomas Cook bankruptcy. For example, neither PwC nor EY gave any indication that Thomas Cook was headed to bankruptcy (as for instance, also occurred with Bernie Madoff).

Consultancy.uk wrote the following about the LeasePlan SAP failure.

International automotive hire and fleet management company LeasePlan has been stung by a massive bill for a failed SAP implementation. LeasePlan has since dropped SAP to pursue an alternative IT infrastructure, citing the “monolithic nature” of the ERP system as being incompatible with its more agile needs – but not before sinking almost €100 million into its SAP efforts.

Many businesses purchase enterprise resource planning (ERP) systems to manage various business processes within the organisation – including accounting, human resources and purchasing – in one integrated system. SAP is a computer programme that many businesses select as their ERP system, and includes features for nearly all business operations.

What is Monolithic Software?

A monolithic system describes a development pattern. ERP systems are the prime example typically used to explain monolithic software.

Multiple modules sit on one database and are highly interdependent. These systems are easy to begin developing, but as they grow, they become higher and higher maintenance. However, microservices, which are the opposite of software monoliths also have their disadvantages. 

We cover this in significant detail How to Understand Monolithic Versus Microservice Based Development.

A highly integrated system or “monolith” sitting on a single database type was the main selling point of ERP systems since they were first introduced. However, the overhead of software monoliths has become more apparent as time has passed (since the 1980s) — but it has not become more apparent since 2017, which is when LeasePlan made their S/4HANA and other SAP systems purchase.

Observe the following quote in the article from the CEO of LeasePlan, Tex Gunning.

“The system is not fit for purpose in the emerging digital world. The monolithic nature of [the SAP system] hinders its ability to make incremental product and service improvements at a time of accelerated technological change. As a consequence, the system is being restructured.”

SAP is Not a Fit for a Digital World?

This does not make any sense.

Obviously, SAP has always been a digital product and Tex might want to know that SAP stores its data digitally. But the second part of the quote is correct. SAP has a very inefficient development language called ABAP, which does hinder incremental improvements. But again, this did not change from 2017, when the purchased S/4HANA and the other SAP applications.

Poor Implementation Was the Primary Culprit in the LeasePlan Failure?

Let us note another interesting quote from Consulting.uk:

If implemented poorly, however, companies can soon find themselves trapped in a seemingly endless ERP hell.

Companies such as Revlon, National Grid, Hertz, Haribo and Lidl have all found to their chagrin that, when done wrong, SAP projects can be nightmarishly complex and extremely expensive.

Something the Consultancy.uk article did not put together is that Revlon, Haribo, and Lidl were S/4HANA projects.

The Problem with Financially Biased Media Coverage of S/4HANA

Just about every entity that publishes on SAP has been uncritically promoting S/4HANA since it was first introduced. Brightwork Research & Analysis has been warning companies S/4HANA is not ready to implement for several years.

What SAP Consulting Firms Said to Their Clients About S/4HANA

Recall, again, every SAP consulting firm at this time, and since S/4HANA’s introduction has been promoting S/4HANA as a viable solution and recommending an expensive and the highest risk of all upgrades that we currently track.

The Non-S/4HANA Failures

If we look at the non-S/4HANA implementations in Consultancy.uk’s list, Hertz was some SAP Vehicle Network vaporware (+Concur) that any company with 1/2 of a brain should have been able to sniff out as they had no reference accounts and nothing more than some marketing slides. National Grid, which we covered in the article How National Grid’s SAP Implementation Damaged a Company, was the subject of a major lawsuit against Wipro, with the implementation partner once again shielding SAP from the lawsuit (which is part of the SAP consulting partnership arrangement).

This means that all of the projects listed by Consultancy.uk had maturity problems or simply did not exist and were vaporware. The other was the subject of a lawsuit against the implementing company (Wipro at National Grid).

Consultancy.uk would know really have had any way of knowing this as they cover the consulting industry and are not product specialists in SAP. 

Was LeasePlan a Good Fit for an ERP System?

Leaseplan’s gradual realization about the low fit of S/4HANA to their requirements is explained, in the following quotation.

Rather than placing its faith in one supplier from now on, the car leasing company is opting for a combination of best-of-breed third-party solutions combined with a deeper in-house involvement. The company will now leverage leading off-the-shelf solutions for various modules (e.g. contract management, insurance claims, predictive maintenance) and combine them with existing LeasePlan best practices to form its new infrastructure.

Yes, LeasePlan should have never listened to SAP or HCL, which clearly both overstated the fit to of SAP to the leasing business. The reason you see so much customization on Leaseplan is that SAP lied to Leaseplan about how much their functionality covered at the company.

*SAP consultants reading this, please do not ask how I know this. I am routinely sent decks from clients that were submitted by SAP, that a filled with falsehoods — I know what SAP sales reps are presenting to customers and prospects and these decks come to me from sources globally.

Using a System That Actually Fits Requirements?

Leaseplan is now using applications that actually fit their requirements, which is according to our analysis the number one factor in project success. There are a number of non-technical project managers who come on to LinkedIn and state that essentially the software is almost irrelevant. And that what is of primary importance is project management. The following quote is a perfect example of this.

First rule for successful software implimentation – the software has to work “tolerably” well and even that can be mitigated. Beyond that, in my experience, the bottom line is always bad Governance. The Programme Director/Manager needs to know what’s going on, to have built a team that “cando”, to have the experience to know what to do in every situation, and has the ability to persuade Sponsors and Stakeholders to do the right thing (or have access to a Trusted Advisor who does!!!).

How does this commenter know if these were the issues on the project? Secondly, the statement is not true. I personally managed projects with completely immature applications that were lied into the account. Trying to implement products that are still in development is a terrible experience and it undermines projects. It also undermines the trust the customer has in the project team, and the bad product negative impacts the overall implementation.

Example 1:

Decades ago I was part of project where most of my time was spent not in actually managing the project, but in debating and trying to get the development team to meet their promises. The development team could simply not stop making promises, and could not hit any of their deadlines — which is a problem when you are currently implementing an incomplete product.

Example 2:

I have been part of projects where SAP account management pushed for team members to..

“Get creative”

..to create a solution that sales had lied to the customer about functionality that did not exist.

This lie caused a massive dislocation on the project as we spun in circles trying to not go back and tell the client that SAP had lied to them.

Example #3

I was an expert witness supporting a lawsuit against a consulting firm. Several products being implemented from the vendor worked, but one product, which again had been lied onto the account, pulled down the rest of the project creating great animosity between the customer and the consulting company.

That one product was such a problem it caused the consulting company to repeatedly go out to the market to find the most experienced resource to try to mitigate the problematic application and to double up on resources, which caused them to cut resources in other areas as they had fixed price bid the project.

I happen to write about this exact product at least 7 years before this case and told companies that it should not be purchased.

That one problematic product is eventually what caused business losses and the lawsuit to occur.

Working Tolerably Well?

S/4HANA does not work tolerably well and this commenter did not know that the ERP system as S/4HANA. Before I introduced the fact that the system was S/4HANA, no one in the comment thread referred to the ERP system as S/4HANA, and S/4HANA was not listed in the article share.

This comment does not require any understanding of the case study and it is not based on the information from the case study. If the analysis of the same regardless of the specifics of the case study, then it cannot be considered analysis but is a canned response.

The Importance of Not Blaming the System, Even When the Implementing Company Says the System was Inadequate?

It is not determinable from the articles on the LeasePlan S/4HANA implementation if the program or project management was lacking. Leaseplan’s comments are around the inadequacy or inappropriateness of the SAP solution.

It is actually Leaseplan that is blaming the ERP system they purchased. They are saying they wish they never purchased the system. And they invested 100 M Euro and two years of time to set themselves back. However, even if the customer blames the software, and the software is known to have enormous maturity problems, there are still many who propose that even when the client specifically names the ERP system as the problem and prefers to walk away from a 100 M Euro investment as a complete write off, that the system should not be part of the conversation. Essentially this is a group that wants no analysis of system failure and wants all project failures to be attributed to better project management.

One such project manager, when provided evidence that SAP’s claims about HANA were false, proposed that “no one cares about databases,” which we cover in the article Is It True That Few Customers Care About Databases?

Why Do Different Applications Fail at Different Rates?

There are specific systems that fail at higher frequency than other systems. One example of this is S/4HANA. Of the 237 S/4HANA case studies we have analyzed, we rate only 16 as being a “High” Likelihood of working as advertised, and 33 as a medium likelihood of working as advertised. This leaves (237 – 16 – 33) or 188 as being highly suspect. Were all of these implementors not competent or lacked

“Full executive buy-in?”

What would explain such a high failure rate other than the commonality of the application being implemented?

LeasePlan was a poor fit for any ERP system. This is on the heels of another S/4HANA failure at Nanshan which we covered in the article The Hidden S/4HANA Failure at Nanshan Life Insurance, which is another business that does not make a product or distribute a product, which are the core market for ERP vendors. This means that when a non producing or product distributing company purchases an ERP system, much of the functionality goes unused. Not only must the customer pay the price for the entire ERP package, it must also pay 22% support for software that they mostly do not use.

According to Tex Gunning, it is an exciting time to work in the leasing business as they are finally using computers. This is curious because it would seem this “revolution” already occurred a number of years ago. 

Digital Revolution in the Global Lease Industry?

Then Gunning goes on to make the following statement.

This approach is, according to Gunning, better suited to the “digital revolution” taking place in the global lease industry. It will allow for a more scalable and flexible IT infrastructure, smoother product deployments and updates, and will enhance integration with third-party systems to speed up innovation.

What digital revolution is Gunning talking about?

All of the systems being discussed are digital. Leasing companies have been using digital — or why don’t we just call them computer — systems for decades.

What Gunning and LeasePlan decided to do was smart (although it took them too long). They figured out that S/4HANA was a problem, and it was a bad fit, that it had been sold on false pretenses, and they shifted to using purpose-built best of breed applications that were actually designed for the leasing industry. It took them 100 million Euro to figure it out, but as the saying goes..

“Better late than never.”

Making HCL Unhappy

HCL will be most disappointed because they want to bill for SAP resources, do not have resources in the best of breed applications, which is of course why HCL would have forced SAP onto LeasePlan in the first place.

Actually, this brings into question their relationship with HCL which they entered into in June of 2016, clearly with the intent of using HCL for their SAP expertise as they were going all-in on SAP before they had this unpleasant experience and wrote off their SAP project.

How useful will HCL be now that LeasePlan has turned away from SAP? Furthermore, a comment was made by a person working at SAP that LeasePlan still has SAP, however, if we look at the quote

(e.g. contract management, insurance claims, predictive maintenance)

How much is left for SAP?

The core of LeasePlan’s business will not be on SAP. Does it really make any sense to use Business Objects or Ariba or BW if the primary applications are now not SAP? If LeasePlan continues to use HCL, HCL will simply try to push them back to using SAP. Probably best to show HCL the door as well.

Being More Accurate that Gunning

Let me rephrase what Gunning said in a way that is far more accurate.

LeasePlan moved away from a generic and immature ERP solution that was a poor fit for their business requirements, to applications from multiple vendors that each have a solution specialized to different areas of leasing. – Shaun Snapp

What ERP System Was Implemented at LeasePlan?

Nowhere does the Consultancy.uk article mention the name of the ERP system that was implemented. LeasePlan does not specifically mention the system in question.

Let us observe the quote from another website on this article, LeMonde Informatique.

All signs were therefore green for LeasePlan, which launched its IPO procedure in October 2018. The group did not hesitate to put forward its IT project in its presentations to appeal to investors. But among these, some wondered about the need and benefits of the ERP. 

In the end, considering that the market conditions had deteriorated, LeasePlan has given up listing on the stock market.

Interesting. Even some investors questioned why LeasePlan purchased an ERP system — as they are in the leasing business.

But note that Lemonde Informatique again did not mention which ERP system was implemented.

In fact, upon searching the Internet, I was not a single article that reported on the LeasePlan ERP failure that listed the ERP system that was implemented. Now that this article you are presently reading is published, this article will be the first, and it should appear on the first page of results in Google in just a few days after its publication on November 10th.

But just this point is worth noting — not a single entity saw fit to publish on the ERP system, or in fact to even question what ERP system was implemented — globally. And it brings up the question of how much those that publish on SAP are actually trying to get to the bottom of the issues on SAP projects. This reminiscent of the coverage of major project failures by Michael Krigsman, who used to opine on project failures, without actually seeming to read the actual case study as we cover in the article The Art of Blaming the Customer When SAP Fails.

Where Did We Find the ERP System Declared?

At first, I was not able to find the ERP system in question, however, an article found and posted to LinkedIn by Eric Kimberling did declare the ERP system. However, the article was from when the system was acquired back in 2017 (that is not from 2019 when the failure of the system was announced). At that point, there was no reason to sensor the specific ERP system purchased.

In FinTech Business, the article LeasePlan in Enterprise-Wide Tech Overhaul with SAP and HCL, from May 2017, the following is stated.

The identification of the system was deliberately stripped out of the Nov 2019 article, most likely at SAP’s request. This was done to misinform the reader as to which system failed.

Notice the quote from 2017.

“We were the only entity within LeasePlan using SAP Leasing,” says Venturi. LeasePlan Australia went live with the solution in 2010. “It was a challenging project,” he recalls. It took the company until 2013 to get settled with new technology.

The project was ultimately a success, comments Venturi, and it was decided to standardise on SAP’s technology across the group. India-based system integrator and SAP partner HCL Technologies has been brought in as a strategic partner.

These are SAP Leasing at the back-end, Fiori for user experience (UX), Ariba for procurement, Hybris for e-commerce and product content management, S/4HANA (including for the new insurance business) and Business Objects for reporting and analytics/business intelligence (BI).

So LeasePlan purchased..

  1. S/4HANA
  2. Ariba
  3. Hybris
  4. Business Objects
  5. BI

Notice that when the acquisition is announced, the company has no problem with announcing what was purchased. However, after the project is written off — now the specific ERP system must be censored.

The identification of the system was deliberately stripped out of the recent coverage of the LeasePlan failure, most likely at SAP’s request. This was done to misinform the reader as to which system failed. The other entities that covered the story did not determine what system was implemented, and then also failed to ask the question of why the specific system was left out of the description.

Conclusion

LeasePlan attempted to explain away its $100 million Euro project write off by concocting a story around a “digital revolution” and that SAP is a monolithic application, that was well and fully understood back in 2017 when LeasePlan made their software acquisition. We had to perform considerable research to connect up the dots, that the coverage of the failure in other publications did not do, and that SAP nor LeasePlan nor HCL want readers to understand.

Fact Checking

We ask a fundamental question that everyone that works in enterprise software should ask themselves.

Should decisions be made based on sales information provided by 100% financially biased parties (consulting firms, IT analysts), to companies that do not have internal fact-checking capabilities?

If the answer is “No,” (contact us if you think the answer “Yes“) then perhaps the present system of decision making should be improved.

If you are worried about getting the real story, we can help. We have a history of proving accurate fact-checking analysis. We also have no financial connections to any entity we fact check.

Financial Disclosure

Financial Bias Disclosure

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

Search Our Other SAP S/4HANA Implementation Failure Content

References

https://www.lemondeinformatique.fr/actualites/lire-leaseplan-abandonne-un-projet-sap-a-100-millions-de-dollars-76980.html

*https://www.saug.com.au/news/leaseplan-australia-capitalising-on-disruptive-innovation

*https://www.fintechfutures.com/2017/05/leaseplan-in-enterprise-wide-tech-overhaul-with-sap-and-hcl/

https://www.sap.com/industries/energy-utilities.html

https://www.consultancy.uk/news/22850/failed-sap-implementation-costs-leaseplan-100-million

The Hidden S/4HANA Failure at Nanshan Life Insurance

Executive Summary

  • Nanshan Life Insurance made major investments in building customizations around S/4HANA.
  • This investment was a major failure for Nanshan, a story that is uncovered in the non-Taiwanese Media.

Introduction

IT industry’s standard excuse for failed ERP projects always has been something akin to the following:

The software is not the problem.

The mistake is not hiring qualified implementation consultants to lead the project, or the enterprise users themselves have problems.

This invariably assumes — without evidence, that the application or database is fully mature and ready to be implemented, and that all of nearly all of the application or database functions as advertised. This is, of course, a hypothesis normally put forward by those that make money from ERP sales or from ERP implementations.

Let’s take Nanshan Life Insurance’s example to debunk this hypothesis:

Nanshan Life Insurance is a company based in Taiwan and at one point the US insurance giant AIG sold its 97.5% stake in Nanshan for $2.15 billion. Its chairman is Mr. Du. Dr Du is a former vice president of New York Goldman Sacks and an SAP proponent. Mr. Du flew several times to SAP headquarters in Germany to meet with SAP.

Mr. Du firmly insisted on buying HANA. Du’s boss told media that.

“SAP is the only qualified vendor having 9 modules that meet Nanshan’s requirements.”

Nanshan then signed with SAP the $157 million contract of the ERP project which included a number of SAP applications including CRM, Business Objects as well as S/4HANA.

This was announced by SAP as we can see in the following article/PR release on the SAP website.

TAIPEI — SAP AG today announced that it has signed a multi-billion dollar contract (TWD) with Nan Shan Life Insurance Co., Ltd. to build the insurer’s next-generation IT infrastructure as part of its multi-year business transformation initiatives. The IT upgrade project, named “Envision,” enhances the efficiency of business processes and creates best practice solutions tailored for the insurance industry in Taiwan. Nan Shan has selected the SAP ERP application, SAP CRM application, SAP BusinessObjects business intelligence (BI) solutions, SAP Mobile Platform and the SAP HANA platform to revamp its existing systems in order to improve sales productivity and customer experience across multiple touchpoints.

This was announced on June 19 of 2014. We found another article from SAP Insider (one of the many subordinate media outlets to SAP), that basically said the same thing and was published on June 24 of 2014. Note that this was 9 months before S/4HANA was introduced, which was in Feb of 2015. However, something similar happened with the Lidl S/4HANA failure where the company eventually moved to and failed with S/4HANA over a span of seven years and 500 million Euro.

However, since this announcement, we were unable to find anything else published about this project.

What Really Happened with S/4HANA at Nanshan

SAP spent five years designing life insurance applications on top of the HANA database for Nanshan. Why did SAP bother spending 5 years developing applications?

Well, SAP told Nanshan decision-makers before they won the contract that.

“They (SAP) already had 9 modules for Nanshan’s use(emphasis added)

After 5 years of effort, SAP finally rolled out its new life insurance applications and replaced the stable legacy application system that ran on an IBM MVS mainframe.

The stable legacy application system was ultimately suspended immediately on the same day S/4HANA was brought to live – a procedure coined by Mr. Du as “big bang” and “only courageous people can do it.”

However, the reality of the SAP implementation, which included S/4HANA is the following:

“Boundary Achievement”, which has been invested by 10.1 billion yuan and was tailored to find the German business SAP (SAP). Unexpectedly, the system that took five years to develop has been “chaotic” since it was launched in September last year. A senior Nanshan salesperson said, “A variety of unreasonable things happen.”

Nanshan has more than 6 million customers and 37,000 salesmen. The chaos of the (Boundary Achievlment Project) has caused 150,000 cases to be suspended, and customers and salesmen have been deeply disturbed. In the first half of the year, the trade unions constantly reflected the chaos in the (Boundary Achievlment Project) and took the lead in public protests.

In the (Boundary Achievlment Project) of chaos, how bad is the disaster? Insurance Commissioner Shi Qionghua described the “disaster scene”: “At present, there are a total of 152,000 tickets for “no payment”, including no payment notice, advance payment, or no payment, etc. The company has contacted one by one. More than a thousand remaining policies have not been processed.” – Commerical Times

And…

For example, a policyholder who applied for a savings insurance policy to Nanshan found that the amount of the cancellation fee and the written contract calculated by Nanshan Life Insurance’s computer system did not match, and was reimbursed after being reflected to Nanshan Life Insurance.

Another citizen said that the new system was in a mess after the online launch, and the amount and date of the deduction were still wrong. There were also people who wanted to redeem the value of the fund unit in the account. The unit error displayed on the website could not be redeemed. All kinds of chaos have been questioned by the public. The new system has been launched without rigorous testing. The system has caused various problems and seriously affected the rights and interests of customers.  – IT Home (*Brightwork Research & Analysis had never heard of IT Home, but they are one of the top IT websites in Taiwan)

Since going live, S/4HANA produced numerous inaccurate outputs to Nanshan’s software users. According to media reports, many, if not all, inaccurate outputs were discovered by Nanshan’s salespeople and customers.

  • S/4HANA erroneously terminated 150,000 policies or set them to “automatic premium loan” states.
  • 60,000 cases of credit card payment failed.
  • S/4HANA mistakenly tagged 1,381 alive insureds as “dead.” Nanshan stated that “this error already emerged 6 months ago but they treated those cases as exceptions.”
  • S/4HANA tells you that you have not paid a premium even after you made the payment. Nanshan accordingly mobilized its employees to manually compare each and every policy, which amounts to 4 million, in S/4HANA against those in Nanshan’s legacy system.

What is incredible is that the system was only taken live on September 10th. The articles that we reference were published on or around early October. This means that the go-live has been so devastating to Nanshan’s operations that it has developed these negative comments from both salespeople and shareholders in this short amount of time. It literally took less than a month for Nanshan to feel the effects of something akin to a bomb going off in their IT department.

The following quotation is representative of the sentiment of many salespeople at Nanshan.

It is not our obligation to find out software bugs in lieu of the company!

No one in the world is aware of how many more errors are hidden in that software.

Get rid of the new software and go back to the old system!

The biggest problem is not that the system is difficult to use, but that there is no way to tell which figures are right or wrong!

How many more timed bombs are in the system?

And from a Nashan shareholder.

“What kind of bad system does the company buy for 10 billion yuan? It has been impossible to log in at the customer!” Nanshan Life’s minority shareholder broke the news to the reporter of ETtoday News Cloud. Since the new system of Nanshan Life Insurance’s (Boundary Achievlment Project) has been launched, many problems cannot be solved. Including data comparison, customer rights, and now even entering the password may not be able to log in. Resetting the password more than 10 times is impossible to use, causing the salesperson to be staggered by the customer. “This company has no integrity, profiteers and The vampire is in power.”

And futher..

The most important thing is that the former chairman Du Yingzong has been obsessed with these problems, which seriously affects the image of the entire company. The customers do not trust the salesman and the shareholders’ rights are also damaged.

Curiously, Nanshan appears to have been entirely in the dark about the lack of capabilities of the system they were about to roll out. This points to a problem of oversight within the company. SAP will lie to customers to sell their software, but if a company is unaware of major issues before they go live, then they are clearly internally not effectively managing the project or the software vendor, as the following quotation indicates.

Another citizen said that the new system was in a mess after the online launch, and the amount and date of the deduction were still wrong. There were also people who wanted to redeem the value of the fund unit in the account. The unit error displayed on the website could not be redeemed. All kinds of chaos have been questioned by the public. The new system has been launched without rigorous testing. The system has caused various problems and seriously affected the rights and interests of customers. – IT Home

Of course, going back to the legacy system is absolutely not an option at this stage because it was marked for retirement more than a year ago and its data is now dated. Is there any way to re-synchronize the old system’s data and then bring the legacy system back to live? Perhaps some consultants have secret killer recipes as Nanshan’s remedy, but at this point, it looks unlikely.

Various media outlets reported that:

“SAP Head Office serves as the exclusive consultant of that project.”

Before SAP won the order, SAP made claims that they had significant experience in the life insurance industry, which later became apparent was inaccurate.

Project “Boundary Achievement”

Five or so years after the start of project “Boundary Achievement,” Dr. Du was removed from his post by Financial Supervisory Commission Taiwan as a result of the failure and the chaos brought by both SAP and its S/4HANA to Nanshan. Du reiterated to journalist several days before his removal as this:

I would do the same if this project had to be restarted all over again.

After Dr. Du’s removal, overwhelmed by Nanshan’s salespersons and policyholders’ complaints, this company’s highest-ranking individual confessed to journalists that his company had so far poured “only” $336 million on SAP and its S/4HANA ERP system.

One of the complaints from salespersons is that S/4HANA runs extremely slow. Nanshan decided to boost its hardware used by S/4HANA. Mr. Yen told a media that Nanshan had ordered another powerful server at high-cost to boost the S/4HANA, whose existing response time stretches to hours according to its users. That server is planned to arrive in November 2019.

The Problematic Fit Between SAP and Nanshan’s Business

Something undiscussed in any of the media entities covering this story is the fit between SAP’s software and Nanshan. Nanshan is the fifth insurance company we have tracked in our S/4HANA implementation database, however, the fit between S/4HANA and insurance is incredibly weak. This is explained in the following quotation from someone with quite a lot of experience in the insurance industry.

Why did this insurance company buy SAP software for their core business? Insurance industry is not and never has been a core industry of SAP, and completely irrelevant at life insurance, one of the most complicated lines of the insurance business.

So why could anyone believe SAP has something to offer? – Rolf Paulsen

Nanshan is yet another company that is implementing an ERP system, that does not need an ERP system. And that was just the beginning of the issue, before the issues of maturity of brought into account. Again, SAP stated to Nanshan that they had nine modules that met their needs. What modules are these, because we research SAP extensively and cannot imagine what modules SAP was describing.

SAP’s Problems Implementing Their Own Software

Normally when an SAP project goes south, SAP or SAP consultants will point to the implementing partner. However, in this case, that is not possible, because SAP was the implementing partner. However, after we initially published this article the following quotation came in from Wolfgang Steinert, who is a long-time SAP consultant.

Another portion of the story is around the inability of SAP to implement their own software and screwing up most if not all projects they are directly involved in.

I recall that back in 2011 I was working on a reasonably large SAP upgrade as PM and I got a phone call from my headhunter looking to fill positions for a large project with Nanshan (appears to be the one you now write about). They wanted to replace their entire insurance IT with SAP products (of course there was no S/4HANA at this time). I was told that SAP could not find enough people to actually start the project in a timely fashion and with qualified enough people and Nanshan was already angry with SAP back in 2011. The rates SAP offered were abysmal and I decided to not accept them.

After a great deal of exposure, I believe that SAP is incapable of running projects successfully. I have yet to see one that SAP manages that is completed successfully. The Thailand project was also in shambles and it took quite an effort to pull the cart out of the mud.

This one was a greenfield implementation of almost all SAP software you could identify (also in excess of US $140,000,000.00). After the Thailand job I was again offered an opportunity at “a large Taiwanese Insurance” but having gone through the implementation experience with SAP as the implementor at PTT I declined the offer. PTT was so p****d off with SAP that they contemplated to take them to court and arbitration – the stint there with SAP did damage my reputation in Thailand somewhat.

What angers me most is their audacity to laud their achievements when it comes to projects they ran. See this article for details. It is always BIG BANG (same in Thailand) … and Accenture has taken a leaf out of SAP’s playbook.

Maybe we should have a closer look at how they run their projects in addition to investigating the (in)capabilities of their software.

There are multiple points of failure when a project fails. S/4HANA’s maturity is one. The unexpected custom development required to make S/4HANA fit the life insurance industry is another. SAP’s inability to implement its own software is another. The low rates expected for experienced contractors in Taiwan is interesting because SAP charges such high rates to customers. However, SAP has enormous margin requirements when it hires a contractor. Therefore, if SAP had been more reasonable on its expected margin, it would have been able to find more experienced implementation resources.

Conclusion

When the Lidl project failed at a cost of 500 million Euro over seven years, it made major waves. However, when Nanshan fails with their S/4HANA implementation, which is already up to $336 million over five years, up until now, it did not make it out of the Taiwanese media. This is Brightwork Research and Analysis’ first exposure to Taiwanese media — and it is far less censored than the IT media in the US. The articles as published in the Taiwanese media would never have been allowed to be published in IDG publications like ComputerWorld or in TechTarget or similar UW media outlets. Instead, the US publication would have asked SAP who they should speak to — and SAP would have pointed them to one of their “approved independent analysts” who is financially connected to SAP and who would have stated that the issue was not the software and not the implementation, but the customer. The readers would not have been informed that ComputerWorld/TechTarget/etc.. counted SAP as a customer (for advertizement and paid placements) and that the “approved independent analyst” (say Josh Greenbaum for example as we cover Why Josh Greenbaum Continually Carries Water for SAP), was financially connected to SAP. Readers would never be told that ComputerWorld/TechTarget/etc.. had sided with SAP because their editorial interpretation had been already purchased by SAP many years ago.

Furthermore, Nanshan has much more costs it will incur on this system.

  • Just the implementation of the new servers brings up more costs.
  • The dislocation to the business is many more millions.
  • Nanshan will lose customers from this and will lose the lifetime value of many of those customers who will not come back. Imagine you were a Nanshan customer who experienced the items listed in this earlier article.
  • The Taiwanese Insurance Commission fined Nanshan $1.18 million already due to the outcomes from this project.

The quotes describe an appalling situation at Nanshan, and many within Nanshan are no doubt holding back their critiques. The environment within Nanshan is one of chaos and has been since September 10th, with people using numerous workarounds of S/4HANA to try to get their jobs done.

The system that caused all of this dislocation for Nanshan has been hidden in the media reports. Repeatedly S/4HANA is simply referred to as “the system.” In fact, we could only find one source (IT Home) that identified SAP as the software vendor that caused these issues, and also identified the project which was “Boundary Achievement,” as originating in 2014 – which of course matches up with SAP’s announcement of its major sale to Nanshan.

This is the promise that was made by SAP to Nanshan.

The person in charge even said, “I understand that the (Boundary Achievlment Project) attempted to integrate all the sales from the front desk salesman, the policy to the back office, and the claims settlement. Once it is successfully launched, it will lead the existing Taiwan life insurance system for five years.” – Commerical Times

When will companies learn that SAP will say anything to sell their software?

This case study is similar to the Revlon case study as covered in the article What Was the Real Story with the Revlon S/4HANA Failure?, in that, at the time S/4HANA was acquired the application was so immature that it had no possibility of being taken live — for years. Brightwork Research & Analysis repeatedly covered the issue of S/4HANA’s immaturity Why Did SAP Fake S/4HANA Maturity so Aggressively?, which was routinely critiqued by SAP consultants who did not want S/4HANA analyzed from any realistic perspective that might negatively affect their ability to sell or work on S/4HANA projects.

And now over five years after the acquisition and massively exceeding the timeline and budget, Nanshan received a major blow to its business by trying to take S/4HANA live.

Fact Checking

We ask a fundamental question that everyone that works in enterprise software should ask themselves.

Should decisions be made based on sales information provided by 100% financially biased parties (consulting firms, IT analysts), to companies that do not have internal fact-checking capabilities?

If the answer is “No,” (contact us if you think the answer “Yes“) then perhaps the present system of decision making should be improved.

If you are worried about getting the real story, we can help. We have a history of proving accurate fact-checking analysis. We also have no financial connections to any entity we fact check.

Financial Disclosure

Financial Bias Disclosure

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

Search Our Other SAP S/4HANA Implementation Failure Content

References

*https://insidesap.com.au/nan-shan-life-signs-multi-year-contract-with-sap/

https://news.sap.com/2014/06/sap-nan-shan-life-build-best-practice-solutions-insurance-industry-taiwan/

https://www.reuters.com/article/us-nanshan-confirmation/aig-sells-taiwan-insurance-unit-for-2-15-billion-idUSTRE59C0B120091013

https://ctee.com.tw/news/insurance/155053.html

https://www.chinatimes.com/realtimenews/20190917003371-260410?chdtv

https://www.ithome.com.tw/news/126374

https://www.ettoday.net/news/20191014/1556747.htm

How to Interpret SAP’s 2019 HANA for Cloud Announcement

Executive Summary

  • SAP made an announcement about making HANA “cloud-native.”
  • We provide our analysis for what this means.

Introduction

At SAP’s TechEd announced that its HANA database had been re-architected for the cloud. This was covered by ZDNet.

Beneath those headlines was a very significant development, of SAP re-architecting HANA for its new managed cloud database service to become what it terms “cloud-native.” By that, they are speaking of a separation of storage from compute and embrace of Kubernetes, the combination of which will enable elasticity and quick start, stop, and resizing of cloud services. – ZDNet

Accomplishing in the Cloud What AWS and Azure Have Not Been Able To?

This was analyzed in the following quote by Christian Kaul.

AWS and Azure have so far not been able to rewrite their cloud data warehouse offerings in this way. But I am sure SAP has managed it, given their extensive database and cloud expertise. Neither Redshift nor the Azure version of SQL Server PDW (Parallel Data Warehouse) can scale storage and compute in a cloud-native way.

Snowflake and Google BigQuery can but they have been designed for the cloud and only for the cloud.

Also, which version of HANA did they make cloud-native? I thought native meant born somewhere.

Correct.

HANA is not cloud-native, it is on-premises native. It is being “re-architected” for the cloud, which means it is not cloud-native. If it were, it would not require re-architecting. For example I was born in California. I can’t be “re-architected” to be a native-born Papua New Guinean. I can apply to live in Papua New Guinea. I can perhaps with effort become a citizen, but I can never be a native Papua New Guinean.

Native has a specific meaning.

In another post, we’ll devote a further airing on what’s meant by “cloud-native” data platform as the term is being applied so broadly these days that the definition is in the eye of the beholder. For now, we’ll refer to it as denoting a data platform that exploits the elasticity (use and pay only for the compute that you use) and horizontal scale of the cloud. – ZDNet

Let us help out ZDNet. Cloud-native means developed for the cloud. It is not subjective or in

“the eye of the beholder.”

Secondly, developing for the cloud means exploiting elasticity, but just because SAP announces something does not mean they have mastered it. This is something ZDNet (owned by CBS Interactive) might be more willing to emphasize if they did not receive income from SAP. ZDNet makes zero effort to compare SAP’s history versus the reality, and of course they are being paid not to. They simply accept whatever they are told by SAP. Notice this in the following quote.

By that definition, SAP HANA is just the latest database to exploit a cloud-native architecture. For instance, other platforms such as Amazon Aurora, Microsoft Azure Cosmos DB, and Google Cloud Spanner also exploit the scale of the cloud. – ZDNet

Again, according to ZDNet, SAP does not have to actually provide evidence, they simply have to make the announcement, and ZDNet immediately associates SAP’s product right along with products that are truly cloud-native, such as Google Cloud Spanner and Amazon Arora.

And the list goes on. Oracle Exadata in the cloud also exploits an abstracted storage/compute architecture to support elasticity. – ZDNet

No this is false.

Exadata is not cloud. Oracle calls Exadata “cloud in a box,” but that is inaccurate marketing hyperbole and part of Oracle’s pattern of slapping the “cloud sticker” on anything they have.

Exadata is a customized database appliance that is an on-premises server. We cover this in the article How to Understand Exadata and Exadata Cloud Services.

Back to our main train of thought, we think that as the data pillar of SAP’s next-generation enterprise application portfolio, including S/4HANA and C/4HANA, rearchitecting HANA for the cloud presents some unique possibilities. – ZDNet

No, this is also false.

S/4HANA is barely implemented in the cloud, and C/4HANA will not exist for years as we cover in the article How Accurate Was Bluefin Solutions on C4HANA?

Rearchitecting HANA for the cloud may present unique possibilities, but again, ZDNet is assuming that the announcement is true and that it works. There is no reason (when not paid by SAP that is) to assume either of these things without first seeing the evidence.

Pay As You Go Licensing and Change The Way We Run and Pay for Enterprise Applications?

And combined with phasing in of pay-as-you-go licensing, which will simplify pricing and offer more economical options for running HANA and its sister services in the cloud, the result could lower barriers to adoption. It could change the very architecture and the way we run and pay for enterprise applications. – ZDNet

Once again, ZDNet assumes because SAP says they will do something they say they will. SAP has been promising more transparency in pricing for at least a decade, and it has yet to arrive in anything but around the fringes. SAP has been continually promising to make it is licensing more cloud-like in press releases while doing nothing to make them more transparent or cloud like in reality. This is part of their commitment to cloud washing.

None of SAP’s cloud offerings, even the S/4HANA Cloud are month to month. They are all at least yearly in commitment. SAP is a vendor that sells on-premises software under on-premises and highly restrictive terms and conditions while promising that it offers the flexibility of AWS.

SaaS Providers to Change Their Underlying Data Platform?

It stands to reason that if the underlying data platform is re-engineered to support elasticity, why shouldn’t the application tier? It provides the opportunity for SAP (and others) to rethink their SaaS enterprise application portfolios to provide the ability to ramp up and down compute for specific business processes, or modules. – ZDNet

SAP actually means SaaS providers or cloud service providers. Increasingly SaaS providers don’t run their own infrastructure, it is the cloud service providers. SaaS providers are just a dev team and marketing team at this point.

Brightwork Research & Analysis is a SaaS provider with our Brightwork Explorer application for forecast error measurement and MRP parameter optimization, but we don’t have any servers. We don’t have to make any adjustments — AWS or GCP make the adjustments.

HANA on AWS Marketing Gimmick?

You know, HANA is the most popular item in terms of instances available on AWS.

But my hypothesis is that its really just for marketing. SAP does not want companies running HANA on AWS, because then they can’t upcharge them the same way as we cover in the article How to Understand SAP’s Upcharge as a Service Cloud. SAP wants them using a corrupt private cloud entity (a CPCE) they can control. Therefore, I view the HANA instances on AWS as a marketing gimmick.

How SAP’s Story Falls Apart for the Public Cloud

The announcement is directed towards the public cloud providers. However, this is not a market SAP has much to do with.

For years SAP proposed that using AWS or GCP was a “race to the bottom” (Steve Lucas as covered in the article Diginomica, Steve Lucas on HANA, Oracle, IBM, AWS, Azure. Only later did they change this narrative with their multicloud announcement as we covered in the article How to Best Understand SAP’s MultiCloud Announcement.

SAP has virtually (and outside of its declining SaaS acquisitions) nothing to do with the cloud. Most of SAP’s applications can’t function in a private cloud environment.

SAP’s only hope to attain what McDermott proposed as margins from the cloud is to keep pushing the CPCEs, which aren’t cloud but are hosting. It is not multi-tenant and there are no economies of scale versus the public cloud. Rather, it is just on-premises but in different geographies. Basically they are moving the server location from the IT department location to the hosting location.

Without those short term massive margins off CPCE, Elliott Management (who is currently pressuring SAP to further increase margins) won’t be happy, and SAP’s cloud margin dream can’t come true.

Conclusion

It is amazing. HANA as fallen on its face in nearly every dimension — and that is just backward engineering other databases — and yet they continue to make new announcements. HANA should be called the Chinese knock off database as we cover in the article Did SAP Just Reinvent the Wheel with HANA? And SAP always has IT media entities that will carry their message, and pretend they are engaging in journalism.

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

Fact-Checking SAP’s HANA Information

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

SAP Video Accuracy Measurement

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

The Problem: A Lack of Fact-Checking of HANA

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

Fact Checking

We ask a fundamental question that everyone that works in enterprise software should ask themselves.

Should decisions be made based on sales information provided by 100% financially biased parties (consulting firms, IT analysts), to companies that do not have internal fact-checking capabilities?

If the answer is “No,” (contact us if you think the answer “Yes“) then perhaps the present system of decision making should be improved.

If you are worried about getting the real story, we can help. We have a history of proving accurate fact-checking analysis. We also have no financial connections to any entity we fact check.

Inaccurate Messaging on HANA as Communicated in SAP Consulting Firm Videos

For those interested in the accuracy level of information communicated by consulting firms on HANA, see our analysis of the following video by IBM. SAP consulting firms are unreliable sources of information about SAP and primarily serve to simply repeat what SAP says, without any concern for accuracy. The lying in this video is brazen and shows that as a matter of normal course, the consulting firms are happy to provide false information around SAP.

SAP Video Accuracy Measurement

SAP's Statement
Accuracy
Brightwork Fact Check
Link to Analysis Article
HANA runs more "in-memory" than other databases.
10%
HANA uses a lot of memory, but the entire database is not loaded into memory.How to Understand the In-Memory Myth
HANA is orders of magnitude faster than other databases.
0%
Our research shows that not only can competing databases do more than HANA, but they are also a better fit for ERP systems.How to Understand the Mismatch Between HANA and S/4HANA and ECC.
HANA runs faster because it does not use disks like other databases.
0%
Other databases also use SSDs in addition to disk.Why Did SAP Pivot the Explanation of HANA In Memory?
HANA holds "business data" and "UX data" and "mobile data" and "machine learning data" and "IoT data."
0%
HANA is not a unifying database. HANA is only a database that supports a particular application, it is not for supporting data lakes.
SRM and CRM are part of S/4HANA.
0%
SRM and CRM are not part of S/4HANA. They are separate and separately sold applications. SAP C/4HANA is not yet ready for sale. How Accurate Was Bluefin Solutions on C-4HANA?
Netweaver is critical as a platform and is related to HANA.
0%
Netweaver is not relevant for this discussion. Secondly Netweaver is not an efficient environment from which to develop.
HANA works with Business Objects
10%
It is very rare to even hear about HANA and Business Objects. There are few Buisness Objects implementations that use HANA.SAP Business Objects Rating
Leonardo is an important application on SAP accounts.
0%
Leonardo is dead, therefore its discussion here is both misleading and irrelevant.Our 2019 Observation: SAP Leonardo is Dead
IBM Watson is an important application on SAP accounts.
0%
Watson is dead, therefore its discussion here is both misleading and irrelevant.How IBM is Distracting from the Watson Failure to Sell More AI and Machine Learning
Digital Boardroom is an important application on SAP accounts.
0%
SAP Digital Boardroom is another SAP item that has never been implemented many places.

Financial Disclosure

Financial Bias Disclosure

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

Search Our Other Accuracy on HANA Content

References

https://www.zdnet.com/article/sap-teched-postmortem-sap-hana-clouds-potential-impact-on-s4hana/

https://docs.microsoft.com/en-us/sql/analytics-platform-system/parallel-data-warehouse-overview?view=aps-pdw-2016-au7

The Hidden S/4HANA S Oliver and KPS Failure

Executive Summary

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

Introduction

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

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

Failure at S Oliver

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

KPS Strikes Again?

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

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

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

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

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

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

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

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

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

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

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

Selling SAP Without Any Concern for Implementability

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

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

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

EWM Implementation

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

KPS’s Performance at S Oliver

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

S Oliver’s Fault in the Failure

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

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

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

How Incompetent is KPS?

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

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

What is KPS Currently Doing at S Oliver?

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

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

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

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

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

Fact-Checking SAP Information on S/4HANA

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

SAP Video Accuracy Mesurement

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

Conclusion

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

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

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

The Necessity of Fact Checking

We ask a question that anyone working in enterprise software should ask.

Should decisions be made based on sales information from 100% financially biased parties like consulting firms, IT analysts, and vendors to companies that do not specialize in fact-checking?

If the answer is “No,” then perhaps there should be a change to the present approach to IT decision making.

In a market where inaccurate information is commonplace, our conclusion from our research is that software project problems and failures correlate to a lack of fact checking of the claims made by vendors and consulting firms. If you are worried that you don’t have the real story from your current sources, we offer the solution.

Financial Disclosure

Financial Bias Disclosure

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

S/4HANA Implementation Research

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

Select the description that best matches you.

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

See this link for an explanation to sales teams.

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

See this link for an explanation for investment entities. 

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

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

Search Our Other SAP S/4HANA Implementation Failure Content

References

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

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

The Hidden S/4HANA Home24 and KPS Failure

Executive Summary

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

Introduction

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

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

Failure at Home24

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

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

Business Issues at Home24

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

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

A sampling of the issues includes the following.

Review Example #1: Delayed Delivery

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

Review Example #2: 10 Weeks of Waiting?

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

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

Review Example #3: Never Again?

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

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

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

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

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

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

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

Review Example #5: Home24 is Fraudulent?

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

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

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

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

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

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

Review Example #8: A Major System Meltdown?

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

Interpreting the Reviews

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

There are many questions that arise.

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

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

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

What Appear to be Fake Reviews Posted by Home24

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

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

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

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

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

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

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

The Implications for Home24

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

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

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

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

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

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

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

Notice this response from someone in attendance.

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

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

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

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

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

KPS Strikes Again?

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

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

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

CONTEXT

Innovative, ambitious company with a start-up character

Strong commitment from the executive team, business driven project

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

High number of interfaces, inefficient and cost-intensive processes

Complex fulfillment requirements

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

Aggressive timeframe: 13 months from prototype to go-live

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

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

USE

Implemented end-to-end processes

High transparency, “single point of truth”

Fast and reliable customer service feedback to customers

Extension of the service portfolio

High availability, transparency and consistency of data

Reduction in the number of systems

ACTION

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

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

Go live by country, big-bang approach

No migration of customer orders

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

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

TECHNOLOGY

SAP S / 4HANA Merchandise Mgmt

SAP EWM

SAP Customer Experience Suite

SAP Commerce Cloud (PIM, Billing)

SAP Service Cloud

SAP VIM

SAP BW / BI

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

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

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

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

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

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

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

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

Selling SAP Without Any Concern for Implementability

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

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

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

What Was Implemented?

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

KPS’s Performance at Home24

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

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

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

Home24’s Fault in the Failure

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

How Prepared Was Home24 to Even Engage in This Implementation?

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

How Incompetent is KPS?

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

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

What is KPS Currently Doing at Home24?

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

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

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

How KPS and SAP Would Like the Story to be Told

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

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

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

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

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

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

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

Fact-Checking SAP Information on S/4HANA

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

SAP Video Accuracy Mesurement

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

The Necessity of Fact Checking

We ask a question that anyone working in enterprise software should ask.

Should decisions be made based on sales information from 100% financially biased parties like consulting firms, IT analysts, and vendors to companies that do not specialize in fact-checking?

If the answer is “No,” then perhaps there should be a change to the present approach to IT decision making.

In a market where inaccurate information is commonplace, our conclusion from our research is that software project problems and failures correlate to a lack of fact checking of the claims made by vendors and consulting firms. If you are worried that you don’t have the real story from your current sources, we offer the solution.

Conclusion

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

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

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

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

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

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

Projecting the Future for Home24

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

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

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

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

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

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

Financial Disclosure

Financial Bias Disclosure

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S/4HANA Implementation Research

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References

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

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

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

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

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