Traditional ERP applications that were used by a small number of companies around the world in the 2000s have become a necessity for many companies to survive in today's competitive markets. In recent years, a large number of new ERP applications have been developed in order to balance the market demand in the IT world. SAP, which has been a leader in the ERP application market for many years, has made serious investments on its products as part of their future roadmap. In 2015, a next generation ERP solution was announced by SAP. In this article, I am going to mention the critical milestones of this revolution which I had the opportunity to witness in my 10+ years of SAP consultancy career.
The first step of the revolution begun in 2011 when the ERP application has became compatible with the HANA database. Previous SAP ERP application that was implemented on the legacy databases (Oracle, MSSQL, etc.) and had an intensive data flow, had serious performance problems over time. Solutions such as archiving and expanding disk space could not completely resolve performance issues. Under those circumstances, HANA innovation was a turning point for SAP. HANA is a column based database that can also hold data in-memory. ABAP developments must be done properly to get the max benefit from these new and expensive HANA certified servers. As an example, data sets can be summarized and accessed much faster with the information stored in memory, which is also known as CDS (core data services). This new infrastructure allowed SAP solve the system performance problems.
The second step of the revolution took place in 2013 with the new user interface named Fiori. For many reasons, GUI and web dynpro could have never been the next generation user interface. SAP UI5 technology has been designed to provide superior graphic capabilities with the help of diversified element library. Fiori also has a new backend structure, which is called Odata, designed for HANA architecture. Thus, the interface of the next generation was founded. Today SAP Fiori applications are platform independent and have a handsome new look. SAP announced that the team will develop new applications on the Fiori platform, not the GUI anymore.
Completion of interface and infrastructure problems were a good start for SAP to renovate its ERP product. Changing core components could create a new product with a new sustainable future. ECC 6.0 was based on a modular structure since traditional ERP R3. Consultants, who spend time in ECC 6.0 systems, can remember software component names like SAP_LOG, SAP_FI, SAP_HR, etc.. Version differences in these components can create serious stability problems. Therefore, it would make sense to move to a new product rather than living with the ECC 6.0.
In 2015, software components (SAP_LOG, SAP_FI, SAP_HR, etc.) in ECC 6.0 were combined into a new software component under S4 Core. Therefore, there won't be any difference for core modules in S/4 HANA and the same package would be at the center and bottom layer of the system. To be able to do this, all system components had to be redevelop on HANA. Thus, all modules in the S4 Core, which were created and established a long time ago, have been redesigned in a suitable form. Those were the hard days for any SAP team. There were lots of changes in tables, programs, and transaction codes. Almost all elements were to be reviewed and evaluated. The code changes were not enough to make a sustainable next generation system. Therefore, SAP has found the right answer by simplifying all business scenarios. All industries have their own struggles and SAP solved this issue by creating a diverse industry-specific solution portfolio. It was not an easy job but a solid future path for S/4 HANA product. After creating a new version of S/4 HANA, SAP published its own simplification lists by industry that were specific to a line of business. Simplification lists are helpful to understand version-specific developments and impacts to business scenarios.
With the creation of a new technical template, SAP was able to compile and integrate a significant number of the highly diversified ERP-related product families with the S/4 HANA product. The proven line-of-business (LOB) modules (EWM, TM, etc.) that were able to run on different servers on the previous version are now embedded in the S4 Core. This made a new generation of enterprise management structure possible. Older integrations and extinct applications (WM, etc.) were removed from the product and roadmap. New embedded modules have become free for basic usage. Many new modules were built level-by-level on this new creation. Basically, the solutions are grouped in three stages in S/4 HANA. At the bottom layer is SAP S/4 HANA Enterprise Management, in the middle S/4 HANA Line of Business Solutions and at the top Suite LOB Solutions. You can find more applications in S/4 HANA, which are differentiated according to industry and business line, or you can merge with other SAP products which are specialized in a related topic and have organic integration with S/4 HANA. Because of this layered structure, maybe the poor Z tables can harm potential future application integrations with S/4 HANA.
S/4 HANA has emerged as a product that has been carefully prepared with new technologies compared to old products. However, the long calender of SAP ERP projects would have made this transformation difficult to use. This is where the new project methodology, called Activate, is nourished by the long-standing and diversified experience of being a great player in the ERP applications industry. Projects could be completed in a much shorter time and many risks that might arise in future projects could be eliminated with this new implementation methodology. S/4 HANA has built up the rapid deployment solutions to quickly add the best practices to the related line of business. Customers can reach a template of business scenarios with proven preconfigured processes for industrial needs with the famous model company service. Activate methodology has the ability to get SAP consultants and SAP users at the same page easily, shorten project calendars and increase product awareness of the whole project team.
To start the Activate methodology, the applications used in best practices must be seen through a template system. In order to prepare this demo system, server and installation problems must be solved. It is not possible to predict from the first day which modules and process steps can be used at what depth. Therefore, it is not realistic to invest in a highly costly server at that phase. At this stage, SAP expects customers to experience the first phase of the project with a cloud-based deployment instead of investing in a server and managing it according to the changing requirements. Main goal here is to focus on the successful implementation of business processes instead of technical problems.
In summary, SAP major revolutions with S/4 HANA are a result of newer database, better user interface, simpler core architecture and business process, optional embedded line of business solutions, wider industry-specific solution portfolio, faster project methodology and completely cloud computing. There are also lots of revolutions in S/4 HANA related to the new rising global technologies such as IoT, Machine Learning, Artificial Intelligence and Blockchain, etc., but I will leave SAP value propositions on these new technologies for another article.
Please feel free to share your inputs, comments and experiences. Until we meet again, bye!
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