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 is clearly a highly dishonest company that will misrepresent 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.

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.

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.

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

This article is a collaboration between CN Liou and Shaun Snapp.

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.

My name is CN Liou and I am a guest author at Brightwork Research & Analysis, and I am opposed to these types of ERP systems and the way they are sold into accounts. If Nanshan had used my data-centric simple custom ERP development, they could have stayed away from all of these issues. They would have a fully functioning ERP system at low cost. See my company link at TeraRows.

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.

Being Part of the Solution: What to Do About HANA

We can provide feedback from multiple HANA accounts that provide realistic information around HANA — 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.

The major problem with companies that bought HANA is that they made the investment without seeking any entity independent of SAP. SAP does not pay Gartner and Forrester the amount of money that they do so these entities can be independent as we covered in the article How Accurate Was The Forrester HANA TCO Study?

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.

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.

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

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

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

Financial Disclosure

Financial Bias Disclosure

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

S/4HANA Implementation Research

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

Select the description that best matches you.

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

See this link for an explanation to sales teams.

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

See this link for an explanation for investment entities. 

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

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

Search Our Other 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.

Conclusion

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

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

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

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

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

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

Projecting the Future for Home24

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

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

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

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

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

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

Financial Disclosure

Financial Bias Disclosure

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

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/de/successes/home24.html

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

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

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

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

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

Executive Summary

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

Introduction

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

Code Remediation for S/4HANA

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

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

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

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

Oracle’s Proposal on its Data Model for SAP

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

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

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

This following anonymous provides more details.

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

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

The Logic of Using HANA for Other Applications

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

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

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

Oracle continues…

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

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

The Problem with S/4HANA’s Data Model

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

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

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

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

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

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

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

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

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

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

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

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

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

Conclusion

Customers that bought HANA basically much accepted the “simplification” of the data model without questioning if it was actually improved.

SAP could have dramatically improved the data model with true simplification. This is true of almost any software vendor, but more so for SAP ERP because most of the application was designed before modeling tools were anything like we have today.

Recreating ECC’s data model in a modern modeling applications shows many opportunities for improvement. 

But that was not what SAP did.

They redesigned the data model for reporting or analytics, went all-in on the column-oriented table design and then got caught in a design conundrum as they had to keep adding row-based tables. This would be like a person buying a sports car, an then figuring out that they actually need to live in it, so they put a camper on top.

SAP still claims this hodgepodge design outperforms any other database — and like a person, if they made this claim about their Frankenstein sports car/camper hybrid, they refuse to allow any competitive benchmark, just as a person with the Franken-car I described would refuse to race anyone in their contraption.

As one commenter I was discussing this topic with.

“If you have no technological know-how, you are at SAP’s mercy, and they haven’t been educating the community enough on their flagship database.” – Simone Sailer, Managing Editor of e3zine.com

Bingo.

I actually thought of creating a list of knowledgeable SAP customers and using the SAP HANA list to make the determination. And recall, its the most expensive database that you can buy in the category — that is the pricing right off of the price list. Our position is that HANA has the highest TCO of any database also.

The Future & What To Do About It

SAP will never admit any of this. Customers would have to pressure SAP to change. Honestly, HANA can be improved by simply using an open-source database like MariaDB or PostgresSQL — but the issue is certification and compatibility. SAP has pushed application code into the HANA, and it controls the process — and so they are stuck using HANA. HANA decreases the value of S/4HANA to customers.

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

Fact-Checking SAP’s HANA Information

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

SAP Video Accuracy Measurement

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

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

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

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

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

Financial Disclosure

Financial Bias Disclosure

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

S/4HANA Implementation Research

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

Select the description that best matches you.

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

See this link for an explanation to sales teams.

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

See this link for an explanation for investment entities. 

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

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

Search Our Other SAP S4HANA DB Portability Content

References

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

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

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

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

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

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

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

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

Executive Summary

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

Introduction

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

How S/4HANA Operationally and Financially Damaged Revlon

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

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

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

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

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

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

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

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

The Remediation Plan?

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

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

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

However, Revlon also stated the following.

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

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

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

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

It turns out very easily.

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

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

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

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

The Deloitte Website on S/4HANA

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

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

Let us look at two examples:

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

The CapGemini Website

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

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

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

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

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

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

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

Fact-Checking SAP Information on S/4HANA

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

SAP Video Accuracy Mesurement

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Conclusion

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

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

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

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

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

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

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

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

Fact-Checking SAP Information on S/4HANA

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

SAP Video Accuracy Mesurement

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

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

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

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

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

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

Financial Disclosure

Financial Bias Disclosure

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

S/4HANA Implementation Research

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

Select the description that best matches you.

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

See this link for an explanation to sales teams.

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

See this link for an explanation for investment entities. 

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

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

Search Our Other S/4HANA Content

References

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

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

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

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

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

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

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

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

Executive Summary

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

Introduction

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The Swiss Property S/4HANA Example

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

SAP’s Inaccurate Messaging as Communicated in SAP Videos

Fact-Checking SAP Information

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

SAP Video Accuracy Mesurement

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

The Typical Technique for Analyzing S/4HANA

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

S/4HANA Paid Research Benefits Listing

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

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

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

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

S/4HANA Implementation Research

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

Select the description that best matches you.

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

See this link for an explanation to sales teams.

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

See this link for an explanation for investment entities. 

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

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

Search Our Other S/4HANA Content

Financial Disclosure

Financial Bias Disclosure

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

References

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

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

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

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

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

The Risk Estimation Book

 

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

Better Managing Software Risk

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

Finding What Works and What Doesn’t

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

Chapters

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